-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QXiijkcw59I42RLWTYkV/qF5bQLaoOfrkJIXmAJvS7/y27aPOa3CaQS6aCs3x79x 5dA5cVBpDB9Q3JSgLPYfLQ== 0001047469-98-010215.txt : 19980318 0001047469-98-010215.hdr.sgml : 19980318 ACCESSION NUMBER: 0001047469-98-010215 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 20 FILED AS OF DATE: 19980317 SROS: AMEX SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN PAGING INC CENTRAL INDEX KEY: 0000916065 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 363109408 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A SEC ACT: SEC FILE NUMBER: 005-43693 FILM NUMBER: 98567454 BUSINESS ADDRESS: STREET 1: 1300 GODWARD ST NE STE 3100 CITY: MINNEAPOLIS STATE: MN ZIP: 55413-1767 BUSINESS PHONE: 6126233100 MAIL ADDRESS: STREET 1: 1300 GODWARD ST NE STREET 2: SUITE 3100 CITY: MINNEAPOLIS STATE: MN ZIP: 55413-1767 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TELEPHONE & DATA SYSTEMS INC CENTRAL INDEX KEY: 0000096966 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 362669023 STATE OF INCORPORATION: IA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A BUSINESS ADDRESS: STREET 1: 8401 GREENWAY BLVD STREET 2: PO BOX 628010 CITY: MIDDLETON STATE: WI ZIP: 535628010 BUSINESS PHONE: 3126301900 MAIL ADDRESS: STREET 1: 30 NORTH LASALLE STREET SUITE 400 CITY: CHICAGO STATE: IL ZIP: 60602 FORMER COMPANY: FORMER CONFORMED NAME: TELEPHONE SYSTEMS INC STOCK OPTION PLANS DATE OF NAME CHANGE: 19741118 FORMER COMPANY: FORMER CONFORMED NAME: TELEPHONE SYSTEMS INC DATE OF NAME CHANGE: 19740509 SC 14D1/A 1 SCHEDULE 14D1/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------- SCHEDULE 14D-1 (AMENDMENT NO. 1) TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 ___________________ SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 3) AMERICAN PAGING, INC. ------------------------------------------------------------ (NAME OF SUBJECT COMPANY [ISSUER]) API MERGER CORP. AND TELEPHONE AND DATA SYSTEMS, INC. ------------------------------------------------------------ (BIDDER) COMMON SHARES ($1.00 PAR VALUE) ------------------------------------------------------------ (TITLE OF CLASS OF SECURITIES) 02882K10 ------------------------------------------------------------ (CUSIP NUMBER OF CLASS OF SECURITIES) LEROY T. CARLSON, JR. PRESIDENT AND CHIEF EXECUTIVE OFFICER TELEPHONE AND DATA SYSTEMS, INC. 30 N. LASALLE STREET, SUITE 4000, CHICAGO, ILLINOIS 60602 ------------------------------------------------------------ (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER) --------- COPY TO: JAMES G. ARCHER, ESQ. SIDLEY & AUSTIN 875 THIRD AVENUE NEW YORK, NEW YORK 10022 (212) 906-2000 This Amendment No. 1 to the Tender Offer Statement on Schedule 14D-1 ("Schedule 14D-1") and Amendment No. 3 to the Statement on Schedule 13D (collectively, this "Amendment") relates to the offer by API Merger Corp., a Delaware corporation ("Purchaser") and a direct wholly owned subsidiary of Telephone and Data Systems, Inc., a company organized under the laws of Iowa ("TDS"), to purchase all outstanding Common Shares, par value $1.00 per share (the "Common Shares"), of American Paging Inc., a Delaware corporation (the "Company"), at a price of $2.50 per Common Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in Purchaser's Offer to Purchase dated February 18, 1998 (the "Offer of Purchase") and in the related Letter of Transmittal (which together with the Offer to Purchase constitute the "Offer"). All capitalized terms used in this Amendment without definition have the meanings attributed to them in the Schedule 14D-1. ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The information set forth under "THE TENDER OFFER -- 9. Financing of the Offer and the Merger" of the Offer to Purchase is hereby amended and restated to read in its entirety as follows: The total amount of funds required by Purchaser to consummate the Offer and the Merger and to pay related fees and expenses is estimated to be approximately $10 million. TDS will ensure that Purchaser has sufficient funds to acquire all of the outstanding Common Shares pursuant to the Offer and the Merger. TDS will provide such funds from its working capital or from existing credit facilities. No decision has been made concerning which of the existing credit facilities, if any, will be utilized. Such decision will be made on such dates as funds are required to consummate the Offer and the Merger and to pay related fees and expenses. ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. The information set forth under "SPECIAL FACTORS -- Beneficial Ownership of the Securities of the Company -- Security Ownership of the Company by TDS, Purchaser and Certain Beneficial Owners" of the Offer to Purchase is hereby supplemented and amended by adding the following: A Schedule 13D was filed with the Commission by Gabelli Funds, Inc. ("GFI"), Gabelli Associates Fund ("Gabelli Associates"), Gabelli Associates Limited ("GAL") and Mario J. Gabelli with respect to 409,300 Common Shares which represents approximately 5.4 percent of the outstanding Common Shares. Pursuant to such Schedule 13D, GFI has sole voting and dispositive power with respect to 271,100 Common Shares, Gabelli Associates has sole voting and dispositive power with respect to 130,200 Common Shares and GAL has sole voting and dispositive power with respect to 8,000 Common Shares. ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES. The information set forth under "THE TENDER OFFER -- 8. Certain Information Concerning Purchaser, TDS and The Voting Trust" of the Offer to Purchase is hereby amended and supplemented by adding the following information: 2 The Voting Trust holds TDS Series A Common Shares and was created under an Agreement, dated June 30, 1989, as amended ("The Voting Trust Agreement"), to facilitate long-standing relationships among the trust's certificate holders. The five trustees of The Voting Trust (the "Trustees") hold and vote the TDS Series A Common Shares in accordance with the terms of The Voting Trust Agreement. Under the terms of The Voting Trust Agreement, the Trustees, except as otherwise specifically provided, possess and are entitled to exercise all of the rights and powers of owners of the TDS Series A Common Shares deposited in The Voting Trust. Except as otherwise provided in the Trust Agreement with respect to certain transactions, such Series A Common Shares are to be voted as a unit in accordance with the six-vote majority of the Trustees. A "six-vote majority" requires the affirmative vote by the Trustees holding no fewer than six votes. Four of the Trustees, who are currently directors of TDS, have two votes each, and the remaining Trustee has one vote. Pursuant to the terms of The Voting Trust Agreement, the Trustees are instructed to use their best judgment to select suitable directors. TDS has a twelve person Board of Directors and four of the five Trustees are directors of TDS; however, The Voting Trust Agreement does not require the Trustees to elect any specified persons as directors. As a result of the TDS Series A Common Shares held in The Voting Trust representing 51.4% of the voting power of the combined TDS Common Shares and the TDS Series A Common Shares and four of its Trustees serving as directors on the Board of Directors of TDS, The Voting Trust may be deemed to control TDS and indirectly the Company. ITEM 10. ADDITIONAL INFORMATION. The first paragraph under "THE TENDER OFFER - - 12. Certain Conditions to the Offer" of the Offer to Purchase is hereby amended and restated in its entirety as follows: 12. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other term or provision of the Offer or the Merger Agreement, Purchaser shall not be required to accept for payment or pay for any Common Shares tendered pursuant to the Offer, and may terminate or amend the Offer and may postpone the acceptance for payment of, and payment for Common Shares tendered if (i) immediately prior to the expiration of the Offer the Asset Contribution Agreement Condition is not satisfied or (ii) at any time on or after February 11, 1998 and prior to the expiration of the Offer and prior to the acceptance of the Common Shares, any of the following events or facts shall have occurred: ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. Item 11 is hereby supplemented and amended by adding the following exhibits which were previously incorporated by reference: (c) (2) Asset Contribution Agreement, dated as of December 22, 1997, among TDS, TSR Paging and TSR Wireless. (c)(3) Option Agreement, dated as of December 22, 1997, between TDS and TSR Wireless LLC. 3 (c)(4) Restated Certificate of Incorporation, as amended, of the Company. (c)(5) The Voting Trust Agreement, dated as of June 30, 1989, with respect to the TDS Series A Common Shares. (c)(6) Exchange Agreement, dated as of January 1, 1994, between the Company and TDS. (c)(7) Revolving Credit Agreement, dated as of January 1, 1994, between the Company and TDS. (c)(8) Amendment to Revolving Credit Agreement, dated March 5, 1997 and effective January 1, 1997, between the Company and TDS. (c)(10) Intercompany Agreement, dated as of January 1, 1994, between the Company and TDS. (c)(11) Registration Rights Agreement, dated as of January 1, 1994, between the Company and TDS. (c)(12) Employee Benefit Plans Agreement, dated as of January 1, 1994, between the Company and TDS. (c)(13) Amendment to Revolving Credit Agreement, dated February 27, 1995, between the Company and TDS. (c)(14) Amendment to Revolving Credit Agreement, dated August 10, 1995, between the Company and TDS. (c)(15) Amendment to Revolving Credit Agreement, dated December 31, 1995, between the Company and TDS. (c)(16) Amendment to Revolving Credit Agreement, dated April 15, 1996, between the Company and TDS. (c)(17) Amendment to Revolving Credit Agreement, dated August 2, 1996, between the Company and TDS. (c)(18) Amendment to Revolving Credit Agreement, dated November 13, 1996, between the Company and TDS. (c)(19) Amendment, dated as of November 20, 1992, to The Voting Trust Agreement with respect to the TDS Series A Common Shares. (c)(20) Amendment, dated as of May 9, 1991, to The Voting Trust Agreement with respect to the TDS Series A Common Shares. (c)(21) Joint Filing Agreement and Power of Attorney, dated February 10, 1997, with respect to The Voting Trust. 4 SIGNATURES Dated: March 17, 1998 After due inquiry and to the best of our knowledge and belief, we certify that the information set forth in this Amendment is true, complete and correct. API MERGER CORP. THE VOTING TRUST* By: /s/ LeRoy T. Carlson, Jr. By: /s/ LeRoy T. Carlson,Jr. --------------------------------- ------------------------------ Name: LeRoy T. Carlson, Jr. Name: LeRoy T. Carlson, Jr. Title: President Title: As Trustee and Attorney-in-Fact for other Trustees** * Signature only for Amendment No. 3 to the Schedule 13D relating to the TELEPHONE AND DATA SYSTEMS, INC. direct and indirect beneficial ownership of the Common Shares of American Paging, Inc. by API Merger Corp., Telephone and Data By: /s/ LeRoy T. Carlson, Jr. Systems, Inc. and The Voting Trust, --------------------------------- respectively. Name: LeRoy T. Carlson, Jr. Title: President and Chief ** Pursuant to Joint Filing Agreement Executive Officer and Power of Attorney filed herewith. Signature Page to Amendment No. 1 to Schedule 14D-1 relating to the Offer by API Merger Corp. to purchase all outstanding Common Shares of American Paging, Inc. and Amendment No. 3 to Schedule 13D relating to the direct and indirect beneficial ownership of the Common Shares of American Paging, Inc. by API Merger Corp., Telephone and Data Systems, Inc., and The Voting Trust, respectively. EXHIBIT INDEX
Exhibit No. Exhibit Description ----------- ------------------- (c)(2) Asset Contribution Agreement, dated as of December 22, 1997, among TDS, TSR Paging and TSR Wireless. (c)(3) Option Agreement, dated as of December 22, 1997, between TDS and TSR Wireless LLC. (c)(4) Restated Certificate of Incorporation, as amended, of the Company. (c)(5) The Voting Trust Agreement, dated as of June 30, 1989, with respect to TDS Series A Common Shares. (c)(6) Exchange Agreement, dated as of January 1, 1994, between the Company and TDS. (c)(7) Revolving Credit Agreement, dated as of January 1, 1994, between the Company and TDS. (c)(8) Amendment to Revolving Credit Agreement, dated March 5, 1997 and effective January 1, 1997, between the Company and TDS. (c)(10) Intercompany Agreement, dated as of January 1, 1994, between the Company and TDS. (c)(11) Registration Rights Agreement, dated as of January 1, 1994, between the Company and TDS. (c)(12) Employee Benefit Plans Agreement, dated as of January 1, 1994, between the Company and TDS. (c)(13) Amendment to Revolving Credit Agreement, dated February 27, 1995, between the Company and TDS. (c)(14) Amendment to Revolving Credit Agreement, dated August 10, 1995, between the Company and TDS. (c)(15) Amendment to Revolving Credit Agreement, dated December 31, 1995, between the Company and TDS. (c)(16) Amendment to Revolving Credit Agreement, dated April 15, 1996, between the Company and TDS. (c)(17) Amendment to Revolving Credit Agreement, dated August 2, 1996, between the Company and TDS. (c)(18) Amendment to Revolving Credit Agreement, dated November 13, 1996, between the Company and TDS. (c)(19) Amendment, dated as of November 20, 1992, to The Voting Trust Agreement with respect to the TDS Series A Common Shares. (c)(20) Amendment, dated as of May 9, 1991, to The Voting Trust Agreement with respect to the TDS Series A Common Shares. (c)(21) Joint Filing Agreement and Power of Attorney, dated February 10, 1997, with respect to The Voting Trust.
EX-99.C2 2 EXHIBIT 99.C2/ASSET CONTRIBUTION AGREEMENT - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------- ASSET CONTRIBUTION AGREEMENT by and among TSR PAGING INC. TELEPHONE AND DATA SYSTEMS, INC. and TSR WIRELESS LLC Dated: December 22, 1997 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- TABLE OF CONTENTS PAGE ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . 2 1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.2 Other Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . 10 ARTICLE II CONTRIBUTION OF ASSETS. . . . . . . . . . . . . 12 2.1 Contribution of TSR Paging Assets. . . . . . . . . . . . . . . . . 12 2.2 Assumption of TSR Paging Liabilities . . . . . . . . . . . . . . . 14 2.3 Contribution of API Assets . . . . . . . . . . . . . . . . . . . . 14 2.4 Assumption of API Liabilities. . . . . . . . . . . . . . . . . . . 16 2.5 API Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . 16 2.6 Assets and Liabilities of AMS; Rejected Assets . . . . . . . . . . 17 ARTICLE III ISSUANCE OF MEMBERSHIP INTERESTS . . . . . . . . . . 18 3.1 Issuance of Membership Interests . . . . . . . . . . . . . . . . . 18 3.2 Post-Closing Adjustment. . . . . . . . . . . . . . . . . . . . . . 18 3.3 Closing Costs; Transfer Fees . . . . . . . . . . . . . . . . . . . 20 3.4 Unit Allocation Following Exercise of Extension Option . . . . . . 20 ARTICLE IV CLOSING . . . . . . . . . . . . . . . . 20 4.1 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 4.2 Conveyances by TSR Paging at Closing . . . . . . . . . . . . . . . 20 4.3 Conveyances by TDS at Closing. . . . . . . . . . . . . . . . . . . 21 4.4 Form of Instruments. . . . . . . . . . . . . . . . . . . . . . . . 22 4.5 Certificates; Opinions . . . . . . . . . . . . . . . . . . . . . . 22 ARTICLE V REPRESENTATIONS AND WARRANTIES OF TSR PAGING . . . . . . . 23 5.1 Organization of TSR Paging . . . . . . . . . . . . . . . . . . . . 23 5.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . 23 5.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 5.4 Absence of Certain Changes or Events . . . . . . . . . . . . . . . 23 5.5 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 i Page ---- 5.6 TSR Paging Real Property . . . . . . . . . . . . . . . . . . . . . 24 5.7 Contracts and Commitments. . . . . . . . . . . . . . . . . . . . . 25 5.8 Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . . . 27 5.9 Operation of the TSR Paging Business . . . . . . . . . . . . . . . 27 5.10 Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 5.11 Absence of Certain Business Practices. . . . . . . . . . . . . . . 28 5.12 No Conflict or Violation . . . . . . . . . . . . . . . . . . . . . 28 5.13 Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . 28 5.14 Financial Statements; Receivables. . . . . . . . . . . . . . . . . 30 5.15 Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . 31 5.16 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 5.17 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . . 31 5.18 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 5.19 No Other Agreements to Sell the TSR Paging Assets. . . . . . . . . 32 5.20 Proprietary Rights . . . . . . . . . . . . . . . . . . . . . . . . 32 5.21 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . 32 5.22 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 5.23 Investment Intent. . . . . . . . . . . . . . . . . . . . . . . . . 34 5.24 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . 34 5.25 Employment Matters . . . . . . . . . . . . . . . . . . . . . . . . 35 5.26 Employee Benefit Plan Matters. . . . . . . . . . . . . . . . . . . 35 ARTICLE VI REPRESENTATIONS AND WARRANTIES OF TDS. . . . . . . . . 36 6.1 Organization of TDS and API. . . . . . . . . . . . . . . . . . . . 36 6.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . 37 6.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 6.4 Absence of Certain Changes or Events . . . . . . . . . . . . . . . 38 6.5 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 6.6 API Real Property. . . . . . . . . . . . . . . . . . . . . . . . . 39 6.7 Contracts and Commitments. . . . . . . . . . . . . . . . . . . . . 40 6.8 Customers, Distributors and Suppliers. . . . . . . . . . . . . . . 41 6.9 Operation of the API Business. . . . . . . . . . . . . . . . . . . 42 6.10 Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 6.11 Absence of Certain Business Practices. . . . . . . . . . . . . . . 42 6.12 No Conflict or Violation . . . . . . . . . . . . . . . . . . . . . 43 6.13 Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . 43 6.14 Financial Statements; Receivables; Public Filings. . . . . . . . . 45 6.15 Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . 46 6.16 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 ii Page ---- 6.17 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . . 46 6.18 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 6.19 No Other Agreements to Sell the API Assets . . . . . . . . . . . . 47 6.20 Proprietary Rights . . . . . . . . . . . . . . . . . . . . . . . . 47 6.21 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . 47 6.22 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 6.23 Investment Intent. . . . . . . . . . . . . . . . . . . . . . . . . 49 ARTICLE VII REPRESENTATIONS AND WARRANTIES OF TSR WIRELESS. . . . . . . 49 7.1 Organization of TSR Wireless . . . . . . . . . . . . . . . . . . . 49 7.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . 49 7.3 No Conflict or Violation . . . . . . . . . . . . . . . . . . . . . 50 7.4 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . 50 7.5 Broker and Finders . . . . . . . . . . . . . . . . . . . . . . . . 50 7.6 Litigation and Proceedings . . . . . . . . . . . . . . . . . . . . 50 7.7 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . . 50 ARTICLE VIII COVENANTS OF THE TRANSFERORS AND TSR WIRELESS. . . . . . . 50 8.1 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . 50 8.2 FCC Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 8.3 Notification of Certain Matters. . . . . . . . . . . . . . . . . . 51 ARTICLE IX COVENANTS OF TSR PAGING . . . . . . . . . . . . 52 9.1 Access to Information. . . . . . . . . . . . . . . . . . . . . . . 52 9.2 Employee and Employee Benefit Matters. . . . . . . . . . . . . . . 52 9.3 Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . 53 9.4 1997 Financial Statements. . . . . . . . . . . . . . . . . . . . . 54 ARTICLE X COVENANTS OF TDS . . . . . . . . . . . . . . 55 10.1 No Solicitation. . . . . . . . . . . . . . . . . . . . . . . . . . 55 10.2 Access to Information. . . . . . . . . . . . . . . . . . . . . . . 55 10.3 Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . 57 10.4 1997 Financial Statements. . . . . . . . . . . . . . . . . . . . . 58 iii Page ---- 10.5 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 10.6 Support of API . . . . . . . . . . . . . . . . . . . . . . . . . . 58 10.7 Transitional Services Agreement. . . . . . . . . . . . . . . . . . 58 10.8 Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 10.9 Monthly Certificates . . . . . . . . . . . . . . . . . . . . . . . 59 ARTICLE XI CONDITIONS TO OBLIGATIONS OF TSR PAGING . . . . . . . . 59 11.1 Representations, Warranties and Covenants. . . . . . . . . . . . . 59 11.2 No Injunction, etc.. . . . . . . . . . . . . . . . . . . . . . . . 59 11.3 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . 59 11.4 Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 11.5 Corporate Documents. . . . . . . . . . . . . . . . . . . . . . . . 60 11.6 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 11.7 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 11.8 Material Adverse Change. . . . . . . . . . . . . . . . . . . . . . 60 11.9 Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 60 11.10 Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . . . 60 11.11 Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . . . 60 11.12 Tenant Estoppel Certificates . . . . . . . . . . . . . . . . . . . 60 11.13 Closing Current Assets . . . . . . . . . . . . . . . . . . . . . . 61 ARTICLE XII CONDITIONS TO OBLIGATIONS OF TDS . . . . . . . . . . 61 12.1 Representations, Warranties and Covenants. . . . . . . . . . . . . 61 12.2 No Injunction, etc.. . . . . . . . . . . . . . . . . . . . . . . . 61 12.3 Opinions of Counsel. . . . . . . . . . . . . . . . . . . . . . . . 61 12.4 Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 12.5 Corporate Documents. . . . . . . . . . . . . . . . . . . . . . . . 62 12.6 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 12.7 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 12.8 Material Adverse Change. . . . . . . . . . . . . . . . . . . . . . 62 12.9 Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 62 12.10 Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . . . 62 12.11 Closing Current Assets . . . . . . . . . . . . . . . . . . . . . . 62 ARTICLE XIII RISK OF LOSS; CONSENTS TO ASSIGNMENT OF CONTRACTS, REAL PROPERTY iv Page ---- LEASES AND PERSONAL PROPERTY LEASES. . . . . . . . . . . . 63 13.1 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 13.2 Consents to Assignment of Contracts, Real Property Leases and Personal Property Leases . . . . . . . . . . . . . . . . . . . 63 ARTICLE XIV ACTIONS BY TSR WIRELESS AND TRANSFERORS AFTER THE CLOSING. . . . 64 14.1 Further Actions. . . . . . . . . . . . . . . . . . . . . . . . . . 64 14.2 Survival of Representations, Etc.. . . . . . . . . . . . . . . . . 64 14.3 Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . 64 14.4 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . 65 14.5 Bulk Sales, Transfer Taxes . . . . . . . . . . . . . . . . . . . . 68 14.6 Assistance for Filing of Tax Returns . . . . . . . . . . . . . . . 68 ARTICLE XV MISCELLANEOUS. . . . . . . . . . . . . . . 69 15.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 15.2 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 15.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 15.4 Choice of Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 73 15.5 Entire Agreement; Amendments and Waivers . . . . . . . . . . . . . 74 15.6 Multiple Counterparts. . . . . . . . . . . . . . . . . . . . . . . 74 15.7 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 15.8 Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 15.9 Titles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 15.10 Public Statements and Press Releases . . . . . . . . . . . . . . . 74 15.11 Knowledge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 15.12 Confidential Information . . . . . . . . . . . . . . . . . . . . . 75 v SCHEDULES
Schedule 1.1 Excluded API Assets Schedule 10.3.3 API Facilities - To Be Surrendered TSR PAGING DISCLOSURE LETTER SCHEDULES - --------------------------------------- TSR Paging Disclosure Letter Schedule 5.1 Foreign Qualifications of TSR Paging TSR Paging Disclosure Letter Schedule 5.6 TSR Paging Leased Real Property TSR Paging Disclosure Letter Schedule 5.7 TSR Paging Contracts TSR Paging Disclosure Letter Schedule 5.8 Customers and Suppliers of TSR Paging TSR Paging Disclosure Letter Schedule 5.9 Operation of TSR Paging Business TSR Paging Disclosure Letter Schedule 5.10 TSR Paging Inventory TSR Paging Disclosure Letter Schedule 5.12 Consents of TSR Paging TSR Paging Disclosure Letter Schedule 5.13.1 TSR Paging FCC Licenses, TSR Paging FCC License Applications TSR Paging Disclosure Letter Schedule 5.13.3 Filings of TSR Paging TSR Paging Disclosure Letter Schedule 5.13.5 Sharing Agreements TSR Paging Disclosure Letter Schedule 5.13.7 Construction TSR Paging Disclosure Letter Schedule 5.14.1 TSR Paging Financial Statements TSR Paging Disclosure Letter Schedule 5.14.2 Receivables of TSR Paging TSR Paging Disclosure Letter Schedule 5.16 Litigation of TSR Paging TSR Paging Disclosure Letter Schedule 5.20 Proprietary Rights of TSR Paging TSR Paging Disclosure Letter Schedule 5.22 Tax Matters TDS DISCLOSURE LETTER SCHEDULES - ------------------------------- TDS Disclosure Letter Schedule 6.1 Foreign Qualifications of API TDS Disclosure Letter Schedule 6.3 Subsidiaries of API TDS Disclosure Letter Schedule 6.6 API Leased Real Property TDS Disclosure Letter Schedule 6.7 API Contracts TDS Disclosure Letter Schedule 6.8 Customers and Suppliers of API TDS Disclosure Letter Schedule 6.9 Operation of API Business TDS Disclosure Letter Schedule 6.10 API Inventory TDS Disclosure Letter Schedule 6.12 Consents of API TDS Disclosure Letter Schedule 6.13.1 API FCC Licenses, API FCC License Applications TDS Disclosure Letter Schedule 6.13.3 Filings of API TDS Disclosure Letter Schedule 6.13.5 Sharing Agreements TDS Disclosure Letter Schedule 6.13.7 Construction TDS Disclosure Letter Schedule 6.14.1 API Financial Statements TDS Disclosure Letter Schedule 6.14.2 Receivables of API TDS Disclosure Letter Schedule 6.14.3 SEC Reports TDS Disclosure Letter Schedule 6.16 Litigation of API vi TDS Disclosure Letter Schedule 6.20 Proprietary Rights of API TDS Disclosure Letter Schedule 6.22 Tax Matters EXHIBITS EXHIBIT A Exchange and Registration Rights Agreement EXHIBIT B TSR Wireless LLC Agreement EXHIBIT C Option Agreement EXHIBIT D TDS Non-Compete and Non-Solicitation Agreement EXHIBIT E-1 Form of legal opinion of counsel for TSR Paging EXHIBIT E-2 Form of legal opinion of regulatory counsel for TSR Paging EXHIBIT F-1 Form of legal opinion of counsel for TDS and API EXHIBIT F-2 Form of legal opinion of regulatory counsel for TDS and API EXHIBIT G Form of Transitional Services Agreement EXHIBIT H Wire Instructions EXHIBIT I 1998 API Capital Expenditure Budget
vii ASSET CONTRIBUTION AGREEMENT This ASSET CONTRIBUTION AGREEMENT, dated as of December 22, 1997, is by and among TSR PAGING INC., a Delaware corporation ("TSR PAGING"), TELEPHONE AND DATA SYSTEMS, INC., an Iowa corporation ("TDS" and, together with TSR Paging, the "TRANSFERORS"), and TSR WIRELESS LLC, a Delaware limited liability company ("TSR WIRELESS"). RECITALS WHEREAS, the Transferors each conduct businesses which, among other things, provide local and regional wireless messaging services in the United States; WHEREAS, TDS currently owns approximately 82 percent of the issued and outstanding capital stock of API; WHEREAS, TDS proposes to negotiate and enter into an agreement of merger (the "MERGER") with API pursuant to which a wholly owned subsidiary of TDS will acquire all the outstanding stock of API not currently owned by TDS or its Affiliates. WHEREAS, following the Merger the Contributing Parties desire to combine their respective businesses by contributing all of their respective assets, all of the liabilities of TSR Paging and certain, limited, liabilities of API to TSR Wireless in exchange for their Membership Interests (as defined in the TSR Wireless LLC Agreement) of TSR Wireless. WHEREAS, upon Closing, the Transferors and TSR Wireless shall effective as of the Closing Date, enter into that certain limited liability company operating agreement, (the "TSR WIRELESS LLC AGREEMENT"), a conformed copy of which is attached hereto as Exhibit B. WHEREAS, concurrently herewith, TDS and TSR Wireless have executed and delivered that certain option agreement (the "OPTION AGREEMENT"), a conformed copy of which is attached hereto as Exhibit C, pursuant to which TDS has granted TSR Wireless an exclusive option to acquire the API Note (as defined below). AGREEMENT NOW THEREFORE, in consideration of the premises and mutual covenants and promises contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS 1.1 DEFINED TERMS. As used herein, the terms below shall have the following meanings. Any of such terms, unless the context otherwise requires, may be used in the singular or plural, depending upon the reference. "ACTION" shall mean any action, claim, suit, litigation, administrative appeal, proceeding, labor dispute, arbitral action, governmental audit, inquiry, criminal prosecution, investigation or unfair labor practice charge or complaint. "AFFILIATE" of a Person shall mean a Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the first Person. "Control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of voting securities, by contract or credit arrangement, as trustee or executor, or otherwise, provided however neither the Investors nor any of their respective directors, officers, partners, members, stockholders or employees shall be an Affiliate of TSR Paging for the purposes of this Agreement. "AFTER-TAX BASIS" shall mean, with respect to any indemnification payment, an amount which is sufficient to compensate the indemnified party for any Damages after taking into account all increases in Taxes payable by the indemnified party as a result of the receipt of such payment (by reason of such payment being included in income, resulting in a reduction of tax basis, or otherwise increasing such Taxes payable by the indemnified party or reducing the amount of any refund of Taxes otherwise due to the indemnified party at any time), net of the present value of any deductions or other tax benefits arising from the event which gave rise to the indemnification obligation, to the extent such deductions or other tax benefits are actually realized by the indemnified party. "AMS" shall mean American Messaging Services, LLC, a Minnesota limited liability company. "ANCILLARY AGREEMENTS" shall mean the Exchange and Registration Rights Agreement, the TSR Wireless LLC Agreement and the TDS Non-Compete and Non- Solicitation Agreement and the Transitional Services Agreement, each substantially in the forms attached hereto as Exhibits A, B, D and G, respectively. "API" shall mean American Paging, Inc. a Delaware corporation. "API BUSINESS" shall mean the business and operations of API and its Subsidiaries relating generally to the provision of paging and wireless messaging services, the 2 sale and support of pagers and other telecommunications-related products and services and the provision of technical and repair services in connection therewith. "API EXCLUDED ASSETS" shall mean (i) all stock and other ownership interests of API and its Subsidiaries (other than AMS) in Subsidiaries of API (other than AMS), (ii) the API assets listed on Schedule 1.1, (iii) any Liabilities of TDS (or its Subsidiaries, other than API and its Subsidiaries) to API and its Subsidiaries; (iv) all insurance policies of API and its Subsidiaries, (v) all refunds of any Tax that API, or any member of an affiliated, consolidated, combined or unitary group of which API is also a member, paid pursuant to Section 6.22, Section 14.4.2 or Section 14.5.2. and (vi) any deferred Tax Liability as described in note 2 to the 1996 API Financial Statements. "API FINANCIAL STATEMENTS" shall mean (i) the audited consolidated balance sheet of API and its Subsidiaries (other than AMS) as of December 31, 1996 (and, following delivery thereof to TSR Paging, as of December 31, 1997) the related consolidated statements of income and cash flow of API and its Subsidiaries (other than AMS) for the year ended December 31, 1996, (and, following delivery thereof to TSR Paging, as of December 31, 1997), the audited balance sheet of AMS as of December 31, 1996 and the related statement of income and cash flow of AMS for the year ended December 31, 1996 (and, following delivery thereof to TSR Paging, for the year ended December 31, 1997) (collectively, the "API AUDITED FINANCIAL STATEMENTS"), and (ii) the unaudited consolidated balance sheet of API and its Subsidiaries (other than AMS) dated September 30, 1997, and the related unaudited consolidated statements of income of API and its Subsidiaries (other than AMS) for the nine (9) months ended September 30, 1997, the cash flow statement of API and its Subsidiaries (other than AMS) for the nine (9) months ended September 30, 1997, the unaudited balance sheet of AMS dated September 30, 1997, and the related unaudited statement of income of AMS for the nine (9) months ended September 30, 1997 and the cash flow statement of AMS for the nine (9) months ended September 30, 1997 (the "API UNAUDITED FINANCIAL STATEMENTS"). "API INTERCOMPANY LIABILITIES" shall mean all Liabilities of API (or its Subsidiaries) to TDS or its other Subsidiaries including, without limitation, Liabilities under the API Note. "API NOTE" shall mean that certain revolving credit agreement between TDS and API, effective as of January 1, 1994 and that certain loan note made by API in favor of TDS pursuant thereto. "AUTHORIZATION" of a Person shall mean any consent, approval, waiver or authorization of, expiration or termination of any waiting period requirement (including pursuant to the HSR Act) of, or filing, registration, qualification, declaration or designation with or by, any Governmental Authority, including the Final FCC Orders. 3 "BOOKS AND RECORDS" of any Contributing Party shall mean (a) all records and lists of that Contributing Party and its Subsidiaries pertaining to the TSR Paging Assets or the API Assets, as applicable, (b) all records and lists of that Contributing Party and its Subsidiaries pertaining to the Business of that Contributing Party, customers, suppliers or personnel of that Contributing Party and its Subsidiaries, (c) all product, business and marketing plans of that Contributing Party and its Subsidiaries and (d) all books, ledgers, files, reports, plans, drawings and operating records of every kind maintained by that Contributing Party and its Subsidiaries, but excluding the originals of that Contributing Party's minute books, stock books and tax returns, and books and records pertaining to API Excluded Assets. "BUSINESS DAY" shall mean a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required to close. "CLOSING DATE" shall mean (i) March 31, 1998, or (ii) if all of the conditions set forth in Articles XI and XII have not been satisfied or waived by March 31, 1998, the fifth Business Day following the satisfaction or waiver of such conditions which Business Day is also the last day of any monthly accounting period of TSR Paging, or (iii) such other date as the Transferors shall mutually agree upon. "CODE" shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations thereunder. "COMMUNICATIONS ACT" shall mean the Communications Act of 1934, as amended. "CONSENT" shall mean any consent, approval or waiver of a Person, not including the Authorization of any Governmental Authority. "CONTRACTS" of any Contributing Party shall mean all contracts, leases, licenses (other than Permits), commitments, understandings and agreements to which that Contributing Party or any of its Subsidiaries is a party or is bound, whether oral or written, including, without limitation, all reseller agreements, the Real Property Leases and the Personal Property Leases of that Contributing Party or its Subsidiaries. "CONTRIBUTING PARTIES" shall mean, on the one hand, TSR Paging, and on the other hand, API and its Subsidiaries and each shall be a "CONTRIBUTING PARTY." "DEFAULT" shall mean (i) a breach of or default under any Contract, FCC License, Real Property Lease or Personal Property Lease or other agreement to which a Person is party or subject, (ii) the occurrence of an event that with the passage of time or the giving of notice or both would constitute a breach of or default under any of the foregoing, or (iii) the occurrence of an event that with or without the passage of time or the giving of notice or both would give rise to a right of termination, renegotiation or acceleration under any of the foregoing. 4 "DGCL" shall mean the Delaware General Corporations Law, as amended. "DISCLOSURE LETTER" of a Transferor shall mean the letters delivered by such Transferor dated as of the date hereof which set forth certain exceptions to the representations and warranties contained in Articles V and VI and certain other information called for by this Agreement. Unless otherwise specified, each reference in this Agreement to any numbered Disclosure Letter Schedule of a Transferor is a reference to that numbered schedule which is included in the Disclosure Letter of such Transferor. "EMPLOYEE PLAN" of a Contributing Party shall mean any written plan, program, agreement, policy or arrangement (a "plan") maintained or contributed to by that Contributing Party or any of its Subsidiaries that is: (i) a welfare benefit plan within the meaning of Section 3(1) of ERISA; (ii) a pension benefit plan within the meaning of Section 3(2) of ERISA; (iii) a stock bonus, stock purchase, stock option, restricted stock, stock appreciation right or similar equity-based plan; or (iv) any other deferred-compensation, retirement, severance, welfare-benefit, COBRA, bonus, incentive or fringe-benefit plan. "ENCUMBRANCE" shall mean any claim, lien, pledge, option, charge, easement, security interest, deed of trust, mortgage, right-of-way, encroachment, building or use restriction, conditional sales agreement, encumbrance or other right of third parties, whether voluntarily incurred or arising by operation of law, and includes, without limitation, any agreement to give any of the foregoing in the future, and any contingent sale or other title retention agreement or lease in the nature thereof. "ENVIRONMENTAL LAWS" shall mean all Regulations which regulate or relate to the protection or clean-up of the environment, the use, treatment, storage, transportation, generation, manufacture, processing, distribution, handling or disposal of, or emission, discharge or other release or threatened release of, Hazardous Substances or otherwise dangerous substances, wastes, pollution or materials (whether, gas, liquid or solid), the preservation or protection of waterways, groundwater, drinking water, air, wildlife, plants or other natural resources, or the health and safety of Persons or property, including without limitation protection of the health and safety of employees. Environmental Laws shall include, without limitation, the Federal Insecticide, Fungicide, Rodenticide Act, Resource Conservation & Recovery Act, Clean Water Act, Safe Drinking Water Act, Atomic Energy Act, Occupational Safety and Health Act, Toxic Substances Control Act, Clean Air Act, Comprehensive Environmental Response, Compensation and Liability Act, Emergency Planning and Community Right-to-Know Act, Hazardous Materials Transportation Act and all analogous or related federal, state or local law, each as amended. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. "ERISA AFFILIATE" of any Contributing Party shall mean any entity which is (or at any relevant time was) a member of a "controlled group of corporations" with, under 5 "common control" with, or a member of an "affiliated service group" with, that Contributing Party as defined in Section 414(b), (c), (m) or (o) of the Code. "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended. "FACILITY" of any Contributing Party shall mean all real property or facility owned, leased or used anytime by that Contributing Party and/or its Subsidiaries (or a predecessor or Affiliate of such Contributing Party and/or its Subsidiaries). "FCC" shall mean the Federal Communications Commission or any successor body thereto. "FCC LICENSE" shall mean any license, construction permit, consent, certificate of compliance, approval or Authorization issued by the FCC authorizing operations in, INTER ALIA, Public Mobile Services pursuant to Part 22 of the FCC Rules, Personal Communications Services pursuant to Part 24 of the FCC Rules, Domestic Fixed Satellite Service pursuant to Part 25 of the FCC Rules, Private Land Mobile Radio Services pursuant to Part 90 of the FCC Rules (including one-way paging operations on exclusive and non-exclusive channels in the 929-930 MHz frequency band), and Fixed Microwave Radio Services pursuant to Part 101 of the FCC Rules, or other license, permit, consent, certificate of compliance, franchise approval or Authorization of the FCC or construction permit in respect of any of the foregoing. "FCC LICENSE APPLICATION" shall mean an application for an FCC License. "FCC RULES" shall mean the Rules and Regulations of the FCC promulgated under the Communications Act, as amended. "FINAL FCC ORDERS" shall mean a final, nonappealable order no longer subject to administrative or judicial reconsideration, review or appeal. "FINANCING OBLIGATIONS" shall mean (i) indebtedness for borrowed money, (ii) obligations evidenced by bonds, notes, debentures or similar instruments (other than surety or similar bonds), (iii) obligations under capitalized leases, (iv) obligations under conditional sale, title retention or similar agreements or arrangements creating an obligation with respect to the deferred purchase price of property (other than customary trade credit), and (v) obligations to guarantee any of the foregoing types of obligations on behalf of others. "FIXTURES AND EQUIPMENT" of any Contributing Party shall mean all of the furniture, fixtures, furnishings, machinery, automobiles, trucks, spare parts, supplies, equipment and other tangible personal property owned or used by that Contributing Party and its Subsidiaries. "GAAP" shall mean generally accepted accounting principles in the United States, consistently applied in accordance with past practice, as in effect on the date hereof. 6 "GOVERNMENTAL AUTHORITY" shall mean any governmental or political subdivision or department thereof, any governmental or regulatory body, commission, board, bureau, agency or instrumentality, or any court or arbitrator or alternative dispute resolution body, in each case whether domestic or foreign, federal, state or local. "HAZARDOUS SUBSTANCE" shall mean any pollutant, contaminant, chemical, waste and any toxic, infectious, carcinogenic, reactive, corrosive, ignitible or flammable chemical or chemical compound or hazardous substance, material or waste, whether solid, liquid or gas, including, without limitation, any quantity of asbestos in any form, urea formaldehyde, PCB's, radon gas, crude oil or any fraction thereof, all forms of natural gas, petroleum products or by-products or derivatives, radioactive substance or material, pesticide waste waters, sludges, slag and any other substance, material or waste that is subject to regulation, control or remediation under any Environmental Laws. "HSR ACT" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder. "INTERIM BALANCE SHEET" of a Contributing Party shall mean the unaudited consolidated balance sheet of that Contributing Party as of the Interim Balance Sheet Date, as included in the API Unaudited Financial Statements or the TSR Paging Unaudited Financial Statements, as applicable. "INTERIM BALANCE SHEET DATE" shall mean September 30, 1997. "INVENTORY" of a Contributing Party shall mean all of that Contributing Party's and its Subsidiaries' inventory held for resale, lease or repair including all pagers, phones, phone accessories, two-way radios and their related accessories, crystals, phone cards, spare parts, wrapping, supply and packaging items and similar items, in each case wherever the same may be located or in transit. "INVESTORS" shall mean TA Associates Group, Spectrum Equity Investors L.P. and St. Paul Venture Capital, Inc. "LEASEHOLD IMPROVEMENTS" shall mean all leasehold improvements situated in or on the real property covered by the Real Property Leases. "LIABILITIES" shall mean any direct or indirect liability, indebtedness, obligation, responsibility, commitment, expense, claim, loss, damage, deficiency, guaranty or endorsement of or by any Person, whether fixed or unfixed, choate or inchoate, liquidated or unliquidated, known or unknown, secured or unsecured, accrued or unaccrued, joint, several, joint and several, due or to become due, vested or unvested, executory, determined, determinable, absolute, contingent, matured, unmatured or other and whether or not required by GAAP to be set forth in a financial statement of a Person including, without limitation, all Financing Obligations of such Person. 7 "MATERIAL ADVERSE CHANGE", in respect of any Contributing Party, shall mean any significant and substantial adverse change in the financial condition, business or operations of the Business of that Contributing Party and its Subsidiaries to be acquired hereunder or on the ability of such Contributing Party to consummate the transactions contemplated hereby or by the Ancillary Agreements or the Merger. "MATERIAL ADVERSE EFFECT", in respect of any Contributing Party, shall mean any significant and substantial adverse effect on the financial condition, business or operations of the Business of that Contributing Party and its Subsidiaries to be acquired hereunder or on the ability of such Contributing Party to consummate the transactions contemplated hereby or by the Ancillary Agreements, the Merger Agreement or the Option Agreement. "NET MONTHLY PAGER REVENUES" of any Contributing Party shall mean all revenues from pagers of such Contributing Party and its Subsidiaries whose assets are being contributed (other than AMS in the case of API) recognizable in the relevant month in accordance with GAAP limited to recurring airtime charges, recurring pager rental charges, recurring ancillary service charges, and recurring debit/credit adjustments but excluding all equipment sales, one time or non-recurring charges, accessory charges, late fees and connection fees less the aggregate sums paid or payable to third party airtime vendors for such month by such Contributing Party for such month. "NET WORKING CAPITAL" shall mean the sum of all current assets of a Contributing Party and its Subsidiaries (other than AMS in the case of API) including cash, Inventory and accounts receivable less current liabilities of such Contributing Party and its Subsidiaries. "ORDER" shall mean any judgment, decision, consent decree, injunction, ruling or order of any Governmental Authority that is binding on any Person or its property under applicable law. "PAGERS IN SERVICE" of a Contributing Party shall mean Closing Date activated pagers in service of that Contributing Party and its Subsidiaries (whether direct or indirect through resellers, dealers or other agents) billable for the subsequent month (and collectible for the purposes of calculating the adjustment set forth in Section 3.2), excluding any pagers that are not on billing or are billed at $0.00 (including, without limitation, pagers with employees and demo or spare pagers with customers) or in respect of which the customer's account is more than 90 days delinquent and for which no payment has been received for 60 days. "PERMITS" shall mean in respect of any Contributing Party, all licenses, permits, approvals, authorizations or consents, certificates of compliance, franchise approvals or other similar authorizations of any Governmental Authority necessary for the conduct of the Business of that Contributing Party and its Subsidiaries, other than FCC Licenses. 8 "PERMITTED ENCUMBRANCES" shall mean (i) minor liens which in aggregate are not substantial in amount, do not materially detract from the value or transferability of the property or assets subject thereto, (ii) liens arising pursuant to Personal Property Leases of a Contributing Party, and (iii) in the case of the TSR Paging Assets, liens granted pursuant to the TSR Paging Credit Agreement and in respect of any TSR Paging Assumed Liabilities. "PERSON" shall mean any individual, partnership, corporation, trust, association, unincorporated organization, government or any department or agency thereof or any other entity. "PERSONAL PROPERTY LEASES" of any Contributing Party shall mean all of the existing leases with respect to the personal property of that Contributing Party and its Subsidiaries. "PROPRIETARY RIGHTS" of any Party shall mean that Contributing Party's and its Subsidiaries' (i) domestic and foreign registrations of trademarks and other marks, trade names and trade rights, (ii) pending applications for such registrations, (iii) patents and applications therefor, (iv) trademarks and other marks, trade names and other trade rights whether or not registered, (v) copyrights and registrations thereof, (vi) trade secrets, designs, plans, specifications, technical information and other proprietary rights and (vii) rights under any licenses to such Contributing Party or its Subsidiaries to use any copyrights, marks, trade names, trade rights, patents or other proprietary rights. "PUC" shall mean any state public utilities commission, public service commission or other similar agency. "REAL PROPERTY LEASES" of any Contributing Party shall mean all real property leases entered into by such Contributing Party or any of its Subsidiaries. "REGULATIONS" shall mean any laws, statutes, ordinances, regulations, rules, notice requirements, court decisions, agency guidelines, principles of law and orders of any foreign, federal, state or local government and any other governmental department or agency, including without limitation Environmental Laws, energy, motor vehicle safety, public utility, zoning, building and health codes, occupational safety and health and laws respecting employment practices, employee documentation, terms and conditions of employment and wages and hours. "REPRESENTATIVE" of any Person shall mean any officer, director, principal, attorney, agent, analyst, consultant or other representative of such Person. "RELEASE" shall mean and include any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing into the environment or the workplace of any Hazardous Substance, and otherwise as defined in any Environmental Law. 9 "SEC" shall mean the Securities and Exchange Commission or any successor body thereto. "SECURITIES ACT" shall mean the Securities Act of 1933, as amended. "SUBSIDIARY" shall mean each corporation or other Person in which a Person owns or controls, directly or indirectly, capital stock or other equity interests representing at least 50% of the outstanding voting stock or other equity interests. Unless otherwise specified, for the purposes of this Agreement AMS shall be considered a Subsidiary of TDS and API. "TAX" shall mean any federal, state, local, foreign or other tax, levy, impost, fee, assessment or other government charge, including without limitation income, estimated income, business, occupation, franchise, property, payroll, personal property, sales, transfer, use, employment, commercial rent, occupancy, franchise or withholding taxes, and any premium, including without limitation interest, penalties and additions in connection therewith. "TRANSFER" shall mean and includes the act of selling, giving, transferring, creating a trust (voting or otherwise), assigning or otherwise disposing of, pledging, hypothecating or otherwise transferring as security (and correlative words shall have correlative meanings). "TSR PAGING BUSINESS" shall mean the business and operations of TSR Paging relating generally to the provision of paging and wireless messaging services, the sale and support of pagers, cellphones, PCS phones, 2-way radios and accessories and other telecommunications-related products and services and the provision of technical and repair services in connection therewith, as well as the provision of long distance telephone resale services. "TSR PAGING EXCLUDED ASSETS" shall mean all refunds of any Tax that TSR Paging, any shareholder of TSR Paging and any member of an affiliated, consolidated, combined or unitary group of which TSR Paging is also a member, paid pursuant to Section 5.22, Section 14.4.1 or Section 14.5.2. "TSR PAGING FINANCIAL STATEMENTS" shall mean (i) the audited balance sheet of TSR Paging as of December 31, 1996, (and, following delivery thereof to TDS, as of December 31, 1997), and the related statement of income and cash flow of TSR Paging for the year ended December 31, 1996 (and, following delivery thereof to TDS, as of December 31, 1997), (the "TSR PAGING AUDITED FINANCIAL STATEMENTS"), and (ii) the unaudited balance sheet of TSR Paging dated September 30, 1997, and the related unaudited statement of income of TSR Paging for the nine (9) months ended September 30, 1997 and the cash flow statement of TSR Paging for the nine (9) months ended September 30, 1997 (the "TSR PAGING UNAUDITED FINANCIAL STATEMENTS"). 10 1.2 OTHER DEFINED TERMS. The following terms shall have the meanings defined for such terms in the Sections set forth below: Term Section ----- ------- "API ASSETS" Section 2.3 "API ASSUMED LIABILITIES" Section 2.4 "API ASSUMPTION DOCUMENT" Section 4.3.2 "API PCD TAX RETURNS" Section 6.22.1 "API CONTRACTS" Section 6.7 "API EXCLUDED LIABILITIES" Section 2.5 "API FACILITIES" Section 6.21.1 "API FCC LICENSE APPLICATION" Section 6.13.2 "API FCC LICENSE" Section 6.13.1 "API INVENTORY" Section 6.10 "API LEASED REAL PROPERTY" Section 6.6 "API 929 MHz EXCLUSIVE FREQUENCY" Section 6.13.1(iii) "API PCD TAXES" Section 6.22.1 "API PERSONAL PROPERTY LEASES" Section 6.7.1 "API PAGER SHORTFALL" Section 3.2.2 "API REVENUE SHORTFALL" Section 3.2.2 "API WITHHOLDING TAXES" Section 6.22.1 "ASSETS" Section 13.1 "AUDITOR" Section 3.2.5 "AUGUST CERTIFICATE" Section 10.9 "TSR WIRELESS INDEMNITEES" Section 14.4.1 "TSR WIRELESS" Preamble "CLAIM NOTICE" Section 14.4.5 "CLAIM" Section 14.4.5 "CLOSING" Section 4.1 "CONFIDENTIAL INFORMATION" Section 15.12.1 "CONSULTANT" Section 10.1.2 "DAMAGES" Section 14.4.1 "EXCHANGE ACT" Section 6.14.3 "EXTENSION OPTION" Section 15.1.1(v) "FCC 929 MHz EXCLUSIVE FREQUENCY" Section 5.13.1(iii) "FICA" Section 9.2.5 "FUTA" Section 9.2.5 "INDEMNITEES" Section 14.4.2 "INVESTMENT DOCUMENTS" Section 5.7.1 "IRS" Section 5.22.2 "JULY CERTIFICATE" Section 10.9 "JUNE CERTIFICATE" Section 10.9 "MEMBERSHIP INTERESTS" Recitals 11 "MERGER" Recitals "MIS CHARGES Section 2.4.2 "OFFER DOCUMENTS" Section 10.6.2 "OFFER" Section 10.6.1 "OPTION AGREEMENT" Recitals "OTHER FILINGS" Section 10.9.1 "PROPOSED API ACQUISITION TRANSACTION" Section 10.1 "SCHEDULE 14D-9" Section 10.7.1 "SEC REPORTS" Section 6.14.3 "SHAREHOLDERS' MEETING" Section 10.9 "SHARES" Section 10.6.1 "TDS" Preamble "TDS INDEMNITEES" Schedule 14.4.1 "THIRD PARTY NOTICE" Section 14.4.5 "TRANSFERORS" Preamble "TRANSFER TAXES" Section 14.5.2 "TSR PAGING" Preamble "TSR PAGING ASSETS" Section 2.1 "TSR PAGING ASSUMED LIABILITIES" Section 2.2 "TSR PAGING ASSUMPTION DOCUMENT" Section 4.2 "TSR PAGING PCD TAX RETURNS" Section 5.22.1 "TSR PAGING CONTRACTS" Section 5.7 "TSR PAGING CREDIT AGREEMENT" Section 5.7.1 (xii) "TSR PAGING EMPLOYEES" Section 9.3.1 "TSR PAGING FACILITIES" Section 5.21.1 "TSR PAGING FCC LICENSE APPLICATION" Section 5.13.2 "TSR PAGING FCC LICENSE" Section 5.13.1 "TSR PAGING INDEMNITEES" Section 14.4.2 "TSR PAGING INVENTORY" Section 5.6 "TSR PAGING LEASED REAL PROPERTY" Section 5.6 "TSR PAGING 929 MHz EXCLUSIVE FREQUENCY" Section 5.13.1(iii) "TSR PAGING PCD TAXES" Section 5.22.1 "TSR PAGING PERSONAL PROPERTY LEASES" Section 5.7.1 "TSR PAGING PAGER SHORTFALL" Section 3.2.1 "TSR PAGING REVENUE SHORTFALL" Section 3.24.1 "TSR PAGING WITHHOLDING TAXES" Section 5.22.1 "TSR WIRELESS" Recitals "UNIT ADJUSTMENTS" Section 3.2.3 12 "UNITS" Section 3.2.3 "WIRE TRANSFER" Section 15.1.1(v) ARTICLE II CONTRIBUTION OF ASSETS 2.1 CONTRIBUTION OF TSR PAGING ASSETS. Upon the terms and subject to the conditions contained herein, at the Closing, TSR Paging will convey, transfer, assign and deliver to TSR Wireless, and TSR Wireless will acquire from TSR Paging, all of the right, title and interest of TSR Paging in and to properties, assets and rights of any kind, whether tangible or intangible, real or personal, other than the TSR Paging Excluded Assets (collectively, the "TSR PAGING ASSETS"), including, without limitation, all of TSR Paging's right, title and interest in the following: 2.1.1 All accounts and notes receivable (whether current or noncurrent), refunds, deposits, prepayments or prepaid expenses of TSR Paging; 2.1.2 All cash and cash equivalents of TSR Paging on hand or in banks, certificates of deposit, money market funds and securities; 2.1.3 All TSR Paging Contracts; 2.1.4 All TSR Paging Real Property Leases and all TSR Paging Personal Property Leases; 2.1.5 Intentionally omitted. 2.1.6 All Leasehold Improvements of TSR Paging; 2.1.7 All Fixtures and Equipment of TSR Paging; 2.1.8 All TSR Paging Inventory; 2.1.9 All Books and Records of TSR Paging; 2.1.10 All Proprietary Rights of TSR Paging; 2.1.11 All Permits of TSR Paging; 2.1.12 All computer software of TSR Paging, to the extent transferable; 2.1.13 All insurance policies of TSR Paging, to the extent assignable; 13 2.1.14 All available supplies, sales literature, promotional literature, customer, supplier and distributor lists, art work, display units, telephone and fax numbers and purchasing records related to the TSR Paging Business; 2.1.15 All rights under or pursuant to all warranties, representations and guarantees made by suppliers in connection with the TSR Paging Assets or services furnished to TSR Paging to the extent such warranties, representations and guarantees are assignable; 2.1.16 All claims, causes of action, choses in action, rights of recovery and rights of set-off of any kind relating to the TSR Paging Assets, the TSR Paging Business or the TSR Paging Assumed Liabilities, against any Person, including, without limitation, any liens, security interests, pledges or other rights to payment or to enforce payment in connection with products delivered or services rendered by TSR Paging on or prior to the Closing Date; and 2.1.17 All FCC Licenses, FCC License Applications owned or used in the operation of the TSR Paging Business held by TSR Paging including, without limitation, those FCC Licenses and FCC License Applications listed on TSR Paging Disclosure Letter Schedule 5.13. 2.2 ASSUMPTION OF TSR PAGING LIABILITIES. Upon the terms and subject to the conditions contained herein, at the Closing, TSR Wireless shall assume and become responsible for all Liabilities of TSR Paging (the "TSR PAGING ASSUMED LIABILITIES"), including, without limitation: 2.2.1 All Liabilities accruing, arising out of, or relating to events or occurrences under the TSR Paging FCC Licenses, TSR Paging FCC License Applications, TSR Paging Contracts, TSR Paging Real Property Leases and TSR Paging Personal Property Leases; 2.2.2 All accounts payable, accrued expenses and other current Liabilities of TSR Paging; 2.2.3 All Financing Obligations of TSR Paging; 2.2.4 All Liabilities arising out of TSR Wireless's employment of all employees of TSR Paging, including all Liabilities under any Employee Plan of TSR Paging or any ERISA Affiliate of TSR Paging; and 2.2.5 All Liabilities for Taxes of TSR Paging except any Tax for which TSR Paging, any shareholder of TSR Paging, or any member of an affiliated, consolidated, combined or unitary group of which TSR Paging is also a member, is liable pursuant to Section 5.22, Section 14.4.1 or Section 14.5.2. 14 2.3 CONTRIBUTION OF API ASSETS. Upon the terms and subject to the conditions contained herein and subject to Section 2.6, at the Closing, TDS shall cause API and each of its Subsidiaries to convey, transfer, assign and deliver to TSR Wireless, and TSR Wireless will acquire from API and such Subsidiaries, all of the right, title and interest of API and such Subsidiaries in and to properties, assets and rights of any kind, whether tangible or intangible, real or personal, except for the API Excluded Assets (collectively, the "API ASSETS"), including, without limitation, all of API's and such Subsidiaries' right, title and interest in the following: 2.3.1 All accounts and notes receivable (whether current or noncurrent), refunds, deposits, prepayments or prepaid expenses of API and its Subsidiaries (except in connection with insurance policies of API or its Subsidiaries); 2.3.2 All cash and cash equivalents of API and its Subsidiaries on hand, in the TDS cash management system, or in banks, certificates of deposit, money market funds and securities, including such cash as is necessary to ensure that the consolidated Net Working Capital, excluding any API Intercompany Liabilities (but including the MIS Charges), of API and its Subsidiaries on the Closing Date calculated in accordance with GAAP on a consistent basis with current practice is $9,800,000 and, if necessary, TDS shall advance or contribute to API such cash as is necessary to enable API to comply with this Section 2.3.2; 2.3.3 All API Contracts, unless rejected by TSR Paging pursuant to Section 2.6.2; 2.3.4 All API Real Property Leases and all API Personal Property Leases; 2.3.5 Intentionally omitted; 2.3.6 All Leasehold Improvements of API and its Subsidiaries; 2.3.7 All Fixtures and Equipment of API and its Subsidiaries; 2.3.8 All API Inventory; 2.3.9 All Books and Records of API and its Subsidiaries; 2.3.10 All Proprietary Rights of API and its Subsidiaries; 2.3.11 All Permits of API and its Subsidiaries to the extent transferable; 2.3.12 All computer software of API and its Subsidiaries to the extent transferable; 2.3.13 Intentionally omitted; 15 2.3.14 All available supplies, sales literature, promotional literature, customer, supplier and distributor lists, art work, display units, telephone and fax numbers and purchasing records related to the API Business; 2.3.15 All rights under or pursuant to all warranties, representations and guarantees made by suppliers in connection with the API Assets or services furnished to API or its Subsidiaries, to the extent such warranties, representations and guarantees are assignable; 2.3.16 All claims, causes of action, choses in action, rights of recovery and rights of set-off of any kind relating to the API Assets or the API Assumed Liabilities, against any Person, including, without limitation, any liens, security interests, pledges or other rights to payment or to enforce payment in connection with products delivered or services rendered by API or its Subsidiaries on or prior to the Closing Date; 2.3.17 All FCC Licenses and FCC License Applications owned or used in the operation of the API Business held by API, API's Subsidiaries (including but not limited to Advanced Wireless Messaging, Inc.), TDS or any Subsidiary of TDS, including, without limitation, those FCC Licenses and FCC License Applications listed on TDS Disclosure Letter Schedule 6.13; and 2.3.18 All right, title and interest of API in AMS unless rejected by TSR Paging pursuant to Section 2.6.2. 2.4 ASSUMPTION OF API LIABILITIES. Upon the terms and subject to the conditions contained herein and subject to Section 2.6, at the Closing, TSR Wireless shall assume the following, and only the following, Liabilities of API and its Subsidiaries (the "API ASSUMED LIABILITIES"); 2.4.1 All Liabilities accruing, arising out of, or relating to events or occurrences happening after the Closing Date under (i) the API FCC Licenses and the API FCC License Applications; (ii) Contracts listed on TDS Disclosure Letter Schedules 6.6 and 6.7 and not rejected by TSR Paging pursuant to Section 2.6.2, or under Contracts which are not listed on TDS Disclosure Letter Schedules 6.6 and 6.7, but which TSR Paging, in its sole discretion, elects to accept and assume; and (iii) Real Estate Leases and Personal Property Leases; but not including any Liability for any Default under any FCC License, FCC License Application or Contract, Real Estate Lease or Personal Property Lease in each case, of API or any of its Subsidiaries occurring on or prior to the Closing Date or occurring after the Closing Date as a result of actions or omissions prior to the Closing Date; and 2.4.2 All of API's and its Subsidiaries' current liabilities set forth on the API Interim Balance Sheet or incurred after the Interim Balance Sheet Date (i) in the ordinary course of business, (ii) consistent with amounts historically incurred and (iii) in compliance with the terms of this Agreement other than (x) the API Intercompany Liabilities, but including monthly service charges of TDS for API's use of certain computer facilities and 16 processing services of TDS ("MIS CHARGES"), (y) any Tax excluded pursuant to Section 2.5.2 and (z) any Liabilities excluded pursuant to Section 2.5.1 to the extent not included in current liabilities. 2.5 API LIABILITIES. Notwithstanding any other provision of this Agreement, TSR Wireless shall not assume, or otherwise be responsible for, (i) any Liabilities of TDS or (ii) except for the Assumed Liabilities expressly specified in Section 2.4, any Liabilities of API or any of its Subsidiaries, in each case whether liquidated or unliquidated, or known or unknown, whether arising out of occurrences prior to, at or after the date hereof ("API EXCLUDED LIABILITIES"), which API Excluded Liabilities include, without limitation: 2.5.1 Any Liabilities to or in respect of any employees or former employees of API or any of its Subsidiaries including without limitation (i) any employment agreement, whether or not written, between API or any of its Subsidiaries and any Person, (ii) any Liability under any Employee Plan at any time maintained, contributed to or required to be contributed to by or with respect to API or any of its Subsidiaries, or any ERISA Affiliate of API or any of its Subsidiaries or TDS or under which API or any of its Subsidiaries or TDS may incur any Liability, or any contributions, benefits or Liabilities therefor, or any Liability with respect to API's or any of its Subsidiaries withdrawal or partial withdrawal from or termination of any Employee Plan and (iii) any claim of an unfair labor practice, or any claim under any state unemployment compensation or worker's compensation law or regulation or under any federal or state employment discrimination law or regulation, which shall have been asserted on or prior to the Closing Date or is based on acts or omissions which occurred on or prior to the Closing Date. 2.5.2 Any Liability of API or any of its Subsidiaries in respect of any Tax except any Tax Liability (other than income tax) included within current liabilities described in Section 2.4.2. 2.5.3 Any Liability arising from any injury to or death of any Person or damage to or destruction of any property, whether based on negligence, breach of warranty, strict liability, enterprise liability or any other legal or equitable theory arising from services performed by or on behalf of API or any of its Subsidiaries or any other Person or entity on or prior to the Closing Date; 2.5.4 Any Liability of API or any of its Subsidiaries arising out of or related to any Action against or any Action which adversely affects the API Assets and which shall have been asserted on or prior to the Closing Date or to the extent the basis of which shall have arisen on or prior to the Closing Date; 2.5.5 Any Liability of API or any of its Subsidiaries resulting from entering into, performing its obligations pursuant to or consummating the transactions contemplated by, this Agreement except as otherwise provided in Sections 3.3 and 14.5.2; 17 2.5.6 Any Financing Obligations of API or its Subsidiaries; 2.5.7 The API Intercompany Liabilities except for the MIS Charges; 2.5.8 Any Liability for violation of any Environmental Law; 2.5.9 Any Liability in respect of any Facility formerly owned, leased or occupied by API or any of its Subsidiaries or any predecessor thereto; and 2.5.10 Any Liability arising in respect of any Claim by any shareholder of TDS or API (except for the MIS Charges). 2.6 ASSETS AND LIABILITIES OF AMS; REJECTED ASSETS 2.6.1 AMS. Notwithstanding any other provision of this Agreement, TSR Wireless shall not assume any API Assets which are assets of AMS or any Liabilities of AMS other than Liabilities to the BIRD Foundation which constitute Liabilities of API assumed hereunder, which shall remain with AMS following the Closing. 2.6.2 REJECTED API ASSETS. TSR Paging in its sole discretion may reject (i) any API Assets not listed or described on the Disclosure Schedule, except those not required to be so disclosed, (ii) any API Contract with a third party airtime vendor, provided however that TSR Wireless shall enter into a "back to back" contract with API to resell such airtime on the same financial terms as the rejected third party airtime vendor Contracts, but otherwise on terms similar to TSR Paging's usual terms, and (iii) the interests of API (and any of its Subsidiaries) in AMS, and any Liabilities associated therewith by notice to TDS at any time on or prior to the Closing Date, in which case any such API Assets shall be excluded from the sale hereunder and the definition of API Assets shall be modified accordingly. ARTICLE III ISSUANCE OF MEMBERSHIP INTERESTS 3.1 ISSUANCE OF MEMBERSHIP INTERESTS. Unless TSR Paging shall have exercised the Extension Option, in which case the provisions of Section 3.4 shall apply and the provisions of this Section 3.1 shall not apply, on the Closing Date, TSR Wireless shall issue to the Transferors an aggregate of 20,000,000 Units of TSR Wireless (the "UNITS"), which Units shall represent Membership Interests of TSR Wireless in exchange for the Assets which are being contributed to, and the Liabilities being assumed by, TSR Wireless pursuant to this Agreement, which Units shall reflect the total value of the assets contributed to, and the Liabilities assumed by, TSR Wireless but not any other Contributed Property (as defined in the TSR Wireless LLC Agreement) already contributed to TSR Wireless on or before Closing and 18 which shall be apportioned, subject to adjustment as set forth in Section 3.2, between the Transferors as follows: 3.1.1 to TSR Paging, 14,000,000 Units, and 3.1.2 to TDS, 6,000,000 Units. 3.2 POST-CLOSING ADJUSTMENT. 3.2.1 CERTIFICATION BY TSR PAGING. Within forty-five (45) Business Days after the Closing Date, TSR Paging shall certify to TDS and TSR Wireless (i) the number of Pagers in Service of TSR Paging as of the Closing Date and (ii) the Net Monthly Pager Revenue of TSR Paging for the month ended the Closing Date. If the number of Pagers in Service of TSR Paging as of the Closing Date is less than 1,260,000, and/or the Net Monthly Pager Revenue of TSR Paging for the month ended on the Closing Date is less than $5,500,000, then the certificate shall state the shortfall in the number of Pagers in Service of TSR Paging ("TSR PAGING PAGER SHORTFALL") and the shortfall in the Net Monthly Pager Revenue of TSR Paging ("TSR PAGING REVENUE SHORTFALL"). The provisions of this Section 3.2.1 shall not be deemed to diminish the rights of TSR Wireless or TDS under Section 14.4. 3.2.2 CERTIFICATION BY TDS. Within forty-five (45) Business Days after the Closing Date, TDS shall certify to TSR Paging and TSR Wireless (i) the number of Pagers in Service of API for the month ended the Closing Date and (ii) the Net Monthly Pager Revenue of API as of the Closing Date. If the number of Pagers in Service of API as of the Closing Date is less than 775,000, and/or the Net Monthly Pager Revenues of API for the month ended the Closing Date is less than $5,800,000, then the certificate shall state the shortfall in the number of Pagers in Service of API ("API PAGER SHORTFALL") and the shortfall in the Net Monthly Pager Revenues of API ("API REVENUE SHORTFALL"). The provisions of this Section 3.2.2 shall not be deemed to diminish the rights of TSR Wireless or TSR Paging under Section 14.4. 3.2.3 UNIT ADJUSTMENT. Promptly, and in any event within five (5) Business Days following receipt of the certificates referred to above, TSR Wireless shall calculate and certify to the Transferors the adjustments to be made to the Units allocated to each Transferor hereunder, as of the Closing Date, to be made as follows (the "UNIT ADJUSTMENTS"): (i) The number of Units allocated to TSR Paging hereunder on the Closing shall be reduced by the greater of (a) the product of the TSR Paging Pager Shortfall multiplied by 9.828, and (b) the product of the TSR Paging Revenue Shortfall multiplied by 1.770, and the excess Units and the Membership Interests represented by the Units shall be cancelled by TSR Wireless, effective as of the Closing Date; and 19 (ii) The number of Units allocated to TDS hereunder on the Closing shall be reduced by the greater of (a) the product of the API Pager Shortfall (if greater than 77,500) multiplied by 9.828, and (b) the product of the API Revenue Shortfall (if greater than $580,000) multiplied by 1.770, and the excess Units and the Membership Interests represented by the Units shall be cancelled by TSR Wireless, effective as of the Closing Date. 3.2.4 DISPUTED UNIT ADJUSTMENT. If either Transferor shall disagree with the Unit Adjustment, which disagreement shall be limited to the number of Pagers in Service or the Net Monthly Pager Revenue, the Pager Shortfall or the Revenue Shortfall certified by the other Transferor or TSR Wireless's failure to apply the standards and correctly perform the calculations of the Unit Adjustments set forth in Section 3.2.3, it shall notify the other Transferor and TSR Wireless of such disagreement in writing specifying in detail the particulars of such disagreement within twenty (20) Business Days after receipt of the applicable certificate. 3.2.5 RESOLUTION OF DISPUTED UNIT ADJUSTMENT AMOUNT. The Transferors shall use their reasonable efforts for a period of thirty (30) calendar days after (i) the delivery of a notice pursuant to Section 3.2.4 above (or such longer period as the Transferors shall mutually agree upon), or after Closing if Section 3.4 is applicable, to resolve any disagreements raised by a Transferor with respect to the number of Pagers in Service, the Net Monthly Pager Revenue, the Pager Shortfall or the Revenue Shortfall of the other Transferor (as set forth in the June Certificate, if applicable) or the calculation of the Unit Adjustments or the Unit Allocation pursuant to Section 3.4, as the case may be. If, at the end of such period, the Transferors and TSR Wireless are unable to resolve all such disagreements, Arthur Andersen LLP (the "AUDITOR") shall resolve any remaining disagreements. The Auditor shall determine whether the Pagers in Service, the Net Monthly Pager Revenue, the Pager Shortfall and the Revenue Shortfall were correctly certified by the relevant Transferor, only with respect to the remaining differences submitted to the Auditor, and whether and to what extent, if any, the Unit Adjustment requires further adjustment. The determination of the Auditor shall be final, binding and conclusive on the parties. The Transferors and TSR Wireless shall use their reasonable efforts to cause the Auditor to make its determination within thirty (30) calendar days of accepting its selection. Within ten (10) calendar days after the date of determination of the Auditor, the Units of the Transferors allocated hereunder shall be adjusted by the Unit Adjustment as determined by the Auditor in the manner set forth in Section 3.2.3 and the Membership Interest represented by the Units shall be correspondingly adjusted. The fees and expenses of the Auditor shall be borne by the Transferors equally or as otherwise determined by the Auditor. 3.3 CLOSING COSTS; TRANSFER FEES. The cost of any surveys, title reports or title searches, and the recording or filing of all applicable conveyancing instruments incurred by reason of the transfer of Assets hereunder will be paid by the TSR Wireless upon the Closing. 20 3.4 UNIT ALLOCATION FOLLOWING EXERCISE OF EXTENSION OPTION. If TSR Paging shall have exercised the Extension Option, on the Closing Date, TSR Wireless shall issue 14,000,000 Units to TSR Paging and shall issue to TDS the number of Units as results from subtracting from 6,000,000 the greater of (i) the product of the API Pager Shortfall as at June 30, 1998 multiplied by 9.828 and (ii) the product of the API Revenue Shortfall for the month ended June 30, 1998 multiplied by 1.770, each as set forth on the June Certificate, subject to adjustment after Closing as set forth in Section 3.2.5 upon the request of either Transferor on the Closing Date. ARTICLE IV CLOSING 4.1 CLOSING. The Closing of the transactions contemplated herein (the "CLOSING") shall be held at 10:00 a.m. local time on the Closing Date at the offices of Latham & Watkins, 885 Third Avenue, New York, New York, unless the parties hereto otherwise agree. 4.2 CONVEYANCES BY TSR PAGING AT CLOSING. 4.2.1 INSTRUMENTS AND POSSESSION. To effect the acquisition and assumption referred to in Section 2.1, TSR Paging will, at the Closing, execute and deliver to TSR Wireless: (i) one or more instruments of conveyance conveying in the aggregate all of TSR Paging's owned personal property included in the TSR Paging Assets; (ii) the Exchange and Registration Rights Agreement duly executed by the Stockholders and the Investors (as defined therein) in substantially the form attached as Exhibit A (the "EXCHANGE AND REGISTRATION RIGHTS AGREEMENT"); (iii) Assignments of Lease with respect to the TSR Paging Real Property Leases and the TSR Paging Personal Property Leases; (iv) an Assignment of the TSR Paging Contracts; (v) Assignments of those Proprietary Rights included in the TSR Paging Assets, in recordable form to the extent necessary to assign such rights; (vi) such of the Ancillary Agreements to which TSR Paging is a party; 21 (vii) such other instruments as shall be reasonably requested by TSR Wireless to vest in TSR Wireless such right, title or interest in and to the TSR Paging Assets in accordance with this Agreement; (viii) the certificates, opinions of counsel and other documents to be delivered by TSR Paging described in Article XII; and (ix) the Consents and Authorizations of TSR Paging. 4.2.2 ASSUMPTION AND OTHER DOCUMENTS. To effect the acquisition and assumption referred to in Section 2.2, at the Closing, TSR Wireless shall execute and deliver to TSR Paging: (i) an instrument of assumption evidencing TSR Wireless's assumption, pursuant to Section 2.2, of the TSR Paging Assumed Liabilities (the "TSR PAGING ASSUMPTION DOCUMENT"); (ii) the Ancillary Agreements, duly signed by TSR Wireless; and (iii) such other instruments as shall be reasonably requested by TSR Paging to evidence TSR Wireless's assumption of the Assumed Liabilities in accordance with this Agreement. 4.3 CONVEYANCES BY TDS AT CLOSING. 4.3.1 INSTRUMENTS AND POSSESSION. To effect the acquisition and assumption referred to in Section 2.3, TDS will, or will cause API or its Subsidiaries, as appropriate, to, at the Closing, execute and deliver to TSR Wireless: (i) one or more instruments of conveyance conveying in the aggregate all of API's and its Subsidiaries' owned personal property included in the API Assets: (ii) Assignments of Lease with respect to the API Real Property Leases and the API Personal Property Leases; (iii) an Assignment of the API Contracts; (iv) Assignments of those Proprietary Rights included in the API Assets, in recordable form to the extent necessary to assign such rights; (v) such of the Ancillary Agreements to which API and/or TDS is a party; 22 (vi) such other instruments as shall be reasonably requested by TSR Wireless to vest in TSR Wireless such right, title or interest in and to the API Assets in accordance with this Agreement; (vii) the certificates, opinions of counsel and other documents to be delivered by TDS described in Article XI; and (viii) the Consents and Authorizations of API. 4.3.2 ASSUMPTION AND OTHER DOCUMENTS. To effect the acquisition and assumption referred to in Section 2.4, at the Closing, TSR Wireless shall execute and deliver to TDS or API and its Subsidiaries, as the case may be: (i) an instrument of assumption evidencing TSR Wireless's assumption, pursuant to Section 4, of the API Assumed Liabilities (the "API ASSUMPTION DOCUMENT"); (ii) the Ancillary Agreements duly signed by TSR Wireless; and (iii) such other instruments as shall be reasonably requested by TDS to evidence TSR Wireless's assumption of the API Assumed Liabilities in accordance with this Agreement. 4.4 FORM OF INSTRUMENTS. To the extent that a form of any document to be delivered hereunder is not attached as an Exhibit hereto, such documents shall be in form and substance, and shall be executed and delivered in a manner, reasonably satisfactory to the party or parties in whose favor the document runs. 4.5 CERTIFICATES; OPINIONS. The Transferors and TSR Wireless shall deliver the certificates, opinions of counsel and other documents described in Articles XI and XII. ARTICLE V REPRESENTATIONS AND WARRANTIES OF TSR PAGING TSR Paging hereby represents and warrants to TDS and TSR Wireless as follows: 5.1 ORGANIZATION OF TSR PAGING. TSR Paging is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. TSR Paging is duly qualified under the FCC Rules and Policies to hold a controlling interest in the TSR Wireless as contemplated herein. TSR Paging is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where the character of its properties 23 owned or leased or the nature of its activities make such qualification necessary, except where the failure to be so qualified or in good standing would not have a Material Adverse Effect. Copies of the Certificate of Incorporation and Bylaws of TSR Paging, and all amendments thereto, heretofore delivered to TSR Wireless are accurate and complete as of the date hereof. TSR Paging Disclosure Letter Schedule 5.1 lists all jurisdictions in which TSR Paging is qualified to do business as a foreign corporation. 5.2 AUTHORIZATION. TSR Paging has all requisite corporate power and authority to own, lease and operate the TSR Paging Assets, to conduct the TSR Paging Business as it is presently being conducted, to execute and deliver this Agreement, the Ancillary Agreements and the Option Agreement and to perform its obligations hereunder and thereunder including, without limitation, the transfer of the TSR Paging Assets. The execution and delivery of this Agreement, the Ancillary Agreements and the Option Agreement by TSR Paging and the consummation by TSR Paging of the transactions contemplated hereby and thereby have been duly approved by the board of directors of TSR Paging. No other corporate proceedings on the part of TSR Paging is necessary to authorize the entering into and the performance of this Agreement, the Ancillary Agreements and the Option Agreement and the transactions contemplated hereby and thereby including, without limitation, transfer of the TSR Paging Assets. This Agreement and the Option Agreement have been duly executed and delivered by TSR Paging and are legal, valid and binding obligations of TSR Paging and each of the Ancillary Agreements to which TSR Paging is to be a party when executed at Closing will constitute legal, valid and binding obligations of TSR Paging, enforceable against TSR Paging in accordance with their respective terms. 5.3 SUBSIDIARIES. TSR Paging has no Subsidiaries. 5.4 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the Interim Balance Sheet Date, except as contemplated by this Agreement, there has not been any: 5.4.1 Material Adverse Change in respect of TSR Paging, the TSR Paging FCC Licenses and/or the TSR Paging FCC License Applications; 5.4.2 change in accounting methods, principles or practices by TSR Paging, except as required by law or by generally applicable changes instituted in the accounting profession; 5.4.3 material damage, destruction or loss (whether or not covered by insurance) adversely affecting the Assets or the TSR Paging Business; 5.4.4 sale, assignment or transfer of any material portion of the TSR Paging Assets other than sales of Inventory in the ordinary course of business; 5.4.5 cancellation or termination of any material Contract of TSR Paging; 24 5.4.6 institution of settlement of or agreement to settle any Action relating to the TSR Paging Business or the TSR Paging Assets other than in the ordinary course of business consistent with past practices but not in any case involving amounts in excess of $200,000 in the aggregate; or 5.4.7 agreement by TSR Paging to do, or any action or omission by TSR Paging which is likely to result in, any of the representations and warranties set forth in the preceding clauses 5.4.1 through 5.4.6 becoming untrue other than as expressly provided for herein. 5.5 ASSETS. TSR Paging has and will transfer good and marketable title to the TSR Paging Assets and, upon the consummation of the transactions contemplated hereby, TSR Wireless will acquire good title to all the TSR Paging Assets, free and clear of any Encumbrances, other than Permitted Encumbrances. The TSR Paging Assets include all assets necessary for the conduct of the TSR Paging Business as presently conducted. 5.6 TSR PAGING REAL PROPERTY. TSR Paging owns no Real Property. TSR Paging Disclosure Letter Schedule 5.6 contains a complete and accurate list of all Real Property Leases of TSR Paging ("TSR PAGING LEASED REAL PROPERTY" distinguishing between the stores, transmission sites, office premises and warehouses comprising the TSR Paging Leased Real Property. 5.6.1 INTENTIONALLY OMITTED. 5.6.2 ACTIONS. There are no pending or, to the knowledge of TSR Paging, threatened condemnation proceedings or other Actions with respect to any TSR Paging Leased Real Property. 5.6.3 REAL PROPERTY LEASES OR OTHER AGREEMENTS. Except for the TSR Paging Real Property Leases listed on TSR Paging Disclosure Letter Schedule 5.6, there are no material leases, subleases, licenses, occupancy agreements, options, rights, concessions or other agreements or arrangements, written or oral, granting to any Person the right to purchase, use or occupy any TSR Paging Leased Real Property. With respect to each TSR Paging Real Property Lease, TSR Paging has and will transfer to TSR Wireless at the Closing a valid leasehold interest in the leasehold estate, free and clear of all Encumbrances other than Permitted Encumbrances. All TSR Paging Real Property Leases are valid, binding and enforceable in all material respects in accordance with their terms and are in full force and effect. TSR Paging enjoys peaceful and undisturbed possession of all real property subject to such TSR Paging Real Property Leases, and TSR Paging has in all material respects performed all the material obligations required to be performed by it through the date hereof with respect to such TSR Paging Real Property Leases, and each TSR Paging Real Property Lease is assignable (upon receipt of necessary landlord Consents) in connection with the transactions contemplated hereby. 25 5.6.4 CERTIFICATE OF OCCUPANCY. TSR Paging has received all required material approvals of Governmental Authorities (including, without limitation, Permits and material certificates of occupancy or other similar certificates permitting lawful occupancy of the TSR Paging Leased Real Property) required in connection with the present use of the TSR Paging Leased Real Property and all improvements thereon. 5.6.5 UTILITIES. All TSR Paging Leased Real Property and the improvements thereon are supplied with utilities and other services necessary for the operation of such facilities as currently operated. 5.6.6 IMPROVEMENTS, FIXTURES AND EQUIPMENT. All Leasehold Improvements, and all Fixtures and Equipment and other tangible assets owned, leased or used by TSR Paging on the TSR Paging Leased Real Property are sufficient in all material respects for the operation of the TSR Paging Business as presently conducted. 5.6.7 NO SPECIAL ASSESSMENT. TSR Paging has not received notice of any special assessment relating to any TSR Paging Leased Real Property or any portion thereof, and TSR Paging has no knowledge of any pending or threatened special assessment, other than any special assessments disclosed in TSR Paging Disclosure Letter Schedule 5.6. 5.7 CONTRACTS AND COMMITMENTS. 5.7.1 CONTRACTS. TSR Paging Disclosure Letter Schedule 5.7 sets forth a complete and accurate list of all Contracts of TSR Paging of the following categories: (i) Reseller Contracts for over 2,000 pagers; (ii) Sales, commission, consulting, agency or advertising Contracts which are not cancelable on thirty (30) calendar days notice and, in the case of advertising Contracts, which could result in payments of over $50,000 over the life of the Contract; (iii) Options to buy any property, real or personal, or options to sell or sublet any TSR Paging Leased Real Property or personal property included in the TSR Paging Assets; (iv) Contracts involving expenditures or Liabilities in excess of $250,000 over the life of the Contract or otherwise material to TSR Paging; (v) Contracts containing covenants limiting the freedom of TSR Paging to engage in any line of business or compete with any Person; (vi) Intentionally omitted; 26 (vii) All Contracts with Local Exchange Carriers, whether incumbent, independent, competitive or otherwise (collectively "LECs", for provision of interconnection services and facilities (collectively, "INTERCONNECTION") to TSR Paging ("TSR Paging INTERCONNECTION CONTRACTS"), including: (a) all such TSR Paging Interconnection Contracts regardless of whether such agreements have yet been submitted to or approved by the relevant PUCs; (b) a listing of any requests for Interconnection filed by TSR Paging with PUC(s) pursuant to Section 252(a) of the Communications Act and a brief description of the status of the PUC proceeding with respect to each such request; (c) a brief description of outstanding negotiations between TSR Paging and LECs regarding provision of Interconnection by LECs regardless of whether such negotiations are pursuant to a request for Interconnection submitted by TSR Paging pursuant to Section 252(a) of the Communications Act; and (d) any related agreements between TSR Paging and LECs regarding Interconnection; (viii) All Personal Property Leases of TSR Paging ("TSR PAGING PERSONAL PROPERTY LEASES"), excluding Contracts with customers for lease of pagers and excluding non-material Personal Property Leases entered into in the ordinary course of business; (ix) All Contracts not listed pursuant to Sections 5.7.1(i) through 5.7.1(viii) but which are (a) material to the TSR Paging Business; or (b) not made in the ordinary course of the TSR Paging Business; (x) the securities purchase agreement dated July 17, 1995 between, inter alia, the Investors and TSR Paging and the option agreement, investment agreement and form of notes ancillary thereto (the "INVESTMENT DOCUMENTS"); (xi) any TSR Paging Employee Plan, any employment agreements between TSR Paging and Phil Sacks, Leonard P. DiSavino and Mitchell L. Sacks and any stock option or phantom stock or other equity based plan of TSR Paging; and (xii) the Third Amended and Restated Credit Agreement among TSR Paging and First National Bank of Chicago dated as of October 29, 1997 (the "TSR PAGING CREDIT AGREEMENT"). TSR Paging has delivered or made available to TDS true, correct and complete copies of each of the Contracts listed on TSR Paging Disclosure Letter Schedule 5.7, including all amendments and supplements thereto other than TSR Paging Personal Property Leases with individual customers on standard forms (the standard forms having been supplied). 5.7.2 ABSENCE OF BREACHES OR DEFAULTS. All of the Contracts to which TSR Paging is a party or bound ("TSR PAGING CONTRACTS") are valid and in full force and effect. TSR Paging has duly performed all of its material obligations under such Contracts to the extent those obligations to perform have accrued, and no material violation of, or material default or breach under, such Contracts by TSR Paging, or, to TSR Paging's knowledge, any 27 other party has occurred and neither TSR Paging, nor, to TSR Paging's knowledge, any other party has repudiated any material provisions thereof. No material violation of, or material default or breach under, has occurred with respect to the Investment Documents by TSR Paging, or to TSR Paging's knowledge, its Stockholders. 5.7.3 PRODUCT WARRANTY. TSR Paging has committed no act, and there has been no omission, which would result in, and there has been no occurrence which would give rise to, any material product liability or material liability for breach of warranty (whether covered by insurance or not) on the part of TSR Paging, with respect to products sold, or services rendered prior to the Closing. 5.8 INTENTIONALLY OMITTED. 5.9 OPERATION OF THE TSR PAGING BUSINESS. Except as set forth in TSR Paging Disclosure Letter Schedule 5.9, (i) TSR Paging has conducted the TSR Paging Business only through TSR Paging and not through any other divisions or any direct or indirect Subsidiary or Affiliate of TSR Paging and (ii) no part of the TSR Paging Business is operated by TSR Paging through any entity other than TSR Paging. 5.10 INVENTORY. All Inventory of TSR Paging ("TSR PAGING INVENTORY") is of good, usable and merchantable quality in all respects and, except as set forth on TSR Paging Disclosure Letter Schedule 5.10, does not include obsolete or discontinued items not otherwise saleable for ten dollars ($10) or more in the ordinary course of business. Except as set forth on TSR Paging Disclosure Letter Schedule 5.10 or in amounts that are not material; 5.10.1 all TSR Paging Inventory is of such quality as to meet the quality control standards of TSR Paging and any applicable governmental quality control standards; 5.10.2 all TSR Paging Inventory is saleable as current Inventory at the current prices thereof in the ordinary course of business; and 5.10.3 all TSR Paging Inventory is recorded on the books of the TSR Paging Business and in the TSR Paging Interim Balance Sheet at the lower of cost or market value determined in accordance with GAAP. 5.11 ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither TSR Paging, nor any officer, employee or agent of TSR Paging, nor any other Person acting on their behalf, has, directly or indirectly, within the past five years given or agreed to give any gift or similar benefit to any customer, supplier, governmental employee or other Person who is or may be in a position to help or hinder the TSR Paging Business (or assist in connection with any actual or proposed transaction relating to the TSR Paging Business) (i) which subjected or might have subjected TSR Paging or any of its Subsidiaries to any damage or penalty in any civil, criminal or governmental litigation or proceeding, (ii) which if not given in the past, might have had a 28 Material Adverse Effect, (iii) which if not continued in the future, might have a Material Adverse Effect or subject TSR Wireless to suit or penalty in any private or governmental litigation or proceeding, (iv) for any of the purposes described in Section 162(c) of the Code or (v) for the purpose of establishing or maintaining any concealed fund or concealed bank account. 5.12 NO CONFLICT OR VIOLATION. Subject to Sections 8.2, 11.6 and 12.6 and except as set forth in TSR Paging Disclosure Letter Schedule 5.12, neither the execution, delivery or performance of this Agreement, the Ancillary Agreements or the Option Agreement by TSR Paging nor the consummation by TSR Paging of the transactions contemplated hereby and thereby will (a) violate or conflict with any provision of the Certificate of Incorporation or Bylaws of TSR Paging, (b) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration under, or result in the creation of any Encumbrance (other than a Permitted Encumbrance) upon any of the TSR Paging Assets under, or require any Consent under any of the terms, conditions or provisions of any TSR Paging Contract, any Financing Obligation of TSR Paging, any Authorization, any TSR Paging Real Property Lease, TSR Paging Personal Property Lease, franchise, Permit, agreement, or other instrument or obligation (i) to which TSR Paging is a party or (ii) by which the TSR Paging Assets are bound, (c) violate any statute, rule, regulation, ordinance, code, order, judgment, ruling, writ, injunction, decree or award to which TSR Paging or the TSR Paging Assets is subject, (d) impose any Encumbrance (other than a Permitted Encumbrance) on the TSR Paging Assets. Except as set forth in TSR Paging Disclosure Letter Schedule 5.12, no Consent is required to be obtained or made by TSR Paging in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby. 5.13 REGULATORY MATTERS. 5.13.1 FCC LICENSES. (i) TSR Paging Disclosure Letter Schedule 5.13.1 lists (a) each FCC License which is issued to TSR Paging ("TSR PAGING FCC LICENSE") and, in each case, the name of the licensee (if other than TSR Paging), the call sign, the operating frequency or frequencies, the location and the expiration date of the TSR Paging FCC License; and (b) each FCC License Application of TSR Paging ("TSR PAGING FCC LICENSE APPLICATION") as of the date hereof and, in each case, the name of the applicant (if other than TSR Paging), the frequency or frequencies, the proposed location and the file number of the TSR Paging FCC License Application. Pursuant to the provisions of Section 9.1, TSR Paging has made available to TDS for inspection copies of each TSR Paging FCC License and TSR Paging FCC License Application. 29 (ii) Except as set forth on TSR Paging Disclosure Letter Schedule 5.13.1, (A) none of the TSR Paging FCC Licenses or TSR Paging FCC License Applications is subject to any purchase, sale, option or right of first refusal agreements; (B) TSR Paging has good and marketable title to the TSR Paging FCC Licenses to the extent allowed by law; and (C) subject to the regulatory jurisdiction of the FCC, TSR Paging holds all TSR Paging FCC Licenses free and clear of all Encumbrances. (iii) TSR Paging Disclosure Letter Schedule 5.13.1 lists each 929 MHz one-way paging frequency for which TSR Paging currently has nationwide exclusivity ("TSR PAGING 929 MHz EXCLUSIVE FREQUENCY"). Except as set forth in TSR Paging Disclosure Letter Schedule 5.13.1, for each TSR Paging 929 MHz Exclusive Frequency: (i) TSR Paging timely constructed and placed into operation in accordance with FCC Rules sufficient transmitters to comply with 929 MHz frequency exclusivity requirements imposed by the FCC (collectively, "FCC 929 MHz EXCLUSIVITY REQUIREMENTS") as specified, INTER ALIA, in FCC Rules and FCC decisions in AMENDMENT OF THE COMMISSION'S RULES TO PROVIDE CHANNEL EXCLUSIVITY TO QUALIFIED PRIVATE PAGING SYSTEMS AT 929-930 MHz, REPORT AND ORDER, PR Docket No. 93-35, 8 FCC Rcd 8318 (1993), RECON. 11 FCC Rcd 3091 (1996), and WIRELESS TELECOMMUNICATIONS BUREAU ANNOUNCES 929-930 MHz PAGING LICENSEES THAT HAVE MET CONSTRUCTION REQUIREMENTS FOR NATIONWIDE EXCLUSIVITY, PUBLIC NOTICE, DA 96-748 (released May 10, 1996); REVISION OF PART 22 AND PART 90 OF THE COMMISSION'S RULES TO FACILITATE FUTURE DEVELOPMENT OF PAGING SYSTEMS, WT Docket No. 96-18, FCC 97-59 (released February 24, 1997); (ii) TSR Paging has continued to operate sufficient transmitters to comply with the terms and conditions of such TSR Paging FCC Licenses and Authorizations, the Communications Act, the FCC Rules and all applicable state laws and rules. 5.13.2 INTENTIONALLY OMITTED. 5.13.3 FILINGS, ETC. (i) The TSR Paging FCC Licenses and TSR Paging FCC License Applications are the only FCC and PUC Permits and Authorizations necessary to conduct the TSR Paging Business. Except as set forth on TSR Paging Disclosure Letter Schedule 5.13.3, TSR Paging has duly and in a timely fashion secured or filed under applicable law all necessary Permits and Authorizations from, and have filed all required registrations, applications, reports and any other documents with, the FCC, and, if applicable, any PUC and any other Governmental Authority exercising jurisdiction or having jurisdiction over TSR Paging, in each case, with respect to the TSR Paging Business. Except as set forth on TSR Paging Disclosure Letter Schedule 5.13.3, (a) the TSR Paging FCC Licenses and (b) all other Authorizations are in full force and effect, are valid for the balances of the current license term, are not impaired by acts or failures to make required filings on the part of TSR Paging, and are free and clear of restrictions that may reasonably be expected to limit the full operation of the TSR Paging FCC Licenses or Authorizations, in each case without adverse conditions, restrictions or impairments, except for such conditions as are generally applicable to holders of 30 such FCC Licenses and Authorizations. No renewal of any TSR Paging FCC License would constitute a major environmental action under the rules of the FCC. (ii) Except as set forth on TSR Paging Disclosure Letter Schedule 5.13.3, TSR Paging is not subject to any Order or any pending or, to the knowledge of TSR Paging, threatened, Action (excluding rulemaking that has general industry applicability) which affects or would be expected to affect, in any material respect, the validity of any TSR Paging FCC License, or result in the revocation, termination, or adverse modification thereof, or impair the renewal thereof. Except as set forth on TSR Paging Disclosure Letter Schedule 5.13.3, no event has occurred and is continuing (excluding rule making that has general industry applicability) that could reasonably be expected to (a) result in the revocation, termination, non-renewal or adverse modification of any TSR Paging FCC License or (b) materially and adversely affect any rights of TSR Paging thereunder. 5.13.4 FEES. TSR Paging has paid all franchise, license, regulatory or other fees and charges which have become due and payable pursuant to any applications, filings, recordings and registrations with, and all Authorizations and Permits from, the FCC, any PUC or any other Governmental Authority, in respect of the TSR Paging Business. 5.13.5 SHARING AGREEMENTS. Except as set forth on TSR Paging Disclosure Letter Schedule 5.13.5, TSR Paging is not a party to any agreement for the shared use of facilities or equipment used in connection with the TSR Paging Business. 5.13.6 OPERATIONS. The equipment operating pursuant to the TSR Paging FCC Licenses or PUC Authorizations of TSR Paging is operating in all material respects in accordance with the terms and conditions of such TSR Paging FCC License or Authorizations, the Communications Act, the FCC Rules and all applicable state laws and regulations. 5.13.7 CONSTRUCTION. Except as set forth on TSR Paging Disclosure Letter Schedule 5.13.7 all construction for facilities that TSR Paging intends to place in service proposed in any TSR Paging FCC License is proceeding in a manner that may reasonably be expected to allow the completion of such construction and commencement of operations within the time specified in the relevant TSR Paging FCC License. 5.14 FINANCIAL STATEMENTS; RECEIVABLES. 5.14.1 FINANCIAL STATEMENTS. The TSR Paging Financial Statements are attached hereto as TSR Paging Disclosure Letter Schedule 5.14.1. The TSR Paging Financial Statements (a) were prepared in accordance with the Books and Records of TSR Paging, (b) were prepared in accordance with generally accepted accounting principles consistently applied throughout the periods covered thereby subject, in the case of the TSR Paging Unaudited Financial Statements, to the absence of footnotes and to normal year-end adjustments and (c) fairly present the assets, Liabilities (including all reserves) and financial position of TSR Paging as of the respective dates thereof and the results of operations and changes in cash 31 flows for the periods then ended, as appropriate. The TSR Paging Audited Financial Statements have been audited by Arthur Andersen LLP, independent certified public accountants, whose reports thereon are included with such TSR Paging Audited Financial Statements. 5.14.2 RECEIVABLES. All of the receivables of TSR Paging (including accounts receivable, loans receivable and advances) which have arisen in connection with the TSR Paging Business and which are reflected in the Interim Financial Statements, and all such receivables which will have arisen since the Interim Balance Sheet Date, have arisen only from BONA FIDE transactions in the ordinary course of business. All receivables of TSR Paging on the date of this Agreement are, and on the Closing Date will be, good and collectible in the ordinary course of business of TSR Paging within 120 days of their incurrence, subject to any applicable reserves set forth on the Interim Balance Sheet of TSR Paging. TSR Paging has no knowledge of any facts or circumstances generally which would result in any material increase in the uncollectability of such receivables as a class in excess of the reserves therefor set forth on the Interim Financial Statements. TSR Paging Disclosure Letter Schedule 5.14.2 hereto accurately lists as of December 11, 1997, all receivables arising out of or relating to the TSR Paging Business in excess of $1,000, the amount owing and the aging of such receivable and the name of the party from whom such receivable is owing. 5.15 BOOKS AND RECORDS. TSR Paging has made and kept (and given TDS access to) the Books and Records of TSR Paging, which, in all material respects accurately and fairly reflect the activities of TSR Paging that would be so recorded. 5.16 LITIGATION. Except as set forth on Schedules 5.13.3 and 5.16 there is no Action or Order, pending or, to the knowledge of TSR Paging, threatened (a) against, related to or affecting (i) TSR Paging or the TSR Paging Assets, or (ii) any stockholders, officers or directors of TSR Paging (in each case, in such capacity) and which either (A) may be reasonably expected to result in Damages in excess of $100,000 in respect of any individual Order for the payment of money damages (or $200,000 in the aggregate), or (B) seeks as of the date hereof to delay, limit or enjoin the transactions contemplated by this Agreement, the Ancillary Agreements or the Option Agreement or (b) in which TSR Paging is a plaintiff, including any derivative suits brought by or on behalf of TSR Paging. TSR Paging is not in default with respect to or subject to any Order, and to the knowledge of TSR Paging, there are no unsatisfied Orders against TSR Paging or the TSR Paging Assets. 5.17 COMPLIANCE WITH LAW. TSR Paging is and has been in compliance in all material respects with all Authorizations, Regulations, and Permits in respect of the TSR Paging Assets and the TSR Paging Business; IT BEING UNDERSTOOD that nothing in this representation is intended to address any compliance issues that are the subject of any other representation or warranty set forth herein. 32 5.18 NO BROKERS. No broker, finder or similar agent is entitled to any finder's fee, brokerage fees or commission or similar payment from TSR Paging in connection with the transactions contemplated hereby. 5.19 NO OTHER AGREEMENTS TO SELL THE TSR PAGING ASSETS. Except for (i) security granted pursuant to the TSR Paging Credit Agreement (ii) the options to acquire stock of TSR Paging granted to the Investors and others pursuant to the Investor Documents and (iii) stock options granted to officers, directors and employees of TSR Paging, neither TSR Paging nor any of its officers, directors, shareholders or Affiliates have any commitment or legal obligation, absolute or contingent, to any other Person other than TSR Wireless and TDS to sell, assign, transfer or effect a sale of the TSR Paging Assets (other than sales of Inventory in the ordinary course of business), to sell or effect a sale of the capital stock of TSR Paging, to effect any merger, consolidation, exclusive license, liquidation, dissolution or other reorganization of TSR Paging or to enter into any agreement or cause the entering into of an agreement with respect to any of the foregoing business combination transactions. 5.20 PROPRIETARY RIGHTS. 5.20.1 PROPRIETARY RIGHTS. TSR Paging Disclosure Letter Schedule 5.20 lists all of TSR Paging's domestic and foreign registrations of trademarks and of other marks, trade names or other trade rights, and all pending applications for any such registrations, all of TSR Paging's registered copyrights and all of TSR Paging's patents and pending patent applications, and all agreements under which TSR Paging is licensed to use Proprietary Rights. 5.20.2 OWNERSHIP AND PROTECTION OF PROPRIETARY RIGHTS. TSR Paging owns and/or has the right to use each of the Proprietary Rights listed on TSR Paging Disclosure Letter Schedule 5.20. The Proprietary Rights listed on TSR Paging Disclosure Letter Schedule 5.20 constitute all of the material Proprietary Rights necessary to conduct the TSR Paging Business in the manner presently conducted. None of the Proprietary Rights is involved in any pending or, to the knowledge of TSR Paging, threatened litigation. No other Person (i) has the right to use any of the Proprietary Rights, except pursuant to the Contracts; or (ii) to TSR Paging's knowledge is infringing upon any Proprietary Rights. To TSR Paging's knowledge, the use by TSR Paging of the Proprietary Rights is not infringing upon or otherwise violating the rights of any third party. No proceedings have been instituted against or notices received by TSR Paging that are presently outstanding alleging that the use by TSR Paging of the Proprietary Rights infringes upon or otherwise violates any rights of a third party in or to such Proprietary Rights. All Proprietary Rights are assignable by TSR Paging to TSR Wireless in the manner contemplated by this Agreement. 5.21 ENVIRONMENTAL MATTERS. 5.21.1 COMPLIANCE WITH ENVIRONMENTAL LAW. TSR Paging has complied and is in compliance in all material respects with all applicable Environmental Laws pertaining to any 33 of the properties and assets of the TSR Paging Business (including the Facilities of TSR Paging ("TSR PAGING FACILITIES")) and the use and ownership thereof, and to the operation of the TSR Paging Business. No violation by TSR Paging is being alleged of any applicable Environmental Law relating to any of the properties and assets of the TSR Paging Business including the TSR Paging Facilities or the use, occupation or ownership thereof, or to the operation of the TSR Paging Business. 5.21.2 OTHER ENVIRONMENTAL MATTERS. Neither TSR Paging nor to TSR Paging's knowledge any other Person (including any tenant or subtenant) has caused or taken any action that will result in, and TSR Paging is not subject to, any material Liability relating (i) environmental conditions on, under, or about the TSR Paging Facilities, including without limitation, the air, soil and groundwater conditions at such Facilities or (ii) the past or present use, management, handling, transport, treatment, generation, storage, disposal or Release of any Hazardous Materials. TSR Paging has disclosed and made available to TDS all information, including, without limitation, all studies, analyses and test results, in the possession, custody or control of or otherwise known to TSR Paging relating to (x) the environmental conditions on, under or about the TSR Paging Facilities, and (y) any Hazardous Materials used, managed, handled, transported, treated, generated, stored or Released by TSR Paging or any other Person on, under, about or from any of the TSR Paging Facilities, or otherwise in connection with the use or operation of the TSR Paging Business. 5.22 TAX MATTERS. 5.22.1 TSR Paging has (or by the Closing will have), in respect of the TSR Paging Business and the TSR Paging Assets, duly and timely filed all Tax returns required to be filed on or before the Closing Date ("TSR PAGING PCD TAX RETURNS"), and paid all Taxes which have become due pursuant to such Tax returns or pursuant to any assessment which has become payable ("TSR PAGING PCD TAXES"). All Tax returns are complete in all material respects. All Taxes required to be collected or withheld by or on behalf of TSR Paging (including amounts paid or owing to any employee, independent contractor, creditor or other party with respect to TSR Paging) ("TSR PAGING WITHHOLDING TAXES") have been collected or withheld, and such taxes have either been duly and timely paid to the proper Governmental Authorities or set aside in accounts for such purpose. 5.22.2 Except as set forth on TSR Paging Disclosure Letter Schedule 5.22, (i) all TSR Paging PCD Tax Returns have been examined by the relevant taxing authority or the period for assessment of the Taxes in respect of which such Tax returns were required to be filed has expired, and (ii) no agreement or other document extending, or having the effect of extending, the period of assessment or collection of any TSR Paging PCD Taxes or TSR Paging Withholding Taxes, and no power of attorney with respect to any such Taxes, has been filed with the Internal Revenue Service ("IRS") or any other Governmental Authority. 5.22.3 Except as set forth on TSR Paging Disclosure Letter Schedule 5.22, (i) there are no TSR Paging PCD Taxes or TSR Paging Withholding Taxes for which a deficiency 34 has been asserted in writing by any Governmental Authority to be due (ii) no issue has been raised in writing by any Governmental Authority in the course of any audit with respect to TSR Paging PCD Taxes or TSR Paging Withholding Taxes and (iii) there are no Tax rulings, requests for rulings or closing agreements relating to TSR Paging which could affect TSR Paging's liability for Taxes for any period after the Closing Date. Except as set forth on TSR Paging Disclosure Letter Schedule 5.22, no TSR Paging PCD Taxes and no TSR Paging Withholding Taxes are currently under audit by any Governmental Authority of which TSR Paging has or will have by the Closing, received written notice. 5.22.4 TSR Wireless will not be required to deduct and withhold any amount pursuant to section 1445(a) of the Code upon the transfer of the TSR Paging Business to TSR Wireless. 5.22.5 Except as set forth on TSR Paging Disclosure Letter Schedule 5.22, there is no assessment or Action pending or threatened of which TSR Paging has received an assessment or written notice against or relating to TSR Paging in connection with TSR Paging PCD Taxes. 5.22.6 None of the TSR Paging Assets is properly treated as owned by persons other than TSR Paging for income tax purposes. 5.22.7 TSR Paging (i) has made a valid election under Section 1362 of the Code to be treated as an "S Corporation" and has, at all times since the date it was organized, qualified as an "S Corporation" for purposes of Subchapter S of the Code, and (ii) with respect to all states which for state Tax purposes allow a corporation to be treated as an "S Corporation" or similar entity entitled to special Tax treatment, all elections for such treatment have been properly and validly made in such states and TSR Paging has maintained compliance at all times with all applicable qualifications and filing procedures for such treatment provided however that it shall not be a breach of this Section 5.22.7 for any of the foregoing to be untrue insofar as such breach has not had, and is not likely to have, a Material Adverse Effect on TSR Paging. 5.23 INVESTMENT INTENT. TSR Paging is acquiring its Membership Interests for its own account for investment and with no present intention of distributing or reselling such Membership Interests or any part thereof. TSR Paging is fully informed as to the applicable limitations upon any distribution or resale of Membership Interests, which have not been registered pursuant to the Securities Act. TSR Paging agrees not to distribute or resell any of the Membership Interests if such distribution or resale would constitute a violation of the Securities Act by TSR Paging. 5.24 CAPITALIZATION. The authorized and issued capital stock of TSR Paging is as set forth in TSR Paging Disclosure Letter Schedule 5.24. All of the presently issued and outstanding shares of capital stock of TSR Paging have been duly and validly authorized and issued and are fully paid and non-assessable and have been issued in compliance with all 35 applicable federal and state securities laws. Except as provided above or in TSR Paging Disclosure Letter Schedule 5.24, TSR Paging has not issued any other shares of its capital stock or any other equity interests and there are no outstanding warrants, options or other rights to purchase or acquire any of such shares or other equity interests, nor any outstanding securities convertible into such shares or other equity interest or outstanding warrants, options or other rights to acquire any such convertible securities. Except as disclosed in TSR Paging Disclosure Letter Schedule 5.24, there are no preemptive rights with respect to the issuance or sale of any of TSR Paging's capital stock. The outstanding capital stock of TSR Paging is held of record and beneficially by the Persons identified in TSR Paging Disclosure Letter Schedule 5.24 in the amounts indicated therein. 5.25 EMPLOYMENT MATTERS. 5.25.1 There is no material unfair labor practice Action pending against TSR Paging before any Governmental Authority. 5.25.2 There is no labor strike pending or, to the knowledge of TSR Paging, threatened against or involving TSR Paging. TSR Paging believes that its relations with its employees are satisfactory. No union organizing or election activities known to TSR Paging involving any non-union employees of TSR Paging have occurred since January 1, 1996. 5.25.3 TSR Paging has complied with the Worker Adjustment and Retraining Notification Act and furnished any required notices of any "plant closing" or "mass layoff" which TSR Paging has ordered to take place. 5.25.4 TSR Paging is not a party to any collective bargaining agreement or labor contract with respect to any of its employees and is not a party to, and, to its knowledge, has no liability or obligations under, any individual employment agreement or contract with any of its current or former employees that has not been performed in all material respects by TSR Paging. 5.26 EMPLOYEE BENEFIT PLAN MATTERS. 5.26.1 TSR Paging Disclosure Letter Schedule 5.26.1 contains a complete and accurate list of all Employee Plans maintained or contributed to by TSR Paging ("TSR PAGING EMPLOYEE PLANS"). Neither TSR Paging nor any ERISA Affiliate of TSR Paging is now maintaining or contributing to or has ever maintained or contributed to or been obligated to contribute to any Employee Plan subject to either Title IV of ERISA or the minimum funding standards of Section 302 of ERISA, including without limitation any "multiemployer plan" (as such term is defined in Section 3(37) of ERISA). 5.26.2 Each TSR Paging Employee Plan has been administered in accordance with its terms and complies in all material respects with all the requirements prescribed by any 36 and all statutes, orders and governmental rules and regulations applicable to such TSR Paging Employee Plan, including, but not limited to, ERISA and the Code. 5.26.3 Each TSR Paging Employee Plan intended to qualify under Section 401(a) and 401(k) of the Code has heretofore been determined by the Internal Revenue Service to so qualify or a timely application for such determination has been made, and the trusts created thereunder have heretofore been determined to be exempt from tax under the provisions of Section 501(a) of the Code or an application for such determination has been made, and to the knowledge of TSR Paging no circumstance has occurred or exists which may reasonably be expected to cause the loss of such qualifications or exemption. 5.26.4 There is no pending or, to the knowledge of TSR Paging, threatened Claim in respect of any of the TSR Paging Employee Plans other than claims for benefits in the ordinary course of business or Claims which are not material. 5.26.5 To its knowledge, TSR Paging has complied in all material respects with the health care continuation requirements of Part 6 of Title I of ERISA. 5.26.6 The consummation of the transactions contemplated by this Agreement will not result in any material automatic increase in the amount of compensation or benefits or accelerate the vesting or timing of payment of any compensation or benefits payable to or in respect of any employee of TSR Paging or any participant in a TSR Paging Employee Plan. 5.26.7 TSR Paging has not engaged in a nonexempt prohibited transaction described in Section 406 of ERISA or Section 4975 of the Code which could result in a material liability. 5.26.8 Except as described in TSR Paging Disclosure Letter Schedule 5.26.8, TSR Paging does not maintain or contribute to any employee welfare benefit plan within the meaning of Section 3(1) of ERISA which provides benefits to employees or their beneficiaries after termination of employment other than as required by Part 6 of Title I of ERISA. 5.26.9 TSR Paging has delivered or made available to TDS true and complete copies of all TSR Paging Employee Plans, including amendments, trust agreements, and insurance contracts relating to such Plans, all summary plan descriptions and all modifications thereto communicated to employees, the most recent Form 5500 and determination letter issues by the Internal Revenue Service for any applicable TSR Paging Employee Plan, and the most recent actuarial report describing the estimated liabilities of TSR Paging to provide pension and welfare benefits to employees and their beneficiaries after termination of employment and any related information regarding funding by TSR Paging to pay such liabilities. 37 ARTICLE VI REPRESENTATIONS AND WARRANTIES OF TDS TDS hereby represents and warrants to TSR Paging and TSR Wireless as follows: 6.1 ORGANIZATION OF TDS AND API. TDS is a corporation duly organized, validly existing and in good standing under the laws of the State of Iowa. TDS is duly qualified under the FCC Rules and Policies to hold an interest in TSR Wireless as contemplated herein. API is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware. Except as set forth on TDS Disclosure Letter Schedule 6.1, API is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where the character of its properties owned or leased or the nature of its activities make such qualification necessary, except where the failure to be so qualified or in good standing would not have a Material Adverse Effect. Copies of the Certificate of Incorporation and Bylaws of API, and all amendments thereto, heretofore delivered to TSR Wireless are accurate and complete as of the date hereof. TDS Disclosure Letter Schedule 6.1 lists all jurisdictions in which API is qualified to do business as a foreign corporation. 6.2 AUTHORIZATION. TDS and API have all requisite corporate power and authority to own, lease and operate the API Assets, to conduct the API Business as it is presently being conducted, and TDS has and, upon receipt of necessary approvals by its board of directors and shareholders (all of which shall have been received by Closing), API will have, all requisite corporate power and authority to execute and deliver such of this Agreement, the Ancillary Agreements and the Option Agreement to which each of them is a party, and to perform their respective obligations hereunder and thereunder including, without limitation, the transfer of the API Assets and the Merger. The execution and delivery of this Agreement, the Ancillary Agreements and the Option Agreement by TDS, and the consummation by TDS of the transactions contemplated hereby and thereby have been duly approved by the board of directors of TDS. No other corporate proceedings on the part of TDS, are necessary to authorize the entering into and the performance of this Agreement, the Ancillary Agreements and the Option Agreement and the transactions contemplated hereby and thereby including, without limitation, transfer of the API Assets. This Agreement and the Option Agreement have been duly executed and delivered by TDS and are legal, valid and binding obligations of TDS and each of the Ancillary Agreements when executed at Closing will constitute legal, valid and binding obligations of TDS, and/or API (as applicable), enforceable against TDS and/or API (as applicable) in accordance with their respective terms. 6.3 SUBSIDIARIES. TDS Disclosure Letter Schedule 6.3 is a correct and complete list of API's Subsidiaries, each of which is a corporation or limited liability company duly organized or formed, validly existing and in good standing under the laws of its jurisdiction of incorporation or formation (as applicable) (as identified on TDS Disclosure Letter Schedule 6.3), and has the requisite corporate or limited liability company power and authority to conduct its business as it is presently being conducted and to own and lease its properties and 38 assets. The transactions contemplated by this Agreement to which such Subsidiaries are or will be a party will, upon receipt of necessary approvals of their respective boards of directors and stockholders, as necessary (all of which shall have been received by Closing), be duly approved by all necessary corporate or limited liability company proceedings on the part of such Subsidiaries. TDS Disclosure Letter Schedule 6.3 contains a true, correct and complete list of all jurisdictions in which each Subsidiary is qualified to do business as a foreign corporation or limited liability company. Except as set forth in TDS Disclosure Letter Schedule 6.3, each of the Subsidiaries is duly qualified to do business as a foreign corporation or limited liability company (as applicable) and is in good standing in each jurisdiction where the character of its properties owned or leased or the nature of its activities make such qualification necessary, except where the failure to be so qualified or in good standing would not have a Material Adverse Effect. Copies of the Certificate or Articles of Incorporation and Bylaws or other organizational documents of each Subsidiary of API have been made available to TSR Paging and are accurate and complete. API owns of record and beneficially all of the issued and outstanding capital stock of each free and clear of any Encumbrances, except as set forth on TDS Disclosure Letter Schedule 6.3. 6.4 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the Interim Balance Sheet Date, except as contemplated by this Agreement, there has not been any: 6.4.1 Material Adverse Change in respect of API, or any of its Subsidiaries, the API FCC Licenses and/or the API FCC License Applications. 6.4.2 change in accounting methods, principles or practices by API or any of its Subsidiaries, except as required by law or by generally applicable changes instituted in the accounting profession; 6.4.3 material damage, destruction or loss (whether or not covered by insurance) adversely affecting the API Assets or the API Business; 6.4.4 cancellation, individually or the aggregate of any material indebtedness or waiver or release of any material right or claim of API or its Subsidiaries; 6.4.5 cancellation or termination of any material Contract of API or its Subsidiaries or entry into any material Contract by API or its Subsidiaries, other than in respect of the API Excluded Assets; 6.4.6 sale, assignment or transfer of (i) any transmitters and paging terminals of API or its Subsidiaries included in the Interim Balance Sheet of API, whether in use or in storage or (ii) any material portion of the API Assets other than sales of Inventory in the ordinary course of business; 6.4.7 failure to replenish API's inventories and supplies in a normal and customary manner consistent with prior practice and prudent business practices prevailing in 39 the industry, except for reductions in API's and its Subsidiaries' Inventory not exceeding ten percent of such Inventory on the Interim Balance Sheet Date consistent with prudent business practice, or any purchase commitment made by API or its Subsidiaries in excess of the normal, ordinary and usual requirements of its business or at any price in excess of the then current market price or upon terms and conditions more onerous than those usual and customary in the industry, or any change in the selling, pricing, advertising or personnel practices of API and its Subsidiaries inconsistent with their prior practice and prudent business practices prevailing in the industry; 6.4.8 institution of settlement of or agreement to settle any Action relating to the API Business (other than the API Excluded Assets) or the API Assets other than in the ordinary course of business consistent with past practices but not in any case involving amounts in excess of $200,000 in the aggregate; 6.4.9 agreement by API or its Subsidiaries to do, or any action or omission by API or its Subsidiaries which is likely to result in, any of the representations and warranties set forth in the preceding clauses 6.4.1 through 6.4.8 becoming untrue other than as expressly provided for herein. 6.5 ASSETS. API and its Subsidiaries have and will transfer good and marketable title to the API Assets and, upon the consummation of the transactions contemplated hereby, TSR Wireless will acquire good title to all the API Assets, free and clear of any Encumbrances other than Permitted Encumbrances. The API Assets include all assets necessary for the conduct of the API Business as presently conducted. 6.6 API REAL PROPERTY. API and its Subsidiaries do not own any Real Property. TDS Disclosure Letter Schedule 6.6 also contains a complete and accurate list of all Real Property Leases of API and its Subsidiaries ("API LEASED REAL PROPERTY" distinguishing between the stores, transmission sites, office premises and other Leased Real Property comprising the API Leased Real Property. 6.6.1 INTENTIONALLY OMITTED. 6.6.2 ACTIONS. There are no pending or, to the knowledge of API, threatened condemnation proceedings or other Actions with respect to any API Real Property. 6.6.3 REAL PROPERTY LEASES OR OTHER AGREEMENTS. Except for the API Real Property Leases listed on TDS Disclosure Letter Schedule 6.6, there are no material leases, subleases, licenses, occupancy agreements, options, rights, concessions or other agreements or arrangements, written or oral, granting to any Person the right to purchase, use or occupy any API Leased Real Property. Except as set forth in TDS Disclosure Letter Schedule 6.6, with respect to each API Real Property Lease, API or its Subsidiaries have and will transfer to TSR Wireless at the Closing a valid leasehold interest in the leasehold estate, free and clear of all Encumbrances other than Permitted Encumbrances. Except as set forth on TDS Disclosure 40 Letter Schedule 6.6, all API Real Property Leases are valid, binding and enforceable in all material respects in accordance with their terms and are in full force and effect. Except as set forth on TDS Disclosure Letter Schedule 6.6, API and its Subsidiaries enjoy peaceful and undisturbed possession of all real property subject to such API Real Property Leases, and API and its Subsidiaries have in all material respects performed all the material obligations required to be performed by them through the date hereof with respect to such API Real Property Leases, and each API Real Property Lease is assignable (upon receipt of necessary landlord Consents) in connection with the transactions contemplated hereby. 6.6.4 CERTIFICATE OF OCCUPANCY. API and its Subsidiaries have received all required material approvals of Governmental Authorities (including, without limitation, Permits and material certificates of occupancy or other similar certificates permitting lawful occupancy of the API Leased Real Property) required in connection with the present use of the API Leased Real Property and all improvements thereon. 6.6.5 UTILITIES. All API Leased Real Property and the improvements thereon are supplied with utilities and other services necessary for the operation of such facilities as currently operated. 6.6.6 IMPROVEMENTS, FIXTURES AND EQUIPMENT. All Leasehold Improvements, and all Fixtures and Equipment and other tangible assets owned, leased or used by API or its Subsidiaries on the API Leased Real Property are sufficient in all material respects for the operation of the API Business as presently conducted. 6.6.7 NO SPECIAL ASSESSMENT. Other than to the extent such Contracts relate to the Excluded Assets, API and its Subsidiaries have not received notice of any special assessment relating to any API Leased Real Property or any portion thereof, and API has no knowledge of any pending or threatened special assessment, other than any special assessments disclosed in TDS Disclosure Letter Schedule 6.6. 6.7 CONTRACTS AND COMMITMENTS. 6.7.1 CONTRACTS. Other than to the extent such Contracts relate to the Excluded Assets, TDS Disclosure Letter Schedule 6.7 sets forth a complete and accurate list of all Contracts of API and its Subsidiaries of the following categories: (i) Reseller Contracts (provided, that, with respect to reseller agreements with customers only reseller agreements with customers for at least 2,000 or more pagers and with respect to reseller agreements with third party vendors only material national reseller agreements along with totals by region of reseller agreements with third party vendors), distribution, franchise, lease and license (other than with respect to software that is available in consumer retail stores and subject to "shrink wrap" license agreements) Contracts; 41 (ii) Sales, commission, consulting, agency or advertising Contracts which are not cancelable on thirty (30) calendar days notice; (iii) Options to buy any property, real or personal, or options to sell or sublet any API Leased Real Property or personal property included in the API Assets; (iv) Contracts involving expenditures or Liabilities in excess of $250,000 over the life of the Contract or otherwise material to API and its Subsidiaries; (v) Contracts containing covenants limiting the freedom of API or its Subsidiaries to engage in any line of business or compete with any Person; (vi) Intentionally omitted; (vii) All Contracts with LECs for provision of Interconnection to API ("API INTERCONNECTION CONTRACTS"), including: (a) all such API Interconnection Contracts regardless of whether such agreements have yet been submitted to or approved by the relevant PUCs; (b) a listing of any requests for interconnection filed by API with PUC(s) pursuant to Section 252(a) of the Communications Act and a brief description of the status of the PUC proceeding with respect to each such request; (c) a brief description of outstanding negotiations between API and LECs regarding provision of Interconnection by LECs regardless of whether such negotiations are pursuant to a request for interconnection submitted by API pursuant to Section 252(a) of the Communications Act; and (d) any related agreements between API and LECs regarding Interconnection. (viii) All Personal Property Leases of API and its Subsidiaries ("API PERSONAL PROPERTY LEASES") excluding Contracts with customers for lease of pagers; and (ix) All Contracts not listed pursuant to Sections 6.7.1 (i) through 6.7.1 (viii) but which are (a) material to the API Business; or (b) not made in the ordinary course of the API Business. Except as set forth in TDS Disclosure Letter Schedule 6.7, API has delivered or made available to TSR Paging true, correct and complete copies of each of the Contracts listed on TDS Disclosure Letter Schedule 6.7 and TDS Disclosure Letter Schedule 6.8, including all amendments and supplements thereto other than API Personal Property Leases with individual customers on standard forms (the standard forms having been supplied). 6.7.2 ABSENCE OF BREACHES OR DEFAULTS. Except as set forth in TDS Disclosure Letter Schedule 6.6, all of the Contracts to which API or any Subsidiary of API is a party or bound ("API CONTRACTS") are valid and in full force and effect. API or its Subsidiaries have duly performed all of their material obligations under such Contracts to the extent those obligations to perform have accrued, and no material violation of, or material default or breach under, such Contracts by API or its Subsidiaries, or, to TDS's knowledge, any other party has 42 occurred and neither API nor its Subsidiaries, nor, to TDS's knowledge, any other party has repudiated any material provisions thereof. 6.7.3 PRODUCT WARRANTY. API and its Subsidiaries have committed no act, and there has been no omission, which would result in, and there has been no occurrence which would give rise to, any material product liability or material liability for breach of warranty (whether covered by insurance or not) on the part of API or its Subsidiaries, with respect to products sold, or services rendered prior to the Closing. 6.8 CUSTOMERS, DISTRIBUTORS AND SUPPLIERS. TDS Disclosure Letter Schedule 6.8 sets forth a complete and accurate list of the names and addresses of API and its Subsidiaries' (i) ten (10) largest direct customers and the ten (10) largest reseller customers for November 1997 for each sales region, showing the approximate recurring revenue in dollars by API and its Subsidiaries to each such customer during such month; and (ii) five (5) largest suppliers for January through November 1997 showing the approximate total purchases in dollars by API and its Subsidiaries from each such supplier during such period. As of the date hereof, neither API nor any of its Subsidiaries has received any communication from any customer or supplier named on TDS Disclosure Letter Schedule 6.8 of any intention to terminate or reduce purchases from or supplies to API and its Subsidiaries. 6.9 OPERATION OF THE API BUSINESS. Except as set forth in TDS Disclosure Letter Schedule 6.9, (i) TDS and API have conducted the API Business only through API and its Subsidiaries and not through any other divisions or any direct or indirect Subsidiary or Affiliate of TDS and (ii) no part of the API Business is operated by TDS or API through any entity other than API and its Subsidiaries. 6.10 INVENTORY. All Inventory of API and its Subsidiaries ("API INVENTORY") is of good, usable and merchantable quality and, except as set forth on TDS Disclosure Letter Schedule 6.10, does not include obsolete or discontinued items not otherwise saleable for ten dollars ($10) or more in the ordinary course of business. Except as set forth on TDS Disclosure Letter Schedule 6.10 or in amounts which are not material; 6.10.1 all API Inventory is of such quality as to meet the quality control standards of API and any applicable governmental quality control standards; 6.10.2 all API Inventory is saleable as current Inventory at the current prices thereof in the ordinary course of business; 6.10.3 all API Inventory is recorded on the books of the API Business and in the API Interim Balance Sheet at the net book value determined in accordance with GAAP; 6.10.4 except for a write-down made in September 1996, and September 1997 no write-down in inventory has been made or should have been made pursuant to GAAP 43 during the past two years. Except for items undergoing repair off premises, in the possession of employees or customers all API Inventory is located at the API Leased Real Property. 6.11 ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither API or any Subsidiaries of API, nor any officer, employee or agent of API or its Subsidiaries, nor any other Person acting on their behalf, has, directly or indirectly, within the past five years given or agreed to give any gift or similar benefit to any customer, supplier, governmental employee or other Person who is or may be in a position to help or hinder the API Business (or assist in connection with any actual or proposed transaction relating to the API Business) (i) which subjected or might have subjected API or any of its Subsidiaries to any damage or penalty in any civil, criminal or governmental litigation or proceeding, (ii) which if not given in the past, might have had a Material Adverse Effect, (iii) which if not continued in the future, might have a Material Adverse Effect or subject TSR Wireless to suit or penalty in any private or governmental litigation or proceeding, (iv) for any of the purposes described in Section 162(c) of the Code or (v) for the purpose of establishing or maintaining any concealed fund or concealed bank account. 6.12 NO CONFLICT OR VIOLATION. Subject to Sections 8.2, 11.6 and 12.6 hereof and except as set forth on TDS Disclosure Letter Schedule 6.12, neither the execution, delivery or performance of this Agreement, the Ancillary Agreements or the Option Agreement by TDS and/or API (as applicable) nor the consummation by TDS and/or API (as applicable) of the transactions contemplated hereby, including the Merger, and thereby will (a) violate or conflict with any provision of the Certificate of Incorporation or Bylaws of TDS or API or any of API's Subsidiaries, (b) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration under, or result in the creation of any Encumbrance (other than a Permitted Encumbrance) upon any of the API Assets under, or require any Consent under any of the terms, conditions or provisions of any API Contract, any Financing Obligation of API, any Authorization, any API Real Property Lease, API Personal Property Lease, franchise, Permit, agreement, or other instrument or obligation (i) to which API or any of its Subsidiaries is a party or (ii) by which the API Assets are bound, (c) violate any statute, rule, regulation, ordinance, code, order, judgment, ruling, writ, injunction, decree or award to which API or any of its Subsidiaries or the API Assets is subject, (d) impose any Encumbrance (other than a Permitted Encumbrance) on the API Assets. Except as specified in TDS Disclosure Letter Schedule 6.12, or in connection with necessary corporate approvals by API of the Merger and transactions contemplated hereby, no Consent is required to be obtained or made by API or any of its Subsidiaries in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby. 44 6.13 REGULATORY MATTERS. 6.13.1 FCC LICENSES. (i) TDS Disclosure Letter Schedule 6.13.1 lists (a) each FCC License used in the operation of the API Business ("API FCC LICENSE") and, in each case, the name of the licensee, the call sign, the operating frequency or frequencies, the location and the expiration date of the API FCC License; and (b) each FCC License Application filed as part of the operation of the API Business ("API FCC LICENSE APPLICATION") as of the date hereof and, in each case, the name of the applicant, the proposed frequency or frequencies, the proposed location and the FCC file number of the API FCC License Application. Pursuant to the provisions of Section 10.2.1, TDS has made available to TSR Paging for inspection copies of each API FCC License and API FCC License Application. (ii) Except as set forth on TDS Disclosure Letter Schedule 6.13.1, (A) none of the API FCC Licenses or API FCC License Applications is subject to any purchase, sale, option or right of first refusal agreements; (B) API has good and marketable title, to the extent allowed by law, to the API FCC Licenses; and (C) subject to the regulatory jurisdiction of the FCC , API holds all API FCC Licenses free and clear of all Encumbrances. (iii) TDS Disclosure Letter Schedule 6.13.1 lists each 929 MHz one-way paging frequency for which API or any of its Subsidiaries currently has nationwide exclusivity ("API 929 MHz EXCLUSIVE FREQUENCY"). Except as set forth in TDS Disclosure Letter Schedule 6.13.1, for each API 929 MHz Exclusive Frequency: (i) API and its Subsidiaries timely constructed and placed into operation in accordance with FCC Rules sufficient transmitters to comply with FCC 929 MHz Exclusivity Requirements; (ii) API and its Subsidiaries have continued to operate sufficient transmitters to comply with the terms and conditions of such API FCC Licenses and Authorizations, the Communications Act, the FCC Rules and all applicable state laws and regulations. 6.13.2 INTENTIONALLY OMITTED. 6.13.3 FILINGS, ETC. (i) The API FCC Licenses and API FCC License Applications and are the only FCC and PUC Permits and Authorizations necessary to conduct the API Business. Except as set forth on TDS Disclosure Letter Schedule 6.13.3, API and its Subsidiaries have duly and in a timely fashion secured or filed under applicable law all necessary Permits and Authorizations from, and have filed all required registrations, applications, reports and any other documents with, the FCC, and, if applicable, any PUC and any other Governmental Authority exercising jurisdiction or having jurisdiction over API and its Subsidiaries, in each case, with respect to the API Business. Except as set forth on TDS Disclosure Letter Schedule 6.13.3, (a) the API FCC Licenses (b) all other Authorizations are in full force and effect, are 45 valid for the balances of the current license term, are not impaired by acts or failures to make required filings on the part of API or any of its Subsidiaries, and are free and clear of restrictions that may reasonably be expected to limit the full operation of the API FCC Licenses or Authorizations, in each case without adverse conditions, restrictions or impairments, except for such conditions as are generally applicable to holders of such FCC Licenses and Authorizations. No renewal of any API FCC License would constitute a major environmental action under the rules of the FCC. (ii) Except as set forth on TDS Disclosure Letter Schedule 6.13.3, neither API nor its Subsidiaries is subject to any Order or any pending or, to the knowledge of TDS, threatened, Action (excluding rule making that has general industry applicability) which affects or would be expected to affect, in any material respect, the validity of any API FCC License, or result in the revocation, termination, or adverse modification thereof, or impair the renewal thereof. Except as set forth on TDS Disclosure Letter Schedule 6.13.3, no event has occurred and is continuing (excluding rule making that has general industry applicability) that could reasonably be expected to (a) result in the revocation, termination, non-renewal or adverse modification of any API FCC License or (b) materially and adversely affect any rights of API or its Subsidiaries thereunder. 6.13.4 FEES. API and its Subsidiaries have paid all franchise, license, regulatory or other fees and charges which have become due and payable pursuant to any applications, filings, recordings and registrations with, and all Authorizations and Permits from, the FCC, any PUC or any other Governmental Authority, in respect of the API Business. 6.13.5 SHARING AGREEMENTS. Except as set forth on TDS Disclosure Letter Schedule 6.13.5, neither API nor any of its Subsidiaries is a party to any agreement for the shared use of facilities or equipment used in connection with the API Business. 6.13.6 OPERATIONS. The equipment operating pursuant to the API FCC Licenses or PUC Authorizations of API and its Subsidiaries is operating in all material respects in accordance with the terms and conditions of such API FCC License or Authorizations, the Communications Act, the FCC Rules and all applicable state laws and regulations. 6.13.7 CONSTRUCTION. Except as set forth on TDS Disclosure Letter Schedule 6.13.7 all construction for facilities that API intends to place in service proposed in any API FCC License is proceeding in a manner that may reasonably be expected to allow compliance with applicable FCC construction benchmarks, the completion of such construction and commencement of operations within the time specified in the relevant API FCC License. 46 6.14 FINANCIAL STATEMENTS; RECEIVABLES; PUBLIC FILINGS. 6.14.1 FINANCIAL STATEMENTS. The API Financial Statements are attached hereto as TDS Disclosure Letter Schedule 6.14.1. The API Financial Statements (a) were prepared in accordance with the Books and Records of API and its Subsidiaries, (b) were prepared in accordance with generally accepted accounting principles consistently applied throughout the periods covered thereby subject, in the case of the API Unaudited Financial Statements, to the absence of footnotes and to normal year-end adjustments and (c) fairly present (i) the consolidated assets, liabilities (including all reserves) and financial position of API and its Subsidiaries (other than AMS) and (ii) the assets, Liabilities (including all reserves) and financial position of AMS in each case as of the respective dates thereof and the results of operations and changes in cash flows for the periods then ended, consolidated as appropriate. The API Audited Financial Statements have been audited by Arthur Anderson LLP, independent certified public accountants, whose reports thereon are included with such API Audited Financial Statements. 6.14.2 RECEIVABLES. All of the receivables of API and its Subsidiaries (including accounts receivable, loans receivable and advances) which have arisen in connection with the API Business and which are reflected in the Interim Financial Statements, and all such receivables which will have arisen since the Interim Balance Sheet Date, have arisen only from BONA FIDE transactions in the ordinary course of business. All receivables of API and its Subsidiaries on the date of this Agreement are, and on the Closing Date will be, good and collectible in the ordinary course of business of API within 120 days of their incurrence, subject to any applicable reserves set forth in the Interim Balance Sheet of API. TDS has no knowledge of any facts or circumstances generally which would result in any material increase in the uncollectability of such receivables as a class in excess of the reserves therefor set forth on the Interim Financial Statements. TDS Disclosure Letter Schedule 6.14.2 hereto accurately lists as of November 28, 1997 all receivables arising out of or relating to the API Business in excess of $1,000, the amount owing and the aging of such receivable and the name and last known address of the party from whom such receivable is owing. 6.14.3 FILINGS. TDS Disclosure Letter Schedule 6.14.3 sets forth a list of all reports filed by API with the SEC under the Exchange Act during the period from January 1, 1995 to the date hereof (collectively, the "SEC REPORTS"), true and correct copies of which have been made available to TSR Paging. None of the SEC Reports, as of their respective dates (as amended through the date hereof) contained any untrue statement of material fact or omitted to state a material fact with respect to the API Business required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading. 6.15 BOOKS AND RECORDS. API and its Subsidiaries have made and kept (and given TSR Paging access to) the Books and Records of API, which, in all material respects accurately and fairly reflect the activities of API and its Subsidiaries that would be so recorded. 47 6.16 LITIGATION. Except as set forth on Schedules 6.13.3 and 6.16 there is no Action or Order, pending or to the knowledge of API threatened (a) against, related to or affecting (i) API or any of its Subsidiaries or the API Assets, or (ii) any stockholders (including TDS) officers or directors of API or any of its Subsidiaries (in each case, in such capacity) and which either (A) may be reasonably expected to result in Damages in excess of $100,000 in respect of any individual Order for the payment of money damages (or $200,000 in the aggregate), or (B) seeks as of the date hereof to delay, limit or enjoin the transactions contemplated by this Agreement, the Ancillary Agreements, the Merger Agreement or the Option Agreement or (b) in which TDS (in a matter directly related to API or the API Business), API or any of its Subsidiaries is a plaintiff, including any derivative suits brought by or on behalf of TDS, API or any of its Subsidiaries. None of TDS (in a matter directly related to API or the API Business), API or any of its Subsidiaries is in default with respect to or subject to any Order, and to the knowledge of TDS, there are no unsatisfied Orders against API or any of its Subsidiaries or the API Assets. 6.17 COMPLIANCE WITH LAW. API and its Subsidiaries are and have been in compliance in all material respects with all Authorizations, Regulations, and Permits in respect of the API Assets and the API Business; IT BEING UNDERSTOOD that nothing in this representation is intended to address any compliance issues that are the subject of any other representation or warranty set forth herein. 6.18 NO BROKERS. Except for the fees payable to Credit Suisse First Boston and BancBoston Securities Inc. in connection with the transactions contemplated hereby, which shall be paid by TDS, no broker, finder or similar agent is entitled to any finder's fee, brokerage fees or commission or similar payment from TDS, API or any of its Subsidiaries in connection with the transactions contemplated hereby. 6.19 NO OTHER AGREEMENTS TO SELL THE API ASSETS. Neither TDS nor API nor any of their respective officers, directors or affiliates have any commitment or legal obligation, absolute or contingent, to any other Person other than TSR Wireless and TSR Paging to sell, assign, transfer or effect a sale of the API Assets (other than Sales of Inventory in the ordinary course of business), to sell or effect a sale of the capital stock of API or any of its Subsidiaries (other than in connection with existing employee stock option and stock purchase plans to effect any merger, consolidation, exclusive license, liquidation, dissolution or other reorganization of API or any of its Subsidiaries, or to enter into any agreement or cause the entering into of an agreement with respect to any of the foregoing business combination transactions. 6.20 PROPRIETARY RIGHTS. 6.20.1 PROPRIETARY RIGHTS. TDS Disclosure Letter Schedule 6.20 lists all of API and its Subsidiaries' domestic and foreign registrations of trademarks and of other marks, trade names or other trade rights, and all pending applications for any such registrations, all of API's and its Subsidiaries' registered copyrights and all of API's and its Subsidiaries' patents 48 and pending patent applications, and all agreements under which API or its Subsidiaries are licensed to use Proprietary Rights. 6.20.2 OWNERSHIP AND PROTECTION OF PROPRIETARY RIGHTS. API or one of its Subsidiaries owns and/or has the right to use each of the Proprietary Rights listed on TDS Disclosure Letter Schedule 6.20. The Proprietary Rights listed on TDS Disclosure Letter Schedule 6.20 constitute all of the Proprietary Rights necessary to conduct the API Business in the manner presently conducted. None of the Proprietary Rights is involved in any pending or, to the knowledge of TDS, threatened litigation. No other Person (i) has the right to use any of the Proprietary Rights, except pursuant to the Contracts; or (ii) to TDS' knowledge, except as set forth in TDS Disclosure Letter Schedule 6.20, is infringing upon any Proprietary Rights. To TDS' knowledge, the use by API and its Subsidiaries of the Proprietary Rights is not infringing upon or otherwise violating the rights of any third party. No proceedings have been instituted against or notices received by API or any of its Subsidiaries that are presently outstanding alleging that the use by API or any of its Subsidiaries of the Proprietary Rights infringes upon or otherwise violates any rights of a third party in or to such Proprietary Rights. All Proprietary Rights are assignable by API and its Subsidiaries to TSR Wireless in the manner contemplated by this Agreement. 6.21 ENVIRONMENTAL MATTERS. 6.21.1 COMPLIANCE WITH ENVIRONMENTAL LAW. Each of API and its Subsidiaries has complied and is in compliance in all material respects with all applicable Environmental Laws pertaining to any of the properties and assets of the API Business (including the Facilities of API and its Subsidiaries ("API FACILITIES")) and the use and ownership thereof, and to the operation of the API Business. No violation by API or any of its Subsidiaries is being alleged of any applicable Environmental Law relating to any of the properties and assets of the API Business including the API Facilities or the use, occupation or ownership thereof, or to the operation of the API Business. 6.21.2 OTHER ENVIRONMENTAL MATTERS. Neither API nor to the knowledge of API any other Person (including any tenant or subtenant) has caused or taken any action that will result in, and neither API nor any of its Subsidiaries is subject to, any material Liability relating (i) environmental conditions on, under, or about the API Facilities, including without limitation, the air, soil and groundwater conditions at such Facilities or (ii) the past or present use, management, handling, transport, treatment, generation, storage, disposal or Release of any Hazardous Materials. TDS has disclosed and made available to TSR Paging all information, including, without limitation, all studies, analyses and test results, in the possession, custody or control of or otherwise known to TDS relating to (x) the environmental conditions on, under or about the API Facilities, and (y) any Hazardous Materials used, managed, handled, transported, treated, generated, stored or Released by API or any other Person on, under, about or from any of the API Facilities, or otherwise in connection with the use or operation of the API Business. 49 6.22 TAX MATTERS. 6.22.1 API has (or by the Closing will have) duly and timely filed all Tax returns relating to the API Business with respect to Taxes through the Closing Date for which TSR Wireless could have post-closing liability ("API PCD TAXES") required to be filed on or before the Closing Date ("API PCD TAX RETURNS"). Except for API PCD Taxes set forth on TDS Disclosure Letter Schedule 6.22, which are being contested in good faith and by appropriate proceedings, the following API PCD Taxes have (or by the Closing Date will have) been duly and timely paid: (i) all API PCD Taxes shown to be due on the API PCD Tax Returns, (ii) all deficiencies and assessments of API PCD Taxes of which API has or by the Closing Date will have received written notice. All Taxes required to be withheld by or on behalf of API in connection with amounts paid or owing to any employee, independent contractor, creditor or other party with respect to API ("API WITHHOLDING TAXES") have been withheld, and such withheld taxes have either been duly and timely paid to the proper Governmental Authorities or set aside in accounts for such purpose. 6.22.2 Except as set forth on TDS Disclosure Letter Schedule 6.22, (i) all API PCD Tax Returns have been examined by the relevant taxing authority or the period for assessment of the Taxes in respect of which such Tax returns were required to be filed has expired, and (ii) no agreement or other document extending, or having the effect of extending, the period of assessment or collection of any API PCD Taxes or API Withholding Taxes, and no power of attorney with respect to any such Taxes, has been filed with the Internal Revenue Service ("IRS") or any other Governmental Authority. 6.22.3 Except as set forth on TDS Disclosure Letter Schedule 6.22, (i) there are no API PCD Taxes or API Withholding Taxes for which a deficiency has been asserted in writing by any Governmental Authority to be due and (ii) no issue has been raised in writing by any Governmental Authority in the course of any audit with respect to API PCD Taxes or API Withholding Taxes. Except as set forth on TDS Disclosure Letter Schedule 6.22.3, no API PCD Taxes and no API Withholding Taxes are currently under audit by any Governmental Authority of which API has, or will have by the Closing, received written notice. 6.22.4 TSR Wireless will not be required to deduct and withhold any amount pursuant to section 1445(a) of the Code upon the transfer of the API Business to TSR Wireless. 6.22.5 Except as set forth on TDS Disclosure Letter Schedule 6.22, there is no assessment or Action or administrative appeal pending, or threatened of which API has received assessment or written notice against or relating to API in connection with API PCD Taxes. 6.23 INVESTMENT INTENT. TDS is acquiring its Membership Interests for its own account for investment and with no present intention of distributing or reselling such 50 Membership Interests or any part thereof. TDS is fully informed as to the applicable limitations upon any distribution or resale of Membership Interests, which have not been registered pursuant to the Securities Act. TDS agrees not to distribute or resell any of the Membership Interests if such distribution or resale would constitute a violation of the Securities Act by TDS. ARTICLE VII REPRESENTATIONS AND WARRANTIES OF TSR WIRELESS TSR Wireless hereby represents and warrants to the Transferors as follows: 7.1 ORGANIZATION OF TSR WIRELESS. TSR Wireless is a limited liability company duly formed validly existing and in good standing under the laws of the State of Delaware. Copies of the Certificate of Formation and Limited Liability Company Agreement of TSR Wireless, heretofore delivered by TSR Wireless to each of the Transferors, are accurate and complete as of the date hereof. TSR Wireless is duly qualified to do business and is in good standing in each jurisdiction in which such qualification is required or will be required as a result of the transactions contemplated by this Agreement by applicable law, except where the failure to be so qualified will not have a material adverse effect on the ability of TSR Wireless to consummate the transactions contemplated hereby. TSR Wireless has not engaged in any activity other than in connection with the transactions contemplated hereby. 7.2 AUTHORIZATION. TSR Wireless has full corporate power and authority to execute and deliver this Agreement, the Ancillary Agreements and the Option Agreement and to perform its obligations hereunder and thereunder. The execution, delivery and performance by TSR Wireless of this Agreement, the Ancillary Agreements and the Option Agreement has been duly authorized by all requisite action on the part of TSR Wireless. This Agreement and the Option Agreement have been duly executed and delivered by TSR Wireless and are valid and binding obligations of TSR Wireless and each of the Ancillary Agreements when executed at Closing will constitute a valid and binding obligation of TSR Wireless enforceable against TSR Wireless in accordance with their respective terms. 7.3 NO CONFLICT OR VIOLATION. Neither the execution and delivery of this Agreement, the Ancillary Agreements or the Option Agreement by TSR Wireless, nor the performance of its obligations hereunder and thereunder will result in (i) a violation of or a conflict with any provision of the Certificate of Formation of TSR Wireless or the TSR Wireless LLC Agreement, or (ii) violate or conflict with or result in a breach of or constitute a default under any term or provision of any contract, agreement, commitment, lease, license, franchise or permit or other instrument or obligation to which TSR Wireless is a party or is bound, or (iii) a violation by TSR Wireless of any Regulation or Order to which TSR Wireless is subject. 51 7.4 CONSENTS AND APPROVALS. No Authorization, Consent or Permit, is required to be made or obtained by TSR Wireless in connection with TSR Wireless's execution, delivery and performance of this Agreement. 7.5 BROKER AND FINDERS. Neither TSR Wireless nor any of its Affiliates has entered into any agreement or incurred any obligation, directly or indirectly, for the payment of any brokerage fees, commissions or finder's fee in connection with the transactions contemplated by this Agreement. 7.6 LITIGATION AND PROCEEDINGS. There are no Actions pending or, to the best of knowledge of TSR Wireless, threatened against the consummation by TSR Wireless of the transactions contemplated hereby. 7.7 COMPLIANCE WITH LAW. TSR Wireless is, and since its organization has been, in compliance in all material respects with all applicable Regulations and Permits. ARTICLE VIII COVENANTS OF THE TRANSFERORS AND TSR WIRELESS The Transferors and TSR Wireless hereby each covenant as follows: 8.1 FURTHER ASSURANCES. Each of the parties hereto agrees, both before and after the Closing, (i) to use their respective best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement, the Ancillary Agreements and the Merger, (ii) to execute any documents, instruments or conveyances of any kind which may be reasonably necessary or advisable to carry out any of the transactions contemplated hereunder and under the Ancillary Agreement and the Merger, (iii) to cooperate with each other in connection with the foregoing, including using their respective best efforts (A) to obtain all necessary Authorizations and Consents; (B) to obtain all necessary Permits as are required to be obtained under any Regulations, (C) to effect all necessary registrations and filings, including, without limitation, submissions of information requested by Governmental Authorities, and (D) to fulfill all conditions to this Agreement provided, in connection with the Merger, the use of best efforts (x) shall require TDS to offer merger consideration of $2.25 per share in cash (net) to acquire the outstanding Common Stock of API in the Merger not owned by TDS, (y) subject to approval of the Merger by a special committee of the independent directors of the Board of Directors of API, shall require TDS to forthwith consummate the Merger upon acquiring ninety (90) or more percent of the outstanding Common Stock of API and if TDS shall fail to acquire ninety (90) percent of the outstanding Common Stock of API, to proceed forthwith and consummate the Merger in accordance with applicable state law and (z) shall not require TDS to complete a merger which does not have the recommendation of a special committee of independent directors of API; PROVIDED, 52 HOWEVER, that neither shall be required to make any material payments, commence litigation or agree to any material modifications to the terms of any Contracts, Real Property Leases or Permits in connection with the foregoing. Notwithstanding the generality of this Section 8.1, TSR Paging's due diligence review of the API FCC Licenses has raised certain discrepancies and errors that TSR Paging believes should be corrected prior to Closing. API will use its reasonable commercial efforts, with TSR Paging's cooperation, to correct such discrepancies and errors prior to Closing and will correct such errors and discrepancies within its control. 8.2 FCC CONSENT. Each of the parties hereto acknowledges and agrees that the transactions contemplated by this Agreement, including but not necessarily limited to assignment of the TSR Paging FCC Licenses to TSR Wireless and assignment of the API FCC Licenses to TSR Wireless, can only by accomplished upon receipt of prior FCC Consent. Without in any way limiting the generality of Section 8.1 hereof, the parties agree to cooperate with each other, including using their respective best efforts, to promptly prepare, file with the FCC, prosecute and obtain FCC grant by Final FCC Order within the time frame specified in Section 15.1.1 (ii) of this Agreement of the applications necessary to obtain all required FCC Consent, including but not necessarily limited to applications to obtain FCC Consent to assignment of the API FCC Licenses to TSR Wireless (collectively, the "API-TSR WIRELESS ASSIGNMENT APPLICATION") and to obtain FCC Consent to assignment of the TSR Paging FCC Licenses to TSR Wireless (collectively, the "TSR PAGING-TSR WIRELESS ASSIGNMENT APPLICATION"). With respect to the API-TSR Wireless Assignment Application and the TSR Paging-TSR Wireless Assignment Application: (A) TDS will prepare those portions of such applications required for TDS, API and/or their Subsidiaries; (B) TSR Paging will prepare those portions of such applications required for TSR Paging; (C) TSR Wireless will specify the manner in which TSR Wireless's portions of such applications are prepared; (D) TSR Wireless will pay all FCC-imposed filing fees with respect to the API-TSR Wireless Assignment Application; and (E) TSR Wireless will pay all FCC-imposed filing fees with respect to the TSR Paging-TSR Wireless Assignment Application. 8.3 NOTIFICATION OF CERTAIN MATTERS. From the date hereof through the Closing, each Transferor shall give prompt notice to TSR Wireless and the other Transferor and TSR Wireless shall give prompt notice to each Transferor of (a) the occurrence, or failure to occur, of any event which occurrence or failure would be likely to cause any of the Transferors' or TSR Wireless's respective representations or warranties contained in this Agreement to be untrue or inaccurate in any material respect and (b) any failure of any Transferor or to comply with or satisfy any of its respective covenants, conditions or agreements to be complied with or satisfied by it under this Agreement; PROVIDED, HOWEVER, that such disclosure shall not be deemed to cure any breach of a representation, warranty, covenant or agreement, or to satisfy any condition. ARTICLE IX 53 COVENANTS OF TSR PAGING TSR Paging hereby covenants as follows: 9.1 ACCESS TO INFORMATION. 9.1.1 From the date hereof through the Closing, subject to any confidentiality obligations of TSR Paging, TSR Paging shall, and shall cause its officers, directors and employees to, afford TDS and its Representatives, during normal business hours and upon reasonable notice to TSR Paging and in a manner which will not unduly interfere with the operation of the TSR Paging Business, complete access at all reasonable times to the TSR Paging Assets for the purpose of inspecting the same, and to the officers and employees of TSR Paging, and shall furnish TDS and its Representatives all financial, operating and other data and information as TDS may reasonably request, except to the extent that such access would violate any Regulation to which TSR Paging, its employees, the TSR Paging Assets or the TSR Paging Business is subject; PROVIDED that TSR Paging shall have the right to have a Representative present at all such times; and PROVIDED FURTHER that such access shall be at the expense of the party exercising its rights hereunder. Notwithstanding such access and the information provided to TDS after the date hereof, TDS and TSR Wireless each acknowledge and agrees that TSR Paging makes no representation or warranty, express or implied, at common law, by statute or otherwise, except as specifically set forth in this Agreement. 9.2 EMPLOYEE AND EMPLOYEE BENEFIT MATTERS. 9.2.1 TSR Paging shall use all reasonable efforts to cause all employees of TSR Paging to make available their employment services to TSR Wireless (the "TSR PAGING EMPLOYEES"). Effective as of the Closing Date, TSR Wireless shall offer employment to all of the TSR Paging Employees on the same terms and conditions and with the same benefits as enjoyed by them prior to the Closing Date and shall assume all Liabilities of TSR Paging in respect of the TSR Paging Employees or other beneficiaries or dependents, including all Liabilities under the Employee Plans of TSR Paging and all Liabilities in relation to life, disability, accidental death or dismemberment, supplemental unemployment compensation, medical, dental, hospitalization, other health or other welfare or fringe benefits or expense reimbursements. In connection therewith, TSR Wireless shall assume all of TSR Paging's responsibility for, become the successor plan sponsor of, and assume, each of TSR Paging's Employee Plans. 9.2.2 From and after the Closing, TSR Wireless shall assume and become solely responsible for any and all Liabilities of TSR Paging in respect of each TSR Paging Employee, or the beneficiary or dependent of each such TSR Paging Employee, to provide post-employment welfare benefits to such TSR Paging Employee, beneficiary or dependent following termination of employment with TSR Wireless. 54 9.2.3 From and after the Closing Date, TSR Wireless shall assume and be solely responsible for any and all Liabilities relating to or arising in connection with the requirements of section 4980B of the Code to provide continuation of health care coverage under any Employee Plan of TSR Paging in respect of TSR Paging Employees and their covered dependents. 9.2.4 From and after the Closing Date, TSR Wireless shall assume and be solely responsible for any and all Liabilities to or in respect of any TSR Paging Employee relating to or arising in connection with any and all claims for workers' compensation benefits arising in connection with any occupational injury or disease occurring or existing on or prior to the Closing Date. 9.2.5 TSR Paging will, and TSR Wireless will, (i) treat TSR Wireless as a "successor employer' and TSR Paging as a "predecessor," within the meaning of sections 3121(a)(1) and 3306(b)(1) of the Code, with respect to TSR Paging Employees who are employed by TSR Wireless for purposes of Taxes imposed under the United States Federal Unemployment Tax Act ("FUTA") or the United States Federal Insurance Contributions Act ("FICA") and (ii) cooperate with each other to avoid, to the extent possible, the filing of more year within which the Closing Date occurs. 9.2.6 At the request of TSR Wireless with respect to any particular applicable Tax law relating to employment, unemployment insurance, social security, disability, workers' compensation payroll, health care or other similar Tax other than Taxes imposed under FICA and FUTA, TSR Paging will and TSR Wireless will, (i) treat TSR Wireless as a successor employer and TSR Paging as a predecessor employer, within the meaning of the relevant provisions of such Tax law, with respect to TSR Paging Employees who are employed by TSR Wireless and (ii) cooperate with each other to avoid, to the extent possible, the filing of more than one individual information reporting form pursuant to each such Tax law with respect to each TSR Paging Employee for the calendar year within which the Closing Date occurs. 9.2.7. Before and after the Closing, TSR Paging will use all reasonable efforts to cause TSR Wireless to take, or cause to be taken, all actions necessary, proper or advisable to carry out its obligations hereunder. 9.3 CONDUCT OF BUSINESS. From the date hereof through the Closing TSR Paging shall, except as contemplated by this Agreement, or as consented to by TDS in writing, operate its business in the ordinary course and substantially in accordance with past practice and will use its best efforts not to take any action inconsistent with this Agreement. Without limiting the generally of the foregoing, TSR Paging shall not, except as specifically contemplated by this Agreement: 9.3.1 engage in any transaction not permitted by Sections 5.10 and 5.11 of the Securities Purchase Agreement dated July 17, 1995 between, amongst other Persons, TSR Paging and the Investors; 55 9.3.2 do any other act which would cause any representation or warranty of TSR Paging in this Agreement to be or become untrue in any material respect; or 9.3.3 enter into any agreement, or otherwise become obligated, to do any action prohibited hereunder. 9.3.4 directly or indirectly, (a) enter into any merger, consolidation or reorganization in which TSR Paging is not the surviving corporation or (b) transfer or agree to transfer all or substantially all TSR Paging's Assets, unless prior to such merger, consolidation, reorganization or asset transfer (collectively, a "TRANSACTION"), the surviving corporation or the transferee, respectively, shall have agreed in writing (i) to assume the obligations of TSR Paging under this Agreement, and for that purpose references in the Exchange and Registration Rights Agreement to "Registrable Securities" shall be deemed to include any securities which API or its shareholders would be entitled to receive pursuant to any such Transaction, or (ii) to purchase the API Assets and the API Assumed Liabilities or otherwise acquire the API Business for consideration consisting of cash, a cash equivalent or freely transferable and marketable securities (or, if not freely transferable and marketable, subject to restrictions no more onerous than on the securities received by the Investors in the Transaction), PROVIDED that such consideration (x) shall be the same type of consideration as payable to TSR Paging or its shareholders in connection with the Transaction, (y) shall be payable on the same terms as the consideration paid to TSR Paging in the Transaction, (z) shall be in an amount that bears the same proportion to the consideration paid to TSR Paging in the Transaction as the initial Membership Interest of API pursuant to Section 3.1 bears to the initial Membership Interest of TSR Paging pursuant to Section 3.1 (i.e., the aggregate consideration paid in such a Transaction for TSR Paging and for the API Assets and API Assumed Liabilities shall be allocated 70% to TSR Paging and 30% to API), and PROVIDED FURTHER that the obligation to purchase the API Assets and the API Assumed Liabilities or otherwise acquire the API Business shall be contingent on and subject only to the satisfaction by API or TDS of closing conditions comparable to those set forth in Sections 11.6 and 11.7, and other usual and customary closing conditions in acquisitions of paging businesses. 9.4 1997 FINANCIAL STATEMENTS. TSR Paging shall prepare its audited financial statements for the fiscal year ending on December 31, 1997 and deliver a copy thereof to TDS on or before May 1, 1998. ARTICLE X COVENANTS OF TDS TDS hereby covenants as follows: 10.1 NO SOLICITATION. 56 10.1.1 NO SOLICITATION. From the date hereof through the Closing or the earlier termination of this Agreement, TDS shall not, and shall use its best efforts to cause its Representatives not to, directly or indirectly, enter into, solicit, initiate or continue any discussions or negotiations with, or encourage or respond to any inquires or proposals by, or participate in any negotiations with, or provide any information to, or otherwise cooperate in any other way with, any Person, other than TSR Paging and its Representatives, concerning any sale of all or any substantial portion of the API Assets or the API Business, or of any shares of capital stock of API or its Subsidiaries, or any merger, consolidation, liquidation, dissolution or exclusive licensing arrangement or similar transaction involving API or its Subsidiaries (each such transaction being referred to herein as a "PROPOSED API ACQUISITION TRANSACTION"). 10.1.2 NOTIFICATION. TDS shall promptly notify TSR Paging if any discussions or negotiations are sought to be initiated, any inquiry or proposal is made, or any information is requested with respect to any Proposed API Acquisition Transaction and notify TSR Paging of the terms of any proposal which it may receive in respect of any such Proposed API Acquisition Transaction, including, without limitation, the identity of the prospective purchaser or soliciting party, except to the extent that any such notification would violate any now existing agreement of TDS or API. 10.2 ACCESS TO INFORMATION. 10.2.1 From the date hereof through the Closing, TDS shall, and shall cause API and their respective officers, directors and employees to, afford TSR Paging and its Representatives, during normal business hours and upon reasonable notice to TDS and API and in a manner which will not interfere with the operation of the API Business, complete access at all reasonable times to the API Assets and the API Business for the purpose of inspecting the same, and to the officers and employees of API, and shall furnish TSR Paging and its authorized representatives all financial, operating and other data and information as TSR Paging may reasonably request, except to the extent that such access would violate any governmental regulation, law or order to which TDS, API, their employees or the API Assets are subject; PROVIDED that API shall have the right to have Representatives present at all such times; and PROVIDED FURTHER that such access shall be at the expense of TSR Paging. Notwithstanding such access and the information provided to TSR Paging after the date hereof, TSR Paging and TSR Wireless acknowledge and agree that TDS makes no representations or warranties, express or implied, at common law, by statute or otherwise, except as specifically set forth in this Agreement. 10.2.2 TSR Paging shall have the right, at its sole cost and expense to (i) after consultation with and with the consent of API (not to be unreasonably withheld or delayed) conduct tests of the soil surface or subsurface waters and air quality at, in, on, beneath or about the API Leased Real Property, and such other procedures as may be recommended by an independent environmental consultant selected by TSR Paging (the "CONSULTANT") based on its reasonable professional judgment, in a manner consistent with good engineering practice, (ii) 57 inspect records, reports, permits, applications, monitoring results, studies, correspondence, data and any other information or documents relevant to environmental conditions or environmental noncompliance, and (iii) inspect all buildings and equipment at the API Facilities, including without limitation the visual inspection of the API Facilities for asbestos-containing construction materials; PROVIDED, in each case, such tests and inspections shall be conducted only (a) during regular business hours; and (b) in a manner which will not interfere with the operation of the API Business and/or the use of, access to or egress from the API Facilities. 10.2.3 TSR Paging's right to conduct tests, inspect records and other documents, and visually inspect all buildings and equipment at the API Facilities shall also be subject to the following terms and conditions: (i) All testing performed on TSR Paging's behalf shall be conducted by the Consultant; (ii) A Representative of TDS shall have the right to accompany the Consultant as it performs testing; (iii) Except as otherwise required by law, any information concerning the API Leased Real Property gathered by TSR Paging or the Consultant as the result of, or in connection with, the testing shall be kept confidential in accordance with subsection (iv) below and shall not be revealed to, or discussed with, anyone other than Representatives of TSR Paging or Representatives of TDS who agree to comply with the provisions of subsection (iv) below; and (iv) In the event that any party to this Agreement or any party set forth in subsection 10.2.3(iii) is requested or required to disclose information described in subsection 10.2.2, TSR Paging shall provide TDS or TDS shall provide TSR Paging, as the case may be, with prompt notice of such request so that TDS or TSR Paging, as the case may be, may seek an appropriate protective order or waiver by the other party's compliance with this Agreement. If, in the absence of a protective order or the receipt of a waiver hereunder, such party is nonetheless, in the opinion of its counsel, compelled to disclose such information to any tribunal or else stand liable for contempt or suffer other censure or penalty, such party will furnish only that portion of the information which is legally required and will exercise its reasonable efforts to obtain reliable assurance that confidential treatment will be afforded to the disclosed information. The requirements of this subsection 10.2.3(iv) shall not apply to information in the public domain or lawfully acquired on a nonconfidential basis from others. 10.3 CONDUCT OF BUSINESS. From the date hereof through the Closing TDS shall cause API, except as contemplated by this Agreement, or as consented to by TSR Paging in writing to operate its business in the ordinary course and substantially in accordance with past practice (except with respect to certain API FCC Licenses and API FCC License Applications and certain reductions in planned License build-outs as described in TDS Disclosure Letter 58 Schedule 6.13.7) and will use its best efforts not to take any action inconsistent with this Agreement. Without limiting the generality of the foregoing, TDS shall not, and shall cause API and each of its Subsidiaries not to, except as specifically contemplated by this Agreement: 10.3.1 change or amend the Certificate of Incorporation or Bylaws of API or any of API's Subsidiaries, except as otherwise required by law; 10.3.2 enter into, extend, modify, terminate or renew any API Contract disclosed, or which would have been required to be disclosed on TDS Disclosure Letter Schedule 6.7 if entered into, extended or modified prior to the date of this Agreement, or any API Real Property Lease; 10.3.3 sell, assign, transfer, convey, lease, mortgage, pledge or otherwise dispose of or encumber any API FCC License, API FCC License Application except those previously identified in TDS Disclosure Letter Schedule 10.3.3 or any other API Assets, or any interests therein other than sales and leases of Inventory in the ordinary course of business; 10.3.4 acquire by merger or consolidation with, or merge or consolidate with, or purchase substantially all of the assets of, or otherwise acquire any material assets or business of any Person; 10.3.5 fail to expend funds for budgeted capital expenditures or commitments as set forth in the budget of API attached hereto as Exhibit I including, without limitation, maintaining levels of spare parts sufficient to maintain and upgrade the network infrastructure as reasonably necessary and maintain the present level of Pagers in Service; 10.3.6 fail to maintain the API Assets in substantially their current state of repair, excepting normal wear and tear, or fail to replace consistent with API's past practice inoperable, worn-out or obsolete or destroyed API Assets or fail to maintain the Inventory levels of API and its Subsidiaries at the levels on the Interim Balance Sheet Date (subject to reductions in Inventory not exceeding ten (10) percent of such Inventory on the Interim Balance Sheet Date in accordance with prudent business practice); 10.3.7 make any loans or advances to any Person, except for normal advances in respect of expenses incurred by employees in the ordinary course of business. 10.3.8 for one year from the date of this Agreement, Transfer or agree to Transfer all or any part of the API Note or any interest therein to any Person otherwise than pursuant to the Option Agreement. 10.3.9 take or omit to take any action which will result in the further default under (not otherwise waived) or any acceleration of any API Intercompany Liabilities or any other Financing Obligations; 59 10.3.10 fail to take all commercially reasonable actions reasonably necessary to retain employees of API and its Subsidiaries in the employment of API or the applicable Subsidiary through the Closing. 10.3.11 do any other act which would cause any representation or warranty of TDS in this Agreement to be or become untrue in any material respect; or 10.3.12 enter into any agreement, or otherwise become obligated, to do any action prohibited hereunder. 10.4 1997 FINANCIAL STATEMENTS. TDS shall cause API to prepare its audited financial statements for the fiscal year ending on December 31, 1997 and deliver a copy thereof to TSR Paging on or before May 1, 1998. 10.5 THE MERGER. In support of and in furtherance of TDS' obligations in Article VIII in connection with the Merger and this Article X to cause API to take and refrain from taking certain acts and obligations, TDS shall ensure that any merger agreement entered into with API (i) provides for the direct or indirect acquisition by TDS of all outstanding shares of capital stock of API not presently owned by TDS or its Affiliates in exchange for consideration other than capital stock of API; and (ii) imposes similar covenants on API as are imposed on TDS in this Article X in respect of API. 10.6 SUPPORT OF API. TDS shall continue to provide API with such financial support and assistance as it requires to continue operating the API Business in the ordinary course of business, including without limitation under the API Intercompany Indebtedness (taking into account the waiver of certain defaults dated March 5, 1997). 10.7 TRANSITIONAL SERVICES AGREEMENT. At the Closing, TDS and TSR Wireless shall enter into a transitional services agreement (the "TRANSITIONAL SERVICES AGREEMENT") in the form attached hereto as Exhibit G, pursuant to which TDS or its Affiliates, including API, shall provide certain transitional services in connection with information systems and lock-box services for such charges, periods and other terms as set forth therein. 10.8 EMPLOYEES. The Transferors and TSR Wireless shall agree upon appropriate procedures with respect to the allocation of costs of employees of API and its Subsidiaries (the "API EMPLOYEES"). Notwithstanding the foregoing, neither TSR Wireless or TSR Paging shall become liable for any Liabilities or any benefits to which the API Employees are entitled in respect of their employment prior to the employment of any API Employees by TSR Wireless to the extent not included in current liabilities of API assumed pursuant to Section 2.4.2. 10.9 MONTHLY CERTIFICATES. If the Closing shall not have occurred by the following applicable dates: (i) on or before July 15, 1998, TDS shall deliver a certificate (the "JUNE CERTIFICATE") to TSR Paging setting forth the Pagers in Service and the Net Recurring Pager Revenues of API and its Subsidiaries as at and for the month ended June 30, 1998 and, if 60 applicable, the API Pager Shortfall and the API Revenue Shortfall as at and for the month ended June 30, 1998; (ii) on or before August 15, 1998, TDS shall deliver a certificate (the "JULY CERTIFICATE") to TSR Paging setting forth the Pagers in Service and the Net Revenues of API and its Subsidiaries as at and for the month ended July 31, 1998 and, if applicable, the API Pager Shortfall and the API Revenue Shortfall as at and for the month ended July 31, 1998 and (iii) on or before September 15, 1998, TDS shall deliver a certificate (the "AUGUST CERTIFICATE") to TSR Paging setting forth the Pagers in Service and the Net Revenues of API and its Subsidiaries as at and for the month ended August 31, 1998 and, if applicable, the API Pager Shortfall and the API Revenue Shortfall as at and for the month ended August 31, 1998. ARTICLE XI CONDITIONS TO OBLIGATIONS OF TSR PAGING The obligation of TSR Paging to effect the Closing is subject to the satisfaction, on or prior to the Closing, of each of the following conditions, any of which may be waived by TSR Paging in the discretion of TSR Paging: 11.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. All representations and warranties of TDS contained in this Agreement shall be true and correct in all respects (in the case of any representation or warranty containing a materiality qualification) or in all material respects (in the case of any representation or warranty not containing any materiality qualification) at and as of the date of this Agreement and at and as of the Closing, and TDS shall have performed and satisfied all material agreements and covenants required hereby to be performed by it, and shall have caused API to perform all material actions to be performed by API, prior to the Closing. 11.2 NO INJUNCTION, ETC.. Consummation of the transactions contemplated hereby and by the Ancillary Agreement, the Merger Agreement and the Option Agreement shall not have been restrained, enjoined or otherwise prohibited by any applicable law, including any order, injunction, decree or judgment of any court or other Governmental Authority. No court or other Governmental Authority shall have enacted any applicable law which would make illegal the consummation of the transactions contemplated hereby and thereby and no proceeding with respect to the application of any such applicable law to such effect shall be pending. 11.3 OPINION OF COUNSEL. TDS shall have delivered to TSR Paging opinions of Sidley and Austin and Koteen & Naftalin, L.L.P., respectively, counsel and special regulatory counsel to TDS, dated as of the Closing Date, in substantially the forms attached hereto as Exhibits E-1 and E-2, respectively. 11.4 CERTIFICATES. TDS shall furnish TSR Paging with such certificates of its duly authorized officers and others to evidence compliance with the conditions set forth in this Article XI as may be reasonably requested by TSR Paging. 61 11.5 CORPORATE DOCUMENTS. TSR Paging shall have received from TDS resolutions adopted by the boards of directors of TDS, any corporation which is a constituent corporation in the Merger and API as applicable, approving this Agreement, the Ancillary Agreements, the Merger and the Option Agreement and the transactions contemplated hereby and thereby, certified by the corporate secretary of each Person, as applicable. 11.6 CONSENTS. All Authorizations, Consents and Permits necessary to effect the transfer of the API Assets to TSR Wireless and the performance of the other obligations of TDS hereunder shall have been obtained except (other than in the case of Authorizations, Consents and Permits of the FCC) where the failure to obtain any such Authorization, Consent or Permit would not reasonably be expected to have a Material Adverse Effect. 11.7 MERGER. The Merger shall have been consummated. 11.8 MATERIAL ADVERSE CHANGE. No Material Adverse Change shall have occurred in respect of the API Business. For the purposes of this Section 11.8, Material Adverse Change shall include, without limitation, a reduction in the number of Pagers in Service of API and its Subsidiaries or the Net Monthly Pager Revenues of API and its Subsidiaries as at the last day of and for the month prior to the month in which the Closing occurs below 581,250 and $4,350,000, respectively. Not less than three (3) Business Days prior to the Closing Date, TDS shall deliver a certificate to TSR Paging setting forth the information described above, which shall take effect as an additional representation and warranty of TDS hereunder. No certification pursuant to this Section 11.8 shall affect the rights and obligations of the parties pursuant to Section 3.2, nor shall any waiver by TSR Paging of its rights under this Section 11.8 constitute a waiver of its rights under Section 3.2. If TSR Paging shall have exercised the Option Extension, this Section 11.8 shall no longer apply. 11.9 OTHER AGREEMENTS. TDS and TSR Wireless shall have executed and delivered the Ancillary Agreements to which they are each a party in the forms attached as exhibits hereto. 11.10 INTENTIONALLY OMITTED. 11.11 INTENTIONALLY OMITTED. 11.12 TENANT ESTOPPEL CERTIFICATES. TSR Paging shall have received tenant estoppel certificates addressed to TSR Wireless with respect to the API Leased Real Property indicated with a (*) on TDS Disclosure Letter Schedule 6.6, which certificates shall be reasonably satisfactory to TSR Paging or in the form required by the applicable lease of such API Leased Real Property. 11.13 CLOSING CURRENT ASSETS. The API Inventory, the cash and cash equivalents of API and the receivables of API as at the Closing Date to be transferred to TSR Wireless hereunder shall have an aggregate value of at least ninety percent (90%) of that shown on the 62 Interim Balance Sheet of API, determined in a manner consistent with GAAP and with the preparation of the Interim Balance Sheet of API. Upon the Closing, TDS shall deliver a certificate to TSR Paging setting forth the information described above, which shall take effect as an additional representation and warranty of TDS hereunder. ARTICLE XII CONDITIONS TO OBLIGATIONS OF TDS The obligation of TDS to effect the Closing is subject to the satisfaction, on or prior to the Closing, of each of the following conditions, any of which may be waived by TDS in the discretion of TDS: 12.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. All representations and warranties of TSR Paging and TSR Wireless contained in this Agreement shall be true and correct in all respects (in the case of any representation or warranty containing any materiality qualification) in all material respects (in the case of any representation or warranty not containing any materiality qualification) at and as of the date of this Agreement and at and as of the Closing (other than any breaches of any such representations or warranties as result from any Claims by stockholders of API), and TSR Paging and TSR Wireless shall have performed and satisfied all material agreements and covenants required hereby to be performed by them prior to the Closing. 12.2 NO INJUNCTION, ETC.. Consummation of the transactions contemplated hereby and by the Ancillary Agreements, the Merger Agreement and the Option Agreement shall not have been restrained, enjoined or otherwise prohibited by any applicable law, including any order, injunction, decree or judgment of any court or other Governmental Authority. No court or other Governmental Authority shall have enacted any applicable law which would make illegal the consummation of the transactions contemplated hereby and thereby and no proceeding with respect to the application of any such applicable law to such effect shall be pending. 12.3 OPINIONS OF COUNSEL. TSR Paging shall have delivered to TDS opinions of Latham & Watkins and Richard S. Becker & Associates, respectively counsel and special regulatory counsel to TSR Paging, dated as of the Closing Date, in substantially the forms attached hereto as Exhibits F-1 and F-2, respectively. 12.4 CERTIFICATES. TSR Paging shall furnish TDS with such certificates of its duly authorized officers and others to evidence compliance with the conditions set forth in this Article XII as may be reasonably requested by TDS. 12.5 CORPORATE DOCUMENTS. TDS shall have received from TSR Paging resolutions adopted by the board of directors of TSR Paging and resolutions of TSR Wireless, as 63 applicable, approving this Agreement, the Ancillary Agreements and the Option Agreement and the transactions contemplated hereby and thereby, certified by the corporate secretary or Managing Member of each Person, as applicable. 12.6 CONSENTS. All Authorizations, Consents and Permits necessary to effect the transfer of the TSR Paging Assets to TSR Wireless and the performance of the other obligations of TSR Paging hereunder shall have been obtained except (other than in the case of Authorizations, Consents and Permits of the FCC) where the failure to obtain any such Authorization, Consent or Permit would not reasonably be expected to have a Material Adverse Effect. 12.7 MERGER. The Merger shall have been consummated. 12.8 MATERIAL ADVERSE CHANGE. No Material Adverse Change shall have occurred in respect of the TSR Paging Business. For the purposes of this Section 12.8, Material Adverse Change shall include, without limitation, a reduction in the number of Pagers in Service of TSR Paging or the Net Monthly Pager Revenues of TSR Paging as at and for the last day of the month prior to the month in which the Closing occurs below 945,000 and $4,125,000, respectively. Not less than three (3) Business Days prior to the Closing Date, TSR Paging shall deliver a certificate to TDS setting forth the information described above, which shall take effect as an additional representation and warranty of TSR Paging hereunder. No certification pursuant to this Section shall affect the rights and obligations of the parties pursuant to Section 3.2, nor shall any waiver by TSR Paging of its rights under this Section constitute a waiver of its rights under Section 3.2. If TSR Paging shall have exercised the Extension Option, this Section 12.8 shall no longer apply. 12.9 OTHER AGREEMENTS. TSR Paging, TSR Wireless, the stockholders of TSR Paging and the Investors shall have executed and delivered the Ancillary Agreements to which they are party in the forms attached as exhibits hereto. 12.10 INTENTIONALLY OMITTED. 12.11 CLOSING CURRENT ASSETS. The TSR Paging Inventory, the cash and cash equivalents of TSR Paging and the receivables of TSR Paging as at the Closing Date to be transferred to TSR Wireless hereunder shall have an aggregate value of not at least ninety percent (90%) of that shown on the Interim Balance Sheet of TSR Paging, determined in a manner consistent with GAAP and with the preparation of the Interim Balance Sheet of TSR Paging. Upon the Closing, TSR Paging shall deliver a certificate to TDS setting forth the information described above, which shall take effect as an additional representation and warranty of TSR Paging hereunder. 64 ARTICLE XIII RISK OF LOSS; CONSENTS TO ASSIGNMENT OF CONTRACTS, REAL PROPERTY LEASES AND PERSONAL PROPERTY LEASES 13.1 RISK OF LOSS. From the date hereof through the Closing Date, all risk of loss or damage to the property included (i) in the API Assets shall be borne by TDS; and (ii) in the TSR Paging Assets shall be borne by TSR Paging; and thereafter in each case shall be borne by TSR Wireless. If any material portion of the API Assets or the TSR Paging Assets (collectively, "ASSETS") is destroyed or damaged by fire or any other cause on or prior to the Closing Date, the applicable Transferor shall give written notice to TSR Wireless and the other Transferor as soon as practicable after, but in any event within five (5) calendar days of, discovery of such damage or destruction, including specification of the amount of insurance, if any, covering such Assets and the amount, if any, which the applicable Transferor is otherwise entitled to receive as a consequence of such damage or destruction. Prior to the Closing, the other Transferor shall have the option, which shall be exercised by written notice to the applicable Transferor within ten (10) calendar days after receipt of the applicable Transferor's notice or if there are not ten (10) calendar days prior to the Closing Date, as soon as practicable prior to the Closing Date, of (a) accepting such Assets in their destroyed or damaged condition in which event TSR Wireless shall be entitled to the proceeds of any insurance or other proceeds payable with respect to such loss, or the cash equivalent thereof and to indemnification for any uninsured portion of such loss pursuant to Section 14.4, and the full Units shall be issued to the applicable Transferor, (b) if agreed by the Applicable Transferor, excluding such Assets from this Agreement, in which event the allocation of Units shall be adjusted proportionately, as mutually agreed between the parties or (c) after providing the Applicable Transferor with a reasonable opportunity to cure, terminating this Agreement in accordance with Section 15.1, if such damage or destruction is a Material Adverse Effect. 13.2 CONSENTS TO ASSIGNMENT OF CONTRACTS, REAL PROPERTY LEASES AND PERSONAL PROPERTY LEASES. Anything in this Agreement to the contrary notwithstanding, this Agreement shall not constitute an agreement to assign any Contract, Real Property Lease or Personal Property Lease, or any claim or right or any benefit arising thereunder or resulting therefrom, if an attempted assignment thereof, without the Consent of a third party thereto, would constitute a breach thereof or in any way adversely affect the rights of TSR Wireless thereunder. If such Consent is not obtained, or if an attempted assignment thereof would be ineffective or would affect the rights thereunder so that TSR Wireless would not receive all such rights, the Transferors and TSR Wireless will cooperate, in all reasonable respects, to obtain such Consent as soon as practicable and, until such Consent is obtained, to provide to TSR Wireless the benefits under any of the foregoing to which such Consent relates (with TSR Wireless responsible for all the liabilities and obligations thereunder). In particular, in the event that any such Authorization or Consent is not obtained prior to Closing, then TSR Wireless and the Transferors shall enter into such arrangements (including subleasing or subcontracting if permitted) to provide to the parties the economic and operational equivalent of obtaining such Consent and assigning such Contract, Real Property Lease or Personal 65 Property Lease, including enforcement for the benefit of TSR Wireless of all claims or rights arising thereunder, and the performance by TSR Wireless of the obligations thereunder. ARTICLE XIV ACTIONS BY TSR WIRELESS AND TRANSFERORS AFTER THE CLOSING 14.1 FURTHER ACTIONS. On and after the Closing Date, TSR Wireless and the Transferors will take all appropriate actions and execute all documents, instruments or conveyances of any kind which may be reasonably necessary or advisable to confirm or effect TSR Wireless's ownership, possession and control (in accordance with this Agreement) of the Assets and assumption of the TSR Paging Assumed Liabilities and the API Assumed Liabilities. 14.2 SURVIVAL OF REPRESENTATIONS, ETC.. The representations, warranties, covenants and agreements of the Transferors and TSR Wireless contained herein shall survive the Closing Date for the period set forth in this Section 14.2: (i) all such representations and warranties and all claims and causes of action with respect thereto shall terminate upon expiration of two (2) years after the Closing Date, except that the representations and warranties in Sections 5.1, 6.1 and 7.1 (Organization), 5.2, 6.2 and 7.2 (Authorization) 5.13 and 6.13 (Regulatory Matters) and 5.18 and 6.18 (No Brokers) and all claims and causes of action with respect thereto shall survive indefinitely and the representations and warranties in Sections 5.21 and 6.21 (Environmental Matters) and 5.22 and 6.22 (Tax Matters), and all claims and causes of action with respect thereto shall survive until the expiration of the applicable statute of limitations (with extensions) (including, in the case of any Taxes, the statute of limitations, as such may be extended, in respect of the collection of any Tax) with respect to the matters addressed in such Sections; and (ii) each such covenant and agreement shall survive the Closing and remain in full force and effect unless otherwise limited by its terms. The termination of the representations and warranties provided herein shall not affect the rights of a party in respect of any Claim made by such party in a writing received by the other party prior to the expiration of the applicable survival period provided herein. 14.3 BOOKS AND RECORDS. TSR Wireless agrees that it will cooperate with and make available to the Transferors during normal business hours, all Books and Records, information and employees (without substantial disruption of employment) which are necessary or useful in connection with any tax inquiry, audit, investigation or dispute, any litigation or investigation or any other matter requiring any such Books and Records, information or employees for any reasonable business purpose (including any matter concerning a potential breach of any representation or warranty or covenant of a party under this Agreement); IT BEING UNDERSTOOD that all Books and Records shall be maintained by TSR Wireless for seven (7) years following the Closing. Except as otherwise required in Section 14.4, the investigating Transferor shall bear all of the out-of-pocket costs and expenses (including, without limitation, attorneys' fees, but excluding reimbursement for salaries and employee benefits) reasonably incurred in 66 connection with providing such Books and Records, information or employees. TSR Wireless will give TDS notice of any breach or potential breach by TSR Paging of any representation or warranty. All information received pursuant to this Section 14.3 shall be subject to the confidentiality provisions of Section 14.6. 14.4 INDEMNIFICATION. 14.4.1 BY TSR PAGING. TSR Paging shall indemnify, save and hold harmless, on an After Tax Basis, (x) TSR Wireless and its Subsidiaries, and their respective directors, officers and employees (other than the Transferred Employees) (the "TSR WIRELESS INDEMNITEES") and (y) TDS and its Affiliates and Subsidiaries, and their respective directors, officers, shareholders and employees (the "TDS INDEMNITEES") from and against any and all costs, losses, Taxes, Liabilities, damages, lawsuits, deficiencies, claims, demands, and expenses (whether or not arising out of third-party claims), including, without limitation, reasonable attorneys' fees and all reasonable amounts paid in investigation, defense or settlement of any of the foregoing herein, (collectively, "DAMAGES"), incurred in connection with, arising out of, resulting from (i) subject to Section 14.4.7(i), Section 14.4.7 (iv) and Section 14.4.7(vi), any breach of any representation or warranty made by TSR Paging in this Agreement or (ii) subject to Section 14.4.7(i), Section 14.4.7(iv) and Section 14.4.7(vi), any breach of any covenant or agreement made by TSR Paging in this Agreement. 14.4.2 BY TDS. TDS shall indemnify, save and hold harmless, on an After Tax Basis, (x) TSR Paging, its Affiliates and Subsidiaries, and their respective directors, officers, shareholders and employees (the "TSR PAGING INDEMNITEES" and together with the TDS Indemnitees, the TSR Wireless Indemnitees and the Investor Indemnitees, the "INDEMNITEES") and (y) the TSR Wireless Indemnitees from and against any and all Damages incurred in connection with, arising out of, resulting from (i) subject to Section 14.4.7(ii) and Section 14.4.7(iv) and Section 14.4.7 (vii), any breach of any representation or warranty made by TDS, API or any Subsidiary of API in this Agreement; (ii) subject to Section 14.4.7(ii) and Section 14.4.7(iv) and Section 14.4.7 (vii), any breach of any covenant or agreement made by TDS in this Agreement; (iii) any API Excluded Liability and (iv) any Claim by any shareholder of TDS or API other than MIS Charges. TDS shall indemnify, save and hold harmless the Investors and their respective members, investors, funds, directors, officers, partners and employees (the "INVESTOR INDEMNITEES") from and against any and all Damages incurred in connection with, arising out of, or resulting from any Claim by any shareholder of TDS or API. 14.4.3 BY TSR WIRELESS. TSR Wireless shall indemnify, save and hold harmless, on an After Tax Basis, the TSR Paging Indemnitees and the TDS Indemnitees from and against any and all Damages incurred in connection with, arising out of, resulting from (i) subject to Section 14.4.7(iii) and Section 14.47(iv), any breach of any representation or warranty made by TSR Wireless in this Agreement; (ii) subject to Section 14.4.7(iii) and Section 14.4.7(iv), any breach of any covenant or agreement made by TSR Wireless in this Agreement; (iii) any TSR Paging Assumed Liability; and (iv) any API Assumed Liability; 67 14.4.4 DAMAGES. The term "Damages" as used in this Section 14.4 is not limited to matters asserted by third parties, but includes Damages incurred or sustained by an Indemnitee in the absence of third party claims. Payments by an Indemnitee of amounts for which such Indemnitee is indemnified hereunder shall not be a condition precedent to recovery. 14.4.5 DEFENSE OF CLAIMS. If a claim for Damages (a "CLAIM") is to be made by an Indemnitee, such Indemnitee shall, subject to Section 14.2, give written notice (a "CLAIM NOTICE") to the indemnifying party as soon as practicable after such Indemnitee becomes aware of any fact, condition or event which may give rise to Damages for which indemnification may be sought under this Section 14.4. If any lawsuit or enforcement action is filed against any Indemnitee hereunder, notice thereof (a "THIRD PARTY NOTICE") shall be given to the indemnifying party as promptly as practicable (and in any event within fifteen (15) calendar days after the service of the citation or summons). The failure of any indemnified party to give timely notice hereunder shall not affect rights to indemnification hereunder, except to the extent that the indemnifying party demonstrates actual damage caused by such failure. After receipt of a Third Party Notice, if the indemnifying party shall acknowledge in writing to the indemnified party that the indemnifying party shall be obligated under the terms of its indemnity hereunder in connection with such lawsuit or action, then the indemnifying party shall be entitled, if it so elects, (i) to take control of the defense and investigation of such lawsuit or action, (ii) to employ and engage attorneys of its own choice to handle and defend the same, at the indemnifying party's cost, risk and expense unless the named parties to such action or proceeding include both the indemnifying party and the indemnified party and the indemnified party has been advised in writing by counsel that there may be one or more legal defenses available to such indemnified party that are different from or additional to those available to the indemnifying party, and (iii) to compromise or settle such claim, which compromise or settlement shall be made only with the written consent of the indemnified party, such consent not to be unreasonably withheld. The indemnified party shall cooperate in all reasonable respects with the indemnifying party and such attorneys in the investigation, trial and defense of such lawsuit or action and any appeal arising therefrom; and the indemnified party may, at its own cost, participate in the investigation, trial and defense of such lawsuit or action and any appeal arising therefrom. The parties shall also cooperate with each other in any notifications to insurers. If the indemnifying party fails to assume the defense of such claim within fifteen (15) calendar days after receipt of the Third Party Notice, the indemnified party against which such claim has been asserted will (upon delivering notice to such effect to the indemnifying party) have the right to undertake the defense, compromise or settlement of such claim and the indemnifying party shall have the right to participate therein at its own cost; PROVIDED, HOWEVER, that such claim shall not be compromised or settled without the written consent of the indemnifying party, which consent shall not be unreasonably withheld. In the event the indemnified party assumes the defense of the claim, the indemnified party will keep the indemnifying party reasonably informed of the progress of any such defense, compromise or settlement. 68 14.4.6 BROKERS AND FINDERS. Pursuant to the provisions of this Section 14.4, each Selling Party and TSR Wireless shall indemnify, hold harmless and defend the other parties from the payment of any and all broker's and finder's expenses, commissions, fees or other forms of compensation which may be due or payable from or by the indemnifying party, or may have been earned by any third party acting on behalf of the indemnifying party in connection with the negotiation and execution hereof and the consummation of the transactions contemplated hereby. 14.4.7 LIMITATIONS. (i) TSR Paging shall not be liable to any TDS Indemnitee or any TSR Wireless Indemnitee for any Damages with respect to the matters contained in Section 14.4.1(i) or Section 14.4.1(ii) except to the extent the Damages therefrom exceed, in the aggregate, $1,000,000, provided however that once such Damages, in the aggregate, exceed such sum, TSR Paging shall be liable for all such Damages and not just the excess. (ii) TDS shall not be liable to any TSR Paging Indemnitee or any TSR Wireless Indemnitee for any Damages with respect to the matters contained in Section 14.4.2(i) or Section 14.4.2(ii) except to the extent the Damages therefrom exceed, in the aggregate, $1,000,000, provided however that once such Damages, in the aggregate, exceed such sum, TDS shall be liable for all such Damages and not just the excess. (iii) TSR Wireless shall not be liable to any TSR Paging Indemnitee or any TDS Indemnitee for any Damages with respect to the matters contained in Section 14.4.3(i) or Section 14.4.3(ii) except to the extent the Damages therefrom exceed, in the aggregate, $1,000,000, provided however that once such Damages, in the aggregate, exceed such sum, TSR Wireless shall be liable for all such Damages and not just the excess. (iv) The indemnification provided by this Section 14.4 shall be in addition to any other remedy of the parties hereto including damages, specific performance and injunctive relief, provided that the limitations set forth in Sections 14.4.7(i) through 14.4.7(iii) shall still apply with respect to the matters contained in Sections 14.4.1(i), 14.4.1(ii), 14.4.2(i), 14.4.2(ii), 14.4.3(i) and 14.4.3(ii). (v) No claim based on a breach of any representation or warranty shall be valid unless first made in writing within the survival periods set forth in Section 14.2. (vi) Unless TDS shall terminate this Agreement pursuant to Section 15.1.1(iv)(a) or (c), TSR Paging's liability with respect to any breach of any representation or warranty made by TSR Paging in this Agreement to the extent that any Damages constitute TSR Paging Assumed Liabilities shall be to indemnify, save and hold harmless TSR Wireless and its Affiliates and Subsidiaries and TSR Paging shall be liable to the TDS Indemnitees with respect to any such breach only to the extent of the costs of defending any Claim by a third party made against such Indemnitee arising out of or related to such breach in accordance with 69 Section 14.4.5, provided, (i) any Damages in connection therewith which are also suffered by TSR Wireless shall be satisfied by payments made to TSR Wireless and (ii) TSR Paging shall not be responsible to indemnify, save and hold harmless such TDS Indemnitees in respect of any Claim by any shareholder of TDS or API. (vii) Unless TSR Paging shall terminate this Agreement pursuant to Section 15.1.1(iii)(a) or (c), TDS' liability with respect to any breach of any representation or warranty made by TDS in this Agreement to the extent that any Damages constitute TDS Assumed Liabilities shall be to indemnify, save and hold harmless TSR Wireless and its Affiliates and Subsidiaries and TDS shall be liable to the TSR Paging's Indemnitees with respect to any such breach only to the extent of the costs of defending any Claim by a third party made against such Indemnitee arising out of or related to such breach in accordance with Section 14.4.5, provided, (i) any Damages in connection therewith which are also suffered by TSR Wireless shall be satisfied by payments made to TSR Wireless and (ii) TDS shall not be responsible to indemnify, save and hold harmless such TSR Paging Indemnitees in respect of any Claim by any shareholder of TSR Paging. 14.5 BULK SALES, TRANSFER TAXES. 14.5.1 It may not be practicable to comply or attempt to comply with the procedures of the "Bulk Sales Act" or similar law of any or all of the states in which the Assets are situated or of any other state which may be asserted to be applicable to the transactions contemplated hereby. Accordingly, TSR Wireless and the Transferors waive any requirements, to the extent they are entitled to benefits thereunder, for compliance with any or all of such laws. Each Transferor hereby agrees that the indemnity provisions of Section 14.4 hereof shall apply to any Damages of TSR Wireless arising out of or resulting from the failure of such Transferor to comply with any such laws. 14.5.2 Following the Closing, TSR Wireless shall be responsible for the timely payment of, and shall severally indemnify and hold harmless each Transferor against, all sales (including, without limitation, use, value added, documentary, stamp, gross receipts, registration, transfer, conveyance, excise, recording, license and other similar Taxes and fees ("TRANSFER TAXES")), arising out of or in connection with or attributable to the transactions effected by a Transferor pursuant to this Agreement and the Ancillary Agreements. Subject to the foregoing, each Transferor shall prepare and timely file all Tax returns required to be filed in respect of Transfer Taxes, PROVIDED that TSR Wireless shall be permitted to prepare any such Tax returns that are the primary responsibility of TSR Wireless under applicable law. 14.6 ASSISTANCE FOR FILING OF TAX RETURNS. Each Transferor and TSR Wireless agrees (i) to furnish or cause to be furnished to each other upon request, as promptly as practicable, such information and assistance (including access to books, records and correspondence received from any taxing authority) relating to the TSR Paging Business, the TSR Paging Assets, the API Business, and the API Assets as is reasonably necessary for the preparation and filing of any Tax return, claim for refund or audit, and the presentation or defense of any 70 Action relating to Taxes; (ii) to provide timely notice to each interested party in writing of any pending or threatened Tax audits or assessments relating to Taxes in respect of the TSR Paging Business, TSR Paging Assets, API Business or API Assets for which another party may have a liability under Section 14.4 and Section 14.5.2. ARTICLE XV MISCELLANEOUS 15.1 TERMINATION. 15.1.1 TERMINATION. This Agreement may be terminated at any time prior to Closing: (i) By mutual written consent of the Transferors; (ii) By TSR Paging or TDS by written notice to the other parties if the Closing shall not have occurred on or before 5:00 p.m. New York City time on September 30, 1998; PROVIDED HOWEVER, that this provision shall not be available to TDS if TSR Paging has the right to terminate this Agreement under clause (iii) of this Section 15.1.1, and this provision shall not be available to TSR Paging if TDS has the right to terminate this Agreement under clause (iv) of this Section 15.1.1; (iii) By TSR Paging by written notice to TDS if (a) the representations and warranties of TDS shall not have been true and correct in all respects (in the case of any representation or warranty containing any materiality qualification) or in all material respects (in the case of any representation or warranty without any materiality qualification) as of the date when made, (b) if any of the conditions set forth in Article XI shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by 5:00 p.m. New York City time on September 30, 1998, (c) TDS shall fail to comply with or perform any covenant or agreement to be complied with or performed by TDS pursuant to this Agreement unless such failure described in (b) or (c) shall be due to the failure of TSR Paging to perform or comply with any of the conditions, agreements or covenants hereof to be performed or complied with by it prior to the Closing or (d) the special committee of independent directors of API appointed to consider the acquisition by TDS of the Common Stock of API not owned by TDS shall fail to approve the Merger on or before February 12, 1998 or shall subsequently withdraw its recommendation of the Merger other than as a result of a breach of a representation or covenant of TSR Paging hereunder; or (iv) By TDS by written notice to TSR Paging if (a) the representations and warranties of TSR Paging shall not have been true and correct in all respects (in the case of any representation or warranty containing any materiality qualification) or in all material respects (in the case of any representation or warranty without any materiality 71 qualification) as of the date when made, (b) if any of the conditions set forth in Article XII shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by 5:00 p.m. New York City time on September 30, 1998 or (c) TSR Paging shall fail to comply with or perform any covenant or agreement to be complied with or performed by TSR Paging pursuant to this Agreement unless such failure described in (b) or (c) shall be due to the failure of TDS to perform or comply with any of the conditions, agreements or covenants hereof to be performed or complied with by it prior to the Closing. (v) By TDS by written notice delivered to TSR Paging within ten (10) Business Days following delivery of the June Certificate to TSR Paging if the number of Pagers in Service of API and its Subsidiaries or the Net Monthly Pager Revenues of API and its Subsidiaries set forth on the June Certificate as at and for the month ending June 30, 1998 are below 581,250 and $4,350,000, respectively, unless TSR Paging pays $1,500,000 to TDS by wire transfer of immediately available funds as set forth in the wire instructions attached hereto as Exhibit H ("WIRE TRANSFER") within fifteen (15) Business Days of receipt by TSR Paging of such written notice of termination from TDS (the "EXTENSION OPTION"). Any notice to terminate this Agreement under this Section 15.1.1(v) may not be withdrawn, unless permitted by TSR Paging, and shall take effect on the sixteenth (16th) Business Day following receipt by TSR Paging of the written notice of termination from TDS, unless TSR Paging shall first have exercised the Extension Option, PROVIDED, HOWEVER, that TDS shall not be able to exercise its right to terminate this agreement pursuant to clause 15.1.1(v) if, at the time it would otherwise exercise such right, TDS is in material breach of a representation or warranty (in the case of a representation or warranty not qualified as to materiality) or is in breach of a representation or warranty (in the case of a representation or warranty qualified as to materiality). Solely for purposes of Section 15.1.1(v) and Section 15.1.1(vi), TDS shall not be deemed in breach of the Agreement if TDS has acted in good faith with respect to its obligations under Sections 10.3.5, 10.3.10 and 10.6. (vi) If TSR Paging has exercised the Extension Option, by TDS by written notice delivered within ten (10) Business Days following delivery of each of the July Certificate and the August Certificate, unless TSR Paging pays $1,500,000 to TDS by Wire Transfer with fifteen (15) Business Days of receipt by TSR Paging of such written notice of termination from TDS. Any notice to terminate this Agreement under this Section 15.1.1(vi) may not be withdrawn unless permitted by TSR Paging, and shall take effect on the sixteenth (16th) Business Day following receipt by TSR Paging of the relevant written notice of termination from TDS, unless TSR Paging shall first have paid $1,500,000 to TDS as set forth above, PROVIDED, HOWEVER, that TDS shall not be able to exercise its right to terminate this agreement pursuant to clause 15.1.1(v) if, at the time it would otherwise exercise such right, TDS is in material breach of a representation or warranty (in the case of a representation or warranty not qualified as to materiality) or is in breach of a representation or warranty (in the case of a representation or warranty qualified as to materiality). Solely for purposes of Section 15.1.1(v) and Section 15.1.1(vi), TDS shall not be deemed in breach of the Agreement if TDS has acted in good faith with respect to its obligations under Sections 10.3.5, 10.3.10 and 10.6. 72 (vii) By TSR Paging at any time after it has exercised the Extension Option. 15.1.2 IN THE EVENT OF TERMINATION. In the event of termination of this Agreement: (i) Each party will redeliver all documents, work papers and other material of any other party relating to the transactions contemplated hereby, whether so obtained before or after the execution hereof, to the party furnishing the same; (ii) The provisions of Sections 15.10 and 15.12 shall continue in full force and effect; (iii) No party hereto shall have any liability or further obligation to any other party to this Agreement, except as stated in this Section 15.1.2, and Section 14.4.6 and 15.7, except for any breach of this Agreement by such party occurring prior to the proper termination of this Agreement; and (iv) The provision of Section 10.3.8 shall continue in full force and effect if TSR Paging terminates the Agreement pursuant to Section 15.1.1(iii)(d). 15.2 ASSIGNMENT. Neither this Agreement, the Ancillary Agreements nor any of the rights or obligations hereunder or thereunder may be assigned by any party without the prior written consent of the other parties thereto; except that TSR Wireless may, without such consent, assign all such rights to any lender as collateral security and assign all such rights and obligations to a wholly-owned subsidiary (or a partnership controlled by TSR Wireless) of TSR Wireless or, after the Closing, to a successor in interest to TSR Wireless which shall assume all obligations and liabilities of TSR Wireless under this Agreement (PROVIDED that no assignment shall release the assigning party from responsibility for its obligations hereunder). Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, and no other Person shall have any right, benefit or obligation under this Agreement as a third party beneficiary or otherwise. 15.3 NOTICES. All notices under this Agreement shall be in writing and shall be deemed to have been duly given when received if personally delivered; when transmitted if transmitted by telecopy, electronic or digital transmission method provided that such transmission is confirmed by telephone; the day after it is sent, if sent for next day delivery to a domestic address by overnight mail; and upon receipt, if sent by certified or registered mail, return receipt requested. In each case notice shall be sent to: If to TDS, addressed to: 30 North LaSalle Street 73 Suite 4000 Chicago, Illinois 60602 Fax: (312) 630-9299 Attention: Chief Financial Officer With copies to: Sidley & Austin 1 First National Plaza Chicago, Illinois 60603 Fax: (312) 456-5352 Attention: Michael G. Hron Sidley & Austin 875 Third Avenue New York, New York 10022 Fax: (212) 906-2021 Attention: James G. Archer If to TSR Paging, addressed to: TSR Paging Inc. 400 Kelby Street, 8th Floor Fort Lee, New Jersey 07024 Fax: (201) 947-7145 Attention: Mitchell L. Sacks With copies to: Latham & Watkins 885 Third Avenue Suite 1000 New York, New York 10022 Fax: (212) 751-4864 Attention: Roger H. Kimmel, Esq. TA Associates, Inc. High Street Tower Suite 2500 Boston, Massachusetts 02110 Fax:(617) 574-6728 Attention: Kenneth T. Schiciano and to 74 Spectrum Equity Investors 125 High Street, 26th Floor Boston, Massachusetts 02110 Fax: (617) 464-4601 Attention: William P. Collatos If to TSR Wireless, addressed to: TSR Wireless, LLC 400 Kelby Street, 8th Floor Fort Lee, New Jersey 07024 Fax: (201) 947-7145 Attention: Mitchell L. Sacks With copies to: Latham & Watkins 885 Third Avenue Suite 1000 New York, New York 10022 Fax: (212) 751-4864 Attention: Roger H. Kimmel, Esq. Sidley & Austin 875 Third Avenue New York, New York 10022 Fax: (212) 906-2021 Attention: James G. Archer TA Associates, Inc. High Street Tower Suite 2500 Boston, Massachusetts 02110 Fax:(617) 574-6728 Attention: Kenneth T. Schiciano and to Spectrum Equity Investors 125 High Street, 26th Floor Boston, Massachusetts 02110 Fax: (617) 464-4601 Attention: William P. Collatos 75 or to such other place and with such other copies as either party may designate as to itself by written notice to the others. 15.4 CHOICE OF LAW. This Agreement shall be construed, interpreted and the rights of the parties determined in accordance with the internal law, and not the law of conflicts, of the State of New York. 15.5 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This Agreement, the Ancillary Agreements, together with all exhibits and schedules hereto and thereto (including the Disclosure Schedule) and the Option Agreement and the Confidentiality Agreement constitutes the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties. This Agreement may not be amended or supplemented except by an instrument in writing signed on behalf of each of the parties hereto. No modification or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided. 15.6 MULTIPLE COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 15.7 EXPENSES. Except as otherwise specified in this Agreement, each party hereto shall pay its own legal, accounting, out-of-pocket and other expenses incident to this Agreement and to any action taken by such party in preparation for carrying this Agreement into effect. 15.8 INVALIDITY. In the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument. 15.9 TITLES. The titles, captions or headings of the Articles and Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. 15.10 PUBLIC STATEMENTS AND PRESS RELEASES. The parties hereto covenant and agree that, except as provided for below, each will not from and after the date hereof make, issue or release any public announcement, press release, statement or acknowledgment of the existence of, or reveal publicly the terms, conditions and status of, the transactions provided for herein, without the prior written consent of the other parties as to the content and time of release of and the media in which such statement or announcement is to be made; PROVIDED, HOWEVER, 76 that in the case of announcements, statements, acknowledgements or revelations which any party is required by law to make, issue or release, the making, issuing or releasing of any such announcement, statement, acknowledgment or revelation by the party so required to do so by law shall not constitute a breach of this Agreement if such party shall have given, to the extent reasonably possible, not less than two (2) calendar days prior notice to the other parties, and shall have attempted, to the extent reasonably possible, to clear such announcement, statement, acknowledgment or revelation with the other parties. Each party hereto agrees that it will not unreasonably withhold any such consent or clearances. 15.11 KNOWLEDGE. Whenever this Agreement refers to the "knowledge of TSR Paging", or a similar phrase, it refers to the collective actual and constructive knowledge of Leonard DiSavino, Philip Sacks and Mitchell L. Sacks after reasonable inquiry. Wherever this Agreement refers to the "knowledge of TDS" or a similar phrase, it refers to the collective actual and constructive knowledge of the key management employees of TDS and API and its Subsidiaries including Terrence Sullivan, Leroy T. Carlson, Jr., Scott Williamson and Murray Swanson after reasonable inquiry. 15.12 CONFIDENTIAL INFORMATION. 15.12.1 In connection with the negotiation of this Agreement, the preparation for the consummation of the transactions contemplated hereby, and the performance of obligations hereunder, each party acknowledges that it has had and will have access to confidential information relating to the other parties, including technical or marketing information, ideas, methods, developments, inventions, improvements, business plans, trade secrets, statistical data, diagrams, drawings, specifications or other proprietary information relating thereto, together with all analyses, compilations, studies, customer lists, pricing information or other documents, records or data prepared by each party or their respective Subsidiaries (if any) or Representatives which contain or otherwise reflect or are generated from such information ("CONFIDENTIAL INFORMATION"). The term "Confidential Information" does not include information received by any party or its Subsidiaries in connection with the transactions contemplated hereby which (i) is or becomes generally available to the public other than as a result of a disclosure by such party or its Subsidiaries or Representatives, (ii) was within any such party's possession prior to its being furnished to such party by or on behalf of one of the other parties in connection with the transactions contemplated hereby, provided that the source of such information was not known by the party now possessing the Confidential Information to be bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to any party or any other Person with respect to such information or (iii) becomes available to any party on a non-confidential basis from a source other than one of the other parties and their Subsidiaries, if any, or any of their respective Representatives, provided that such source is not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to such other parties or any other Person with respect to such information. 77 15.12.2 TSR Paging and TDS and TSR Wireless and their respective Subsidiaries shall treat all Confidential Information as confidential, preserve the confidentiality thereof and not disclose any Confidential Information, except to their respective Representatives and Affiliates who need to know such Confidential Information in connection with the transactions contemplated hereby and except to the board of directors of API and their Representatives. Each party shall, and shall cause its Subsidiaries to use all reasonable efforts to cause its Representatives to treat all Confidential Information as confidential, preserve the confidentiality thereof and not disclose any Confidential Information. Each party shall be responsible for any breach of this Agreement by any of its Subsidiaries or Representatives. If, however, Confidential Information is disclosed, such party shall immediately notify the other parties in writing and take all reasonable steps required to prevent further disclosure. 15.12.3 Until the Closing or the termination of this Agreement, all Confidential Information shall remain the property of the party who originally possessed such information. In the event of the termination of this Agreement for any reason whatsoever, each party shall, and shall cause its Subsidiaries and Representatives to destroy or return to the other parties all Confidential Information (including all copies, summaries and extracts thereof) furnished to it by the other parties in connection with the transactions contemplated hereby. 15.12.4 If any of the parties or their Subsidiaries, Representatives or Affiliates is requested or required (by oral questions, interrogatories, requests for information or documents in legal proceedings, subpoena, civil investigative demand or other similar process) or is required by operation of law to disclose any Confidential Information, such party shall provide the other parties with prompt written notice of such request or requirement, which notice shall, if practicable, be at least 48 hours prior to making such disclosure, so that the other parties may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement. If, in the absence of a protective order or other remedy or the receipt of such a waiver, any party and/or any of its Subsidiaries and Representatives is nonetheless, in the opinion of counsel, legally compelled to disclose Confidential Information, then that party may disclose that portion of the Confidential Information which such counsel advises is legally required to be disclosed, provided that the party uses its reasonable efforts to preserve the confidentiality of the Confidential Information, whereupon such disclosure shall not constitute a breach of this Agreement. 15.12.5 This Agreement shall supersede the confidentiality agreement dated as of May 8, 1997 between TSR Paging and TDS. 78 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their respective behalf, by their respective officers thereunto duly authorized, all as of the day and year first above written. TSR PAGING INC. By /s/ Mitchell L. Sacks -------------------------------------------- Name Mitchell L. Sacks -------------------------------------------- Its President -------------------------------------------- TELEPHONE AND DATA SYSTEMS, INC. By /s/ Scott H. Williamson -------------------------------------------- Name Scott H. Williamson -------------------------------------------- Its Vice President - Acquisitions -------------------------------------------- TSR WIRELESS LLC By /s/ Mitchell L. Sacks -------------------------------------------- Name Mitchell L. Sacks -------------------------------------------- Its President ------------------------------------------- 79 SCHEDULE 1.1 1. Contract dated 3/13/97 with Microspace Communications for Stream 3, 64 KBS segment. 2. All contracts with Subscriber Computing. 3. All agreements between API and its employees. 4. The following Agreements between API and TDS: a. Exchange Agreement, dated January 1, 1994, between TDS and API. b. Registration Rights Agreement, dated January 1, 1994, between TDS and API. c. Revolving Credit Agreement, dated January 1, 1994, between TDS and API. d. Intercompany Agreement, dated January 1, 1994, between TDS and API. e. Tax Allocation Agreement, dated January 1, 1994, between TDS and API. f. Employee Benefit Plans Agreement, dated January 1, 1994, between TDS and API. g. Cash Management Agreement, dated January 1, 1994, between TDS and API. h. Insurance Cost Sharing Agreement, dated January 1, 1994, between TDS and API. 5. Licenses for SAP and Ceridian Software (licensed to TDS). See Schedule 6.7(i)(f). 80 EX-99.C3 3 EXHIBIT 99C3/OPTION AGREEMENT OPTION AGREEMENT OPTION AGREEMENT (this "AGREEMENT") dated as of December 22, 1997, by and among TELEPHONE AND DATA SYSTEMS, INC. ("GRANTOR"), and TSR WIRELESS LLC ("TSR WIRELESS"). RECITALS: A. Grantor is the holder of certain indebtedness of American Paging, Inc. (the "COMPANY"). B. On the date hereof TSR Paging Inc. ("TSR PAGING") owns 100% of TSR Wireless. C. Grantor desires to sell and grant to TSR Wireless, and TSR Wireless desires to purchase and acquire from Grantor, an option (the "OPTION") to purchase from Grantor all of Grantor's right, title and interest in and to or arising under or in connection with the Indebtedness (as defined below). AGREEMENT In consideration of the mutual agreements contained herein, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. DEFINITIONS. 1.1 In addition to terms defined elsewhere in this Agreement, the following terms shall have the following meanings herein. "ASSET CONTRIBUTION AGREEMENT": Asset Contribution Agreement dated as of December 22, 1997 by and among TSR Wireless, Grantor and TSR Paging. "BUSINESS DAY": Any day when commercial banks are open for regular banking business in New York City. "CALL NOTICE": A written notice from TSR Wireless to Grantor in the form attached hereto as EXHIBIT A. "COMPANY": American Paging, Inc. "DISTRIBUTIONS": Any and all cash, interest, fees, securities, dividends and other property or consideration which may be exchanged for, distributed or collected in respect of the Indebtedness. "EXERCISE DATE": Any Business Day during the Exercise Period on which TSR Wireless exercises the Option in whole or in part. "EXERCISE PERIOD": Any Business Day occurring during the period from (A) the earlier to occur of (i) February 12, 1998, but only if the Special Committee of the Board of Directors of the Company has failed to approve the merger contemplated in the Asset Contribution Agreement, (ii) the date on which the Special Committee of the Board of Directors of the Company withdraws its approval of the Merger contemplated by the Asset Contribution Agreement, (iii) the date the Company takes board action or the Company's stockholders take action to liquidate the Company and (iv) the date on which Grantor has entered into an agreement for the sale of all or substantially all of the capital stock of the Company owned by Grantor or the Company has entered into an agreement for the merger, consolidation or other combination of the Company or the sale of all or substantially all of the assets of the Company, other than to TSR Wireless, to and including (B) the earlier of (x) 5:00 p.m. New York City time on September 30, 1998 and (y) the date on which the Asset Contribution Agreement is terminated pursuant to Section 15.1.1(iv)(a) or (c) and (z) the Closing occurs under the Asset Contribution Agreement. "FURTHER LLC INTEREST": An LLC Interest equal to 18.1% of the LLC Interest which would have been issued to Grantor pursuant to Section 3.1.2 of the Asset Contribution Agreement had Grantor contributed the Cracker Jack Assets to TSR Wireless upon the Closing without regard to any Post-Closing Adjustment provided by Article III of the Asset Contribution Agreement. "INDEBTEDNESS": The outstanding principal amount of advances made by Grantor to the Company under that certain Revolving Credit Agreement, dated as of January 1, 1994, between Grantor and the Company, as amended, supplemented or otherwise modified to date (the "CREDIT AGREEMENT"), PLUS all interest, fees and other amounts owing thereunder. "INITIAL LLC INTEREST": An LLC Interest equal to 81.9% of the LLC Interest which would have been issued to Grantor pursuant to Section 3.1.2 of the Asset Contribution Agreement had Grantor contributed the Cracker Jack Assets to TSR Wireless upon the Closing without regard to any Post-Closing Adjustment provided by Article III of the Asset Contribution Agreement. "LLC INTEREST": A member interest in TSR Wireless. "TSR ASSET CONTRIBUTION": As defined in Section 2. "TSR WIRELESS": TSR Wireless LLC, a Delaware limited liability company in which, as of the date hereof, TSR Paging holds all LLC Interests. 1.2 Other capitalized terms used in this Agreement, but not defined herein, shall bear the meanings given to them in the Asset Contribution Agreement. 2. OPTION. Grantor hereby irrevocably grants and sells to TSR Wireless, and TSR Wireless hereby purchases and accepts from Grantor, the Option. The Option may be exercised on any Exercise Date selected by TSR Wireless, by delivery to Grantor of a duly 2 executed Call Notice; provided that the Option may only be exercised if (i) all of the assets and liabilities of TSR Paging have been contributed by TSR Paging to TSR Wireless ("TSR ASSET CONTRIBUTION") in exchange for LLC Interests in TSR Wireless, (ii) the condition set forth in Section 12.6 of the Asset Contribution Agreement has been satisfied and the Exchange and Registration Rights Agreement and the TSR Wireless LLC Agreement each has been duly executed by the parties except Grantor. Within five Business Days after Grantor's receipt from TSR Wireless of a duly executed Call Notice, Grantor shall transfer the Indebtedness to TSR Wireless or TSR Wireless's designee, pursuant to an Assignment and Acceptance Agreement substantially in the form of EXHIBIT B, in exchange for an assignment of the Initial LLC Interest and shall deliver the Exchange and Registration Rights Agreement and the TSR Wireless LLC Agreement, each duly executed by Grantor. 3. PREMIUM. Upon delivery by Grantor and TSR Wireless to the other of executed counterparts of this Agreement, TSR Wireless shall pay $1.00 (the "PREMIUM") to Grantor. 4. REPRESENTATIONS AND WARRANTIES. (a) Each party hereto represents, warrants and acknowledges to the other parties hereto that: (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Agreement and all documents required to be executed and delivered by it hereunder (collectively, the "OPTION DOCUMENTS"), and to fulfill its obligations under the Option Documents, and to consummate the transactions contemplated by the Option Documents; (ii) the making and performance by it of the Option Documents, and the fulfillment of its obligations under the Option Documents, does not and will not violate any law or regulation of the jurisdiction under which it exists, any other law or regulation applicable to it or any other agreement to which it is a party or by which it is bound; (iii) the Option Documents have been duly executed and delivered by it and constitute its legal, valid and binding obligation, enforceable against it in accordance with the respective terms thereof; and (iv) all approvals, authorizations or other actions by, or filings with, any governmental authority necessary for the validity or enforceability of its obligations under the Option Documents have been obtained. (b) Grantor further represents, warrants and acknowledges to TSR Wireless as of the date hereof and as of the Exercise Date that: (i) it is the sole legal and beneficial owner and holder of the Indebtedness, and will transfer the Indebtedness to TSR Wireless, and TSR Wireless will acquire the Indebtedness, free and clear of any liens, claims, charges, encumbrances, or other security or ownership interests and the Indebtedness is fully and freely transferable to TSR Wireless; (ii) Grantor has not pledged or encumbered, nor has it granted any security interests in or liens upon the Indebtedness; 3 (iii) the Company is indebted to Grantor in respect of the Indebtedness in principal amounts equal to not less than $170,000,000, and the Indebtedness is not subject to any claim or right of setoff, reduction, recoupment, avoidance, disallowance or subordination; (iv) Grantor has not engaged in any act, conduct or omission which could reasonably be expected to result in the Indebtedness being subject to (and it has not received any notice that the Indebtedness may be subject to) subordination, reduction, disallowance, setoff, right of recoupment, avoidance, defense, counterclaims or impairment of any kind except as set forth in that certain letter from Grantor to the Company dated as of March 5, 1997; (v) no litigation, arbitration or adversarial proceeding is pending against it or the Company or, to its actual knowledge, is threatened against it or the Company, which could reasonably be expected to in any case have a material adverse effect on the Indebtedness; and (vii) without in any way implying that the Option is a "security" within the meaning of applicable securities laws, no offer to sell or solicitation of any offer to buy any portion of the Option or the Indebtedness has been made by it in a manner that would violate or require registration under such applicable securities laws. (c) TSR Wireless further represents, warrants and acknowledges to Grantor that: (i) Grantor has not given any investment advice or rendered any opinion to TSR Wireless as to whether the sale of the Option is prudent and TSR Wireless is not relying on any representation or warranty by Grantor except as expressly set forth in this Agreement or the Asset Contribution Agreement; (ii) TSR Wireless has received, reviewed and relied upon such information concerning the legal, business and financial condition of the Company as it considers adequate to make an informed decision regarding the purchase of the Option; and (iii) without implying that the Option is a "security" within the meaning of applicable securities laws, TSR Wireless is a sophisticated investor with respect to the Option, was not formed for the purpose of purchasing the Option and is not purchasing the Option with a view to any public distribution thereof which would violate applicable securities laws. 5. FURTHER LLC INTEREST. Following the exercise of the Option, upon the earlier to occur of (i) the transfer by the Company of all of the Company's Assets (except for Excluded Assets) to TSR Wireless, whether by foreclosure, conveyance or other transfer and (ii) 4 the entire principal amount of the outstanding Indebtedness is repaid to TSR in cash, TSR Wireless shall issue the Further LLC Interest to Grantor. 6. DISTRIBUTIONS. If Grantor receives any Distributions in respect of the Indebtedness on or after an Exercise Date, it will pay the same over to TSR Wireless or TSR Wireless's designee in the currency received by it or, in the case of securities (to the extent permissible by law and relevant documentation), endorse or cause to be registered in TSR Wireless's names or such names as TSR Wireless may direct in writing (at TSR Wireless's sole expense) and deliver to TSR Wireless or such persons as TSR Wireless may direct such securities within three (3) business days after receipt of any such Distribution. If any cash Distribution is not paid to TSR Wireless within such time period Grantor will pay interest on such Distribution for the period from the day on which such Distribution was actually received by Grantor to (but excluding) the day such Distribution is actually paid to TSR Wireless, at a rate per annum equal to the London Interbank Offering Rate plus two (2) percent, as calculated and published from time to time on page 3750 of the Telerate Screen. Until any Distributions are transferred to TSR Wireless pursuant to this Section 6, Grantor shall hold the same in trust for the benefit of TSR Wireless. 7. COVENANT; INFORMATION; ACTIONS. Grantor shall not amend, supplement or otherwise modify the terms of the Credit Agreement without the prior written consent of TSR Wireless, PROVIDED, HOWEVER, that this shall not prevent an increase by Grantor of the Indebtedness so long as such increase and a draw in an amount equal to such increase occur simultaneously. If Grantor receives any documents, notice or correspondence under the Credit Agreement or in respect of the Indebtedness from and after the date hereof it shall promptly forward the same to TSR Wireless. TSR Wireless shall have sole authority to exercise all voting and other rights and remedies under the Credit Agreement and in respect of the Indebtedness from and after the Exercise Date. If for any reason, Grantor is entitled to exercise any such rights after the Exercise Date (including, without limitation, the right to vote), Grantor shall exercise such rights only in accordance with TSR Wireless's written instructions. 8. NOTICE. Notice (including any Call Notice) will be given by fax, if to TSR Wireless at: TSR Wireless LLC 400 Kelly Street 15th Floor Fort Lee, NJ 07024 Attention: Mitchell L. Sacks Fax: (201) 947-7145 5 With copies to: Latham & Watkins 885 Third Avenue Suite 1000 New York, New York 10022 Attention: Roger H. Kimmel Fax: (212) 751-4864 Grantor, at: Telephone and Data Systems, Inc. 30 North LaSalle Street Suite 4000 Chicago, IL 60602 Attention: Chief Financial Officer Fax: (312) 630-9299 With copies to: Sidley & Austin 1 First National Plaza Chicago, Illinois 60603 Attention: Michael G. Hron Fax: (312) 456-5352 Copies of all notices so sent will also be sent by overnight courier to the parties' respective addresses set forth above (or such other addresses as any party hereto may specify in writing from time to time). All notices shall be deemed effective when received. 9. INDEMNIFICATION. (a) Grantor shall indemnify and hold each of TSR Wireless and TSR Paging (and TSR Wireless's and TSR's fiduciaries, officers, managers, directors, partners, employees and agents) harmless from any actual losses, costs or expenses, including reasonable legal fees and expenses, which are incurred as a result of breaches of any of the representations, warranties, covenants or agreements made by Grantor in this Agreement; (b) TSR Wireless shall indemnify and hold Grantor and TSR Paging (and Grantor's and TSR's officers, directors, trustees, fiduciaries, managers, employees and agents) harmless from any actual losses, costs or expenses, including reasonable legal fees and expenses, which are incurred as a result of breaches of any of the representations, warranties, covenants or agreements made by TSR Wireless in this Agreement; and (c) TSR Paging shall indemnify and hold Grantor and TSR Wireless (and Grantor's and TSR Wireless's officers, directors, trustees, fiduciaries, managers, employees and agents) harmless from any actual losses, costs or expenses, including 6 reasonable legal fees and expenses, which are incurred as a result of breaches of any of the representations, warranties, covenants or agreements made by TSR Paging in this Agreement. 10. COSTS AND EXPENSES. Each party hereto shall be responsible for its own fees and expenses (including legal fees and costs) in connection with the preparation, review and execution of this Agreement. 11. MISCELLANEOUS. This Agreement shall be binding upon, enforceable by and inure to the benefit of the parties hereto and their respective successors, but shall not be assignable by any party hereto without the consent of the other parties. The representations, warranties, covenants, agreements and indemnities contained herein shall survive the execution, delivery and performance of this Agreement and all other Option Documents. Any amendments to, or waivers of, this Agreement shall be in writing and signed by Grantor, TSR Wireless and TSR Paging. This Agreement, together with Asset Contribution Agreement, constitutes the entire agreement of the parties hereto with respect to the subject matter hereof. This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original, but all of which together shall constitute one agreement binding on the parties hereto. Transmission by telecopier of an executed counterpart of this Agreement shall be deemed to constitute due and sufficient delivery of such counterpart, PROVIDED that the party so delivering such counterpart shall, promptly after such delivery, deliver the original of such counterpart of this Agreement to the other parties hereto. 12. GOVERNING LAW. This Agreement shall be construed and the obligations of the parties hereunder shall be determined in accordance with the laws of the State of New York. 7 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written. Grantor: TELEPHONE AND DATA SYSTEMS, INC. By: /s/ Scott H. Williamson ---------------------------------- Name: Scott H. Williamson Title: Vice President-Acquistions TSR Wireless: TSR WIRELESS LLC By: TSR PAGING INC., its sole member By: /s/ Mitchell L. Sacks ------------------------------- Name: Mitchell L. Sacks Title: President 8 EXHIBIT A FORM OF CALL NOTICE Telephone and Data Systems, Inc. 30 North LaSalle Street Suite 4000 Chicago, IL 60602 Attention: Re: EXERCISE OF OPTION Ladies and Gentlemen: The undersigned hereby irrevocably elects to exercise the right, set forth in that certain Option Agreement dated as of December 22, 1997 (the "Option Agreement"), to purchase from Telephone and Data Systems, Inc. ("Grantor") all of Grantor's right, title and interest in and to or arising under or in connection with the Indebtedness, as set forth in the Option Agreement. Capitalized terms used herein without definition have the same meanings as in the Option Agreement. The undersigned has attached the Assignment and Acceptance, and requests that a Note representing the Indebtedness be made in favor of the Assignee named therein. The undersigned agrees to cause to be transferred to Grantor, upon receipt the Note and a counterpart of the Assignment and Acceptance, the LLC Interest. Very truly yours, TSR WIRELESS LLC By: ------------------------------------ Name: Title: Date: 9 EXHIBIT B FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT Dated _______, 19__ Reference is made to the Revolving Credit Agreement, dated as of January 1, 1994, between Telephone and Data Systems, Inc. and American Paging, Inc. (the "Company") (as amended, modified and supplemented to date, the "Credit Agreement"). Unless otherwise defined herein, terms defined in the Credit Agreement are used herein with the same meanings. Telephone and Data Systems, Inc. (the "Assignor") and __________________ (the "Assignee") agree as follows: 1. Subject to Section 3 below, the Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, WITHOUT RECOURSE, [all] [a portion] of Assignor's rights and obligations under the Credit Agreement on the Effective Date (as defined Section 4 below), equal to __________% of the advances owing to, and the Note held by, the Assignor on the Effective Date. 2. The Assignor: (i) represents and warrants that, (A) as of the date hereof, its commitment to extend credit under the Credit Agreement (without giving effect to assignments thereof which have not yet become effective) is $0.00; and (B) the Credit Agreement has been duly authorized and validly executed by the Company and constitutes a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms (assuming the due execution and delivery hereof by the other parties thereto), subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally and to general principles of equity (regardless of whether enforcement is sought at law or in equity), and except as rights to indemnity and contribution thereunder may be limited by public policy considerations underlying such laws; (ii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Company or the performance or observance by the Company or any subsidiary of the Company of any of its obligations under the Credit Agreement or any other instrument or document furnished pursuant thereto; and (iii) attaches the Note referred to in paragraph 1 above. 3. The Assignee: (i) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements referred to in Section 7(a)(l) of the Credit Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (ii) agrees that it will, independently and without reliance upon the Assignor, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (iii) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are 10 required to be performed by it; and (iv) specifies as its address for notices the office set forth beneath its name on the signature pages hereof. 4. The effective date of this Assignment and Acceptance shall be ___________, 19___ (the "Effective Date").(1) Following the execution of this Assignment and Acceptance, a copy will be delivered to the Company. 5. As of the Effective Date, (i) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations which Assignor had thereunder, and (ii) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement [and cease to be a party thereto].(2) 6. From and after the Effective Date, the Company shall make all payments under the Credit Agreement in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest and commitment fees with respect to the Note) to the Assignee. The Assignor and the Assignee shall make all appropriate adjustments in payments under the Credit Agreement for periods prior to the Effective Date directly between themselves. 7. MISCELLANEOUS. (i) NOTICES. Notices shall be given under this Assignment and Acceptance in the manner set forth in the Credit Agreement. The addresses for notice shall be those set forth below the respective signatures of the Assignor and the Assignee on this Agreement. (ii) HEADINGS. Headings are for reference only and are to be ignored in interpreting this Assignment and Acceptance. (iii) GOVERNING LAW. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. (iv) FURTHER ASSURANCES. The Assignor and the Assignee hereby agree to execute and deliver such other instruments, and take such other action, as either party may reasonably request in furtherance of the transactions contemplated by this Assignment and Acceptance. - ------------------------- (1) Such date shall be at least [5] Business Days after the execution of this Assignment and Acceptance. (2) Insert if Assignment and Acceptance covers all or the remaining portion of the Assignor's rights and obligations under the Credit Agreement. 11 (v) COUNTERPARTS. This Assignment and Acceptance may be executed in one or more duplicate counterparts, and when executed and delivered by all the parties listed below shall constitute a single binding agreement. 12 IN WITNESS WHEREOF, the parties hereto have executed this Assignment and Acceptance Agreement by their duly authorized officers as of the date first above written. TELEPHONE AND DATA SYSTEMS, INC. By: ------------------------------------ Name: Title: Notice Address: [NAME OF ASSIGNEE] By: ------------------------------------- Name: Title: Notice Address: Acknowledged this ____ day of __________________, 19___ AMERICAN PAGING, INC. By: ----------------------------------- Name: Title: 13 EX-99.C4 4 RST. CERT. OF INC. RESTATED CERTIFICATE OF INCORPORATION OF AMERICAN PAGING, INC. AMERICAN PAGING, INC., a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows: 1. The name of the corporation is AMERICAN PAGING, INC. The date of filing of its original Certificate of Incorporation with the Secretary of State was April 10, 1980. 2. This Restated Certificate of Incorporation restates and integrates and further amends the Certificate of Incorporation of this corporation by revising such document in its entirety. 3. This text of the Certificate of Incorporation as amended or supplemented heretofore is further amended hereby to read as herein set forth in full: ARTICLE I The name of the corporation is AMERICAN PAGING, INC. ARTICLE II The address of its registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, New Castle County, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company. ARTICLE III The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware; PROVIDED, HOWEVER, that the corporation, without the written consent of TDS, shall not, directly or indirectly (through a Subsidiary of the corporation or any other person or otherwise) for its own account or that of another, own, invest or otherwise have an interest in, lease, operate or manage any business other than a business engaged solely in the construction of, the ownership of interests in and/or the management of radio paging systems. ARTICLE IV CAPITALIZATION (a) AUTHORIZED SHARES. The total number of shares of all classes of stock which the corporation shall have authority to issue is one hundred sixty million (160,000,000) shares, consisting of fifty million (50,000,000) Common Shares with a par value of $1.00 per share; fifty million (50,000,000) Series A Common Shares with a par value of $1.00 per share; fifty million (50,000,000) Series B Common Shares with a par value of $1.00 per share; and ten million (10,000,000) shares of Preferred Stock with a par value of $1.00 per share. (b) COMMON SHARES, SERIES A COMMON SHARES AND SERIES B COMMON SHARES. (1) The powers, preferences and rights of the Common Shares, Series A Common Shares and Series B Common Shares, and the qualifications, limitations or restrictions thereof, shall be in all respects identical, except as expressly provided in this Restated Certificate of Incorporation, as amended, or as otherwise required by law. (2) At each annual or special meeting of stockholders, each holder of Common Shares shall be entitled to one (1) vote in person or by proxy for each Common Share standing in such holder's name on the stock transfer records of the corporation in connection with all actions submitted to a vote of stockholders, each holder of Series A Common Shares shall be entitled to fifteen (15) votes for each Series A Common Share standing in such holder's name, and holders of Series B Common Shares shall not vote on any matter, except as expressly provided in this Restated Certificate of Incorporation, as amended, or as otherwise required by the Delaware General Corporation Law. (3) The number of authorized Common Shares and Series B Common Shares may be increased or decreased (but not below the number of such shares then outstanding in such class, respectively) by the affirmative vote of a majority of the Series A Common Shares by the holders thereof. (c) DIVIDENDS. Dividends may be declared and paid to the holders of the Common Shares, Series A Common Shares and Series B Common Shares in cash, property, or other securities of the corporation out of any net profits or net assets of the corporation legally available therefor. If and when dividends on the Common Shares, Series A Common Shares and Series B Common -2- Shares are declared by the board of directors, whether payable in cash, in property or in shares of stock of the corporation, the holders of Common Shares, Series A Common Shares and Series B Common Shares shall be entitled to share equally, on a per share basis, in such dividends; PROVIDED, HOWEVER, that if at any time a dividend or other distribution is to be paid in capital stock of the corporation on capital stock of the corporation, such dividend or other distribution shall be paid to all holders of common stock of the corporation and may only be paid as follows: (1) Common Shares may be paid to holders of Common Shares and proportionately to holders of Series A Common Shares and Series B Common Shares; (2) Common Shares may be paid to holders of Common Shares at the same time that Series A Common Shares are paid proportionately to holders of Series A Common Shares and Series B Common Shares are paid proportionately to holders of Series B Common Shares; (3) Series A Common Shares may be paid to holders of Series A Common Shares and proportionately to holders of Common Shares and Series B Common Shares; or (4) Series B Common Shares may be paid to holders of Series B Common Shares and proportionately to holders of Common Shares and Series A Common Shares; and in the case of any such dividend or other distribution the board of directors may permit the holders of any class of common stock to elect to receive cash in lieu of stock. (d) STOCK SPLITS, SUBDIVISIONS AND COMBINATIONS. If the corporation shall in any manner split, subdivide or combine the outstanding shares of any class of common stock, the outstanding shares of each other class of common stock shall be proportionately split, subdivided or combined in the same manner and on the same basis. (e) LIQUIDATION. The holders of Common Shares, Series A Common Shares and Series B Common Shares shall be entitled to receive the same amount or distribution per share upon the liquidation, dissolution or winding up of the affairs of the corporation. A consolidation, merger or reorganization of the corporation with any other corporation or corporations, or a sale of all or substantially all of the assets of the corporation, shall not be considered a liquidation, dissolution or winding up of the corporation within the meaning of these provisions. -3- (f) DISTRIBUTIONS OF SUBSIDIARIES. Notwithstanding the provisions of subsections (c) and (e) of Article IV, if the corporation at any time distributes to the holders of common stock of the corporation the stock of a Subsidiary (as hereinafter defined) having two or more classes of common stock outstanding that have relative rights, preferences and limitations vis-a-vis each other that, in the judgment of the board of directors, are similar in all material respects to the relative rights, preferences and limitations of two or more classes of common stock of the corporation vis-a-vis each other (except for any variations in rights, preferences and limitations that are (1) necessary to enable a class of common stock of the Subsidiary to be traded on an exchange or through the National Association of Securities Dealers, Inc. Automated Quotation System (the "NASDAQ System"); (2) due to differences in the laws of the states of incorporation of the corporation and the Subsidiary; or (3) equally applicable to two or more classes of common stock of the Subsidiary), then each class of common stock of the Subsidiary shall be distributed to the extent practicable to the holders of the corresponding class of common stock of the corporation, PROVIDED that the same number of shares on a per share basis shall be distributed with respect to shares of each applicable class of common stock of the corporation. (g) PRE-EMPTIVE RIGHTS. No holder of stock of the corporation shall have any pre-emptive right to subscribe for or acquire any unissued or treasury stock or other securities of the corporation, whether such stock or securities be hereby or hereafter authorized, except as may be specifically granted pursuant to a contract with the corporation approved by the board of directors and except that holders of Series A Common Shares shall have a pre-emptive right to acquire unissued or treasury Series A Common Shares or securities convertible into or exchangeable for, or carrying a right to subscribe to or acquire, Series A Common Shares; PROVIDED, HOWEVER, that no pre-emptive right shall exist to acquire any Series A Common Shares sold otherwise than for cash. The pre-emptive right of each holder of Series A Common Shares may be exercised in full, or in part to the extent determined by each holder, and in no event shall the exercise of such right be conditioned on subscribing for or acquiring any minimum amount or proportion of stock or other securities. (h) CONVERSION OF SERIES A COMMON SHARES. Each outstanding Series A Common Share shall be convertible into one Common Share. Series A Common Shares so converted shall not be reissued. Any such conversion shall be effected by the presentation and surrender of the certificates representing the Series A Common Shares to be converted, at the office of the corporation or at such other place as may from time to time be designated by the corporation, in such form and accompanied by all transfer taxes (or proof of payment thereof), if any, as -4- shall be required for such transfer, and upon such surrender, the holder of such shares shall be entitled to receive in exchange therefor certificates for fully paid and nonassessable Common Shares of the corporation at the rate aforesaid, and such holder shall be registered as the holder of such Common Shares. (i) MANDATORY REDEMPTION. Notwithstanding any other provision of this Restated Certificate of Incorporation to the contrary, any outstanding shares of stock of the corporation shall be subject to redemption by the corporation, by action of the board of directors, if in the judgment of the board of directors such action should be taken, pursuant to Section 151(b) of Title 8 of the Delaware Code or any other applicable provision of law, to the extent necessary to prevent the loss or secure the reinstatement of any license or franchise from any governmental agency held by the corporation or any of its Subsidiaries to conduct any portion of the business of the corporation or any of its Subsidiaries, which license or franchise is conditioned upon some or all of the holders of the corporation's stock possessing prescribed qualifications. The terms and conditions of such redemption shall be as follows: (1) the redemption price of the shares to be redeemed pursuant to this subsection (i) shall be equal to the lesser of (A) the Fair Market Value (as hereinafter defined) of such shares or (B) if such shares were purchased by a Disqualified Holder (as hereinafter defined) within one year of the Redemption Date (as hereinafter defined), such Disqualified Holder's purchase price for such shares; (2) the redemption price of such shares may be paid in cash, Redemption Securities (as hereinafter defined) or any combination thereof; (3) if less than all the shares held by Disqualified Holders are to be redeemed, the shares to be redeemed shall be selected in such manner as shall be determined by the board of directors, which may include selection first of the most recently purchased shares thereof, selection by lot or selection in any other manner determined by the board of directors; (4) at least 30 days' written notice of the Redemption Date shall be given to the record holders of the shares selected to be redeemed (unless waived in writing by any such -5- holder), PROVIDED that the Redemption Date may be the date on which written notice shall be given to record holders if the cash or Redemption Securities necessary to effect the redemption shall have been deposited in trust for the benefit of such record holders and subject to immediate withdrawal by them upon surrender of the stock certificates for their shares to be redeemed; (5) from and after the Redemption Date, any and all rights of whatever nature, which may be held by the owners of shares selected for redemption (including without limitation any rights to vote or participate in dividends declared on stock of the same class or series as such shares), shall cease and terminate and they shall thenceforth be entitled only to receive the cash or Redemption Securities payable upon redemption; and (6) such other terms and conditions as the board of directors shall determine. (j) MINORITY PROTECTION OFFERS. (1) If, after the Effective Time (as hereinafter defined), any person or group acquires beneficial ownership of 10% or more of the then issued and outstanding Common Shares (other than upon original issuance by the corporation, by operation of law, by will or the laws of descent and distribution, by gift or by foreclosure of a bona fide loan), and such person or group (a "Related Person") does not own an equal or greater percentage of the Series B Common Shares acquired after the record date for the first issuance of Series B Common Shares (the "Distribution Date"), such person or group shall, within a 90-day period beginning the day after becoming a Related Person, make a public tender offer in compliance with all applicable laws and regulations to acquire Series B Common Shares as provided in this subsection (j) of Article IV (a "Minority Protection Offer"). (2) In each Minority Protection Offer, the Related Person shall make a public tender offer to acquire that number of Series B Common Shares determined by (A) multiplying the percentage of outstanding Common Shares beneficially owned on the date such person or group became a Related Person and acquired after the Effective Time by such Related Person by the total number of Series B Common Shares outstanding on such date, and (B) subtracting therefrom the total number of Series B Common Shares beneficially owned on such date and acquired after the Distribution Date by such Related Person (including shares acquired on such date at or prior to the time such person or group became a Related Person). The Related Person shall acquire -6- all of such shares validly tendered; PROVIDED, HOWEVER, that if the number of Series B Common Shares tendered to the Related Person exceeds the number of shares required to be acquired pursuant to the formula set forth in this clause (2), the number of Common Shares acquired from each tendering holder shall be pro rata in proportion to the total number of Series B Common Shares tendered by all tendering holders. (3) The offer price for any Series B Common Shares required to be purchased by the Related Person pursuant to this provision shall be the greater of (A) the highest price per share paid by the Related Person for any Common Share in the six-month period ending on the date such person or group became a Related Person, or (B) the highest reported sales price of a Common Share or Series B Common Share on the NASDAQ System (or such securities exchange or other quotation system as is then the principal trading market for such shares) on the date such person or group became a Related Person or, in case no such sale takes place, the Closing Price (as hereinafter defined) on the prior trading day. For purposes of clause (4) below, the applicable date for the calculations required by the preceding sentence shall be the date on which the Related Person becomes required to engage in a Minority Protection Offer. In the event that the Related Person has acquired Common Shares in the six-month period ending on the date such person or group becomes a Related Person for consideration other than cash, the value of such consideration per Common Share shall be as determined in good faith by the board of directors. (4) A Minority Protection Offer shall also be required to be effected by any Related Person that acquires beneficial ownership of the next higher integral multiple of 5% (e.g. 15%, 20%, 25%, etc.) of the outstanding Common Shares after the Effective Time (other than upon issuance or sale by the corporation, by operation of law, by will or the laws of descent and distribution, by gift, or by foreclosure of a bona fide loan) if such Related Person does not then own an equal or greater percentage of the Series B Common Shares acquired after the Distribution Date. Such Related Person shall be required to make a public tender offer to acquire that number of Series B Common Shares prescribed by the formula set forth in clause (2) above, and shall acquire all shares validly tendered or a pro rata portion thereof, as specified in said clause (2), at a price determined pursuant to clause (3) above. (5) If any Related Person fails to make an offer required by this subsection (j) of Article IV, or to purchase shares validly tendered and not withdrawn (after proration, if any), such Related Person shall not be entitled to vote any Common Shares beneficially owned by such Related Person and acquired by such Related Person after the Effective Time unless and until such requirements are complied with or unless and until -7- all Common Shares causing such offer requirement to be effective are no longer beneficially owned by such Related Person. (6) The Minority Protection Offer requirement shall not apply to any increase in percentage ownership of Common Shares resulting solely from a change in the total number of Common Shares outstanding, PROVIDED that any acquisition after such change which results in any person or group owning 10% or more of the Common Shares, excluding, in the case of the numerator but not of the denominator of the calculation of such percentage, Common Shares held by such Related Person immediately after the Effective Time, shall be subject to any Minority Protection Offer requirement that would be imposed with respect to a Related Person pursuant to this subsection (j) of Article IV. (7) All calculations with respect to percentage ownership of issued and outstanding Common Shares or Series B Common Shares shall be based upon the numbers of issued and outstanding shares reported by the corporation on the last filed of (A) the corporation's most recent annual report on Form 10-K, (B) its most recent Quarterly Report on Form 10-Q, or (C) if any, its most recent Current Report on Form 8-K. (8) For purposes of this subsection (j) of Article IV, the term "person" means a natural person, company, government, or political subdivision, agency or instrumentality of a government, or other entity, "beneficial ownership" shall be determined pursuant to Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the "1934 Act"), or any successor regulation and the formation or existence of a "group" shall be determined pursuant to Rule 13d-5(b) under the 1934 Act or any successor regulation. (9) In the event of a merger or consolidation of the corporation with or into another entity (whether or not the corporation is the surviving entity), the holders of Series B Common Shares shall be entitled to receive the same per share consideration as the per share consideration, if any, received by any holders of the Common Shares in such merger or consolidation. (k) POWER TO SELL STOCK. The board of directors shall have the power to issue and sell all or any part of any class of stock herein or hereafter authorized to such person, firm, association or corporation, and for such consideration as the board of directors shall from time to time, in its discretion, determine, whether or not greater consideration could be received upon the issue or sale of the same number of shares of another class, and as otherwise permitted by law. (l) POWER TO REPURCHASE STOCK. The board of directors shall have the power to purchase shares of any class of stock -8- herein or hereafter authorized from such person, firm, association or corporation, and for such consideration as the board of directors shall from time to time, in its discretion, determine, whether or not less consideration could be paid upon the purchase of the same number of shares of another class, and as otherwise permitted by law. (m) PREFERRED STOCK. The board of directors is expressly authorized to adopt, from time to time, a resolution or resolutions providing for the issue of one or more series of Preferred Stock, with such voting powers, full or limited, or no voting powers, and with such designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, in addition to and not inconsistent with those specifically set forth in this Restated Certificate of Incorporation and as shall be stated and expressed in the resolution or resolutions adopted by the board of directors; PROVIDED, HOWEVER, that no shares of any series of Preferred Stock shall be issued for consideration of less than $100 per share, have more than one (1) vote per share with respect to any matter, or have separate class-voting rights with respect to the election of directors or any other matter. In no event shall Preferred Stock of any series be split or divided in any manner, nor shall any dividends or other distributions payable in stock of the corporation of any class or series be paid or payable on Preferred Stock. (n) EFFECTIVE TIME. Effective as of the filing of this Restated Certificate of Incorporation with the Secretary of State of the State of Delaware pursuant to Section 103 of Title 8 of the Delaware Code (the "Effective Time"), the 100 shares of capital stock, par value $1.00 per share, of the corporation, representing all the issued and outstanding capital stock of the corporation ("Outstanding Common Stock") shall, without any action on the part of the holder thereof, be converted into 1,500,000 Common Shares and 15,000,000 Series A Common Shares, all of which shall be fully paid and nonassessable. Upon the surrender of certificates representing shares of Outstanding Common Stock, the corporation or any agent of the corporation appointed for such purpose shall issue in exchange therefor one or more certificates representing the shares into which the shares of Outstanding Common Stock have been converted in accordance with the foregoing. ARTICLE V Any and all right, title, interest and claim in or to any dividends declared by the corporation, whether in cash, stock or otherwise, which are unclaimed by the stockholder entitled thereto for a period of six years after the close of business on -9- the payment date, shall be and be deemed to be extinguished and abandoned; and such unclaimed dividends in the possession of the corporation, its transfer agents or other agents or depositaries shall at such time become the absolute property of the corporation, free and clear of any and all claims of any persons whatsoever. ARTICLE VI DIRECTORS (a) NUMBER; CLASSES; CHANGES. The number of directors of the corporation shall be fixed by or pursuant to the bylaws of the corporation, but shall not be less than three, and, commencing with the 1994 annual meeting of stockholders, the directors shall be divided into three classes, which shall be as nearly equal in number as possible; the term of office of those of the first class to expire at the annual meeting next ensuing; of the second class one year thereafter; of the third class two years thereafter; and at each annual election held after such classification and election, directors shall be chosen for a full three-year term to succeed those whose terms expire. If the number of directors fixed by or pursuant to the bylaws of the corporation is changed at any time, any newly created directorships or any decrease in directorships shall be so apportioned among the classes by the board of directors so as to make all classes as nearly equal in number as possible; PROVIDED, HOWEVER, that no decrease in the number of directors shall shorten the term of any incumbent director. (b) VOTING IN ELECTIONS. With respect to the election of directors, the holders of Common Shares, voting as a class, shall be entitled to elect at each annual meeting that number of directors which (together with all directors whose terms do not expire at the time of such election and who were previously elected by such holders) constitutes 25% of the number of directors of the corporation fixed by or pursuant to the bylaws of the corporation (rounded up to the nearest whole number). After the holders of Common Shares have voted with respect to the election of directors, the holders of (A) Preferred Stock entitled to vote thereon, and (B) Series A Common Shares, both voting together as one class, shall be entitled to elect at each annual meeting that number of directors which (together with all directors whose terms do not expire at the time of such election and who were previously elected by such holders) constitutes 75% of the number of directors fixed by or pursuant to the bylaws of the corporation (rounded down to the nearest whole number); PROVIDED, HOWEVER, that in the event the number of issued and outstanding Series A Common Shares at the time of an annual meeting is less than 500,000, then the holders of Common Shares shall be entitled to vote with the holders of Series A Common -10- Shares and Preferred Stock entitled to vote thereon for the directors such holders are entitled to elect at such meeting, in which case the holders of Common Shares, Series A Common Shares, and Preferred Stock entitled to vote thereon, shall vote together without regard to class. (c) VACANCIES. Vacancies and newly created directorships of the Preferred Stock and Series A Common Shares shall be filled by the holders of such classes. Vacancies and newly created directorships of the Common Shares shall be filled by the holders of such class, if a vacancy or newly created directorship is to be filled at an annual meeting of stockholders, or by a majority of the directors then in office, if the vacancy or newly created directorship is to be filled between annual meetings of stockholders. Vacancies and newly created directorships with respect to directors elected by the holders of Common Shares, Series A Common Shares, and Preferred Stock entitled to vote thereon, voting together without regard to class, shall be filled by the holders of such classes, if a vacancy or newly created directorship is to be filled at an annual meeting of stockholders, or by a majority of the directors then in office, if the vacancy or newly created directorship is to be filled between annual meetings of stockholders. A director chosen by a majority of the directors then in office to fill a vacancy or a newly created directorship shall cease to hold office at the next annual meeting of stockholders held thereafter, whether the term of office of the class for which the director was chosen expires at that meeting or not. In all other cases, directors chosen to fill vacancies and newly created directorships shall hold office until the next election of the class for which such directors shall have been chosen, and until their successors shall be elected and qualified. (d) BALLOTS. Election of directors need not be by written ballot unless the bylaws of the corporation so provide. ARTICLE VII In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized to make, alter, amend or repeal the bylaws of the corporation. ARTICLE VIII No opportunity, transaction, agreement or other arrangement to which TDS, or any other person in which TDS has or acquires a financial interest, is or shall become a party, shall be the property or a corporate opportunity of the corporation or its Subsidiaries, unless (a) not less than 500,000 Series A -11- Common Shares are outstanding, and (b) such opportunity, transaction, agreement or other arrangement relates solely to the construction of, the ownership of interests in and/or the management of radio paging systems, other than such a system that is ancillary to and integrated with another communications system. ARTICLE IX A director of the corporation shall not in the absence of fraud be disqualified by his office from dealing or contracting with the corporation either as a vendor, purchaser or otherwise, nor in the absence of fraud shall a director of the corporation be liable to account to the corporation for any profit realized by him from or through any transaction or contract of the corporation by reason of the fact that he, or any firm of which he is a member, or any corporation of which he is an officer, director or stockholder, was interested in such transaction or contract if such transaction or contract has been authorized, approved or ratified in the manner provided in the General Corporation Law of Delaware for authorization, approval or ratification of transactions or contracts between the corporation and one or more of its directors or officers, or between the corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest. ARTICLE X For purposes of this Restated Certificate of Incorporation: "DISQUALIFIED HOLDER" shall mean any holder of shares of stock of the corporation whose holding of such stock, either individually or when taken together with the holding of shares of stock of the corporation by any other holders, may result, in the judgment of the board of directors, in the loss of, or the failure to secure the reinstatement of, any license or franchise from any governmental agency held by the corporation or any of its Subsidiaries to conduct any portion of the business of the corporation or any of its Subsidiaries. "FAIR MARKET VALUE" of a share of the corporation's stock of any class or series shall mean the average Closing Price for such a share for each of the 20 most recent days on which shares of stock of such class or series shall have been traded preceding the day on which notice of redemption shall be given pursuant to subsection (i)(4) of Article IV; PROVIDED, HOWEVER, that if shares of stock of such class or -12- series are not traded on any securities exchange or on the NASDAQ System, "Fair Market Value" shall be determined by the board of directors in good faith. "CLOSING PRICE" on any day means the last reported sales price or, in case no such sale takes place, the average of the reported closing bid and asked prices on the principal United States securities exchange registered under the 1934 Act on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing sales price or bid quotation for such stock on the NASDAQ System or any system then in use, or if no such prices or quotations are available, the fair market value on the day in question as determined by the board of directors in good faith. A "PERSON" shall mean an individual, a corporation, a partnership, a joint venture, a trust or unincorporated organization, a joint stock company or similar organization, a government or any political subdivision thereof, or any other legal entity. "REDEMPTION DATE" shall mean the date fixed by the board of directors for the redemption of shares of stock of the corporation pursuant to subsection (i) of Article IV. "REDEMPTION SECURITIES" shall mean any debt or equity securities (other than Series A Common Shares or securities convertible into or exchangeable for, or carrying a right to subscribe to or acquire, Series A Common Shares) of the corporation, any of its Subsidiaries or any other corporation, or any combination thereof, having such terms and conditions as shall be approved by the board of directors and which, together with any cash to be paid as part of the redemption price, in the opinion of any nationally recognized investment banking firm selected by the board of directors (which may be a firm which provides other investment banking, brokerage or other services to the corporation), has a value, at the time notice of redemption is given pursuant to subsection (i)(4) of Article IV, at least equal to the price required to be paid pursuant to subsection (i)(1) of Article IV (assuming, in the case of Redemption Securities to be publicly traded, such Redemption Securities were fully distributed and subject only to normal trading activity). "SUBSIDIARY", with respect to a specified person, shall mean any person whose accounts are included in the consolidated financial statements of the specified person and its Subsidiaries prepared in accordance with generally accepted accounting principles at the time. -13- "TDS" means Telephone and Data Systems, Inc., an Iowa corporation, and any successor by merger, consolidation or otherwise to such corporation. ARTICLE XI (a) LIMITATION ON LIABILITY. A director or officer of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, except for liability (1) for any breach of the director's or officer's duty of loyalty to the corporation or its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) under Section 174 of Title 8 of the Delaware Code, or (4) for any transaction from which the director or officer is found by a court of law to have derived an improper personal benefit. (b) INDEMNIFICATION. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the corporation to the fullest extent authorized by the General Corporation Law of Delaware, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said law permitted the corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; PROVIDED, HOWEVER, that, except as provided in subsection (c) of Article XI, the corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the board of directors. The right to indemnification conferred in this Article XI shall be a contract -14- right and shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final disposition; PROVIDED, HOWEVER, that, if the General Corporation Law of Delaware requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article XI or otherwise. The corporation may, by action of its board of directors, provide indemnification to other employees or agents of the corporation with the same scope and effect as the foregoing indemnification of directors and officers. (c) CLAIMS FOR INDEMNIFICATION. If a claim under subsection (b) of Article XI is not paid in full by the corporation within 30 days after a written claim has been received by the corporation, the claimant may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of Delaware for the corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the corporation. Neither the failure of the corporation (including stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of Delaware, nor an actual determination by the corporation (including its board of directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. (d) NON-EXCLUSIVITY. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article XI shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of this -15- Restated Certificate of Incorporation, bylaw, agreement, vote of stockholders or disinterested directors or otherwise. (e) INSURANCE. The corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the corporation would have the power to indemnify such person against the expense, liability or loss under the General Corporation Law of Delaware. ARTICLE XII The corporation reserves the right to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. * * * * * This Restated Certificate of Incorporation was duly adopted by unanimous written consent of the stockholders in accordance with the applicable provisions of Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said AMERICAN PAGING, INC. has caused this Certificate to be signed by John R. Schaaf, its President and attested by Michael G. Hron, its Secretary, this 4th day of February, 1994. AMERICAN PAGING, INC. By: /s/ John R. Schaaf ---------------------------- John R. Schaaf President ATTEST: By: /s/ Michael G. Hron ------------------------- Michael G. Hron Secretary -16- EX-99.C5 5 EXHIBIT 99C5/VOTING TRUST AGREEMENT VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989 TABLE OF CONTENTS Page ARTICLE I DEPOSIT OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.1 Deposit to Trustees . . . . . . . . . . . . . . . . . . . . . . 2 1.2 Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.3 Additional Deposits . . . . . . . . . . . . . . . . . . . . . . 4 1.4 Series A Common . . . . . . . . . . . . . . . . . . . . . . . . 5 ARTICLE II VOTING TRUST CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . 5 2.1 Issuance of Voting Trust Certificates . . . . . . . . . . . . . 5 2.2 Form of Certificates. . . . . . . . . . . . . . . . . . . . . . 6 ARTICLE III WITHDRAWAL OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . 7 3.1 Withdrawal. . . . . . . . . . . . . . . . . . . . . . . . . . . 7 3.2 Option to Acquire . . . . . . . . . . . . . . . . . . . . . . . 13 3.3 Request for Reregistration. . . . . . . . . . . . . . . . . . . 20 3.4 Conversion. . . . . . . . . . . . . . . . . . . . . . . . . . . 21 3.5 Establishment of Price If Company Shares Not Traded . . . . . . 21 ARTICLE IV TRANSFERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 4.1 Permissible Transfers . . . . . . . . . . . . . . . . . . . . . 21 4.2 Permitted Transferees . . . . . . . . . . . . . . . . . . . . . 22 4.3 Limitation of Voting Rights of Certain Permitted Transferees. . 30 4.4 Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 4.5 Transferees Bound by Agreement. . . . . . . . . . . . . . . . . 31 4.6 Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . 32 ARTICLE V DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 5.1 Trustees to Pass Through Cash Dividends . . . . . . . . . . . . 33 5.2 Direct Payment of Dividends . . . . . . . . . . . . . . . . . . 33 5.3 Hold on Dividends at Termination. . . . . . . . . . . . . . . . 34 5.4 Stock Dividends, Stock Splits and Recapitalizations . . . . . . 34 5.5 Other Forms of Dividends. . . . . . . . . . . . . . . . . . . . 34 5.6 Receipt of Voting Securities of Separate Entity . . . . . . . . 35 5.7 Subscription Offer. . . . . . . . . . . . . . . . . . . . . . . 36 ARTICLE VI VOTING RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 6.1 Trustees to Vote Shares . . . . . . . . . . . . . . . . . . . . 38 6.2 Series A Common to be Voted as a Unit . . . . . . . . . . . . . 39 6.3 Failure to Achieve a Six-Vote Majority. . . . . . . . . . . . . 39 6.4 Certain Transactions to Require Joint Consent of Trustees and Certificate Holders . . . . . . . . . . . . . . . . . . . . 39 6.5 Voting Rights of Certificate Holders . . . . . . . . . . . . . 44 ARTICLE VII THE TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 7.1 Meetings and Procedures . . . . . . . . . . . . . . . . . . . . 46 7.2 Voting of Trustees. . . . . . . . . . . . . . . . . . . . . . . 48 7.3 Election of Trustees. . . . . . . . . . . . . . . . . . . . . . 49 7.4 Removal of Trustees . . . . . . . . . . . . . . . . . . . . . . 51 7.5 Johnson Family Trustee. . . . . . . . . . . . . . . . . . . . . 52 7.6 Resignation of Trustees . . . . . . . . . . . . . . . . . . . . 55 7.7 Change of Control . . . . . . . . . . . . . . . . . . . . . . . 55 7.8 Reimbursement of Expenses . . . . . . . . . . . . . . . . . . . 55 7.9 Other Relationships Between Trustees and Company. . . . . . . . 56 7.10 Trustees May be Shareholders, Certificate Holders and May Acquire and Dispose of Shares . . . . . . . . . . . . . . . . . 56 7.11 Compensation of Trustees. . . . . . . . . . . . . . . . . . . . 57 7.12 Limitation of Liability . . . . . . . . . . . . . . . . . . . . 57 ARTICLE VIII GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . 58 8.1 Adjustment for Stock Splits . . . . . . . . . . . . . . . . . . 58 8.2 Scope of Agreement. . . . . . . . . . . . . . . . . . . . . . . 58 8.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 8.4 Reliance by Trustee . . . . . . . . . . . . . . . . . . . . . . 60 8.5 Amendment of Agreement. . . . . . . . . . . . . . . . . . . . . 60 8.6 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 61 8.7 Renewal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 8.8 De Minimis Holdings . . . . . . . . . . . . . . . . . . . . . . 62 8.9 Severability of Provisions. . . . . . . . . . . . . . . . . . . 62 8.10 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . 63 8.11 Controlling Law . . . . . . . . . . . . . . . . . . . . . . . . 64 8.12 Construction of Agreement . . . . . . . . . . . . . . . . . . . 64 8.13 Multiple Counterparts . . . . . . . . . . . . . . . . . . . . . 64 8.14 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . 64 EXHIBIT A - VOTING TRUST CERTIFICATE. . . . . . . . . . . . . . 72 EXHIBIT B - WITHDRAWAL REQUEST. . . . . . . . . . . . . . . . . 79 EXHIBIT C - SUMMARY OF REQUIREMENT FOR CERTAIN ACTIONS BY TRUSTEES AND CERTIFICATE HOLDERS . . . . . . . . . . . . . . . . . . . . . . 82 VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989 THIS VOTING TRUST AGREEMENT is made as of the thirtieth day of June, 1989, between such holders of the Series A Common Shares, par value $1.00 per share ("Series A Common"), of TELEPHONE AND DATA SYSTEMS, INC., an Iowa corporation (the "Company"), as may become parties to this Agreement (the "Depositing "Certificate Holders" or the "Certificate Holders"), and WALTER C.D. CARLSON, LETITIA G.C. CARLSON, LEROY T. CARLSON, JR., MELANIE J. HEALD and DONALD C. NEBERGALL, or their successors (the "Trustees"). The Depositing Shareholders are owners of Series A Common and deem it to be in their mutual best interests to confer upon the Trustees the right to vote and to act with respect to such shares, subject to the terms and conditions of this Agreement. In consideration of the mutual promises and covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, it is agreed between the parties as follows: ARTICLE I DEPOSIT OF SHARES 1.1 DEPOSIT TO TRUSTEES. Each shareholder of the Company who becomes a party hereto by signing this Agreement agrees to deposit or cause to be deposited with the Trustees, to be held by them pursuant to the provisions of this Agreement, one or more stock certificates representing shares of Series A Common now owned by him or her, duly endorsed in blank or to the Trustees, or accompanied by proper instruments of assignment and transfer duly executed in blank or to the Trustees, and accompanied by any revenue stamps required for the transfer, or shares of Series A Common held in non-certificated form pursuant to the Company's dividend reinvestment plan, represented by appropriate transfer documents, and to accept in lieu thereof a Voting Trust Certificate or Certificates issued hereunder in the form herein provided. 1.2 TERM. Each deposit made pursuant to Section 1.1 shall continue from the date this Agreement becomes effective until June 30, 2009, unless sooner terminated as herein provided. This Agreement shall be effective at 12:01 a.m. on the day following the day on which the last of the following events occurs: 2 (a) the Federal Communications Commission order giving consent to the implementation of this Agreement becomes effective or the Trustees determine no such order is required; or (b) the signing of this Agreement by those Certificate Holders who deposit or agree to deposit, in the aggregate, a majority of the Company's then issued and outstanding Series A Common Shares, par value $1.00 per share; provided, however, that the Trustees appointed hereunder may delay the effective date as required to prevent the implementation of the Agreement from interfering with any RSA or MSA applications pending before the Federal Communications Commission. 1.3 ADDITIONAL DEPOSITS. Any owner of shares of Series A Common may at any time apply to the Trustees for permission to deposit stock certificates representing shares of Series A Common, accepting in lieu thereof Voting Trust Certificates issued hereunder in the form hereinafter provided. In consideration of the original deposit of Series A Common by the Depositing Shareholders, the Trustees, by an "eight-vote majority" (as defined in Subsection 7.2(b)), may accept for deposit and receive in trust hereunder any additional stock certificates representing shares of Series A Common owned by any shareholder whomsoever and hold any certificates so deposited in trust under the terms and 3 conditions of this Agreement. Such deposit of additional stock certificates representing shares of Series A Common and the acceptance of Voting Trust Certificates by the depositor thereof shall have the same force and effect as though such depositor had in fact subscribed his or her name to this Agreement. The Trustees, by an eight-vote majority, may also accept for deposit any Common Shares of the Company ("Common Shares"). 1.4 SERIES A COMMON. (a) The term "Series A Common" as hereafter used in this Agreement shall also be deemed to include: (i) any shares of a class other than the Company's existing class of Series A Common Shares, par value $1.00 per share, held or to be held by the Trustees pursuant to this Agreement; (ii) any securities convertible into shares of Series A Common, including any shares or securities deemed to be Series A Common pursuant to this Section 1.4; (iii) any rights to subscribe to Series A Common, including any shares or securities deemed to be Series A Common pursuant to this Section 1.4; 4 (b) Wherever reference is made in this Agreement to shares of Series A Common "beneficially owned," such reference shall be to those shares of Series A Common represented by the Voting Trust Certificates and to those shares of Series A Common acquired in respect of an existing Voting Trust Certificate by reason of participation in the Company's dividend reinvestment plan. (c) Wherever reference is made in this Agreement to votes "beneficially held" by a Certificate Holder, such reference shall be to votes described in Subsection 6.5(c). ARTICLE II VOTING TRUST CERTIFICATES 2.1 ISSUANCE OF VOTING TRUST CERTIFICATES. All stock certificates for shares of Series A Common at any time delivered to the Trustees hereunder or thereafter acquired by the Trustees as provided in this Agreement shall be held and disposed of by the Trustees under and pursuant to the terms and conditions of this Agreement. The Trustees, in exchange for the stock certificates so deposited hereunder, shall cause to be issued and delivered to the Certificate Holders Voting Trust Certificates 5 for the appropriate number of shares of Series A Common in substantially the form set forth in Exhibit A attached hereto or as revised to reflect the deposit of any shares other than the Company's existing issue of Series A Common Shares, par value $1.00 per share. The Trustees shall not issue Voting Trust Certificates with respect to shares purchased through the Company's dividend reinvestment plan until such shares are reduced to stock certificate form, but such shares shall nevertheless be subject to this Agreement if purchased with dividends earned with respect to shares which are subject to this Agreement. 2.2 FORM OF CERTIFICATES. The Trustees may issue temporary typewritten or printed Voting Trust Certificates conforming generally to the form set forth on Exhibit A and may cause the same to be exchanged for definitive Voting Trust Certificates in substantially such form when the same are prepared. The Voting Trust Certificates shall be executed by no fewer than three Trustees, with copies of such Certificates sent to all nonexecuting Trustees. The Trustees, under such rules as they in their discretion may prescribe with respect to indemnity or otherwise, shall provide for the issuance and delivery of new Voting Trust Certificates in lieu of lost, stolen or destroyed Certificates or in exchange for mutilated Certificates. 6 ARTICLE III WITHDRAWAL OF SHARES 3.1 WITHDRAWAL. Any Certificate Holder shall be permitted to withdraw Common Shares, from time to time, upon the surrender Certificates, of the corresponding Voting Trust Certificate or Certificates, subject to the provisions of this Article. The following conditions, limitations and procedures shall apply to any such withdrawal: (a) AUTHORITY TO CONVERT. Any Certificate Holder electing to withdraw Common Shares shall be deemed to have instructed, directed and authorized the Trustees to convert a sufficient number of shares of his or her beneficially owned Series A Common into Common Shares to the extent necessary to effect such withdrawal. (b) WITHDRAWALS UPON TWENTY DAYS' NOTICE. Any Certificate Holder may make aggregate withdrawals during any calendar year of not more than 7,500 Common Shares (as adjusted by Section 8.1), provided written notice of such intended withdrawal is given to the Trustees no less than twenty days prior to the date of withdrawal specified in such written notice. No such withdrawal notice shall be revoked except as provided in Subsection 3.1(i). 7 (c) WITHDRAWALS UPON SIXTY DAYS' NOTICE. Any Certificate Holder may make aggregate withdrawals during any calendar year of more than 7,500 Common Shares (as adjusted by Section 8.1), but not more than five percent (5%) of the number of shares of his or her beneficially owned Series A Common as of the beginning of the calendar year in which such withdrawal occurs (as adjusted by Section 8.1 for capital changes occurring during such calendar year), provided written notice of such intended withdrawal is given to the Trustees no less than sixty days prior to the date of withdrawal specified in such written notice. No such withdrawal notice shall be revoked except as provided in Subsection 3.1(i). (d) WITHDRAWALS UPON NINE MONTHS' NOTICE. In addition to any withdrawals permitted pursuant to Subsections 3.1(b) and 3.1(c), any Certificate Holder may make additional withdrawals during any calendar year which cause his or her aggregate withdrawals for such year to be not more than 300,000 Common Shares (as adjusted by Section 8.1), provided written notice of such intended withdrawal is given to the Trustees no less than nine months prior to the date of withdrawal specified in such written notice. No such withdrawal notice shall be revoked unless cancelled by written notice received at least 105 or more 8 days prior to the specified date of withdrawal or except as provided in Subsection 3.1(i). (e) WITHDRAWALS SUBSEQUENT TO TRANSFER. During any calendar year in which a Certificate Holder makes a gratuitous intervivos transfer of a Voting Trust Certificate, neither such transferor nor any transferee of such Certificate may make a withdrawal to the extent that the number of Common Shares withdrawn by such transferor during such year, when added to the number of Common Shares represented by Voting Trust Certificates transferred by such transferor during such year and deemed to be withdrawn by a transferee during such year, would exceed the limitation set forth in Subsection 3.1(d) For purposes of this Subsection 3.1(e), any such transferee shall be deemed to withdraw Common Shares represented by Voting Trust Certificates transferred by a transferor only after such transferee has withdrawn shares equal in number to (i) the number of shares of Series A Common beneficially-owned by and withdrawable by such transferee as of the beginning of such year plus (ii) the number of shares of Series A Common represented by Voting Trust Certificates acquired for value by such transferee during such year prior to the date of withdrawal. If the transferee receives a gratuitous intervivos transfer of Voting Trust Certificates from more than one transferor during such year, he or she shall be deemed to have withdrawn Common Shares represented by Voting 9 Trust Certificates transferred by each such transferor, if at all (after application of the preceding sentence), on the following basis: (i) to the extent withdrawals are permitted with respect to each such transferor, in proportion to the number of shares of Series A Common represented by Voting Trust Certificates received during such year by such transferee from each such transferor, and (ii) to the extent withdrawals would not be permitted with respect to any transferor because of the limitations imposed by this Subsection 3.1(e), in proportion to the number of shares of Series A Common represented by the Voting Trust Certificates received during such year by such transferee from each transferor with respect to whom withdrawals would be permitted. The ability to make a withdrawal shall be determined as of the date such withdrawal is requested, taking into account all prior withdrawal requests whether or not such withdrawal has been completed. A transferee of a Voting Trust Certificate from a deceased Certificate Holder may not make a withdrawal of any Common Shares represented by such Certificate during the year in which such decedent dies, except for that number of shares which -10- bears the same proportion to the number of shares which such decedent was eligible to withdraw immediately prior to his or her death as the number of shares represented by such Certificate bears to the total number of shares beneficially-owned by such decedent immediately prior to his or her death. No such withdrawals shall cause such transferee's withdrawals for the year to exceed the limitation imposed by Subsection 3.1(d). (f) PERMITTED WITHDRAWALS IN RESPECT OF A DECEDENT. Notwithstanding the limitations on withdrawals set forth in the preceding subsections of this Article III, upon the death of a Certificate Holder, each transferee of such decedent's Voting Trust Certificates may withdraw additional Common Shares so long as the aggregate value of all withdrawals made pursuant to this Subsection 3.1(f) does not exceed the total amount of transfer and succession taxes payable by reason of decedent's death plus the amount of administration expenses deductible (whether or not actually deducted) pursuant to Sections 2053 and 2054 of the Internal Revenue Code of 1986, as amended, or any amended or successor provisions, which such transferee is legally obligated to pay. Any such withdrawals with respect to transfer and succession taxes must be made prior to the due date or dates of such taxes, and any such withdrawals with respect to administration expenses must be made within nine-months of the decedent's death, provided written notice of such intended withdrawal is given to -11- the Trustees no less than sixty days prior to the date of withdrawal as specified in such written notice. For purposes of this Subsection 3.1(f), the value of any withdrawn shares shall be deemed to be the value determined with respect to such shares pursuant to Subsection 3.2(g). No such withdrawal notice shall be revoked except as provided in Subsection 3.1(i). (g) NOTICE OF WITHDRAWAL. The written notice of withdrawal required pursuant to Subsections 3.1(b), (c), (d) or (f) shall be substantially in the form prescribed in Exhibit B attached hereto. (h) WAIVER OF NOTICE. Any notice required pursuant to Section 3.1 may be reduced to sixty days by the "six-vote majority" (as defined in Subsection 7.2(b)) of the Trustees; provided, however, that the required six votes shall be reduced by the number of votes held by any Trustee who is the Certificate Holder requesting such waiver, such Trustee being excluded from voting with respect to such matter. (i) CANCELLATION OF OTHERWISE IRREVOCABLE NOTICE OF WITHDRAWAL. Notwithstanding that any notice of withdrawal may be irrevocable pursuant to the preceding provisions of this Section 3.1, the Trustees may, without liability to any person, permit the cancellation of such withdrawal notice up to fifteen -12- days prior to the specified date of withdrawal, provided that the cancelling Certificate Holder reimburses the Trustees for all expenses incurred by the Trustees with respect to such withdrawal. Such cancellation shall be approved by a six vote majority of the Trustees; provided, however, that the required six votes shall be reduced by the number of votes held by the Trustee who is the Certificate Holder wishing to cancel such withdrawal notice, such Trustee being excluded from voting with respect to such matter. In the event any such cancellation is permitted by the Trustees, neither the Certificate Holder requesting such withdrawal nor the Trustees shall be liable to any other Certificate Holder for any expenses or damages, consequential or otherwise, that such other party or other Certificate Holder may allege to have been incurred in reliance on or otherwise as a result of such notice of withdrawal or cancellation. The Trustees shall not be required to permit or deny cancellation except in their sole and uncontrolled discretion. The Trustees shall, within five business days, provide written notice of any cancellation to all Optionees (as defined in Subsection 3.2(a)). 3.2 OPTION TO ACQUIRE. (a) NOTICE OF INTENT TO WITHDRAW TO OPTIONEES. Upon the Trustees' receipt of notice from a Certificate Holder of such person's intention to make a withdrawal pursuant to Section 3.1 -13- which would cause such person's aggregate withdrawals for the calendar year to equal or exceed 150 (as adjusted by Section 8.1) Common Shares the Trustees shall, within five business days after their receipt of such notice, provide written notice of the proposed withdrawal to each remaining Certificate Holder who beneficially owns 750 (as adjusted by Section 8.1) or more shares of Series A Common (the "Optionee"), which notice shall include all the information that the Trustees received. The withdrawing Certificate Holder may require the Optionees exercising the options hereinafter described to acquire the shares of Series A Common proposed to be converted and withdrawn by an exchange of Common Stock in lieu of a cash purchase. Any such requirement shall be set forth in the withdrawal request. (b) EXERCISE OF FIRST OPTION. Each Optionee shall have the option, exercisable until thirty days prior to the specified date of withdrawal (sixty days in the case of a withdrawal requiring more than ninety days' notice), to elect to acquire his or her proportionate part (as hereinafter defined) of the shares of Series A Common proposed to be converted and withdrawn. Such acquisition may be by cash purchase or by exchange of Common Stock. The notice of intent to exercise such option shall be delivered to the Trustees not less than thirty days prior to the specified date of withdrawal (sixty days in the case of a withdrawal requiring more than ninety days' notice). The closing -14- date of such transaction shall be the specified date of withdrawal. An Optionee's proportionate part pursuant to this option shall be that number of shares which bears the same proportion to the total number of shares proposed to be withdrawn as the number of votes beneficially held by such Optionee at the time the notice of intent to withdraw is given bears to the total number of votes then beneficially held by all Optionees. An Optionee may elect to acquire less than his or her proportionate part of the shares proposed to be withdrawn. (c) NOTICE AND EXERCISE OF SECOND OPTION. In the event all of the shares proposed to be withdrawn are not acquired pursuant to the first option, each Optionee shall be notified within five days after the last date to exercise such option that he or she has a second option exercisable until twenty days prior to the specified date of withdrawal (forty days in the case of withdrawal requiring more than ninety days' notice). Such second option shall entitle each Optionee to acquire his or her proportionate part of the shares of Series A Common not being acquired pursuant to the first option. Such proportionate part shall be that number of shares which bears the same proportion to the total number of shares not acquired pursuant to the first option as the number of votes beneficially held by such Optionee at the time the notice of intent to withdraw is given bears to the total number of votes then beneficially held by all Optionees. An -15- Optionee may elect to acquire less than his or her proportionate part pursuant to this second option. (d) NOTICE AND EXERCISE OF THIRD OPTION. In the event all of the shares of Series A Common proposed to be withdrawn are not acquired pursuant to the first and second options, each Optionee shall be notified within five days after the last date to exercise the second option that he or she has a third option exercisable until ten days prior to the specified date of withdrawal (twenty days in the case of a withdrawal requiring more than ninety days' notice). The third option shall entitle each Optionee to acquire part of any shares not acquired pursuant to such preceding options. Each Optionee wishing to exercise the third option shall be required to specify the maximum number of shares he or she is willing to acquire. An Optionee may elect to acquire less than his or her proportionate part pursuant to this third option. The Trustees shall allocate the unacquired shares so that each such Optionee is entitled to acquire the lesser of (i) that number of unacquired shares which bears the same proportion to the total number of unacquired shares as the number of votes beneficially held by such Optionee at the time the notice of intent to withdraw is given bears to the total number of votes then beneficially held by all Optionees wishing to exercise the third option, and (ii) the number of shares specified by the Optionee pursuant to his or her exercise of this third option. -16- The Trustees shall allocate any shares still unacquired so that each Optionee having specified a number of shares greater than were allocated to him or her pursuant to the preceding allocation is entitled to acquire the lesser of (i) that number of remaining unacquired shares which bears the same proportion to the total number of unacquired shares as the number of votes beneficially held by such Optionee at the time the notice of intent to withdraw is given bears to the total number of votes then beneficially held by all Optionees who specified a number of shares greater than were allocated to him or her pursuant to the preceding allocation, and (ii) the number of shares specified by the Optionee pursuant to his or her exercise of this third option but not yet allocated to him or her. The Trustees shall continue to allocate any unacquired shares in accordance with the preceding sentence until all shares are allocated or until no more shares are specified by the Optionees. (e) ALTERNATE PROCEDURE AND REDUCED NOTICE PERIOD FOR SMALL WITHDRAWALS. Notwithstanding the preceding provisions of this Section 3.2, in the event of any notice of intended withdrawal described in Section 3.2(a) with respect to 7,500 (as adjusted by Section 8.1) Common Shares or less, only the option procedure described in Subsection 3.2(d) shall be used, to be extended to all Optionees. The Trustees may, in their discretion, reduce the period required between notice and withdrawal -17- for purposes of Subsection 3.1(b) so long as notice is given to all Optionees and each such Optionee is given no less than five days after receipt of such notice to respond. Such reduction shall be approved by a six-vote majority of the Trustees; provided, however, that the required six votes shall be reduced by the number of votes held by any Trustee who is the Certificate Holder desiring a reduction of such period, such Trustee being excluded from voting with respect to such matter. If the date of withdrawal is accelerated, the accelerated date of withdrawal shall be used to establish the cash price to be paid determined pursuant to Subsection 3.2(f). (f) PAYMENT OF ACQUISITION PRICE. Each Optionee electing to purchase shares shall deliver to the Trustees on the closing date either (i) cash for each share so purchased in an amount equal to the average closing price of the Common Shares of the Company in their primary marketplace on the first ten of the most recent eleven business days on which they were traded preceding the specified date of withdrawal, (ii) a stock certificate representing that number of Common Shares equal to the number of shares so purchased (and such stock certificate may have been previously deposited hereunder, in which case no delivery shall be required, but the Optionee shall direct the Trustees to use such shares in the exercise of such option), or (iii) a combination of (i) and (ii). To the extent the withdrawing Certif- -18- icate Holder requires that the acquisition be made by an exchange of Common Shares, each Optionee must deposit that number of Common Shares which bears the same proportion to the total number of Common Shares so required as the number of shares to be acquired by such Optionee bears to the total number of shares to be acquired by all Optionees, except to the extent the Optionees may agree to otherwise apportion the requirement to tender Common Shares. (g) WITHDRAWAL OF UNACQUIRED SHARES. To the extent any shares are not acquired pursuant to the preceding provisions of this Section 3.2, the Certificate Holder who intends to withdraw Common Shares may do so, free of the terms of this Agreement, as provided in Section 3.3. (h) ACQUIRED SHARES TO REMAIN SUBJECT TO AGREEMENT. Any Certificate Holder acquiring shares of Series A Common pursuant to the exercise of the option granted under this Section 3.2 shall be deemed to have simultaneously deposited such shares with the Trustees, which shares shall remain subject to this Agreement, and shall be issued a Voting Trust Certificate or Certificates as provided in Section 2.1. -19 (i) OPTION RIGHTS DO NOT APPLY TO SALE BY TRUSTEES. The provisions of this Section 3.2 do not apply to a sale by the Trustees pursuant to Subsection 6.4(a). 3.3 REQUEST FOR REGISTRATION. With respect to any withdrawal of Common Shares pursuant to Subsection 3.2(g) or the withdrawal of Common Shares delivered by an Optionee pursuant to the exercise of an option, the Certificate Holder making such withdrawal shall, not less than five business days prior to the date on which the Common Shares are to be withdrawn, deliver to the Trustees and to any transfer agent for the Common shares appointed by the Company (the "Transfer Agent"), a request, in customary form, setting forth the denominations in which stock certificates for the Common Shares are to be delivered and the names in which such stock certificates are to be registered. A similar request shall be made by an Optionee with respect to the registration of any Voting Trust Certificates issued pursuant to Subsection 3.2(h). To the extent such requests are not made, the Trustees shall issue a single stock certificate in the name of the withdrawing Certificate Holder for all shares to be withdrawn or a single Voting Trust Certificate in the name of the Optionee representing all beneficially-owned shares acquired the exercise of an option. -20- 3.4 CONVERSION. The Trustees shall not convert any shares of Series A Common deposited hereunder except in conjunction with a withdrawal of shares permitted by this Article III. 3.5 ESTABLISHMENT OF PRICE IF COMPANY SHARES NOT TRADED. If a value for withdrawn shares cannot be established for purposes of Subsection 3.2(f) because the Company's Common Shares are no longer traded in a public marketplace or because no trading has occurred on any of the first ten of the most recent eleven business days preceding the specified date of withdrawal, such value shall be established pursuant to such reasonable procedures as the Trustees may from time to time establish, including, without limitation, the securing of one or more appraisals or the use of prices at which the Company's Common Shares were sold prior to the said ten-day period or in non-public transactions. ARTICLE IV TRANSFERS 4.1 PERMISSIBLE TRANSFERS. The Voting Trust Certificates shall not be transferred or disposed of, whether by sale, assignment, gift, bequest, appointment, or otherwise, except to a Permitted Transferee (as that term is defined in Section 4.2), and -21- the Voting Trustees shall not register any transfer except in compliance therewith. 4.2 PERMITTED TRANSFEREES. (a) PERMITTED TRANSFEREE OF A NATURAL PERSON. The following persons shall be "Permitted Transferees" of each Certificate Holder who is a natural person: (i) the Certificate Holder's descendants and siblings, the descendants of such siblings, the spouse of any of the foregoing persons, the Certificate Holder's spouse, and the parents of a Certificate Holder (all hereinafter referred to as such Certificate Holder's "Family Members"); (ii) any organization to which a Certificate Holder transfers Voting Trust Certificates and which is an organization contributions to which are deductible for federal income, estate or gift tax purposes or any split-interest trust described in Section 4947 of the Internal Revenue Code of 1986, as amended, or any successor or amended section ("Charitable Organization"); (iii) the trustee of a trust (including, but not limited to, a voting trust subject to the provisions of Sub- -22 section 6.5(a)(iv), but not including a trust described in Subsection 4.2(a)(ii)) to which a Certificate Holder transfers Voting Trust Certificates and which is a trust solely for the benefit of any person who is the transferring Certificate Holder, a Family Member of such Certificate Holder, the Family Member of any Family Member of the Certificate Holder, or the Family Member of any Family Member of any Family Member of the Certificate Holder; (iv) the court-appointed fiduciary of the estate of a Certificate Holder who is deceased, incompetent, bankrupt or insolvent; (v) a corporation or partnership to which a Certificate Holder transfers Voting Trust Certificates, provided that the articles of incorporation of such corporation or the partnership agreement of such partnership shall irrevocably provide that voting control of such entity, including, without limitation, control of the exercise of all duties, rights and powers with respect to the Voting Trust Certificates so transferred, is vested in a person who is the transferring Certificate Holder or a Permitted Transferee of such Certificate Holder; (vi) to the extent permitted by law and regulation, a qualified retirement plan for the benefit of and under the sole control of the transferring Certificate Holder during his or her -23- lifetime (meaning a plan described in either Section 401(a) or Section 408 and exempt from tax under Section 501(a) of the Internal Revenue Code of 1986, as amended, or any successor or amended provisions); (vii) a Permitted Transferee (determined without regard to this Subsection 4.2(a)(vii)) of a Permitted Transferee; and (viii) a Permitted Transferee (determined without regard to either Subsection 4.2(a)(vii) or this Subsection 4.2(a)(viii)) of a person or entity described in Subsection 4.2(a)(vii). (b) PERMITTED TRANSFEREES OF ENTITIES. With respect to any Certificate Holder which is not a natural person: (i) In the case of any Charitable Organization that is a Certificate Holder, "Permitted Transferee" means (1) with respect to each Voting Trust Certificate transferred to such Charitable Organization, the Certificate Holder who made such transfer and any Permitted Transferee of such Certificate Holder, and (2) with respect to each Subsequent Voting Trust Certificate held by such Charitable Organization, the Certificate -24- Holder who transferred the Voting Trust Certificate in respect of which such Subsequent Voting Trust Certificate was issued and any Permitted Transferee of such Certificate Holder. (ii) In the case of a Certificate Holder who is trustee of any trust other than a Charitable Organization or a trust described in Subsection 4.2(b)(iii), "Permitted Transferee" means (1) with respect to each Voting Trust Certificate transferred to such trust, the Certificate Holder who made such transfer and any Permitted Transferee of such Certificate Holder, and (2) with respect to each Subsequent Voting Trust Certificate held by such trust, the Certificate Holder who transferred the Voting Trust Certificate in respect of which such Subsequent Voting Trust Certificate was issued and any Permitted Transferee of such Certificate Holder. (iii) In the case of a Certificate Holder who is trustee pursuant to a trust (other than a Charitable Organization) which was irrevocable on the effective date of this Agreement, "Permitted Transferee" means any person to whom or for whose benefit principal may be distributed either during or at the end of the term of such trust whether by power of appointment or otherwise. -25- (iv) In the case of a Certificate Holder that is the court-appointed fiduciary of the estate of a deceased, incompetent, bankrupt or insolvent Certificate Holder, "Permitted Transferee" means a Permitted Transferee of such deceased, incompetent, bankrupt or insolvent Certificate Holder. (v) In the case of a Certificate Holder that is a corporation, partnership or qualified retirement plan (other than a Charitable Organization),"Permitted Transferee" means (1) with respect to each Voting Trust Certificate transferred to such entity, the Certificate Holder who made such transfer and any Permitted Transferee of such Certificate Holder, and (2) with respect to each Subsequent Voting Trust Certificate held by such entity, the Certificate Holder who transferred the Voting Trust Certificate in respect of which such Subsequent Voting Trust Certificate was issued and any Permitted Transferee of such Certificate Holder. (vi) Notwithstanding anything to the contrary set forth herein, any Certificate Holder may pledge his or her Voting Trust Certificates to a pledgee pursuant to a bona fide pledge of such Certificates as collateral security for indebtedness due to the pledgee, provided that such Certificates shall not be transferred to or registered in the name of the pledgee and shall remain subject to the provisions of this Section 4.2. -26- In the event of foreclosure or other similar action with respect to such Certificates by the pledgee, such pledged Certificates may only be transferred to a Permitted Transferee of the pledgor or converted into Common Shares and withdrawn subject to the terms of Section 3.1, and with respect to any withdrawal not described in Subsections 3.1(b), 3.1(c) or 3.1(f), written notice of such intended withdrawal must be given to the Trustees no less than six months prior to the date of withdrawal specified in such written notice. Any withdrawal pursuant to this Subsection 4.2(b)(vi) shall be treated as a withdrawal to which Section 3.2 applies. (c) DEFINITIONS AND INTERPRETATION. For purposes of Section 4.2: (i) The term "Subsequent Voting Trust Certificate shall mean any Voting Trust Certificate issued or acquired in respect of an existing Voting Trust Certificate (1) by reason of Section 5.4, (2) by reason of participation in the Company's dividend reinvestment plan, whether or not a Voting Trust Certificate is actually issued, or (3) by reason of the exercise of any option granted pursuant to Section 3.2, such acquired Voting Trust Certificates to be deemed to be in respect of the Voting Trust Certificates which enabled such person to be granted such option. -27- (ii) A spouse shall include a widow or widower. A former spouse by reason of a dissolution of marriage all purposes of Subsection shall remain a Permitted Transferee for all purposes of Subsection 4.2(b) to the extent that person was a Permitted Transferee on the date such marriage was dissolved, but, notwithstanding the provisions of Subsections 4.2(a)(vii) and 4.2(a)(viii), shall cease to be a Permitted Transferee for all other purposes of this Agreement. (iii) The relationship of any person that is derived by or through legal adoption shall be considered a natural one, but only if the person adopted had not attained the age of twenty-one years at the time the adoption became effective. (iv) A custodian under a Uniform Gifts to Minors Act, as in effect in any state, or any similar law, shall be treated as if such custodian were a trustee of a trust for the sole benefit of the donee of any transfer made pursuant to such Act. (v) Unless otherwise specified, the term "person" means both natural persons and legal entities. -28- (vi) The Permitted Transferees of a Certificate Holder shall be the same irrespective of whether such Certificate Holder (or any natural person linking such Certificate Holder to his or her Permitted Transferees by reason of subsections 4.2(a)(vii) or (viii)) is alive or dead and shall include Permitted Transferees born after such Certificate Holder's death. (vii) A Certificate Holder may register or reregister his or her Voting Trust Certificates in the names of one or more persons only if each person in whose name the Voting Trust Certificates are to be registered is the Certificate Holder or a Permitted Transferee of the Certificate Holder. If Voting Trust Certificates are registered in the names of more than one person in accordance with this Subsection 4.2(c)(vii), then such Voting Trust Certificates may be transferred to any Permitted Transferee of any person in whose name such shares are registered. (viii) Notwithstanding any provision of this Agreement to the contrary, no person shall be a Permitted Transferee or act in a fiduciary capacity with respect to any Permitted Transferee if, because of such person's status as an alien or because of his or her criminal record, the Company would be denied the right to provide a material service which it could -29- have otherwise provided consistent with its normal business practices. (ix) Any Certificate Holder or Permitted Transferee who acquires any Voting Trust Certificate for value (other than pursuant to a purchase through the Company's dividend reinvestment plan) shall represent, as a condition to such transfer, that he or she is acquiring such Voting Trust Certificates for his or her own personal account and not with a view to the transfer of such certificates or of the beneficially-owned shares of Series A Common to anyone other than a Permitted Transferee. (x) Any purported transfer of record or beneficial ownership of Voting Trust Certificates other than in accordance with the terms of this Section 4.2 shall be void. 4.3 LIMITATION OF VOTING RIGHTS OF CERTAIN PERMITTED TRANSFEREES. Notwithstanding any provision in this Agreement to the contrary, neither a Charitable Organization, nor a trust described in Subsection 4.2(a)(iii), nor an estate described in Subsection 4.2(a)(iv), nor a retirement plan described in Subsection 4.2(a)(vi) shall exercise any voting rights pursuant to this Agreement unless the majority control over the power to vote and dispose of Voting Trust Certificates held by such entity is -30- vested in a natural person who is either a Certificate Holder or a Permitted Transferee of a Certificate Holder. No such person vested with such control shall cease to be a Permitted Transferee for purposes of exercising such control pursuant to this Section 4.3 by reason of the death of any person. 4.4 TRANSFERS. Subject to the foregoing Sections 4.1 and 4.2, the Voting Trust Certificates shall be transferable on the books of the Trustees by the holders of record thereof in person or by duly authorized attorney, subject to such regulations as may be established by the Trustees for that purpose, upon surrender thereof at the office of the Trustees, properly endorsed for transfer, and the Trustees may treat the holders of record thereof, or when duly endorsed in blank the bearers thereof (so long as such bearers are Permitted Transferees), as the owners of Voting Trust Certificates for all purposes whatsoever. As a condition of making or permitting any transfer or delivery of stock certificates or Voting Trust Certificates, the Trustees may require the payment of a sum sufficient to pay or reimburse them for any stamp tax or other governmental charge in connection therewith or any other charge applicable to such transfer or delivery. 4.5 TRANSFEREES BOUND BY AGREEMENT. Every Permitted Transferee of Voting Trust Certificates shall, with respect thereto -31- and by the acceptance thereof, become a party hereto with like force and effect as though an original party hereto and shall be embraced within the meaning of the terms "Depositing Shareholder" or "Certificate Holder" wherever used herein; provided, however, that no such Permitted Transferee shall be required to deposit any certificates representing shares of Series A Common which he or she may otherwise own and which are not Subsequent Voting Trust Certificates. 4.6 RECORD DATE. The Trustees, in their discretion, may fix a record date as of which the Certificate Holders entitled to any payment or to take any action may be determined. Any record date fixed by the Company with respect to any payment shall be deemed to have been fixed by the Trustees as the record date for the purpose of determining the Certificate Holders entitled to such payment. Any other record date fixed by the Company shall be deemed to have been fixed by the Trustees unless the Trustees, within ten days after the fixing of such record date by the Company, fix and notify the Certificate Holders of a different record date. The Certificate Holders at the close of business on any such record date shall be deemed to be the persons so determined. -32- ARTICLE V DIVIDENDS 5.1 TRUSTEES TO PASS THROUGH CASH DIVIDENDS. Each Certificate Holder shall be entitled during the life of this Voting Trust, except as may be otherwise provided herein, to receive from time to time payments equal to the dividends payable in money, if any, received by the Trustees on a number of shares of Series A Common equal to that represented by such Voting Trust Certificate. 5.2 DIRECT PAYMENT OF DIVIDENDS. The Trustees, instead of themselves receiving and disbursing dividends, may request the Company to pay the amount of any dividends upon the shares of Series A Common held by such Trustees hereunder to which such Trustees from time to time become entitled directly to the Certificate Holders after deducting any charges and expenses authorized herein and any income or other taxes required by law to be deducted therefrom; payments in respect of each such dividend shall be made according to their respective interests to the Certificate Holders registered as such at the close of business on the record date determined pursuant to Section 4.6; provided, however, that the Trustees may at any time or from time to time thereafter request the Company to make payment in respect of such dividends to the Trustees. -33- 5.3 HOLD ON DIVIDENDS AT TERMINATION. At the termination of this Agreement the Trustees may continue to hold the shares of Series A Common represented by any Voting Trust Certificate issued and outstanding under this Agreement and any dividend received on such shares of Series A Common until the surrender of such Voting Trust Certificate by the holder thereof. 5.4 STOCK DIVIDENDS, STOCK SPLITS AND RECAPITALIZATIONS. Except as provided in Section 5.6, in the event the Trustees shall receive any fully-paid shares of Series A Common as a result of a dividend, stock split, recapitalization or other distribution in respect of the shares of Series A Common held hereunder, the Trustees shall hold such shares subject to this Agreement and shall issue Voting Trust Certificates, in proportion to their respective interests, to the Certificate Holders of record at the close of business on the date fixed by the Company as the record date for the determination of the shareholders entitled to receive distributions in respect of such dividend or split. 5.5 OTHER FORMS OF DIVIDENDS. Except as otherwise provided in Sections 5.4 and 5.6, if any dividend or other distribution in respect of the shares of Series A Common held by the Trustees hereunder shall be paid otherwise than in cash, the Trustees -34- shall distribute the same in kind ratably among the Certificate Holders entitled to receive such dividend or other distribution upon payment by each Certificate Holder of a sum sufficient to reimburse the Voting Trustees for any stamp tax, other governmental charge or other expense which the Voting Trustees shall have incurred, or for which they shall have or will become liable in connection therewith. 5.6 RECEIPT OF VOTING SECURITIES OF SEPARATE ENTITY. If, as the result of a merger, reorganization, spin-off, dissolution or other transaction, the Trustees receive any voting securities or property convertible into voting securities of any other entity, the Trustees shall retain such securities and property, holding and administering such securities and property pursuant to this Agreement. If the Trustees hold voting securities of two or more separate entities as a result of any of the transactions referred to in the preceding sentence, and if such securities or property provide the Trustees with more than ten percent (10%) of the voting power required to elect a majority of the board of directors of an entity other than the Company, the Trustees are hereby authorized and directed to create an additional trust or trusts identical to the trust created pursuant to this Agreement, having the same Trustees, such that the voting securities of each separate entity (including any property convertible into such voting securities) are held pursuant to the terms of a separate -35- trust. Any such additional trust must be ratified by no less than sixty-five percent (65%) in interest of the Certificate Holders who elect to exercise their right to vote pursuant to Section 5.6 before becoming effective. If such voting trust is not established, the Trustees shall distribute any such securities and property in accordance with Section 5.5. 5.7 SUBSCRIPTION OFFER. (a) MANNER OF EXERCISE OF SUBSCRIPTION RIGHTS. In the event any securities of the Company shall be offered for subscription to the holders of the shares of Series A Common, the Trustees, promptly upon receipt of notice of such offer, shall mail a copy of such notice to each Certificate Holder with a notice of the number of shares subscribable with respect to such Certificate Holder's beneficially-owned shares of Series A Common. Upon receipt by the Trustees, within such time as shall be fixed by the Trustees prior to the last date fixed by the Company for subscription and payment, of a request from any Certificate Holder to subscribe in his or her behalf and of the amount of money required to pay for a specified amount of such securities (not in excess of the amount of such securities subscribable in respect of such holder's beneficially-owned shares of Series A Common), the Trustees shall make such subscription and payment. Upon receiving from the Company the certificate for -36- the securities so subscribed for, the Trustees, if such securities be Series A Common having voting rights greater than those held by Common Shares, shall hold the same under this Agreement and shall issue to such holder a Voting Trust Certificate in respect thereof; and if such securities be other securities the Trustees may in their discretion hold such securities under this Agreement and shall issue to such holder a Voting Trust Certificate in respect thereof or may deliver the certificates for such other securities to such holder. In the event securities of a subsidiary of the Company shall be offered for subscription to the holders of the shares of Series A Common, the receipt of any voting securities or other property convertible into voting securities of such subsidiary shall be treated as a receipt to which the provisions of Section 5.6 apply. (b) TRANSFER OR WITHDRAWAL OF SUBSCRIPTION RIGHTS. The rights of any Certificate Holder to subscribe to additional shares of Series A Common as provided in Subsection 5.7(a) may be transferred only in accordance with the provisions of Article IV and may be withdrawn only in accordance with the provisions of Article III, except that the Trustees shall establish shorter time periods pursuant to Section 3.2 if reasonably necessary to deal with the terms of the subscription offer, and shall give reasonable notice of such change. -37- (c) SERIES A COMMON ACQUIRED PURSUANT TO SUBSCRIPTION RIGHT BY TRANSFEREE. Any shares of Series A Common acquired pursuant to subscription rights assigned to a transferee shall be held by the Trustees subject to all the terms and conditions of this Agreement. ARTICLE VI VOTING RIGHTS 6.1 TRUSTEES TO VOTE SHARES. Until the actual delivery to the Certificate Holder by or on behalf of the Trustees of a certificate issued by the Company representing the shares of Series A Common deposited hereunder in exchange for said Voting Trust Certificates, pursuant to the provisions hereof, the Trustees shall possess and shall be entitled to exercise all the rights and powers of owners of the shares of Series A Common of the Company deposited hereunder, to vote for every purpose and to consent to any and all corporate acts of the Company, it being expressly stipulated that no right to vote or to consent or to be consulted in respect to any such shares of Series A Common is created in or passes to any Certificate Holder by or under any Voting Trust Certificate, or by or under this Agreement, or by or under any other agreement, express or implied, except as provided in Sections 6.3 and 6.4. -38- 6.2 SERIES A COMMON TO BE VOTED AS A UNIT. Except as provided in Sections 6.3 and 6.4, the Trustees shall vote the shares of Series A Common held by them or take any other action with respect to such shares of Series A Common as a unit in accordance with the determination of the six-vote majority of the Trustees. 6.3 FAILURE TO ACHIEVE A SIX-VOTE MAJORITY. Except as otherwise provided in Section 6.4, in the event of the failure of the Trustees to achieve a six-vote majority with respect to the exercise of the right to vote the Series A Common on any proposal, the Trustees shall promptly notify all Certificate Holders of record and the Trustees shall vote all shares of Series A Common deposited hereunder with respect to each such proposal as more than fifty percent (50%) in interest of the Certificate Holders who elect to exercise their right to vote pursuant to this Section 6.3 shall direct in writing. 6.4 CERTAIN TRANSACTIONS TO REQUIRE JOINT CONSENT OF TRUSTEES AND CERTIFICATE HOLDERS. (a) (i) Upon any proposal for the sale of shares of Series A Common by the Trustees; -39- (ii) Upon any proposal submitted for shareholder approval for: (1) the merger or consolidation of the Company with or into any other corporation, or the merger or consolidation of any other corporation with or into the Company; (2) the sale, lease, exchange, mortgage or pledge of all, or substantially all, the property and assets of the Company; (3) the sale, exchange or other disposition of a significant subsidiary of the Company or of the voting control of such subsidiary (meaning, for purposes of this Section 6.4, a subsidiary whose fair market value, as estimated in the reasonable judgment of the Trustees, equals or exceeds twenty-five percent (25%) of the fair market value of the Company and all of its subsidiaries, similarly determined); (4) the merger or consolidation of a significant subsidiary of the Company with or into any other corporation, or the merger or consolidation of any other corporation with or into a significant subsidiary of the Company in a transaction which would leave the Company with fifty percent (50%) or less of the voting power of such significant subsidiary; -40- (5) the sale, lease, exchange, mortgage or pledge of all, or substantially all, the property and assets of a significant subsidiary of the Company; (6) the dissolution, winding up or liquidation of the Company or its business or of a significant subsidiary of the Company or of its business; (7) the amendment of the Company's Articles of Incorporation; or (8) the issuance of any securities having voting rights superior to those of Common Shares; (iii) Upon any proposal for any other transaction not previously described in this Section 6.4 which would be deemed a change of control under the rules and regulations of either the Securities and Exchange Commission or the Federal Communications Commission; the Trustees shall promptly notify all Certificate Holders and the Trustees shall not approve or implement any such action and shall not vote any shares of Series A Common in favor of any such proposal unless (1) the Trustees receive the written direction in -41- favor of the proposal from no less than seventy-five percent (75%) in interest of the Certificate Holders of record, and (2) a six-vote majority of the Trustees concur at a meeting of the Trustees. In the absence of both conditions (1) and (2) being satisfied, the Trustees shall, as the case may be, refrain from the sale of shares of Series A Common, vote against any proposal which would have the effect of approving any transaction described in Subsections 6.4(a)(ii)(1) through (8), or shall refrain from approving or implementing any proposal described in Subsection 6.4(a)(iii); provided, however, that the rights of each dissenting Certificate Holder shall be safeguarded as provided in Subsection 6.4(b) (b) With respect to any Certificate Holder who files a written direction opposing a proposal referred to in Subsection 6.4(a) (a "dissenting Certificate Holder"): (i) No shares of Series A Common held by the Trustees for the benefit of such dissenting Certificate Holder shall be sold without the express written consent of such Certificate Holder. If all shares of Series A Common except those held for the benefit of dissenting Certificate Holders are being sold, the Trustees shall distribute the shares not being sold to such dissenting Certificate Holders on the date the balance of the Series A Common is sold. -42- (ii) In the event of a transaction in which the law of the state of incorporation of the Company grants a dissenting shareholder appraisal rights, the Trustees shall, in accordance with and to the extent permitted by law, take such reasonable steps as are directed in writing by each dissenting Certificate Holder to perfect such dissenting Certificate Holder's appraisal rights with respect to his or her beneficially owned shares of Series A Common, the costs of which shall be borne by each such dissenting Certificate Holder in accordance with the reasonable allocation of such cost by the Trustees. To the extent the Trustees are not legally permitted to fully perfect such rights, the Trustees shall distribute such shares to their beneficial owners so that they may individually take the necessary steps to perfect such rights. (c) Notwithstanding any provision of this Agreement to the contrary, with respect to the sale of shares of Series A Common held by the Trustees pursuant to this Agreement: (i) no such sale shall be made by the Trustees unless the proceeds of such sale shall benefit all of the non-dissenting Certificate Holders proportionately to their beneficial ownership of each class of securities comprising the Series A Common hereunder; -43- (ii) no Trustee shall negotiate or consider any offer with respect to such sale without notice to all Trustees; (iii) except with the consent of a six-vote majority of the Trustees, no Trustee shall enter into any arrangement which commits the Trustee to vote either in his or her capacity as a Trustee or as a Certificate Holder in any specific manner; and (iv) the Trustees shall give reasonable consideration to any offer to purchase all or a portion of such shares which may be made by any one or more Certificate Holders representing five percent (5%) or more in interest hereunder, provided that the Trustees shall not be required to give any additional notice to such Certificate Holders other than the notice required pursuant to Subsection 6.4(a), nor shall the Trustees be required to grant any additional time to such Certificate Holders in which to present such offer. 6.5 VOTING RIGHTS OF CERTIFICATE HOLDERS. (a) The voting rights available to any Certificate Holder pursuant to Sections 6.3, 6.4 or 7.3: -44- (i) may be exercised in person; (ii) may be exercised by proxy, provided that the holder of such proxy must be another Certificate Holder or the Permitted Transferee of any Certificate Holder and provided the proxy is executed within one year before the date on which it is exercised; (iii) may be exercised by written ballot with respect to any matter placed before the Certificate Holders in a proxy statement or other written notice from the Trustees, in such form and subject to such time limits as the Trustees may reasonably require; (iv) may be assigned to a voting trust as provided in Subsection 4.2(a)(iii); provided that each voting trustee thereof shall be a Certificate Holder or the Permitted Transferee of a Certificate Holder. (b) Whenever a percentage in interest of the Certificate Holders is required with respect to any matter, it shall mean that percentage of the votes of all Certificate Holders eligible to vote after giving effect to the provisions of Section -45- 4.3, except as otherwise provided for purposes of Sections 5.6 and 6.3. (c) A Certificate Holder may cast one vote for each vote to which his or her beneficially-owned shares of Series A Common is entitled with respect to the Company's affairs. ARTICLE VII THE TRUSTEES 7.1 MEETINGS AND PROCEDURES. (a) ANNUAL MEETINGS. The Trustees shall meet annually on the first Saturday in April in Chicago, Illinois, or at such other time and place as they may otherwise determine, with such reasonable notice as their rules may provide, including notice to all Certificate Holders who shall be invited to attend each such annual meeting. (b) OTHER MEETINGS OF THE TRUSTEES. In addition to the annual meetings, the Trustees may meet at such time and place as they may determine, with such reasonable notice as their rules may provide (and such rules shall provide that any two trustees may call such a meeting). -46- (c) MEETING PROCEDURES. Except for actions required of the Trustees pursuant to Subsection 6.4(a), the Trustees may act without a meeting by a writing embodying their action executed by that number of Trustees holding the votes necessary to approve such action if there had been a meeting, with notice to each Trustee not executing such writing. The Trustees shall adopt their own rules of procedure. At any meeting of the Trustees any Trustee may vote in person or by proxy given to any other Trustee, and any Trustee may give powers of attorney to any other Trustee to sign any instrument expressing the actions of the Trustees. Trustees may participate in any meeting by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting. The Trustees may vote by proxy at any meeting of the Company, if they so elect, provided that such proxy be signed by at least those Trustees holding no fewer than six votes. (d) SPECIAL MEETINGS. Special meetings of the Certificate Holders and the Trustees, for any purpose or purposes, may be called by any two Trustees. Written notice of a special meeting, stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, signed by -47- two or more Trustees, shall be given not less than ten nor more than sixty days before the date of the meeting to each Certificate Holder entitled to vote at such meeting, with an information copy to any Certificate Holder not entitled to vote at the meeting by reason of the provisions of Section 4.3. 7.2 VOTING OF TRUSTEES. (a) TRUSTEES' VOTING POWER. The "Johnson Family Trustee" (as defined in Section 7.5) shall have one vote. All other Trustees acting hereunder shall each have two votes. (b) TYPES OF MAJORITIES. A "six-vote majority" shall require the affirmative vote by Trustees holding no fewer than six votes. An "eight-vote majority" shall require the affirmative vote by Trustees holding no fewer than eight votes. Any action requiring the approval of the Trustees for which no reference is made to either of the aforesaid majorities shall require a six-vote majority. The number of votes required shall not be reduced by reason of the temporary vacancy of any trusteeship, by the failure of any Trustee to be present at a meeting of the Trustees either in person or by proxy, by the cessation of the Johnson Family Trustee or for any other reason except as specifically set forth in Subsections 3.1(h), 3.1(i) or 3.2(e). -48- (c) EFFECT OF FAILURE TO ACHIEVE REQUIRED MAJORITY. In the event of the failure of the Trustees to achieve the required six-vote or eight-vote majority as to any proposal not described in Section 6.3 (i.e., a proposal not involving the right to vote the Series A Common), such proposal shall fail. (d) AUTHORITY OF ACTING AND SUCCESSOR TRUSTEES. Pending the election of a successor Trustee to fill any vacancy, the Trustees then acting shall possess and may exercise all the powers of the Trustees hereunder, provided they retain a sufficient number of votes to fulfill the applicable six-vote or eight-vote majorities. 7.3 ELECTION OF TRUSTEES. (a) TERMS OF OFFICE. The Trustees named or elected hereunder shall serve terms of offices, as follows: First Term: The effective date hereof - June 30, 1994 Second Term: July 1, 1994 - June 30, 1999 Third Term: July 1, 1999 - June 30, 2004 Fourth Term: July 1, 2004 - June 30, 2009 (b) REGULAR ELECTION. No less than sixty days prior to the expiration of a term of office, the Trustees shall hold an -49- election among the Certificate Holders to elect a new slate of Trustees. Each Certificate Holder shall have the right to vote, in person or by proxy, the number of votes he or she beneficially holds for as many persons as there are Trustees to be elected, or to accumulate such votes and give one candidate up to that number of votes determined by multiplying the number of Trustees to be elected by the number of shares of Series A Common he or she beneficially owns, or to distribute such votes on the same principle among as many candidates as such Certificate Holder shall think fit. The candidates receiving the highest number of votes up to the total number of Trustees to be elected shall be elected. (c) SPECIAL ELECTION. If one or more vacancies should occur during a term by reason of death, disability, resignation or removal, the Trustees shall, within sixty days of any vacancy, promptly hold a separate special election to elect each successor Trustee to complete the remainder of a term. Only those Voting Trust Certificates with respect to which votes were cast in favor of the Trustee who has died, become disabled, resigned or been removed may be cast with respect to the election of the successor Trustee. If the Trustee who has died, become disabled, resigned or been removed is an initial Trustee, only those Voting Trust Certificates deposited hereunder by such initial Trustee, either in his or her personal or fiduciary capacity, may be cast with -50- respect to the election of the successor Trustee, including any such Voting Trust Certificates then held by a Permitted Transferee who, even after the application of Section 4.3, is entitled to vote hereunder. The identification of those Voting Trust Certificates shall be made by the Trustees as they may reasonably determine. (d) SUCCESSOR TRUSTEES. Any successor Trustee elected hereunder shall be a natural person who is a Certificate Holder or a Permitted Transferee of a Certificate Holder. (e) TERMS FOLLOWING RENEWAL. Should this trust be renewed pursuant to Section 8.6, the Trustees serving during the last term shall serve until September 30 of the first year of the renewal term. All subsequent terms shall be for five years beginning October 1, except any Trustees serving at the termination of this trust because it is not renewed pursuant to Section 8.7 shall serve four years and nine months. 7.4 REMOVAL OF TRUSTEES. Any Trustee may be removed at any time by an instrument signed by no less than eighty-five percent (85%) in interest of the Certificate Holders of record and delivered to the Trustees, such removal to occur upon receipt of such instrument. Any Trustee shall be automatically removed at such time as the Trustees shall have knowledge of any law or -51- regulation to which the Company or this trust is subject which, because of the Trustee's status as an alien or because of the Trustee's criminal record, the Company would be denied the right to provide a material service which it could have otherwise provided consistent with its normal business practices. Upon the removal of any Trustee, the remaining Trustees shall, within sixty days, hold an election as provided in Section 7.3. 7.5 JOHNSON FAMILY TRUSTEE. Notwithstanding the provisions of Sections 7.3 and 7.4: (a) So long as Lester O. Johnson and his Family Members, together with any fiduciary of a Charitable Organization, trust, estate or qualified retirement plan who is a Permitted Transferee of any such person and who, after giving effect to the provisions of Section 4.3, is entitled to vote hereunder, (the "Johnson Family"), hold the percentage in interest required by Subsection 7.5(c), the following provisions shall apply: (i) the Trustee's position held by Melanie J. Heald or any successor elected in her place shall be known as the "Johnson Family Trustee;" (ii) the terms of the Johnson Family Trustee shall be concurrent with the terms of the other Trustees, and a -52- new Johnson Family Trustee shall be elected at the same time the other Trustees are elected; except such election shall be made by the majority in interest of the Johnson Family Certificate Holders of record subject to the approval of the remaining Trustees as provided in Subsection 7.5(a)(v); (iii) the Johnson Family Trustee may be removed only by a majority in interest of the Johnson Family Certificate Holders of record; (iv) if the Johnson Family Trustee should become unable to act by reason of death, disability, resignation or removal, a successor Trustee shall be elected by a majority in interest of the Johnson Family Certificate Holders of record, subject to the approval of the remaining Trustees as provided in Subsection 7.5(a)(v) and; (v) any successor Johnson Family Trustee shall give notice of his or her election to the remaining Trustees and shall be deemed approved (1) upon the consent of a six-vote majority or (2) upon the expiration of ten days from such notice unless four votes of the remaining Trustees have been cast against the approval of such successor Trustee; -53- (b) So long as the Johnson Family Trust is acting, the Johnson Family Certificate Holders shall not be entitled to vote with respect to the election or removal of any other Trustee, and all references to the election or removal of the Trustees shall refer only to the four Trustees other than the Johnson Family Trustee and all references to the Certificate Holders entitled to participate in the election or removal of any other Trustees hereunder shall be a reference only to the Certificate Holders other than the Johnson Family Certificate Holders. (c) Six months after the date on which the percentage in interest of the Johnson Family falls below (i) six percent (6%) at any time either or both of Lester O. Johnson and Frances M. Johnson are living or (ii) five percent (5%) following the death of the survivor of Lester O. Johnson and Frances M. Johnson, the Johnson Family Trustee shall cease to be a Voting Trustee and thereafter there shall be only four such Trustees; provided, however, if at any time during the one-year period following the expiration of the aforesaid six-month period the percentage in interest of the Johnson Family should be in excess of the applicable percentage test, the Johnson Family Trustee shall resume office subject to all of the provisions of this Agreement including the provisions of this Subsection 7.5(c). -54- 7.6 RESIGNATION OF TRUSTEES. Any of the Trustees may at any time resign, and thereby be relieved of all future obligations to act hereunder, by mailing his or her resignation to the Certificate Holders at their respective addresses appearing on the Trustee's records. Such resignation shall be deemed effective immediately upon its being mailed. 7.7 CHANGE OF CONTROL. Any change of trustees hereunder which constitutes a change of control which requires prior Federal Communications Commission approval shall not be effective until such approval is obtained. 7.8 REIMBURSEMENT OF EXPENSES. The Trustees may employ counsel or a depositary and incur other indebtedness or expenses deemed necessary by them for the proper discharge of their duties. In the discretion of the Trustees, by a six-vote majority, any such expenses or discharge of indebtedness may be invoiced among all Certificate Holders holding certificates representing 7,500 (as adjusted by Section 8.1) or more shares of Series A Common, to be paid by such Certificate Holders in proportion to their respective beneficial ownership of Series A Common. To the extent any such invoice is not paid within sixty days, the Trustees shall be entitled to deduct any such amount from the dividends received or receivable by the Trustees with respect to the shares of Series A Common beneficially owned by -55- the non-paying Certificate Holder before paying or causing such dividends to be paid to such Certificate Holder. 7.9 OTHER RELATIONSHIPS BETWEEN TRUSTEES AND COMPANY. Any Trustee shall be permitted to be, at the same time, an officer, director, consultant, agent, or employee of the Company or of any affiliate of the Company, and shall be permitted to be or become pecuniarily interested in his or her personal capacity, either directly or indirectly, in any matter or transaction to which the Company or any affiliate may be a party or in which the Company or any affiliate may be concerned to the same extent as though he or she were not a Trustee. Any Trustee shall be permitted to receive compensation, of whatever character, as is provided by their existing contracts, if any, with the Company or its affiliates, with complete propriety and without disqualifying themselves to act as Trustees hereunder; and upon the expiration of the existing contracts, if any, with the Trustees, or sooner by mutual agreement, the Company or its affiliates and such Trustees shall be permitted to enter into new contracts which may change their compensation. 7.10 TRUSTEES MAY BE SHAREHOLDERS, CERTIFICATE HOLDERS AND MAY ACQUIRE AND DISPOSE OF SHARES. Any Trustee shall be permitted, for his or her personal account or otherwise, subject to all the terms and conditions of this Agreement, to either acquire -56- from or sell to the Company or any shareholder shares of stock or other securities of the Company or Voting Trust Certificates to the same extent as though he or she were not a Trustee. Any Trustee shall be entitled to exercise all rights and options conferred upon Certificate Holders under this Agreement to the same extent as though he or she were not a Trustee. 7.11 COMPENSATION OF TRUSTEES. The Trustees shall not be entitled to compensation for their services as Trustees hereunder. 7.12 LIMITATION OF LIABILITY. In voting or giving directions for voting the shares of Series A Common deposited hereunder or in exercising any consent with respect thereto, the Trustees shall exercise their best judgment, from time to time, to select suitable directors and in voting or giving directions for voting and acting on other matters for shareholders' action the Trustees shall exercise like judgment; provided, however, that the Trustees assume no responsibility in respect of such management or in respect of any action taken by them or taken pursuant to their consent thereto, or pursuant to their votes, and no Trustee shall incur or be under any liability as the holder of securities of the Company in his or her capacity as Trustee, by reason of any error of law or any error in the construction of this Agreement or of any matter or thing done or suggested or omitted to be done -57- pursuant to this Agreement, except for his or her intentional misconduct. No bond shall be required of any Trustee for the performance of his or her services as such. ARTICLE VIII GENERAL PROVISIONS 8.1 ADJUSTMENT FOR STOCK SPLITS. Wherever under this Agreement a provision sets a limitation or requirement of an amount of shares, such number shall be adjusted from time to time as necessary to take into account any stock splits, stock dividends, issuance of other voting stock with voting rights superior to Common shares and other changes in the capital structure of the Company, so that such adjusted number bears the same proportion to the voting power of the Company held by this trust following such capital change as the number immediately prior to adjustment bore to the voting power of the Company held by this trust immediately prior to such capital change. 8.2 SCOPE OF AGREEMENT. This Agreement and all covenants herein contained shall inure to the benefit of and be binding upon the parties hereto, their heirs, executors, administrators, successors and assigns. -58- 8.3 NOTICES. Any notice required to be given under this Agreement shall be deemed to have been given and received if actually received, such as by telephone, telecopier, electronic mail, telegram, hand delivery, or other means, and the giver has reasonable evidence or acknowledgment of its receipt. Notice shall also be deemed to have been given if deposited in the United States mail in a postpaid wrapper, in which case it shall be deemed to have been received on the third business day after the date of such deposit, or if deposited with a commercial or government overnight carrier, in which case it shall be deemed to be received the first business day after the date of such deposit. The Trustees shall request a return receipt with each notice they mail or send by overnight carrier. (a) In the case of a Certificate Holder, such notice shall be addressed to such Certificate Holder at his or her last address appearing on the records of the Trustees. (b) In the case of a notice to the Trustees by a Certificate Holder, such notice shall be given to each of the Trustees, addressed to each Trustee at his or her address of record, as set forth at the end of this Agreement or as it may be changed from time to time by written notice to all such holders. -59- (c) In the case of a notice to a Trustee by another Trustee, notice shall be addressed to the Trustee at his or her address of record, as set forth at the end of this Agreement or and as may be changed from time to time by written notice to the remaining Trustees. The Trustees shall use their best efforts to transmit to the Certificate Holders, or to cause the Company to transmit, all information sent by the Company to the holders of Series A Common. 8.4 RELIANCE BY TRUSTEE. The Trustees shall be conclusively entitled to rely upon any notice or statement received by them from the Company or the holders of record of Voting Trust Certificates and believed by them in good faith to be genuine and shall act and shall be fully protected in acting in accordance therewith. 8.5 AMENDMENT OF AGREEMENT. This Agreement and the Certificates issued hereunder may be amended upon the consent in writing of an eight-vote majority of the Trustees and no less than ninety percent (90%) in interest of the Certificate Holders of record; provided, however, that no amendment which shall have the effect of extending the time for termination of this Voting Trust -60- Agreement shall be made without the consent in writing of all of the Certificate Holders. 8.6 TERMINATION. This Agreement shall be binding upon each of the parties executing the same from the date of its execution by such party. The trust created hereunder shall be effective as of the date hereof, and this Agreement and the trust created hereunder shall remain in full force and effect until January 31, 2009. This Agreement and the trust created hereunder may be terminated at any time with the consent in writing of an eight vote majority of the Trustees and by no less than seventy-five (75%) in interest of the Certificate Holders of record. 8.7 RENEWAL. Not earlier than January 1, 2009, nor later than March 31, 2009, the Trustees shall notify all Certificate Holders of their right to withdraw their shares of Series A Common upon termination of the trust on June 30, 2009, without regard to the provisions of Article III. All Certificate Holders shall have until May 15, 2009, to notify the Trustees of their preliminary intent to withdraw upon termination. The Trustees shall notify all Certificate Holders in writing before May 31, 2009, as to which Certificate Holders have presented such notice. The Certificate Holders shall notify the Trustees of their final election to withdraw upon termination on or before June 30, 2009. Each Certificate Holder shall be eligible to make -61- a final election to withdraw irrespective of whether or not he or she notified the Trustees of a preliminary intent to withdraw. If, as of the close of business on June 30, 2009, fifty percent (50%) or less in interest of the Certificate Holders have elected to withdraw, this trust shall be automatically renewed for an additional term of the lesser of twenty years or the maximum number of years permitted by controlling law. If more than fifty percent (50%) in interest of the Certificate Holders have elected to withdraw, a six-vote majority of the Trustees shall be required to renew the trust. If the trust is renewed, it shall be renewed only with respect to those Certificate Holders not electing to withdraw. This renewal provision shall be equally applicable at the end of each succeeding renewal term, with appropriate changes in dates to reflect the new termination date. 8.8 DE MINIMIS HOLDINGS. The Trustees may, in their discretion, distribute to any Certificate Holder who beneficially owns less than 150 (as adjusted by Section 8.1) shares of Series A Common the shares of Series A Common then held by the Trustees for the benefit of such Certificate Holder, which distribution shall not be subject to the provisions of Article III. 8.9 SEVERABILITY OF PROVISIONS. The invalidity or unenforceability of any term or provision of this Agreement shall not affect the validity of the remainder hereof. -62- 8.10 INTERPRETATION. (a) TRUSTEE. The term "Trustee" or "Trustees" wherever used herein means the person or persons from time to time acting in such capacity pursuant to the provisions of this Agreement. (b) HEREUNDER. Whenever the word "hereunder" is used in this instrument, it shall refer to the entire instrument, not merely to the article, section or subsection in which it appears. (c) BUSINESS DAY. A "business day" shall be any day on which the exchange constituting the primary marketplace for the Company's Common Shares is open for business or, if such shares are not listed for trading on an exchange, any day on which the New York Stock Exchange, or any successor exchange, is open for business. (d) GENDER AND NUMBER. As the context permits, the gender and number of words may be interchanged. (e) HEADINGS. The headings used herein are for convenience only, are not part of the article, section or subsection to which they relate, and are not to be used in construing the legal intent of this instrument. -63- 8.11 CONTROLLING LAW. All questions concerning the validity and administration of this Agreement and the trust created hereunder shall be determined under the law of the State of Iowa, except that the Trustees may, in their discretion, elect to change the law to be so used to that of the state in which the Company is incorporated as such state may change from time to time, upon notice to the Certificate Holders. This Agreement shall be subject to the applicable rules and regulations of the Federal Communications Commission. 8.12 CONSTRUCTION OF AGREEMENT. All questions concerning the interpretation or construction of this Agreement shall be determined by a six-vote majority of the Trustees, whose decision shall be final and binding on all parties. 8.13 MULTIPLE COUNTERPARTS. This Agreement may be executed by the parties herein, or any of them, in any number of counterparts, with the same force and effect as if they had all executed the same instrument. 8.14 ENTIRE AGREEMENT. This Agreement (including the exhibits attached hereto) contains the entire understanding among the parties hereto with respect to the subject matter hereof, and no -64- representation, warranty, covenant or condition other than those expressly set forth herein shall be of any force or effect. * * * * * -65- IN WITNESS WHEREOF, the Trustees and the Certificate Holders have executed this Agreement as of the day and year first above written. TRUSTEES AND ADDRESSES OF RECORD: /s/ Walter C.D. Carlson ----------------------- WALTER C.D. CARLSON 1041 Judson Evanston, Illinois 60202 Home telephone: (312) 864-6869 Office telephone: (312) 853-7734 /s/ Lettitia G.C. Carlson ------------------------- LETITIA G.C. CARLSON 2405 41st Avenue East, #303M Seattle, Washington 98112 Home telephone: (206) 329-6897 /s/ Le Roy T. Carlson, Jr. -------------------------- LE ROY T. CARLSON, JR. 1440 North Lake Shore Drive Apartment 19-C Chicago, Illinois 60610 Home telephone: (312) 266-1725 Office telephone: (312) 630-1900 /s/ Melanie J. Heald -------------------- MELANIE J. HEALD 7410 Longmeadow Road Madison, Wisconsin 53717 Home telephone: (608) 836-9653 /s/ Donald C. Nebergall ----------------------- DONALD C. NEBERGALL 2919 Applewood Place, N.E. Cedar Rapids, Iowa 52402 Home telephone: (319) 364-8386 Signature Page to TDS Voting Trust Agreement dated as of June 30, 1989. -66-
No. of No. of Deposited Deposited Shares of Shares of Series A Series A Common in Signature of Common in Dividend Depositing Date of Certificate Reinvestment Shareholders Execution Form Plan ------------ --------- ------------- ------------- /s/ Arthur Anderson 10/12/89 2,250 ------------------- -------- Arthur Anderson, custodian for Jacob Anderson /s/ Arthur Anderson 10/12/89 1,800 ------------------- -------- Arthur Anderson, custodian for Samuel Keith /s/ Kendrick Anderson (undated) --------------------- --------- 2,250 Kendrick Anderson, custodian Eve Anderson /s/ Kendrick Anderson (undated) 2,250 ------------------- ---------- Kendrick Anderson, custodian for Jill Anderson /s/ K.C. August 9/5/89 20,180 --------------- ---------- K.C. August /s/ LeRoy T. Carlson 9/14/89 363,009 155.6591 -------------------- ---------- LeRoy T. Carlson /s/ LeRoy T. Carlson, Jr. 9/7/89 1,006,331 10,310.7146 ------------------------ ----------- LeRoy T. Carlson, Jr. /s/ LeRoy T. Carlson, Jr., custodian for Anthony J.M. Carlson 9/7/89 6,397 175.9203 ------------------------ ----------- LeRoy T. Carlson, Jr., custodian for Anthony Joseph Mouly Carlson /s/ LeRoy T. Carlson, Jr., custodian for Leo P.M. Carlson 9/7/89 475 0.7945 ------------------------- ------------ LeRoy T. Carlson, Jr., custodian for Leo Peter Mouly Carlson
Signature Page to TDS Voting Trust Agreement dated as of June 30, 1989. -67-
No. of No. of Deposited Deposited Shares of Shares of Series A Series A Common in Signature of Common in Dividend Depositing Date of Certificate Reinvestment Shareholders Execution Form Plan ------------ --------- ------------ -------------- /s/ Letita G.C. Carlson 9/14/89 447,620 10,432.9115 ----------------------- ------- Letitia G.C. Carlson /s/ Margaret D. Carlson 9/14/89 620,725 MDC ----------------------- ------- <#>620,725 Margaret D. Carlson /s/ Prudence E. Carlson (undated) 604,718 ----------------------- --------- Prudence E. Carlson /s/ Ross V. Carlson 9/4/89 4,500 190.4848 ---------------- --------- Ross Carlson, custodian for Dana Dougherty /s/ Ross V. Carlson 9/4/89 4,500 190.4848 ---------------- --------- Ross Carlson, custodian for Adam Maldonado /s/ Ross V. Carlson 9/4/89 4,500 190.4848 ---------------- -------- Ross Carlson, custodian for Nicole Maldonado /s/ Walter C.D. Carlson 9/4/89 612,318 8,111.7163 ----------------------- -------- Walter C.D. Carlson /s/ Walter C.D. Carlson, custodian for Amanda Carlson * 9/4/89 11,612 60.0321 ----------------------- -------- Walter C.D. Carlson, custodian for Amanda Liv de Hoyos Carlson /s/ Walter C.D. Carlson, custodian for Greta Carlson * 9/4/89 1,765 --------------------- -------- custodian for Greta Marion de Hoyos Carlson
*as custodian Signature Page to TDS Voting Trust Agreement dated as of June 30, 1989. -68-
No. of No. of Deposited Deposited Shares of Shares of Series A Series A Common in Signature of Common in Dividend Depositing Date of Certificate Reinvestment Shareholders Execution Form Plan ------------ --------- ------------ -------------- /s/ Yvonne M. Carlson 9/30/89 29,002 1,331.9570 --------------------- Yvonne M. Carlson 2,347 ---------------------- -------- Debora M. de Hoyos /s/ Melanie J. Heald 9/4/89 30,000 -------------------- ------- Melanie J. Heald /s/ Frances M. Johnson 9/4/89 81,324 ---------------------- -------- Frances M. Johnson, Trustee /s/ Graham Johnson 9/4/89 30,000 ------------------ -------- Graham Johnson /s/ Kent Johnson 9/4/89 30,000 ---------------- -------- Kent Johnson /s/ Laurel Ann Johnson 9/4/89 30,000 ---------------------- -------- Laurel Ann Johnson /s/ Lester O. Johnson 9/4/89 162,648 --------------------- -------- Lester O. Johnson, Trustee /s/ Dagmar Maldonado, custodian for Dana Dougherty 10/17/89 675 31.0652 -------------------- --------- Dagmar Maldonado, custodian for Dana Dougherty /s/ Dagmar Maldonado, custodian for Adam Maldonado 10/17/89 450 20.7109 -------------------- ---------- Dagmar Maldonado, custodian for Adam Maldonado /s/ Dagmar Maldonado, custodian for Nicole Maldonado 10/17/89 450 20.7109 -------------------- ---------- Dagmar Maldonado, custodian for Nicole Maldonado
Signature Page to TDS Voting Trust Agreement dated as of June 30, 1989. -69-
No. of No. of Deposited Deposited Shares of Shares of Series A Series A Common in Signature of Common in Dividend Depositing Date of Certificate Reinvestment Shareholders Execution Form Plan ------------ --------- ------------ -------------- /s/ Catherine Mouly 9/13/89 2,347 29.2589 ------------------ --------- Catherine Mouly /s/ Catherine Mouly, custodian for Anthony J.M. Carlson 9/13/89 2,250 733.6283 ------------------------ ---------- Catherine Mouly, custodian for Anthony J.M. Carlson /s/ Donald C. Nebergall 9/6/89 28 1.0430 ----------------------- --------- Donald C. Nebergall /s/ Donald C. Nebergall, tr 9/6/89 395,827 476.7591 -------------------------------- --------- Donald C. Nebergall, Trustee U/A dated 1/1/56 for Prudence E. Carlson /s/ Donald C. Nebergall, tr 9/6/89 395,827 476.7591 -------------------------------- -------- Donald C. Nebergall, Trustee U/A dated 1/1/56 for Walter C.D. Carlson /s/ Donald C. Nebergall, tr 9/6/89 593,741 715.1386 -------------------------------- -------- Donald C. Nebergall, Trustee U/A dated 10/24/60 for Letitia G.C. Carlson /s/ Donald C. Nebergall, tr 9/6/89 315,062 -------------------------------- -------- Donald C. Nebergall, Trustee U/A dated 12/28/72 /s/ Donald C. Nebergall, tr 9/6/89 77,346 -------------------------------- -------- Donald C. Nebergall, Trustee U/A dated 12/31/76
Signature Page to TDS Voting Trust Agreement dated as of June 30, 1989. -70-
No. of No. of Deposited Deposited Shares of Shares of Series A Series A Common in Signature of Common in Dividend Depositing Date of Certificate Reinvestment Shareholders Execution Form Plan ------------ --------- ------------ -------------- /s/ Donald C. Nebergall, tr 9/6/89 130,992 -------------------------------- ------- Donald C. Nebergall, Trustee Lead Annuity Trust for Wellesley College /s/ Byron Wertz, custodian for Allison M. Wertz 9/6/89 4,500 190.4848 -------------------------- -------- Byron Wertz, custodian for Allison M. Wertz /s/ Byron Wertz, custodian for Joseph E. Wertz 9/6/89 4,500 190.4848 --------------------------- -------- Byron Wertz, custodian for Joseph E. Wertz /s/ Florence Wertz, by John E. Wertz 9/9/89 11,925 ------------------ -------- Florence Wertz /s/ John Alan Wertz 10/-/89 2,577 ------------------- -------- John Alan Wertz /s/ Kristin Wertz 9/16/89 475 ----------------- --------- Kristin Wertz /s/ Paul Wertz, for Elizabeth 9/8/89 563 25.8909 -------------- -------- Paul Wertz, custodian for Elizabeth D. Wertz /s/ Paul Wertz, for Jessica 9/8/89 563 25.8909 -------------- -------- Paul Wertz, custodian for Jessica A. Wertz
-71- EXHIBIT A TO VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989 VOTING TRUST CERTIFICATE No.___________ ______Shares of Series A Common TELEPHONE AND DATA SYSTEM, INC. Incorporated under the Laws of the State of Iowa THIS IS TO CERTIFY THAT, subject to the provisions hereof and of the Voting Trust Agreement hereinafter mentioned, on the surrender hereof, properly endorsed, _________________________ will be entitled to receive on June 30, 2009, or on the earlier termination of the Voting Trust Agreement, as therein provided, a stock certificate, expressed to be full-paid and non-assessable, for shares of Series A Common, represented by this Certificate, of Telephone and Data Systems, Inc. (the "Company"), a corporation organized and existing under the laws of the State of Iowa, or its successor. In the event of a withdrawal of Common Shares by the holder of this Certificate pursuant to a Withdrawal Request as contemplated by Article III of the Voting Trust Agreement, he or she will be entitled to receive a stock certificate for the Common Shares so withdrawn under the terms and conditions set forth in Article III or cash or a stock certificate for Common Shares to the extent the shares of Series A Common are acquired pursuant to the option available to certain participants in the Voting Trust Agreement. In the meantime, subject to the -72- provisions of the Voting Trust Agreement, the holder of this Certificate is entitled to receive payments equal and of like character to the dividends if any, received by the Trustees upon the number of shares of Series A Common held by the Trustees for such holder, less such charges and expenses as are authorized by the Voting Trust Agreement to be deducted therefrom and less any income or other taxes required by law to be deducted therefrom; provided, however, such dividends, if received by the Trustees in Series A Common shall be payable in Voting Trust Certificates for such stock. If the Trustees shall exercise on behalf of the holder of this Certificate any right to subscribe to shares of Series A Common, in accordance with the provisions of the Voting Trust Agreement, the Trustees shall issue Voting Trust Certificates in respect thereof. Until actual delivery of the stock certificates called for hereby following the termination of the Voting Trust Agreement (or in the case of Common Shares properly withdrawn pursuant to a Withdrawal Request until actual delivery of the stock certificates for such withdrawn Common Shares), the Trustees, upon the terms and subject to the provisions stated in the Voting Trust Agreement, shall possess and shall be entitled to exercise all rights and powers of the owners of such Series A Common to vote for every purpose and to consent to any and all corporate acts of the Company, except as such right is expressly limited by the terms of the Voting Trust Agreement; it being expressly stipu- -73- lated that except as expressly provided in the Voting Trust Agreement, no right to vote such Series A Common and no right to consent or be consulted in respect of such Series A Common is created or passes to any holder of this Certificate by or under this Certificate or by or under any agreement express or implied. This Certificate is issued under and pursuant to, and the rights of each successive holder hereof are subject to and limited by, the terms and provisions of a certain Voting Trust Agreement, dated as of the thirtieth day of June, 1989, between certain owners of Series A Common of the Company and the Trustees (herein referred to, and as it may be amended from time to time, the "Voting Trust Agreement"), one copy of which is on file with Walter C.D. Carlson, or any other successor Trustee acting in his place. Each holder of this Certificate by the acceptance hereof assents and agrees to be bound by all the provisions of the Voting Trust Agreement. This Certificate is not transferable whether by sale, assignment, gift, bequest, appointment or otherwise by the holder of record hereof except as provided in Article III or Article IV of the Voting Trust Agreement, subject to such regulations as may be established by the Trustees for that purpose, upon surrender hereof at the office of the Trustees, properly endorsed for transfer, and the Trustees may treat the holder of record hereof as the owner of this Certificate for all purposes. Any attempted transfer which is not permitted pursuant to the provisions of -74- Article IV shall be void. Every transferee of this Certificate shall by the acceptance hereof become subject to the provisions of this Voting Trust Agreement. Anyone who acquires this Certificate for value (other than pursuant to the Company's dividend reinvestment plan) represents that he or she is acquiring this Certificate for his or her own personal account and not with a view to the transfer of this Certificate or of the shares of Series A Common represented by this Certificate to anyone other than a Permitted Transferee (as defined in Article IV of the Voting Trust Agreement). As a condition of making or permitting any transfer or delivery of stock certificates or Voting Trust Certificates, the Trustees may require the payment of a sum sufficient to pay or reimburse them for any stamp tax or other governmental charge in connection therewith, or any other charges applicable to such transfer or delivery. The Voting Trust Agreement and this Certificate may be amended at any time and from time to time in the manner therein provided by the Trustees with the consent in writing of the Trustees holding no fewer than eight votes and by not less than ninety percent (90%) in interest of the holders of record of Voting Trust Certificates; provided, however, that no amendment which shall have the effect of extending the time for termination of the Voting Trust Agreement shall be made without the consent in writing of all of such participants. The Voting Trust Agree- -75- ment and the trust created thereunder may be terminated at any time with the consent in writing of the Trustees holding no fewer than eight votes and by not less than seventy-five percent (75%) in interest of the holders of record of Voting Trust Certificates. This Voting Trust Agreement may be renewed for additional terms with respect to the holder of this Certificate unless such holder notifies the Trustees prior to June 30, 2009 (in response to a required notice from the Trustees), of his or her election to withdraw. -76- IN WITNESS WHEREOF, the Trustees have executed this Certificate by affixing their hands this ____ day of _________________, 19___ ___________________ WALTER C.D. CARLSON ___________________ LETITIA G.C. CARLSON ____________________ MELANIE J. HEALD ____________________ DONALD C. NEBERGALL Signature Page to TDS Voting Trust Agreement dated as of June 30, 1989. -77- (FORM OF ASSIGNMENT FOR REVERSE SIDE OF VOTING TRUST CERTIFICATE) FOR VALUE RECEIVED, __________________ hereby sells, assigns and transfers unto ____________________ the within Certificate and all rights and interests thereby and does hereby irrevocably constitute and appoint attorney to transfer such certificate on the books of the Trustees under the Voting Trust Agreement within referred to, with full power of substitution in the premises. Dated: ______________________ ___________________________ In the presence of: _____________________________ -78- EXHIBIT B TO VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989 A "Withdrawal Request," as referred to in Subsection 3.1(g) of the Voting Trust Agreement, shall be in the following form: NOTICE OF WITHDRAWAL Dated _______________ , _______________ To Trustees Under Voting Trust Agreement Dated as of June 30, 1989 ("Voting Trust Agreement") The undersigned hereby requests the withdrawal of ____________ Common Shares of Telephone and Data Systems, Inc. (the "Company"), into which all or part of the shares of Series A Common represented by the enclosed Voting Trust Certificate(s) No(s). ___________ registered in the undersigned's name are convertible. The aforesaid withdrawal is permitted pursuant to the provisions of [Subsection 3.1(b)] [Subsection 3.1(c)] [Subsection 3.1(d)][Subsection 3.1(f)] of the Voting Trust Agreement. You are authorized and directed by the undersigned to convert into the above stated number of Common Shares the requisite number of shares of Series A Common represented by the enclosed Voting Trust Certificate(s). The undersigned hereby stipulates and agrees with you, the Trustees, and the Transfer Agent for the Company's Common Shares that the date of withdrawal will be ____________, 19__, and 79 further information concerning the denominations and registrations of stock certificates to be delivered at that time in accordance with Section 3.3 of the Voting Trust Agreement, will be delivered to the Trustees and the Transfer Agent not less than five business days prior to such closing date; (iii) all conditions in Article III of the Voting Trust Agreement as to the withdrawal of the Common Shares requested hereby to be satisfied by the undersigned have been, or will prior to such closing be, satisfied, and all procedures set forth therein to be complied with by the undersigned have been, or prior to such closing will be, complied with; and (iv) any additional documents, opinions of legal counsel, or other materials reasonably required of the undersigned by you, the Company, the Depositary or the Transfer Agent in connection with the matters that are the subject of this Withdrawal Request will be furnished by the undersigned at or in advance of the closing. The undersigned acknowledges that this Withdrawal Request will cause the Trustees to grant to certain Certificate Holders ("Optionees") an option to acquire pursuant to Section 3.2 of the Voting Trust Agreement, and that this Withdrawal Request shall be or become irrevocable at any time there are 105 days or less prior to the date of withdrawal previously stipulated herein. To the extent the aforesaid option is exercised, the undersigned directs that [all of the shares to be withdrawn] [the first shares to be withdrawn] be acquired by the -80- Optionees' tendering of the Company's Common Shares in exchange for the Series A Shares represented by the enclosed Voting Trust Certificate(s) which the undersigned has authorized you to convert into Common Shares. _________________________________ -81-
EXHIBIT C TO VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989 SUMMARY OF REQUIREMENTS FOR CERTAIN ACTIONS BY TRUSTEES AND CERTIFICATE HOLDERS (1) Required Required # in interest of Votes by of Certifi- Action Section* Trustees cate Holders ------ -------- ----------- -------------- Acceptance of additional deposits 1.3 Eight N/A Issuance of voting Three trust certificates 2.2 Trustees N/A Waiver of Notice 3.1(h) Six(2) N/A Cancellation of Withdrawal 3.1(1) Six(2) N/A Reduction of Notice Period 3.2(e) Six(2) N/A Approval of separate voting trust for 65% of those spun-off entity 5.6 N/A voting Voting of Series A 6.2, More than 50% Common 6.3 Six of those voting (only if Trustees dead- locked) Sale of Series A Common by Trustees and certain major corporate matters 6.4 Six 75% Exercise of appraisal Any Dissenting rights 6.4(b) N/A Certificate Holder Election of Trustees 7.3 N/A Cumulative Voting Removal of Trustee 7.4 N/A 85% Reimbursement of Trustees' expenses 7.7 Six N/A Amendment of agreement 8.5 Eight 90% Early termination 8.6 Eight 75% Renewal 8.7 Six or More than 50%
1. This summary is for convenience only and is not to be used in construing the legal intent of the instrument to which it is attached. In the event of any conflict between the information contained herein and the language of the instrument, the language of the instrument shall control. 2. Any Trustee who is the person requesting the waiver or cancellation is excluded from voting as to this matter. -82- EX-99.C6 6 EX-99(C)(6)/EXCHANGE AGREEMENT EXCHANGE AGREEMENT This Exchange Agreement, dated as of January 1, 1994, is entered into between Telephone and Data Systems, Inc., an Iowa corporation (herein called "TDS"), and American Paging, Inc., a Delaware corporation (herein called "API"). WHEREAS, TDS owns all of the issued and outstanding shares of the capital stock of API; WHEREAS, in connection with the execution and delivery of this Agreement, API is selling in an underwritten public offering (the "Offering") a number of its Common Shares, par value $1.00 per share, as a result of which API will have a class of publicly held securities and API will be subject to the reporting and other requirements of the Securities Exchange Act of 1934, and the parties desire to provide for a recapitalization of API to accommodate the Offering; and WHEREAS, API and TDS desire to set forth certain agreements made between them with respect to such recapitalization and other matters; NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows: ARTICLE I DEFINITIONS As used in this Agreement, the terms set forth below shall have the indicated meanings (such meanings apply equally to the singular and plural forms thereof): "ACT" shall mean the Securities Act of 1933, as amended. "FCC" shall mean the Federal Communications Commission. "SEC" shall mean the Securities and Exchange Commission. ARTICLE II RECAPITALIZATION Promptly upon obtaining stockholder approval of the adoption of a Restated Certificate of Incorporation for API in substantially the form attached hereto as Exhibit A, API shall file the Restated Certificate of Incorporation with the Secretary of State of Delaware pursuant to Section 103 of the General Corporation Law of Delaware, causing the 100 shares of capital stock owned by TDS to be converted into 1,500,000 Common Shares and 15,000,000 Series A Common Shares of API. ARTICLE III RIGHT TO ACQUIRE ADDITIONAL API SECURITIES Section 3.01. PURCHASE RIGHTS. In addition to the pre-emptive rights granted to TDS as a holder of Series A Common Shares of API pursuant to the Restated Certificate of Incorporation of API referred to in Article II, TDS shall have the right to subscribe to any issuance of Common Shares or any other voting securities of API, or of any securities convertible into or exchangeable for, or carrying a right to subscribe to or acquire, Common Shares or any other voting securities of API, other than the Common Shares being issued pursuant to the Offering. To the extent an issuance is to be made for consideration other than cash, the fair market value of the non-cash consideration shall be determined by resolution of the board of directors of API. The proportion of each such issuance that TDS shall have the right to subscribe to (which right may be exercised in full or in part) shall be equal to the proportion of the Common Shares that TDS would own immediately before the issuance if all securities of API that are convertible into Common Shares (including securities convertible into another class that is convertible into Common Shares and including securities that in the future will become convertible) were converted (successively, if necessary) into Common Shares. -3- Section 3.02. COMPLIANCE WITH SECURITIES LAWS. In connection with any issuance to which the purchase rights granted by Section 3.01 apply, API shall take all such action as shall be necessary to register the securities being issued, or to qualify them for an exemption from registration, under the Act and any applicable state securities or blue sky laws. Section 3.03. METHOD OF EXERCISE. The purchase rights granted by Section 3.01 are exercisable by TDS by delivering to the Secretary of API a written election to subscribe to a specified number (in conformity with Section 3.01) of the securities to be issued, within such reasonable period of time as may be established by the board of directors of API after the giving of written notice of the proposed issuance to TDS. The closing of such purchase shall take place at such time and place as shall be determined by the board of directors of API, upon at least 30 days' prior written notice to TDS. At the closing, TDS shall pay for all shares issued and sold to TDS with cash, the cancellation of indebtedness owed by API to TDS, such other consideration as shall be reasonably acceptable to API, or a combination of such forms of consideration. Section 3.04. TRANSFER OF RIGHTS. (a) The rights of TDS under this Article may be transferred to any one or more transferees from TDS of any Common Shares, Series A Common Shares, or any securities convertible into or exchangeable for, or carrying -4- a right to subscribe to or acquire, shares of either such class. Any transfer of rights pursuant to this Section 3.04 shall be effective only upon receipt by API of written notice from TDS stating the name and address of any transferee and identifying the securities being transferred. (b) The rights of a transferee shall be the same rights granted to TDS in Section 3.01 with respect to the securities transferred, subject to the same conditions as are applicable to TDS in Section 3.03. ARTICLE IV CERTAIN OTHER RIGHTS Section 4.01. AGREEMENTS REGARDING PAGING INTERESTS. (a) The parties acknowledge and agree that certain operating telephone and cellular companies and other entities that are subsidiaries or affiliates of TDS (other than API and subsidiaries of API) have FCC licenses to engage in radio paging services (collectively, "Paging Services") to certain areas as set forth on Exhibit B (the "Non-API Paging Interests"). With respect to the Non-API Paging Interests, the parties further acknowledge and agree that: -5- (1) the Non-API Paging Interests have previously been offered for sale to API and API has decided not to acquire the Non-API Paging Interests; and (2) consequently, TDS and such subsidiaries and affiliates will retain all of the Non-API Paging Interests as their own property. (b) The parties acknowledge and agree that TDS and subsidiaries of TDS (other than API and subsidiaries of API) may, in the future, (1) obtain FCC licenses to engage in Paging Services or (2) acquire control of entities that have or obtain FCC licenses to engage in Paging Services or have interests in other entities that provide Paging Services, in exchange for all or some of the Non-API Paging Interests or otherwise (collectively, the "Future Paging Interests"). The parties further acknowledge and agree that all such Future Paging Interests that are ancillary to and integrated with other communications systems shall be retained by TDS and such subsidiaries as their own property and the balance of such Future Paging Interests (the "Eligible Future Paging Interests") shall be subject to Section 4.02. Section 4.02. API RIGHT OF NEGOTIATION. TDS agrees to offer API the opportunity to negotiate regarding the purchase of the Eligible Future Paging Interests, subject to FCC approval of -6- any purchase, if required, PROVIDED that there are no restrictions on a sale of the interests, including without limitation any requirement that the interests be offered first to another person before being sold to API and PROVIDED, FURTHER, that, in the reasonable judgment of TDS, there are no material adverse consequences to TDS that may result therefrom. If API desires to acquire any such interests so offered, then for a period of 90 days (the "API Negotiating Period") beginning on the date of API's receipt of TDS's offer to negotiate, API shall have the right to negotiate with TDS about the price and other terms and conditions of the acquisition. If, notwithstanding the negotiations of the parties, TDS and API are not able to agree on the price and other terms and conditions of sale during the API Negotiating Period, then there shall be no restriction on TDS's ability to sell at any time thereafter any interest that was a subject of those negotiations, except that if, during the one-year period beginning on the last day of the API Negotiating Period, TDS proposes to sell to a third party any such interest for a price that is not more than the highest price API offered in writing for the interest during the API Negotiating Period, TDS shall first offer in writing to sell the interest to API upon the terms and conditions proposed for the sale to a third party. API shall have ten days within which to accept such offer by giving written notice of acceptance. If API does not timely accept such offer, TDS shall then be free to sell the interest to a third party during the remainder of the -7- one-year period, but only if the price and other terms and conditions of sale are in the aggregate, in the reasonable judgment of TDS, not less favorable to TDS than those proposed for the sale of the interest to API. After the expiration of the one-year period, there shall be no restrictions on TDS's ability to sell the interest. Section 4.03. FUTURE ISSUANCE OF SERIES A COMMON SHARES. The parties acknowledge and agree that there have been extensive and in depth discussions between the parties regarding the issuance of additional Series A Common Shares of API subsequent to the Offering to achieve the common goal of the parties of permitting such future issuance in any and all circumstances in which such issuance is requested by TDS and the board of directors of API determines, through the proper exercise of its business judgment, that such issuance would be for a proper corporate purpose. ARTICLE V REPRESENTATIONS AND WARRANTIES As an inducement to enter into this Agreement, each party represents to and agrees with the other that: (a) it is a corporation duly organized, validly existing and in good standing under the laws of its state -8- of incorporation and has all requisite corporate power to own, lease and operate its properties, to carry on its business as presently conducted and to carry out the transactions contemplated by this Agreement; (b) it has duly and validly taken all corporate action necessary to authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby; (c) this Agreement has been duly executed and delivered by it and constitutes its legal, valid and binding obligation enforceable in accordance with its terms (subject, as to the enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditors' rights generally from time to time in effect, and subject to equitable limitations on the availability of the remedy of specific performance); and (d) none of the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby or the compliance with any of the provisions of this Agreement will (i) conflict with or -9- result in a breach of any provision of its corporate charter or bylaws, (ii) breach, violate or result in a default under any of the terms of any agreement or other instrument or obligation to which it is a party or by which it or any of its properties or assets may be bound, or (iii) violate any order, writ, injunction, decree, statute, rule or regulation applicable to it or affecting any of its properties or assets. ARTICLE VI MISCELLANEOUS Section 6.01. TERMINATION OF OBLIGATIONS. Article III of this Agreement shall terminate and cease to be of any force and effect in respect of TDS at such time as TDS shall cease beneficially to own any securities of API; PROVIDED, HOWEVER, that such termination shall not affect the rights of any transferee under Section 3.04. Article IV of this Agreement shall terminate and cease to be of any force and effect in respect of TDS if, at any time after TDS becomes the owner of Series A Common Shares, par value $1.00 per share, of API, less than 500,000 Series A Common Shares are outstanding. Section 6.02. INJUNCTIONS. Irreparable damage would occur in the event that any of the provisions of this Agreement -10- were not performed in accordance with their specific terms or were otherwise breached. Therefore, the parties hereto shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any court having jurisdiction, such remedy being in addition to any other remedy to which they may be entitled at law or in equity. Section 6.03. SEVERABILITY. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, void or unenforceable. In the event that any such term, provision, covenant or restriction is so held to be invalid, void or unenforceable, the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. -11- Section 6.04. ASSIGNMENT. Except as provided otherwise in Section 3.04, and except by operation of law or in connection with the sale or transfer of all or substantially all the assets of a party hereto or of all or substantially all of the capital stock of API beneficially owned by TDS, this Agreement shall not be assignable, in whole or in part, directly or indirectly, by either party hereto without the prior written consent of the other, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void; PROVIDED, HOWEVER, that the provisions of this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective permitted successors and assigns. Section 6.05. FURTHER ASSURANCES. Subject to the provisions hereof, the parties hereto shall make, execute, acknowledge and deliver such other instruments and documents, and take all such other actions as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby. Subject to the provisions hereof, each of the parties shall, in connection with entering into this Agreement, performing its obligations hereunder and taking any and all actions relating hereto, comply with all applicable laws, regulations, orders and decrees, obtain all required consents and approvals and make all required filings with any governmental agency, other regulatory or administrative agency, commission or -12- similar authority and promptly provide the other with all such information as the other may reasonably request in order to be able to comply with the provisions of this sentence. Section 6.06. PARTIES IN INTEREST. Nothing in this Agreement expressed or implied is intended or shall be construed to confer any right or benefit upon any person, firm or corporation other than the parties and their respective permitted successors and assigns. Section 6.07. WAIVERS, ETC. No failure or delay on the part of the parties in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. No amendment, modification or waiver of any provision of this Agreement nor consent to any departure by the parties therefrom shall in any event be effective unless the same shall be in writing and signed by the chief executive officer or the chief financial officer of each party in the case of amendments or modifications, or by the chief executive officer or the chief financial officer of the waiving or consenting party, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. -13- Section 6.08. SETOFF. All payments to be made by either party under this Agreement shall be made without setoff, counterclaim or withholding except as specifically set forth herein with respect to cancellation by TDS of indebtedness owed by API, all of which are expressly waived. Section 6.09. CONFIDENTIALITY. Subject to any contrary requirement of law and the right of each party to enforce its rights hereunder in any legal action, each party shall keep strictly confidential and shall cause its employees and agents to keep strictly confidential, any information which it or any of its agents or employees may acquire pursuant to, or in the course of performing its obligations under, any provision of this Agreement; PROVIDED, HOWEVER, that such obligation to maintain confidentiality shall not apply to information which (a) at the time of disclosure was in the public domain not as a result of acts by the receiving party or (b) was in the possession of the receiving party at the time of disclosure. Section 6.10. ENTIRE AGREEMENT. This Agreement contains the entire understanding of the parties with respect to the transactions contemplated hereby. -14- Section 6.11. HEADINGS. Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement. Section 6.12. COUNTERPARTS. For the convenience of the parties, any number of counterparts of this Agreement may be executed by the parties hereto, and each such executed counterpart shall be, and shall be deemed to be, an original instrument. Section 6.13. NOTICES. All notices, consents, requests, instructions, approvals and other communications provided for herein shall be validly given, made or served, if in writing and delivered personally, by telegram or sent by registered mail, postage prepaid to: TDS at: 30 North LaSalle Street Suite 4000 Chicago, IL 60602-2507 Attention: President with separate copies at such address to the attention of the Chief Financial Officer and the Corporate Secretary API at: 1300 Godward Street, N.E. Suite 3100 Minneapolis, MN 55413-1767 Attention: President with separate copies at such address to the attention of the Chief Financial Officer and the Corporate Secretary -15- or to such other address as any party may, from time to time, designate in a written notice given in a like manner. Any notice given under this Agreement shall be deemed delivered when received at the appropriate address. Section 6.14. GOVERNING LAW. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Illinois applicable to contracts made and to be performed therein. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective officers, each of whom is duly authorized, all as of the day and year first above written. TELEPHONE AND DATA SYSTEMS, INC. By: /s/ LeRoy T. Carlson, Jr. ----------------------------------------- Name: LeRoy T. Carlson, Jr. Title: President AMERICAN PAGING, INC. By:/s/ John R. Schaaf ----------------------------------------- Name: John R. Schaaf Title: President Signature Page of Exchange Agreement dated as of January 1, 1994. -16- EXHIBIT A RESTATED CERTIFICATE OF INCORPORATION EXHIBIT B NON-API PAGING INTERESTS HELD BY CELLULAR SUBSIDIARIES AND AFFILIATES OF TDS:
Licensee Callsign City State - -------------------------------- -------- ------------- ------ United States Cellular Operating KNKC392 Klamath Falls OR Company of Medford Medford OR United States Cellular Operating KNKC278 Richland WA Company of Richland United States Cellular Operating KNKC280 Yakima WA Company of Yakima Benton WA
HELD BY TELEPHONE COMPANY SUBSIDIARIES AND AFFILIATES OF TDS:
Licensee Callsign City State - -------------------------------- -------- ------------- ------ Arcadia Telephone Company KNKC637 Cridersville OH WRW272 Arcadia OH Badger Telecom, Inc. KUS256 Chili WI Barnardsville Telephone Company KNKC990 Asheville NC Bonduel Telephone Company KUS279 Bonduel WI Calhoun City Telephone Company, KUS373 Derma MS Inc. Camden Telephone & Telegraph KNKB475 Kingsland GA Company, Inc. KNKB494 Kingsland GA Communication Corporation of KDS416 Hickory Corners MI Michigan Communications Corporation of KWT929 Danville IN Indiana Concord Telephone Exchange, Inc. KWU286 Concord TN
LICENSEE CALLSIGN CITY STATE - -------------------------------- -------- ------------- ------ Delta County Tele-Comm, Inc. KNKJ597 Hotchkiss CO KNKO605 Telluride CO Eastcoast Telecom, Inc. KDS776 Howards Grove WI Goshen Telephone Company, Inc. KDS431 Goshen AL Grantland Telecom, Inc. KWT854 Pennimore WI Happy Valley Telephone Company KNKD534 Anderson CA Home Telephone Company-Waldron KWT872 Waldron IN Kearsarge Telephone Company KUS308 New London NH KMP Telephone Company WRD432 Kerkhoven MN Ludlow Telephone Company KNKD927 Ludlow VT Mid-State Telephone Company KUC940 Spicer MN Midway Telephone Company KNKI323 Medford WI Peoples Telephone Company KUS361 Leesburg AL Scandinavia Telephone Company KUS264 Scandinavia WI St. Stephen Telephone Company WRW295 St. Stephen SC Tennessee Telephone Company KNKC980 Halls Crossroads TN KNKD778 La Vergne TN
1 March 13, 1998 EX-99.C7 7 EX-99(C)(7)/REVOLVING CREDIT AGREEMENT REVOLVING CREDIT AGREEMENT This Revolving Credit Agreement, dated as of January 1, 1994, is entered into between Telephone and Data Systems, Inc., an Iowa corporation (herein called "TDS"), and American Paging, Inc., a Delaware corporation (herein called the "Company"). WHEREAS, TDS owns certain of the issued and outstanding shares of the capital stock of the Company; and WHEREAS, in order to provide the Company with certain funds for certain specified purposes, the Company has requested TDS to extend loans to the Company in an aggregate amount not to exceed sixty million dollars ($60,000,000) and TDS is willing to extend such loans upon the terms and conditions of this Revolving Credit Agreement; NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows: Section 1. COMMITMENT OF TDS. Subject to the terms and conditions of this Revolving Credit Agreement, TDS, either directly or through one or more of its subsidiaries, agrees to lend to the Company on a revolving basis, during the period from the date hereof to the earlier to occur of (a) January 1, 1999 or (b) the date on which ownership of stock of API by TDS would no longer meet the 80 percent requirement of Section 1504(a)(2) of the Internal Revenue Code of 1986, as amended, after replacing "80 percent" with "70 percent" (the "Early Termination Date"), such amounts (which shall be $100,000 or an integral multiple thereof) as the Company may from time to time request (but not more frequently than once every five Business Days and not more than $3,000,000 per request unless otherwise agreed to by TDS) upon written notice given not less than five Business Days before the date of the loan, but not exceeding the principal amount of $60,000,000 at any one time outstanding. All loans from TDS, either directly or through one or more of its subsidiaries, to the Company or any of its Subsidiaries that were outstanding on December 31, 1993 shall be converted into and regarded for all purposes as a loan made under this Revolving Credit Agreement on January 1, 1994. Notwithstanding any other provision of this Revolving Credit Agreement, no other loan shall be required to be made hereunder if any Event of Default has occurred, or if any Default has occurred and is continuing. Section 2. NOTE EVIDENCING BORROWINGS. The borrowings hereunder by the Company shall be evidenced by a Note of the Company substantially in the form set forth in Exhibit A, with appropriate insertions by TDS on Schedule I thereto, and shall mature on the earlier of (a) December 31, 1998 or (b) the date six months after the Early Termination Date, unless the Company in the written notice requesting a loan specifies that an earlier date on which an interest payment is due shall be the maturity date for that loan. With respect to each borrowing hereunder, TDS is authorized to enter the details thereof on Schedule I to the Note, including, without limitation, the date of the borrowing, the amount of the borrowing, the earlier maturity date specified by the Company, if any, and principal prepayments and payments thereof, and all such entries shall be presumed to be correct absent clear and manifest error. Section 3. PAYMENT OF INTEREST AND PRINCIPAL. The Company agrees to pay interest on the unpaid principal amount of each borrowing hereunder at a rate per annum equal to 1 1/2% above the Prime Lending Rate as in effect from time to time, payable on the first days of January, April, July and October until the principal amount becomes due (whether at maturity, by acceleration or otherwise); and to pay on demand interest on any overdue principal and (to the extent permitted by applicable law) on any overdue installment of interest, at a rate per annum equal to 3 1/2% above the Prime Lending Rate as in effect from time to time. Interest shall be computed on the basis of a year of 360 days for the actual days elapsed (including the first day but excluding the last day) occurring in the period for which payable. Section 4. COMPANY'S RIGHT TO PREPAY BORROWINGS. The Company may from time to time and without premium prepay any -3- borrowing in whole or in part. The amount of any partial prepayment shall be $20,000 or an integral multiple thereof. Any prepayment of the full amount of any borrowing shall include accrued interest thereon. Each prepayment shall be applied first to outstanding interest due and then to principal beginning with the earliest borrowing. Any prepayment made upon any borrowing shall reinstate the Credit in the amount of such prepayment. Section 5. TERM OF REVOLVING CREDIT AGREEMENT. Unless sooner terminated as elsewhere provided herein, this Revolving Credit Agreement and TDS's obligation to furnish the Credit shall terminate on the earlier of (a) December 31, 1998 or (b) the Early Termination Date. Section 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. To induce TDS to grant the Credit and make loans hereunder, the Company represents and warrants that: (a) The Company and its Subsidiaries are corporations, each duly organized and existing, in good standing, under the laws of the jurisdiction of its incorporation, and each has the corporate power to own its property and to carry on its business as now being conducted. The Company is duly qualified to do business and is in good standing in each jurisdiction, if any, in which the character of the properties owned or leased by it therein or in -4- which the transaction of its business makes such qualification necessary, except for such failures to qualify or to be in good standing, if any, as in the aggregate are not material to the business or financial condition of the Company and its Subsidiaries taken as a whole. (b) The Company has full corporate power and authority to enter into this Revolving Credit Agreement, to make the borrowings hereunder, to execute and deliver the Note, and to incur the obligations provided for herein and therein, all of which have been duly authorized by all proper and necessary corporate action. (c) All authorizations, consents, approvals, registrations, exemptions and licenses with or from governmental authorities which are necessary for the borrowings hereunder, the execution and delivery of this Revolving Credit Agreement and the Note and the performance by the Company of its obligations hereunder and thereunder have been effected or obtained and are in full force and effect. (d) This Revolving Credit Agreement constitutes and the Note, when executed and delivered pursuant hereto for value received, will constitute, the valid and legally binding obligations of the Company enforceable in accordance with their terms, subject, as to enforcement, to bankruptcy, insolvency, -5- reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equitable principles. (e) There are no proceedings or investigations pending or threatened before any court or arbitrator or before or by any governmental authority in which there is a reasonable possibility of an adverse decision which would materially adversely affect the business or financial condition of the Company and its Subsidiaries taken as a whole or materially impair the ability of the Company to perform its obligations under this Revolving Credit Agreement or the Note. (f) There is no statute, regulation, rule, order or judgment, and no provision of any mortgage, indenture, contract, license, permit, agreement or other instrument or obligation binding on the Company or any Subsidiary or affecting their respective properties which would prohibit, conflict (except to the extent cured by waivers or consents or to the extent the consequences of such conflict would not, in the aggregate, be material to the financial condition of the Company and its Subsidiaries taken as a whole) with or in any way prevent the execution, delivery, or carrying out of the terms of this Revolving Credit Agreement and/or of the Note. -6- (g) The consolidated balance sheet of the Company and its Subsidiaries as of December 31, 1992, together with consolidated statements of income and expense, retained earnings, paid-in capital and surplus and changes in financial position for the fiscal year then ended, certified by Arthur Andersen & Co., and the unaudited consolidated balance sheet of the Company and its Subsidiaries as of September 30, 1993, together with consolidated statements of income and expense and changes in financial position for the nine months then ended and the accompanying footnotes, heretofore delivered to TDS, fairly present the financial condition of the Company and its Subsidiaries and the results of their operations and transactions in their surplus accounts as of the dates and for the periods referred to and have been prepared in accordance with generally accepted accounting principles consistently maintained by the Company and its Subsidiaries throughout the periods involved, except as otherwise indicated in such financial statements. There has been no material adverse change in the business, properties or financial condition of the Company and its Subsidiaries, taken as a whole, since December 31, 1992. (h) The Company and its Subsidiaries, taken as a whole, have good, valid and marketable title to their respective real, personal and other properties and assets material to the conduct of the business of the Company and its Subsidiaries and reflected on -7- the unaudited consolidated balance sheet of the Company and its Subsidiaries as at September 30, 1993, free and clear of all mortgages, liens, pledges, charges or encumbrances, except for those listed on Exhibit B. Section 7. COVENANTS OF THE COMPANY. (a) Until the expiration or termination of the Credit and thereafter until the Note and other liabilities of the Company hereunder are paid in full, the Company shall: (1) furnish to TDS (i) within 120 days after each fiscal year of the Company, a copy of the annual audit report of the Company and its Subsidiaries, prepared on a consolidated basis and in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding fiscal year, and signed by independent certified public accountants satisfactory to TDS, together with financial statements consisting of consolidated balance sheets of the Company and its Subsidiaries as of the end of such fiscal year and consolidated statements of income and expense, retained earnings, paid-in capital and surplus and changes in financial position of the Company and its Subsidiaries for such fiscal year; (ii) as soon as available but in no event more than 120 days after the close of each fiscal year of the -8- Company, a letter or opinion of the accountants who prepared the annual audit report relating to the Company and its Subsidiaries stating whether anything in such accountants' examination has revealed the occurrence of any event which constitutes a Default or an Event of Default and, if so, stating the facts with respect thereto (PROVIDED that the furnishing of such letter or opinion shall not require expansion of the scope of such accountants' examination); (iii) within 60 days after each quarter (except the last quarter) of each fiscal year of the Company, a copy of its unaudited financial statements, similarly prepared, consisting of at least a balance sheet as at the close of such quarter and a profit and loss statement and a statement of changes in financial position and analysis of surplus for such quarter and for the period from the beginning of such fiscal year to the close of such quarter, and signed by a proper accounting officer of the Company and accompanied by a certificate of said officer stating whether any event has occurred which constitutes a Default or an Event of Default; and (iv) from time to time, such other information as TDS may reasonably request; (2) permit, and cause each of its Subsidiaries to permit, TDS to have one or more of its officers, employees or agents, upon at least three days' notice, and at TDS's -9- expense, visit and inspect any of the properties of the Company or any Subsidiary and examine the minute books, books of account and other records of the Company or any Subsidiary and make copies thereof or extracts therefrom, and discuss its affairs, finances and accounts with its officers and employees and, at the request of TDS, with the Company's independent accountants, during normal business hours and at such other reasonable times and as often as TDS may reasonably desire; (3) maintain, and cause each of its Subsidiaries to maintain, insurance to such extent and against such hazards and liabilities as is commonly maintained by companies similarly situated; (4) pay, and cause each of its Subsidiaries to pay, when due all taxes, assessments, and other liabilities, except where the failure so to pay could not have a material adverse effect on the business, credit, financial condition or operations of the Company and its Subsidiaries taken as a whole or except and so long as contested in good faith; (5) preserve and maintain, and cause each of its Subsidiaries to preserve and maintain, its corporate existence and all of its material (considering the Company and its Subsidiaries taken as a whole) rights, privileges and Fran- -10- chises (including Franchises and any licenses granted by the Federal Communications Commission) necessary in the normal conduct of its business; PROVIDED that nothing herein contained shall prevent (i) the termination during any consecutive 12-month period of the business or corporate existence of any one or more Subsidiaries which comprise less than 5% of the consolidated assets of the Company and its Subsidiaries, or (ii) the Company or any Subsidiary from merging with another Person if the Company or such Subsidiary is the surviving corporation or the other Person is controlled by the Company or any Subsidiary, or any Subsidiary from merging into, consolidating with or transferring assets to the Company or another Subsidiary or any Person controlled by the Company or any Subsidiary, PROVIDED that the effect of such merger will not constitute a Default or Event of Default; (6) comply, and cause each Subsidiary to comply, with the requirements of all applicable laws, rules, regulations and orders of any governmental authority, a breach of which would materially and adversely affect the business or credit of the Company and its Subsidiaries taken as a whole, except where contested in good faith and by proper proceedings; (7) promptly notify TDS upon the discovery by any officer of the Company of the occurrence of any Default or -11- Event of Default, in each case describing the nature thereof and the action the Company proposes to take with respect thereto; and (8) cause each Subsidiary of the Company to comply with all sections of this Revolving Credit Agreement applicable to Subsidiaries to the same extent as if such Subsidiary were the Company. (b) Until the expiration or termination of the Credit and thereafter until the Note and other liabilities of the Company hereunder are paid in full: (1) the Company shall not purchase or redeem any shares of its stock (other than in connection with stock option or other employee benefit programs or where the redemption price is payable in shares of TDS furnished by TDS to the Company to enable it to effect the redemption), declare or pay any dividends thereon or make any other distribution to any of its shareholders other than normal dividends payable with respect to preferred stock, except to the extent that the cumulative sum of all such payments (excluding any payments to redeem shares of the Company's stock with shares of TDS furnished by TDS to the Company to enable it to effect the redemption) shall not exceed one-half of the cumulative consolidated net -12- income of the Company for the period from and after January 1, 1994 to and including the date of making any such payment; (2) the Company shall not permit its consolidated equity (excluding customer deposits and unearned revenues) to be less than 30% of its consolidated liabilities (including, without limitation, the Note, accounts payable and other liabilities); (3) the Company shall not incur or permit to exist any indebtedness for Borrowed Money, except (i) borrowings under this Revolving Credit Agreement, or (ii) indebtedness of the Company or which is guaranteed by the Company if, as to the Company's obligations thereunder, such indebtedness is subordinate to or on a parity with borrowings under this Revolving Credit Agreement; (4) the Company shall not create or permit to exist or allow any of its Subsidiaries to create or permit to exist any mortgage, pledge, title retention lien, or other encumbrance or security interest with respect to any assets now owned or hereafter acquired by the Company's Subsidiaries, except (i) liens in connection with the acquisition of property and attaching only to the property acquired and any licenses related thereto; (ii) liens for current taxes not delinquent or as security for taxes being contested in good faith, or in -13- connection with workmen and materialmen for sums not due or sums being contested in good faith; (iii) liens created in the normal course of business to procure surety bonds; (iv) liens on property or assets of a Subsidiary to secure obligations of such Subsidiary to the Company or another Subsidiary; (v) liens existing on real property owned or leased that are incidental to the conduct of business of the Company or the ownership of its property and assets and that were not incurred in connection with the borrowing of money or the obtaining of advances or credit, and which do not in the aggregate materially detract from the value of the assets of the Company and its Subsidiaries taken as a whole or materially impair the use thereof in the operation of the business of the Company and its Subsidiaries taken as a whole; (vi) liens existing on the date hereof as shown on Exhibit B; (vii) liens on assets of any corporation existing at the time such corporation is merged into or consolidated with a Subsidiary or becomes a Subsidiary and not created in contemplation of such event; (viii) liens existing on any asset prior to the acquisition thereof by a Subsidiary and not created in contemplation of such acquisition; (ix) liens arising out of the refinancing, extension, renewal or refunding of any debt secured by any lien permitted by any of the foregoing clauses of this Section, PROVIDED that such debt is not increased and is not secured by any additional assets; -14- and (x) deposits or pledges to secure obligations under workers' compensation, social security or similar laws, or under unemployment insurance; and (5) the Company shall not enter into or be a party to, or allow any of its Subsidiaries to enter into or be a party to, any contract for the purchase of materials, supplies, other property or services if such contract requires that payment be made by the Company or its Subsidiaries regardless of whether delivery is ever made of such materials, supplies, other property or services. Section 8. CONDITIONS OF LENDING. TDS shall not be required to make the first loan contemplated hereunder to be made after January 1, 1994, unless the Company shall have delivered to TDS: (a) a certified copy of the Company's Board of Directors' resolutions authorizing the execution and delivery of the Note and this Revolving Credit Agreement; (b) a certificate executed by the President or a Vice President of the Company and dated the date of the loan certifying (i) that the warranties and representations made in Section 6 by the Company are true and correct on such date, (ii) that no Event -15- of Default has occurred or would result from the Company obtaining the requested loan, and (iii) that no Default has occurred and is continuing; (c) the Note appropriately completed and duly executed; (d) such other documents as TDS shall reasonably request; and (e) an opinion from counsel to the Company that the Company is a corporation duly existing under the laws of the State of Delaware; that the Company has full power to execute and deliver this Revolving Credit Agreement, to borrow money hereunder, to execute and deliver the Note, and to perform its obligations under this Revolving Credit Agreement and the Note; that such actions have been duly authorized by all necessary corporate action and are not in conflict with any provision of law or of the charter or bylaws of the Company, nor in conflict with any agreement binding upon the Company of which such counsel has knowledge; and that this Revolving Credit Agreement is, and the Note when executed and delivered by the Company for value received will be, the legal and binding obligations of the Company. Section 9. EVENTS OF DEFAULT. The occurrence of any one or more of the following events, unless waived in writing by TDS -16- either before or after the occurrence, shall constitute an "Event of Default" hereunder: (a) the Company fails to pay the principal of or interest on the Note when and as the same shall become due and payable, whether at the due date thereof, by acceleration or otherwise, and in the case of interest such failure shall continue for more than five Business Days thereafter; (b) the Company, or during any consecutive 12-month period any one or more Subsidiaries which comprise more than 5% of the consolidated assets of the Company and its Subsidiaries, becomes insolvent or admits in writing its inability to pay its debts as they mature or applies for, consents to, or acquiesces in the appointment of a trustee or receiver for the Company or any such Subsidiary or any property thereof; in the absence of such application, consent, or acquiescence, a trustee or receiver is appointed for the Company or any such Subsidiary or for a substantial part of the property of any thereof and is not discharged within 30 days; or any bankruptcy, reorganization, debt arrangement, or other proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is instituted by or against the Company or any such Subsidiary, and if instituted against the Company or any such Subsidiary is consented to or -17- acquiesced in by the Company or any such Subsidiary or remains for 30 days undismissed; (c) any representation or warranty made by the Company herein is untrue in any material respect and such representation or warranty is not made true within 30 days after an officer of the Company becomes aware of such material untruth, or if such representation or warranty is not made true within 90 days after an officer of the Company becomes aware of such material untruth PROVIDED the Company is trying in good faith to make such representation or warranty true at all times after an officer of the Company becomes aware of such material untruth and the Company is taking whatever action is necessary to make such representation or warranty true; (d) any schedule, statement, report, notice, or writing furnished by the Company is untrue in any material respect on the date as of which the facts set forth are stated or certified if such document is not revised to be true and furnished by the Company to TDS within ten days after an officer of the Company becomes aware of such material untruth; (e) the Company breaches any of the terms, covenants or agreements herein set forth and such breach continues (i) for 30 days after notice to the Company, (ii) for 60 days after an officer -18- of the Company becomes aware of such breach, or (iii) for 90 days after an officer of the Company becomes aware of such breach in the case of a breach of any of the terms, covenants or agreements of Sections 7(a)(5), 7(a)(6), 7(b)(2), and 7(b)(4), PROVIDED that the Company is making a good faith effort to cure the breach at all times after an officer of the Company becomes aware of it; (f) any event shall occur or fail to occur if the effect of such occurrence or failure is to accelerate the maturity of any indebtedness for Borrowed Money (other than the indebtedness under this Revolving Credit Agreement) of the Company or any of its Subsidiaries, which indebtedness for Borrowed Money in the aggregate exceeds 10% of the Company's consolidated equity as reflected on the most recent consolidated balance sheet of the Company and its Subsidiaries, or to permit the holder thereof to cause such indebtedness to become due prior to the stated maturity thereof and such occurrence or failure shall not have been remedied or waived within any applicable period of grace; (g) the Company or any of its Subsidiaries defaults in the payment of any indebtedness for Borrowed Money other than the indebtedness under this Revolving Credit Agreement if the aggregate of such indebtedness for Borrowed Money, including the defaulted payment, exceeds 10% of the Company's consolidated equity as -19- reflected on the most recent consolidated balance sheet of the Company and its Subsidiaries; and (h) one of more judgments against the Company or any of its Subsidiaries or attachments against its property, which in the aggregate exceed $2,000,000, or the operation or result of which would be to interfere materially and adversely with the conduct of the business of the Company and its Subsidiaries taken as a whole, remain, unpaid, unstayed on appeal, undischarged, unbonded, or undismissed for a period of 30 days. The Company shall immediately advise TDS of any Event of Default or of any Default. If any Event of Default shall occur, whether the Event of Default shall then be continuing, TDS may declare the Credit to be terminated at any time thereafter and the Note to be due and payable, whereupon the Credit shall immediately terminate and the Note shall become immediately due and payable, both as to principal and interest, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the Note to the contrary notwithstanding (PROVIDED that TDS's commitment hereunder shall forthwith terminate, and the unpaid principal of and accrued interest on the loans and all other amounts owing hereunder shall automatically become and be forthwith due and payable upon the occurrence of any event specified in clause (b) above without any -20- such notice or other action, all of which are hereby expressly waived by the Company). TDS shall promptly advise the Company of any such declaration, but failure to do so shall not impair the effect of such declaration. Section 10. DEFINITIONS. (a) Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all financial statements and certificates and reports as to financial matters required to be delivered hereunder shall be prepared, in accordance with generally accepted accounting principles. (b) The following terms shall have the meanings ascribed to them below: "BORROWED MONEY" shall mean, as to any Person, any obligation of such Person to repay money, any indebtedness of such Person evidenced by notes, bonds, debentures or similar obligations, any obligation of such Person under a conditional sale or other title retention agreement, any obligation of others secured by any asset of such Person, whether or not such obligation is assumed by such Person, any obligation of others Guaranteed by such Person, all Capital Lease Obligations, and any reimbursement -21- obligations of such Person (whether contingent or otherwise) in respect of letters of credit, bankers acceptances and similar instruments, PROVIDED, HOWEVER, that Borrowed Money indebtedness shall not include performance bonds, franchise bonds, obligations to reimburse drawings under letters of credit issued in lieu of performance or franchise bonds and other obligations of like nature, trade payables, and accrued liabilities and subscriber advance payments and deposits, arising in the ordinary course of such Person's business. "BUSINESS DAY" shall mean any day on which commercial banks are not generally authorized or required to close in Chicago, Illinois. "CAPITAL LEASE OBLIGATIONS" shall mean, as to any Person, the obligations of such Person to pay rent or other amounts under a lease of (or other agreement containing the right to use) real and/or personal property which obligations are required to be classified and accounted for as a capital lease on the balance sheet of such Person under generally accepted accounting principles and, for the purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with generally accepted accounting principles. -22- "CODE" shall mean the Internal Revenue Code of 1986, as amended. "CONTROL" (including, with its correlative meanings, "controlled by" and under "common control with") shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person. "CREDIT" shall mean TDS's commitment to loan funds to the Company pursuant to the terms and conditions of this Revolving Credit Agreement. "DEFAULT" shall mean any event which, with the giving of notice or the lapse of time, or both, would constitute an Event of Default. "DOLLARS" (including "$") shall mean lawful money of the United States of America. "FRANCHISE" shall mean a franchise, license, authorization or right to construct, own, promote, extend and/or otherwise exploit any System operated or to be operated by the Company or any of its Subsidiaries granted by the Federal Communications Commission, by any foreign government, or by any state, county, city, town, village or other government authority -23- but shall not include any such franchise, license, authorization or right which is incidentally required for the purpose of installing, constructing or extending any System. "GUARANTEE" by any Person shall mean any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any indebtedness for Borrowed Money or other obligation of any other Person, or in any manner providing for the payment of any indebtedness for Borrowed Money or other obligation of any other Person, or otherwise protecting the holder of such indebtedness against loss (whether by virtue of partnership arrangements, agreements to purchase assets, goods, securities or services, or to take-or-pay or otherwise), PROVIDED that the term "guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The term "guarantee" used as a verb shall have a correlative meaning. "NOTE" shall mean the promissory note of the Company to TDS substantially in the form of Exhibit A hereto, evidencing borrowings made under this Revolving Credit Agreement. "PERSON" shall mean an individual, a corporation, a partnership, a joint venture, a trust or unincorporated organization, a joint stock company or similar organization, a -24- government or any political subdivision thereof, or any other legal entity. "PRIME LENDING RATE" shall mean the rate of interest announced by LaSalle National Bank of Chicago ("LaSalle") from time to time as its prime rate. If no such rate of interest is announced by LaSalle at any time, the Prime Lending Rate shall be the rate of interest announced by THE WALL STREET JOURNAL from time to time during such time as the prime rate. "SUBSIDIARY" shall mean any Person other than the Company whose accounts are included in the consolidated financial statements of the Company and its Subsidiaries prepared in accordance with generally accepted accounting principles in effect at the time. "SYSTEM" shall mean the assets constituting a radio paging system serving subscribers within a geographical area covered by one or more Franchises. Section 11. MISCELLANEOUS. (a) No delay on the part of TDS or the holder of the Note in the exercise of any power or right shall operate as a waiver thereof, nor shall any single or partial exercise of any -25- power or right preclude other or further exercise thereof, or the exercise of any other power or right. No waiver by TDS shall be valid unless it is in writing and signed by the chief executive officer or the chief financial officer of TDS and then only to the extent specifically set forth in such writing. (b) All notices, consents, requests, instructions, approvals and other communications provided for herein shall be validly given, made or served, if in writing and delivered personally, by telegram or sent by registered mail, postage prepaid to: TDS at: 30 North LaSalle Street Suite 4000 Chicago, Illinois 60602-2507 Attention: President with separate copies at such address to the attention of the Chief Financial Officer and the Corporate Secretary API at: 1300 Godward Street, N.E. Suite 3100 Minneapolis, MN 55413-1767 Attention: President with separate copies at such address to the attention of the Chief Financial Officer and the Corporate Secretary or to such other address as any party may, from time to time, designate in a written notice given in a like manner. Any notice given under this Agreement shall be deemed delivered when received at the appropriate address. -26- (c) The Company agrees to reimburse TDS upon demand for all reasonable out-of-pocket expenses (including reasonable attorney's fees and legal expenses) incurred by TDS in enforcing the obligations of the Company hereunder or under the Note and to pay, and save TDS harmless from all liability for, any stamp or other taxes which may be payable with respect to the execution or delivery of this Revolving Credit Agreement or the issuance of the Note, which obligations of the Company shall survive any termination of this Revolving Credit Agreement. (d) This Revolving Credit Agreement and the Note shall be a contract made under and governed by the laws of the State of Illinois. (e) This Revolving Credit Agreement shall be binding upon the Company and TDS and their respective successors and assigns, and shall inure to the benefit of the Company and TDS and the successors and assigns of TDS. (f) TDS may at any time sell, assign, transfer, grant participations in, or otherwise dispose of all or any portion of its loans or the Note or of its Credit or of its right, title interest therein or thereto or in or to this Revolving Credit Agreement (collectively, "Participations") to any other Person ("Participant"). The Company agrees that any Participant may -27- exercise any and all rights of banker's lien, set-off and counterclaim with respect to its Participation as fully as if such Participant were the maker of a loan in the amount of its Participation. TDS shall be released from its obligations in connection with any assignment of its rights hereunder if such obligations are expressly assumed by the assignee of such rights. TDS shall promptly furnish the Company with notice of any assignment or Participation hereunder, specifying in each case the identity of the assignee or Participant and the amounts and terms of the assignment or Participation. Any provision of this Revolving Credit Agreement may be amended, modified or waived only by an instrument or instruments in writing and signed by the chief executive officer or chief financial officer of TDS and the chief executive officer or chief financial officer of the Company. (g) This Revolving Credit Agreement may be executed in any number of counterparts and by different parties in separate counterparts. Each counterpart shall be deemed an original and all counterparts taken together shall constitute one instrument. (h) All representations, warranties and covenants of the parties shall survive the delivery of the Note and the furnishing of the Credit and shall expire upon the termination of this Revolving Credit Agreement. -28- (i) If any provision of this Revolving Credit Agreement is held prohibited, invalid or unenforceable under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Revolving Credit Agreement or the Note. (j) Subject to the provisions hereof, TDS and the Company shall each make, execute, acknowledge and deliver such other instruments and documents, and take all such other actions as may be reasonably required in order to effectuate the purposes of this Revolving Credit Agreement and to consummate the transactions contemplated hereby. Subject to the provisions hereof, TDS and the Company shall each, in connection with entering into this Revolving Credit Agreement, performing its obligations hereunder and taking any and all actions relating hereto, comply with all applicable laws, regulations, orders and decrees, obtain all required consents and approvals and make all required filings with any governmental agency, other regulatory or administrative agency, commission or similar authority and promptly provide the other with all such information as the other may reasonably request in order to be able to comply with the provisions of this sentence. (k) Nothing in this Revolving Credit Agreement expressed or implied is intended or shall be construed to confer any right or -29- benefit upon any Person other than TDS and the Company and their respective permitted successors and assigns. (l) Subject to any contrary requirement of law and the right of each party to enforce its rights hereunder in any legal action, each party shall keep strictly confidential and shall cause its employees and agents to keep strictly confidential, any information which it or any of its agents or employees may acquire pursuant to, or in the course of performing its obligations under, any provision of this Revolving Credit Agreement; PROVIDED, HOWEVER, that such obligation to maintain confidentiality shall not apply to information which (i) at the time of disclosure was in the public domain not as a result of acts by the receiving party, or (ii) was in the possession of the receiving party at the time of disclosure. (m) This Revolving Credit Agreement contains the entire understanding of the parties with respect to the transactions contemplated hereby. (n) Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any provision of this Revolving Credit Agreement. -30- IN WITNESS WHEREOF, the parties have executed this Revolving Credit Agreement in Chicago, Illinois, as of the day and year first above written. TELEPHONE DATA AND SYSTEMS, INC. By: /s/ LeRoy T. Carlson, Jr. --------------------------------- Name: LeRoy T. Carlson, Jr. --------------------------------- Title: President ------------------------------- AMERICAN PAGING, INC. By: /s/ John R. Schaaf --------------------------------- Name: John R. Schaaf --------------------------------- Title: President ------------------------------- Signature Page of Revolving Credit Agreement dated as of January 1, 1994 -31- EXHIBIT A REVOLVING CREDIT NOTE $ 60,000,000.00 __________, 1994 For value received, the undersigned, American Paging, Inc., a Delaware corporation (herein called the "Company"), hereby promises to pay to the order of Telephone and Data Systems, Inc., an Iowa corporation (herein called "TDS"), on or before the earlier to occur of (a) December 31, 1998 or (b) the date six months after the Early Termination Date (as defined in the Revolving Credit Agreement referred to herein), the sum of all amounts borrowed under the Revolving Credit Agreement and evidenced hereby, the total of which borrowings at any one time outstanding is not to exceed Sixty Million Dollars pursuant to the terms of the Revolving Credit Agreement. The Company also promises to pay interest on the unpaid principal amount of this Note outstanding at a rate per annum equal to 1 1/2% above the Prime Lending Rate (as defined in the Revolving Credit Agreement) and as in effect from time to time, payable on the first days of January, April, July and October of each year until the principal amount becomes due (whether at maturity, by acceleration or otherwise); and to pay on demand interest on any overdue principal and (to the extent permitted by applicable law) on any overdue installment of interest, at a rate per annum equal to 3 1/2% above the Prime Lending Rate as in effect from time to time. All payments of principal and interest under this Note shall be made in lawful money of the United States at the main office of TDS in Chicago, Illinois, or at such other place or places as TDS may designate in writing to the Company, for the account of TDS, as provided in the Revolving Credit Agreement. The Company expressly waives any presentment, demand, protest or notice in connection with this Note, now or hereafter required by applicable law. This Note is the Note referred to in, and is subject to, the terms and provisions of, the Revolving Credit Agreement dated as of January 1, 1994 (as the same may be amended, modified or supplemented from time to time, herein called the "Revolving Credit Agreement"), executed by the Company and accepted by TDS, to which reference is hereby made for a statement of the terms and conditions under which this Note may be prepaid. All payments on account of the principal amount of this Note shall, prior to transfer hereof, be recorded by TDS on Schedule I attached hereto. AMERICAN PAGING, INC. By: --------------------------------- Name: ------------------------------- Title: ------------------------------ SCHEDULE I
Principal Earlier Principal Date Amount Maturity Date Amount of of Specified by Prepaid Borrowing Borrowing the Company or Paid - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- --------- - -------- --------- ---------- ---------
EXHIBIT B MORTGAGES, LIENS, PLEDGES, CHARGES AND ENCUMBRANCES OF THE COMPANY AND ITS SUBSIDIARIES NONE. EX-99.C8 8 EX-99(C)(8)/AMENDMENT TO REVOLVING CREDIT AGRMNT [Letterhead of TDS] March 5, 1997 American Paging, Inc. Suite 3100 1300 Godward Street, N.E. Minneapolis, Minnesota 55413 Re: Revolving Credit Agreement dated January 1, 1994, as amended (the "Revolving Credit Agreement"), between American Paging, Inc. (the "Company") and Telephone and Data Systems, Inc. ("TDS") Ladies and Gentlemen: This letter will constitute TDS's agreement to amend the Revolving Credit Agreement, effective January 1, 1997, by changing all references to "$150,000,000" in the Revolving Credit Agreement to "$180,000,000." All other terms and conditions of the Revolving Credit Agreement shall remain in full force and effect. TDS also hereby waives all defaults or events of default by the Company under the Revolving Credit Agreement resulting from the violation of the covenant in Section 7(b)(2) of the Revolving Credit Agreement or the insolvency of the Company from the respective dates from any such default or event of default through January 1, 1999. Please acknowledge your agreement to this amendment by executing a copy of this letter and return it to the undersigned. Very truly yours, TELEPHONE AND DATA SYSTEMS, INC. By: /s/ Murray L. Swanson ------------------------------ Murray L. Swanson Executive Vice President - Finance American Paging, Inc. March 5, 1997 Page 2 Accepted and agreed to as of the date set forth above. AMERICAN PAGING, INC. By: /s/ Dennis M. Beste ------------------------------ Dennis M. Beste Vice President - Finance, Chief Financial Officer and Treasurer EX-99.C10 9 EX-99(C)(10)/INTERCOMPANY AGREEMENT INTERCOMPANY AGREEMENT This Intercompany Agreement, dated as of January 1, 1994, is entered into between Telephone and Data Systems, Inc., an Iowa corporation ("herein called TDS"), and American Paging, Inc., a Delaware corporation (herein called "API"). WHEREAS, TDS owns all of the issued and outstanding shares of the capital stock of API; WHEREAS, in connection with the execution and delivery of this Agreement, API is selling in an underwritten public offering (the "Offering") a number of its Common Shares, par value $1.00 per share, as a result of which API will have a class of publicly held securities and API will be subject to the reporting and other requirements of the Securities Exchange Act of 1934 (the "Exchange Act"); and WHEREAS, the parties desire to provide for certain transactions and relationships between the parties hereto after the date hereof; NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows: ARTICLE I DEFINITIONS As used in this Agreement, the terms set out below shall have the indicated meanings (such meanings applying equally to the singular and plural forms thereof): "AFFILIATE" shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in effect on January 1, 1994. "API GROUP" shall mean API and all Subsidiaries of API. "GROUP" shall mean the API Group or the TDS Group. A "PERSON" shall mean an individual, a corporation, a partnership, a joint venture, a trust or unincorporated organization, a joint stock company or similar organization, a governmental or any political subdivision thereof, or any other legal entity. "SUBSIDIARY", with respect to a specified person, shall mean any person whose accounts are included in the consolidated financial statements of the specified person and its Subsidiaries prepared in accordance with generally accepted accounting principles in effect at the time. "TDS GROUP" shall mean TDS and all Subsidiaries of TDS except the members of the API Group. ARTICLE II SERVICES AND OTHER MATTERS Section 2.01. SERVICES TO BE MADE AVAILABLE. Subject to the other provisions of this Article II, TDS, either directly or through other members of the TDS Group, shall make available to members of the API Group, and API, either directly or through other members of the API Group, shall make available to members of the TDS Group, from time to time, services (the "Services") relating to the following: (a) operations, including engineering, governmental relations, systems and procedures, information systems, data processing and other computer services, emergency assistance, education and training, technology assessment, research and development, construction, purchasing, safety, maintenance and consulting; (b) marketing, including strategy development, market analysis, competitive analysis, market planning, product policy, sales, advertising, pricing and customer relations; -3- (c) human resources, including selection, hiring, labor relations, savings, retirement and other employee benefits, compensation, and incentive plans; (d) accounting, including internal auditing, accounting compliance, record keeping, consolidations, taxes, budgeting, and internal and external reporting; (e) customer services, including billing, credit and collections; (f) finance, including financial planning and analysis, capital allocation, treasury, investment management, investor relations, acquisitions and other corporate development; (g) general administration, including corporate planning, security and risk management, insurance, real estate, printing, computer services, legal, public relations and other services; and (h) other matters. Section 2.02. FURNISHING OF SERVICES. Unless TDS shall otherwise determine, or unless Services are provided pursuant to a separate written agreement between a member of the TDS Group and a -4- member of the API Group relating to the specific services to be provided, Services provided hereunder to members of the API Group by members of the TDS Group shall be provided in conformity with the customary practices of the TDS Group for furnishing services to TDS and its Subsidiaries at the time the Services are provided. Services provided hereunder to the TDS Group by members of the API Group shall be provided on request of any officer of TDS desiring Services to be provided to the members of the TDS Group. Section 2.03. LIMITATION ON OBLIGATION TO PROVIDE SERVICES. Notwithstanding the provisions of Section 2.01, neither TDS nor API need make available any Services to the extent that doing so would unreasonably interfere with the performance by any employee of such employee's duties for such employee's employer or otherwise cause unreasonable burden to such employee's employer. Section 2.04. PAYMENT FOR SERVICES. Unless otherwise provided in a separate written agreement between a member of the TDS Group and a member of the API Group relating to specific services, Services provided to members of the API Group by members of the TDS Group shall be charged and paid for in conformity with the customary practices of the TDS Group for charging TDS's non-telephone company Subsidiaries (other than the members of the API Group) for Services at the time the Services are provided. For providing Services requested pursuant to Section 2.02, API shall be -5- entitled to receive from TDS, upon presentation of reasonably detailed invoices therefor, payment for the salaries of its employees and agents assigned to render such Services (plus 40% of the cost of such salaries in respect of overhead) for the time spent rendering such Services (excluding unproductive travel time), determined on a per hour basis, and all travel and out-of-pocket expenses incurred by such employees in rendering such Services, but shall not be entitled to receive any other payment for such Services. Section 2.05. EQUIPMENT AND MATERIALS. API shall, and shall cause the other members of the API Group to, purchase materials and equipment from members of the TDS Group on the same basis as materials and equipment are purchased by members of the TDS Group from other members of the TDS Group. Section 2.06. INDEPENDENT ACCOUNTANTS. API shall, and shall cause the other members of the API Group to, engage the firms of independent public accountants either selected for them by TDS, or selected by the API audit committee and acceptable to TDS, for purposes of auditing the financial statements of the members of the API Group and providing tax, data processing and all other accounting services and advice. The foregoing shall not apply, however, in the case of a member of the API Group that is a partnership if the member of the API Group that is the partner of -6- the partnership does not have the contractual right or power to select the firm of independent public accountants to be engaged by the partnership for the foregoing purposes. Section 2.07. TRANSFEREE OF API ASSETS. Without the prior written consent of TDS, API shall not, nor shall API permit any member of the API Group to, sell, merge or transfer assets or property representing more than 15% of the consolidated assets of the API Group as reflected on the most recent consolidated balance sheet of the API Group, unless the other party to the sale, merger or transfer agrees to be subject to the provisions of this Article II and enters into an appropriate agreement to that effect with TDS. ARTICLE III ACCESS TO INFORMATION AND WITNESSES Section 3.01. INFORMATION AND WITNESSES TO BE MADE AVAILABLE. For purposes of this Article III, the term "Information" means any books, records, contracts, instruments, data, facts and other information in the possession or under the control of either the members of the TDS Group or of the API Group necessary or desirable for use in legal, administrative or other proceedings and, in the case of Information to be provided by the API Group to TDS, for auditing, accounting and tax purposes. TDS shall provide to API and API shall provide to TDS, upon the other's -7- written request, at reasonable times, full and complete access to, and duplication rights with respect to, any and all such Information as the other may reasonably request and require, and TDS shall use its best efforts to make available to API, and API shall use its best efforts to make available to TDS, upon the other's written request, the officers, directors, employees and agents of the members of the TDS Group and of the API Group, respectively, as witnesses to the extent that such persons may reasonably be required in connection with any legal, administrative or other proceedings in which members of the API Group or members of the TDS Group, as the case may be, may from time to time be a party. Section 3.02. LIMITATIONS ON OBLIGATIONS TO PROVIDE ACCESS TO INFORMATION AND WITNESSES. Notwithstanding the provisions of Section 3.01, neither TDS nor API need provide any Information or make available witnesses to the other (a) to the extent that doing so would (i) unreasonably interfere with the performance by any person of such persons's duties to the party to which a request under Section 3.01 is made or otherwise cause unreasonable burden to such party, (ii) result in a waiver of any attorney-client or work product privilege of such party or its legal counsel, (iii) require either TDS or API to provide any Information which relates to the subject matter of any legal, administrative or other proceeding in which any member of the TDS -8- Group and any member of the API Group are adverse parties, or (iv) result in any breach of any agreement with a third party; and (b) with respect to any legal, administrative or other proceeding which has been finally determined by any court or other body having jurisdiction and which shall not be subject to judicial review (by appeal or otherwise). Each party shall use reasonable efforts, if requested by the other, to obtain waivers of any provision of any agreement which restricts the provision of any Information, and shall use reasonable efforts to provide in any future agreements that Information may be provided to Affiliates of such party. Section 3.03. PAYMENT FOR INFORMATION AND WITNESSES. (a) Subject to the provisions of paragraph (b) of this Section, the party providing Information or making available witnesses pursuant to Section 3.01 shall be entitled to receive from the other party payment on the same basis as the party is entitled to receive payment for Services rendered pursuant to Article II hereof. (b) API shall provide Information and make available witnesses pursuant to Section 3.01 hereof free of charge in connection with (i) any legal, administrative or other proceeding in respect of, or any audit or investigation by any applicable taxing authority of, the consolidated tax returns of TDS which -9- shall include within its scope any audit or investigation with respect to any member of the API Group; and (ii) any legal, administrative or other proceeding relating to or arising out of Information provided by any member of the API Group to TDS and included in or relied on in preparing TDS's consolidated financial statements, whether before, at or after the date hereof (audited or unaudited). ARTICLE IV MAIL AND OTHER COMMUNICATIONS TDS and API each authorize the members of the other's Group to receive and open all mail, telegrams, packages and other communications received by any member of its Group and not unambiguously intended for members of the other's Group or any of the officers, directors, employees and agents of any member of the other's Group specifically in their capacities as such, and to retain the same to the extent that they relate to the business of the receiving party. To the extent that any such mail, telegrams, packages and other communications so received does not relate to the business of the receiving party but does relate to the business of the other party's Group, or to the extent that they relate to both, the receiving party shall, unless a prior method for the delivery of such communications shall have been agreed upon between the parties, promptly contact the other party by telephone for the -10- delivery instructions and such mail, telegrams, packages or other communications (or, in case the same is related to both businesses, copies thereof) shall promptly be forwarded to the other party in accordance with its delivery instructions. ARTICLE V LITIGATION Section 5.01. API LIABILITIES. With respect to any litigation, proceeding or investigation by or before any court or governmental agency or body which may be commenced or threatened against members of the TDS Group after the date hereof which arises out of or is based upon the past, present or future business or operations of members of the API Group but not the TDS Group, at TDS's option API and TDS will use their best efforts to have a member of the API Group substituted in the place of and for members of the TDS Group and to have members of the TDS Group removed as parties as promptly as is reasonably practicable. Pending such substitution, and in cases where such substitution cannot be effected, API shall promptly assume and direct the defense, prosecution and/or settlement of the claims involved, employing for this purpose counsel satisfactory to TDS, and shall pay all expenses related thereto. To the extent that any such expenses are paid by members of the TDS Group, API shall promptly reimburse each member therefor. -11- Section 5.02. TDS LIABILITIES. With respect to any litigation, proceeding or investigation by or before any court or governmental agency or body which may be commenced or threatened against members of the API Group after the date hereof which arises out of or is based upon the past, present or future business or operations of members of the TDS Group but not the API Group, at API's option API and TDS will use their best efforts to have a member of the TDS Group substituted in the place of and for members of the API Group and to have members of the API Group removed as parties as promptly as is reasonably practicable. Pending such substitution, and in cases where such substitution cannot be effected, TDS shall promptly assume and direct the defense, prosecution and/or settlement of the claims involved, employing for this purpose counsel selected by TDS, and shall pay all expenses related thereto. To the extent that any such expenses are paid by members of the API Group, TDS shall promptly reimburse API therefor. Section 5.03. INDEMNIFICATION AND PARTICIPATION. The provisions of Sections 5.01 and 5.02 shall not limit or affect the indemnification provided by Article VI, including the right of any indemnified party to participate in the defense of any action and the limitations on settlement rights. -12- Section 5.04. FUTURE LITIGATION. Subject to Article VII, with respect to any litigation, proceeding and investigation which may arise subsequent to the date hereof and which may result in joint liability on the part of both TDS and API, TDS shall have the right to make all decisions regarding the defense thereof, the sharing of expenses in connection therewith and other matters relating to such litigation, proceeding and investigation, and API agrees to cooperate fully to implement any decision made by TDS in connection therewith and to pay its share of any liability, expense or loss arising out of or relating to such litigation, proceeding and investigation as the same shall be incurred. Section 5.05. AFFILIATES OF TDS AND API. As used in Section 5.04, TDS shall include any Affiliates of TDS (other than any member of the API Group) and API shall include any Affiliate of API (other than any member of the TDS Group). ARTICLE VI ALLOCATION OF LIABILITIES AND INDEMNIFICATION Section 6.01. TDS SECONDARY OBLIGATIONS. (a) With respect to all the guarantees and other obligations and liabilities of TDS (collectively, the "TDS Secondary Obligations") in connection with any indebtedness, lease, -13- contract or other obligation in respect to which any member of the API Group is the party primarily liable and with respect to which TDS has obligations which are monetary in nature, including but not limited to those listed on Schedule I hereto, but excluding any such indebtedness, lease, contract or other obligation incurred after January 1, 1994 at the specific request of TDS, API will use its best efforts to have TDS removed as such guarantor or obligor as promptly as practicable. (b) In addition to and not in substitution for the indemnity from API to TDS under Section 6.03(a) hereof, if TDS has not been removed as guarantor or obligor with respect to all the TDS Secondary Obligations by December 31, 1994, API shall pay TDS on December 31, 1994, and on each December 31 thereafter, an amount equal to one percent of the then present value of the maximum amounts TDS could be required to pay on account of all TDS Secondary Obligations. Such present value shall be determined by discounting such maximum amounts at a rate per annum equal to the Prime Lending Rate (as defined in that certain Revolving Credit Agreement dated as of January 1, 1994 (the "Revolving Credit Agreement") between API and TDS) in effect on the December 15 preceding the applicable December 31, compounded annually. (c) TDS agrees that it will not exercise any right that it has, acting either alone or together with another person, to -14- become substituted, either alone or together with another person, as the lessee under any lease listed on Schedule I hereto, so long as API is not in breach of its obligations under paragraphs (a) and (b) of this Section 6.01, no event of default has occurred and is continuing under the lease, and no event of default has occurred and is continuing under the Revolving Credit Agreement. Section 6.02. OBLIGATIONS REGARDING CERTAIN AGREEMENTS. API will not, nor will it permit or cause any member of the API Group to, take or refrain from taking any action that would cause TDS or any of its Subsidiaries or Affiliates to breach, violate or be in default under any of the terms of any agreement or other instrument or obligation to which TDS or any of its Subsidiaries or Affiliates is a party or by which it or any of them or any of its or their properties or assets may be bound and of which API is given notice at any time. Schedule II lists those agreements of which API has been given notice as of the date of this Agreement. Section 6.03. INDEMNIFICATION. (a) API shall indemnify and hold harmless each member of the TDS Group and any person who is or was a director, officer, employee or agent of any such member, or is or was serving at the request of any such member as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or -15- other enterprise, from and against any and all losses, claims, damages and liabilities, and shall promptly reimburse them, as and when incurred, for any legal or other costs and expenses (including, without limitation, reasonable attorneys' fees, any amount paid in settlement of any litigation commenced or threatened, if such settlement is effected with the written consent of API, and any and all expenses reasonably incurred in investigating, preparing or defending any litigation, commenced or threatened, or any claim whatsoever or in enforcing API's obligations under this indemnity) arising out of or related in any manner to (i) the conduct by members of the API Group of their respective businesses prior to, on or after the date hereof (other than any such loss, claim, damage or liability resulting from TDS's gross negligence or willful misconduct); (ii) any breach by API of its representations, warranties and agreements made herein; or (iii) any TDS Secondary Obligations. (b) TDS shall indemnify and hold harmless each member of the API Group and any person who is or was a director, officer or employee of any such member, from and against any and all losses, claims, damages and liabilities, and shall promptly reimburse them, as and when incurred, for any legal or other costs and expenses (including, without limitation, reasonable attorneys' fees, any amount paid in settlement of any litigation commenced or threatened, if such settlement is effected with the written consent -16- of TDS, and any and all expenses reasonably incurred in investigating, preparing or defending any litigation, commenced or threatened, or any claim whatsoever) arising out of or relating in any manner to (i) the conduct by members of the TDS Group of their respective businesses prior to the date hereof (other than any such loss, claim, damage or liability resulting from API's gross negligence or willful misconduct); and (ii) any breach by TDS of its representations and warranties made herein. Section 6.04. PROCEDURE FOR INDEMNIFICATION. Each party indemnified under paragraph (a) or (b) of Section 6.03 shall, promptly after receipt of notice of the commencement of any action against such indemnified party in respect of which indemnity may be sought, notify the indemnifying party in writing of the commencement thereof. The omission of any indemnified party so to notify an indemnifying party of any such action shall not relieve the indemnifying party from any liability in respect of such action which it may have to such indemnified party on account of the indemnity agreement contained in paragraphs (a) or (b) of Section 6.03, unless the indemnifying party was prejudiced by such omission, and in no event shall relieve the indemnifying party from any other liability which it may have to such indemnified party. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate -17- therein and, to the extent that it may wish, to assume the defense thereof, with counsel satisfactory in any case to TDS. If the indemnifying party so assumes the defense thereof, it may not agree to any settlement of such action as the result of which any remedy or relief, other than monetary damages for which the indemnifying party shall be responsible hereunder, shall be applied to or against the indemnified party, without the prior written consent of the indemnified party. If the indemnifying party does not assume the defense thereof, it shall be bound by any settlement to which the indemnified party agrees, irrespective of whether the indemnifying party consents thereto. If any settlement of any claim is effected by the indemnified party prior to commencement of any action relating thereto, the indemnifying party shall be bound thereby only if it has consented in writing thereto. In any action hereunder, the indemnified party shall continue to be entitled to participate in the defense thereof, with counsel satisfactory to TDS, even if the indemnifying party has assumed the defense thereof, and the indemnifying party shall not be relieved of the obligation hereunder to reimburse the indemnified party for the costs thereof. Section 6.05. SURVIVAL OF INDEMNIFICATION; PRIOR KNOWLEDGE. The indemnification provisions of this Article VI shall survive the Offering and any investigation made at any time by either of the parties hereto. Actual prior knowledge by any -18- indemnified party with respect to any matter as to which indemnification may be sought shall not constitute a defense to any indemnified party's rights to indemnification pursuant to the provisions hereof. ARTICLE VII LEGAL COUNSEL In any case where legal counsel is to be employed to represent the parties for any purpose under this Agreement, TDS shall have the right to select such counsel. The parties recognize that API shall have the right to request to discuss such selection with TDS. If in the judgment of TDS it would be appropriate to do so, TDS may select the same counsel to represent both parties in connection with any matter, and API hereby consents in advance to any such joint representation; PROVIDED, HOWEVER, that if any counsel selected for such joint representation is of the opinion at any time that, in light of the circumstances then existing, it would not be able to discharge its professional responsibilities properly in undertaking or in continuing such joint representation, then TDS shall select separate counsel to represent API in the matter. Except as otherwise specifically provided in Section 6.03(b), API shall be solely responsible for the fees and expenses of any separate counsel so selected, and TDS shall have no responsibility or liability whatsoever with respect thereto. If -19- the parties use the same counsel, each of the parties shall be responsible for the portion of the fees and expenses of such counsel determined by such counsel to be allocable to each of the parties. ARTICLE VIII REPRESENTATIONS AND WARRANTIES As an inducement to enter into this Agreement, each party represents to and agrees with the other that: (a) it is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has all requisite corporate power to own, lease and operate its properties, to carry on its business as presently conducted and to carry out the transactions contemplated by this Agreement; (b) it has duly and validly taken all corporate action necessary to authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby; (c) this Agreement has been duly executed and delivered by it and constitutes its legal, valid and binding obligation -20- enforceable in accordance with its terms (subject, as to the enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditors' rights generally from time to time in effect, and subject to equitable limitations on the availability of the remedy of specific performance); and (d) none of the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby or the compliance with any of the provisions of this Agreement will (i) conflict with or result in a breach of any provision of its corporate charter or bylaws, (ii) breach, violate or result in a default under any of the terms of any agreement or other instrument or obligation to which it is a party or by which it or any of its properties or assets may be bound, or (iii) violate any order, writ, injunction, decree, statute, rule or regulation applicable to it or affecting any of its properties or assets. ARTICLE IX MISCELLANEOUS Section 9.01. MATTERS RELATING TO THE OFFERING. API shall pay all costs and expenses relating to the Offering. Each of -21- the parties shall indemnify the other with respect to the Offering in the same manner as set forth in the Registration Rights Agreement between the parties dated as of the date hereof. Section 9.02. DISPOSAL OF API SECURITIES. TDS shall not dispose of any securities of API held by it if the disposition would directly cause any member of the API Group to lose any authorizations or licenses the loss of which would have a material adverse effect on the API Group taken as a whole. Section 9.03. TERMINATION. If, at any time after TDS becomes the owner of Series A Common Shares, par value $1.00 per share, of API, less than 500,000 Series A Common Shares are outstanding, either party may terminate the provisions of Article II hereof upon 60 days' written notice to the other party. All other provisions of this Agreement shall remain in effect indefinitely or until such time as the obligations of both parties hereunder shall have been fully discharged. Section 9.04. INJUNCTIONS. Irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Therefore, the parties hereto shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically the terms -22- and provisions hereof in any court having jurisdiction, such remedy being in addition to any other remedy to which they may be entitled at law or in equity. Section 9.05. SEVERABILITY. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, void or unenforceable. In the event that any such term, provision, covenant, or restriction is so held to be invalid, void or unenforceable, the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. Section 9.06. ASSIGNMENT. Except, with respect to TDS, by operation of law or in connection with the sale or transfer of all or substantially all of the assets of a party hereto or of all or substantially all of the capital stock of API beneficially owned by TDS, this Agreement shall not be assignable, in whole or in -23- part, directly or indirectly, by either party hereto without the prior written consent of the other, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void; PROVIDED, HOWEVER, that the provisions of this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective permitted successors and assigns. Section 9.07. FURTHER ASSURANCES. Subject to the provisions hereof, the parties hereto shall make, execute, acknowledge and deliver such other instruments and documents, and take all such other actions as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby. Subject to the provisions hereof, each of the parties shall, in connection with entering into this Agreement, performing its obligations hereunder and taking any and all actions relating hereto, comply with all applicable laws, regulations, orders and decrees, obtain all required consents and approvals and make all required filings with any governmental agency, other regulatory or administrative agency, commission or similar authority and promptly provide the other with all such information as the other may reasonably request in order to be able to comply with the provisions of this sentence. -24- Section 9.08. PARTIES IN INTEREST. Except for the rights of the parties indemnified pursuant to Sections 6.03(a) and (b) hereof, nothing in this Agreement expressed or implied is intended or shall be construed to confer any right or benefit upon any person, firm or corporation other than the parties and their respective Subsidiaries and permitted successors and assigns. Section 9.09. WAIVERS, ETC. No failure or delay on the part of the parties in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. No amendment, modification or waiver of any provision of this Agreement nor consent to any departure by the parties therefrom shall in any event be effective unless the same shall be in writing and signed by the chief executive officer or the chief financial officer of each party in the case of amendments or modifications, or by the chief executive officer or the chief financial officer of the waiving or consenting party, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. -25- Section 9.10. SETOFF. All payments to be made by either party under this Agreement shall be made without setoff, counterclaim or withholding, all of which are expressly waived. Section 9.11. CHANGES OF LAW. If, due to any change in applicable law or regulations or the interpretation thereof by any court of law or other governing body having jurisdiction subsequent to the date of this Agreement, performance of any provision of this Agreement or any transaction contemplated by this Agreement shall become impracticable or impossible, then the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such provision. Section 9.12. CONFIDENTIALITY. Subject to any contrary requirement of law and the right of each party to enforce its rights hereunder in any legal action, each party shall keep strictly confidential and shall cause its employees and agents to keep strictly confidential, any information which it or any of its agents or employees may acquire pursuant to, or in the course of performing its obligations under, any provision of this Agreement; PROVIDED, HOWEVER, that such obligation to maintain confidentiality shall not apply to information which (a) at the time of disclosure was in the public domain not as a result of acts by the receiving -26- party or (b) was in the possession of the receiving party at the time of disclosure. Section 9.13. ENTIRE AGREEMENT. This Agreement contains the entire understanding of the parties with respect to the transactions contemplated hereby. With respect to Services, the parties acknowledge that certain agreements relating to specific services to be provided and the terms of payment therefor have been, and may in the future be, entered into between members of the API Group and members of the TDS Group. Those agreements are not superseded by this Agreement; PROVIDED, HOWEVER, that if any of the provisions of those agreements shall conflict with any of the provisions of this Agreement (other than as specifically permitted by this Agreement), the provisions of this Agreement shall control. Section 9.14. HEADINGS. Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement. Section 9.15. COUNTERPARTS. For the convenience of the parties, any number of counterparts of this Agreement may be executed by the parties hereto, and each such executed counterpart shall be, and shall be deemed to be, an original instrument. Section 9.16. NOTICES. All notices, consents, requests, instructions, approvals and other communications provided for -27- herein shall be validly given, made or served, if in writing and delivered personally, by telegram or sent by registered mail, postage prepaid to: TDS at: 30 North LaSalle Street Suite 4000 Chicago, IL 60602-2507 Attention: President with separate copies at such address to the attention of the Chief Financial Officer and the Corporate Secretary API at: 1300 Godward Street, N.E. Suite 3100 Minneapolis, MN 55413-1767 Attention: President with separate copies at such address to the attention of the Chief Financial Officer and the Corporate Secretary or to such other address as any party may, from time to time, designate in a written notice given in a like manner. Any notice given under this Agreement shall be deemed delivered when received at the appropriate address. Section 9.17. GOVERNING LAW. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Illinois applicable to contracts made and to be performed therein. -28- IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective officers, each of whom is duly authorized, all as of the day and year first above written. TELEPHONE AND DATA SYSTEMS, INC. By: /s/ LeRoy T. Carlson, Jr. -------------------------------- Name: LeRoy T. Carlson, Jr. ------------------------------ Title: President ----------------------------- AMERICAN PAGING, INC. By: /s/ John R. Schaaf -------------------------------- Name: John R. Schaaf ------------------------------ Title: President ----------------------------- Signature Page of Intercompany Agreement dated as of January 1, 1994 -29- SCHEDULE I AGREEMENTS REFERRED TO IN SECTION 6.01 1. Obligations of TDS in connection with a letter of credit issued by LaSalle National Bank to support the lease of office space in Florida by API or its subsidiaries or affiliates. SCHEDULE II AGREEMENTS REFERRED TO IN SECTION 6.02 1. The indenture dated as of February 1, 1991 (the "Indenture") between TDS and Harris Trust and Savings Bank, as trustee, and the debt securities and instruments issued and to be issued under the Indenture. EX-99.C11 10 EX-99(C)(11)REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement, dated as of January 1, 1994, is entered into between Telephone and Data Systems, Inc., an Iowa corporation (herein called "TDS"), and American Paging, Inc., a Delaware corporation (herein called "API"). WHEREAS, TDS owns all of the issued and outstanding shares of the capital stock of API, which have been or will be converted into Series A Common Shares, par value $1.00 per share, and/or Common Shares, par value $1.00 per share; and WHEREAS, at any time and from time to time hereafter, API may authorize, issue and sell, and TDS may acquire, other classes of debt or equity securities (such other classes of debt or equity securities of API, the Series A Common Shares and the Common Shares being herein collectively called the "Securities", which term shall also have the meaning assigned thereto in Section 8(c) hereof); NOW, THEREFORE, in consideration of the foregoing and in order to specify certain provisions relating to the sale by means of domestic or foreign public offerings of Securities owned by TDS, the parties hereto agree as follows: Section 1. REGISTRATION AND LISTING RIGHTS. (a) REGISTRATION. If TDS shall, at any time and from time to time, request API in writing to register under the Securities Act of 1933 (the "Act") any Securities held by it (whether for purposes of a public offering, an exchange offer or otherwise), API shall use its best efforts to cause the prompt registration of all Securities specified in such request, and in connection therewith shall prepare and file on such appropriate form as API, in its reasonable discretion, shall determine, a registration statement under the Act to effect such registration. If TDS shall so request, API will register such Securities for offering on a delayed or continuous basis pursuant to Rule 415 (or any successor rule or rules to similar effect) under the Act. Notwithstanding the foregoing, API shall be entitled to postpone for a reasonable period of time, but not in excess of 90 calendar days, the filing of any registration statement otherwise required to be prepared and filed by it if (i) API is at such time conducting or about to conduct an underwritten public offering of Securities for sale for its account and determines that such offering would be materially adversely affected by the registration so required and (ii) API so notifies TDS within five days after TDS so requests. -2- (b) OTHER OFFER AND SALE. If TDS shall, at any time and from time to time, request API in writing to take such actions as shall be necessary or appropriate to permit any Securities held by TDS to be publicly or privately offered and sold in compliance with the securities laws or other relevant laws or regulations of any foreign jurisdiction in which a principal securities market outside the United States is located, API shall use its best efforts to take such actions in any such foreign jurisdiction (including listing such Securities on any foreign securities exchange on which such listing is requested by TDS) and shall otherwise cooperate in a timely manner in such offering. Any request under this paragraph (b) may be made separately or in conjunction with any request under paragraph (a). Notwithstanding the foregoing, API shall be entitled to postpone for a reasonable period of time, but not in excess of 90 calendar days, the taking of any actions otherwise required under this paragraph (b) if (i) API is at such time conducting or about to conduct an underwritten public offering of Securities for sale for its account and determines that such offering would be materially adversely affected by the registration so required and (ii) API so notifies TDS within 5 days after TDS so requests. (c) WRITTEN NOTICE. Any request by TDS pursuant to paragraph (a) or (b) of this Section 1, shall (i) specify the number and class of shares or the principal amount, as the case may -3- be, of Securities which TDS intends to offer and sell, (ii) express the intention of TDS to offer or cause the offering of such Securities, (iii) describe the nature or method of the proposed offer and sale thereof and state whether such offer is intended to be made domestically or abroad, or both, and, if abroad, the country or countries in which such offer is intended to be made, (iv) specify any securities exchange (including any foreign securities exchange in any principal securities market outside the United States) or quotation system on which TDS requests that such Securities be listed, (v) contain the undertaking of TDS to provide all such information regarding its holdings and the proposed manner of distribution thereof as may be required in order to permit API to comply with all applicable laws and regulations, foreign or domestic, and all requirements of the Securities and Exchange Commission (the "SEC"), any other applicable United States or foreign regulatory or self-regulatory body and any other body having jurisdiction and any securities exchange (including any foreign securities exchange in any principal securities market outside the United States) on which the Securities are to be listed and to obtain acceleration of the effective date of any registration statement filed in connection therewith, and (vi) in the case of an underwritten public offering made domestically or abroad, or both, specify the managing underwriter or underwriters of such Securities, which shall be selected by TDS; PROVIDED, HOWEVER, that TDS may at any time prior to the effectiveness of any -4- such registration statement or commencement of any such offering not pursuant to a registration statement, in its sole discretion and without the consent of API, abandon the proposed offering. (d) CONDITION TO EXERCISE OF RIGHTS. The obligations of API under paragraphs (a) and (b) of this Section 1 shall be subject to the limitation that API shall not be obligated to register, take other specified actions with respect to, or cooperate in the offering of, Securities upon the request of TDS, unless, in the case of a class of equity Securities, the number of shares specified in such request pursuant to Section 1(c)(i) shall be greater than the lesser of (A) one million shares or (B) one percent of the total number of shares of such class at the time issued and outstanding, or, in the case of a class of debt Securities, the principal amount specified in such request pursuant to Section 1(c)(i) shall be at least $5,000,000. Notwithstanding the foregoing, the failure of TDS to own the minimum number or percent or principal amount of Securities referred to in the preceding sentence at any time shall not affect the ability of TDS to exercise its rights under this Agreement at any subsequent time when TDS again owns such minimum number or percent or principal amount. (e) INCIDENTAL REGISTRATION. If API shall, at any time and from time to time, propose an underwritten offering for cash of -5- any Securities, whether pursuant to a registration statement under the Act or otherwise, API shall give written notice as promptly as practicable of such proposed registration or offering to TDS and shall use its best efforts to include in such offering and, if such offering is pursuant to a registration statement under the Act, in such registration, any of the same class of such Securities held by TDS as TDS shall request within 20 calendar days after the giving of such notice, upon the same terms (including the method of distribution) as such offering; PROVIDED, HOWEVER, that (i) API shall not be required to give such notice or include any such Securities in any offering pursuant to a registration statement filed on Form S-8 or Form S-4 (or such other form or forms as shall be prescribed under the Act for the same purposes), and (ii) API may at any time prior to the effectiveness of any such registration statement or commencement of any such offering not pursuant to a registration statement, in its sole discretion and without the consent of TDS, abandon the proposed offering in which TDS had requested to participate. Notwithstanding the foregoing, API shall not be obligated to include such Securities in such offering if API is advised in writing by its managing underwriter or underwriters (with a copy to TDS within five days after TDS delivers its request pursuant to this paragraph (e)) that such offering would in its or their opinion be materially adversely affected by such inclusion; PROVIDED, HOWEVER, that API shall in any case be obligated to include up to, at TDS's discretion, such number or amount of -6- Securities in such offering as such managing underwriter or underwriters shall determine will not materially adversely affect such offering. (f) CONVERSION OF OTHER SECURITIES. Should TDS offer any rights, warrants or other securities issued by it or any other person that are convertible into or exercisable or exchangeable for any Securities, API's obligations under this Section 1 shall be applicable to such Securities to be purchased upon such conversion, exercise or exchange. Section 2. COVENANTS OF API. In connection with any offering of Securities pursuant to this Agreement, API shall: (a) furnish to TDS such number of copies of any prospectus (including any preliminary prospectus), registration statement, offering memorandum or other offering document (including any exhibits thereto or documents referred to therein) as TDS may reasonably request and a copy of any and all transmittal letters or other correspondence with the SEC or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to such offering of Securities; -7- (b) take such reasonable action as may be necessary to qualify such Securities for offer and sale under such securities, "blue sky" or similar laws of such jurisdictions (including any foreign country or political subdivision thereof) as TDS or any underwriter shall request; (c) enter into an underwriting agreement (or equivalent document in any foreign jurisdiction) containing representations, warranties, indemnities, contribution provisions and agreements then customarily included by an issuer in underwriting agreements (or such equivalent documents) in the form customarily used by the managing underwriter and reasonably acceptable to API and TDS with respect to secondary distributions; (d) at the closing, furnish unlegended certificates representing ownership of the Securities being sold in such denominations as shall be requested by TDS or the managing underwriter; (e) in the case of any offering of equity securities, instruct the transfer agent and registrar to release any stop transfer orders with respect to the equity securities being sold; -8- (f) promptly inform TDS (i) in the case of any domestic offering of Securities in respect of which a registration statement is filed under the Act, of the date on which such registration statement or any post-effective amendment thereto becomes effective (and, in the case of any offering abroad of Securities, of the date when any required filing under the securities and other laws of such foreign jurisdiction shall have been made and when the offering may be commenced in accordance with such laws) and (ii) of any request by the SEC, any securities exchange, government agency, self-regulatory body or other body having jurisdiction for any amendment of or supplement to any registration statement or preliminary prospectus or prospectus included therein or any offering memorandum or other offering document relating to such offering; (g) upon any registration statement becoming effective pursuant to any registration under the Act pursuant to this Agreement, file any necessary amendments or supplements to such registration statement and otherwise use its best efforts to keep such registration statement effective for such period as TDS shall request; (h) take such reasonable actions as may be necessary to have such Securities listed on any securities exchange or -9- quotation system on which TDS shall request such listing pursuant to the notice delivered by TDS under Section 1(c) hereof; (i) promptly notify TDS of the happening of any event as a result of which any registration statement or any preliminary prospectus or prospectus included therein or any offering memorandum or other offering document includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and prepare and furnish to TDS as many copies of a supplement to or amendment of such offering document which shall correct such untrue statement or eliminate such omission, as TDS shall request; (j) appoint a trustee or fiscal agent (in the case of debt securities) and any transfer agent, registrar, depository, authentication agent or other agent as may be necessary or desirable or as may be requested by TDS; and (k) take such actions and execute and deliver such other documents as may be necessary to give full effect to the rights of TDS under this Agreement. -10- Section 3. EXPENSES. (a) All expenses incurred in complying with Section 1(a) or (b) hereof, including, without limitation, all registration and filing fees (including all expenses incident to any filing with the National Association of Securities Dealers, Inc., or listing on any domestic or foreign securities exchange), fees and expenses of complying with securities and blue sky laws (including those of counsel satisfactory to TDS retained to effect such compliance) and printing expenses (collectively "Registration Expenses") and any stamp, duty or transfer tax shall be paid by TDS. Notwithstanding the foregoing, (i) TDS shall pay all underwriting discounts and commissions, (ii) API shall pay (x) the fees and disbursements of its independent public accountants (including any such fees and expenses incurred in performing any special audits required in connection with any such offering and incurred in connection with the preparation of pro forma financial statements and comfort letters for any such offering), (y) transfer agents', trustees', fiscal agents', depositaries', and registrars' fees and the fees of any other agent appointed in connection with such offering, and (z) all security engraving and printing expenses and (iii) each party shall pay the fees and expenses of its counsel. (b) All expenses incurred in complying with Section 1(e) hereof, including, without limitation, any Registration Expenses, -11- shall be paid by API, except that (i) TDS shall pay all underwriting discounts, commissions and expenses specifically attributable to the inclusion in the offering under said Section 1(e) of the Securities being sold by TDS and (ii) each party shall pay the fees and expenses of its counsel. Section 4. INDEMNIFICATION. (a) API INDEMNITY. In the case of each offering contemplated by this Agreement, API shall indemnify and hold harmless TDS, its officers and directors, each underwriter of Securities so offered and each person, if any, who controls TDS or any such underwriter within the meaning of Section 15 of the Act, and each person affiliated with or retained by TDS and who may be subject to liability under any applicable securities laws, against any and all losses, claims, damages or liabilities to which they or any of them may become subject under the Act or any other statute or common law of the United States of America or any other country, or otherwise, including any amount paid in settlement of any litigation commenced or threatened, and shall promptly reimburse them, as and when incurred, for any legal or other expenses incurred by them in connection with investigating any claims and defending any actions, insofar as any such losses, claims, damages, liabilities or actions shall arise out of or shall be based upon any untrue statement or alleged untrue statement of a material fact -12- contained in the registration statement (or in any preliminary or final prospectus included therein) or in any offering memorandum or other offering document relating to the offering and sale of such Securities, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or any violation or alleged violation by API of the Act, any blue sky laws, securities laws or other applicable laws of any state or country in which Securities are offered and relating to action or inaction required of API in connection with such offering; PROVIDED, HOWEVER, that the indemnification agreement contained in this Section 4(a) shall not apply to such losses, claims, damages, liabilities or actions if such losses, claims, damages, liabilities or actions shall arise out of or shall be based upon any such untrue statement or alleged untrue statement, or any such omission or alleged omission, made in reliance upon and in conformity with information concerning TDS supplied or approved by TDS for use in connection with the preparation of the registration statement or any preliminary prospectus or final prospectus contained in the registration statement, any offering memorandum or other offering document, or any amendment thereof or supplement thereto. (b) TDS INDEMNITY. In the case of each offering made pursuant to this Agreement, TDS shall, in the same manner and to the same extent as set forth in paragraph (a) of this Section 4, -13- indemnify and hold harmless API and each person, if any, who controls API within the meaning of Section 15 of the Act, and each person affiliated with or retained by API and who may be subject to liability under any applicable securities laws, its directors and those officers of API who shall have signed any registration statement, offering memorandum or other offering document with respect to any statement in or omission from such registration statement, any preliminary prospectus or final prospectus contained in such registration statement, any offering memorandum or other offering document, or any amendment thereof or supplement thereto, if such statement or omission shall have been made in reliance upon and in conformity with information concerning TDS supplied or approved by TDS for use in connection with the preparation of such registration statement, any preliminary prospectus or final prospectus contained in such registration statement, any offering memorandum or other offering document, or any amendment thereof or supplement thereto. (c) PROCEDURE FOR INDEMNIFICATION. Each party indemnified under paragraph (a) or (b) of this Section 4, or under Section 8(f) hereof, shall, promptly after receipt of notice of the commencement of any action against such indemnified party in respect of which indemnity may be sought, notify the indemnifying party in writing of the commencement thereof. The omission of any indemnified party so to notify an indemnifying party of any such -14- action shall not relieve the indemnifying party from any liability in respect of such action which it may have to such indemnified party on account of the indemnity agreement contained in paragraph (a) or (b) of this Section 4, or under Section 8(f) hereof, unless the indemnifying party was materially prejudiced by such omission, and in no event shall relieve the indemnifying party from any other liability which it may have to such indemnified party. In case any such action shall be brought against any indemnified party and such indemnified party shall notify an indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory in any case to TDS. If the indemnifying party so assumes the defense thereof, it may not agree to any settlement of any such action as the result of which any remedy or relief shall be applied to or against the indemnified party, without the prior written consent of the indemnified party. If the indemnifying party does not assume the defense thereof, it shall be bound by any settlement to which the indemnified party agrees, irrespective of whether the indemnifying party consents thereto. If any settlement of any claim is effected by the indemnified party prior to commencement of any action relating thereto, the indemnifying party shall be bound thereby only if it has consented in writing thereto. In any action hereunder, the indemnified party shall continue to be entitled to participate in -15- the defense thereof, with counsel satisfactory to TDS, even if the indemnifying party has assumed the defense thereof, and the indemnifying party shall not be relieved of the obligation hereunder to reimburse the indemnified party for the costs thereof. Section 5. TRANSFER OF RIGHTS. (a) Subject to paragraph (b) below, the rights of TDS under this Agreement with respect to any Security may be transferred to any one or more transferees of such Security. Any transfer of registration rights pursuant to this Section 5 shall be effective only upon receipt by API of written notice from TDS stating the name and address of any transferee and identifying the Securities with respect to which the rights under this Agreement are being transferred. (b) The rights of a transferee under paragraph (a) above shall be the same rights granted to TDS under this Agreement, except such transferee shall (i) only have the right to make one request under paragraph (a) or (b) of Section 1, which may be a simultaneous request under paragraphs (a) and (b), and two requests under paragraph (e) of Section 1 and (ii) in the case of a request under paragraph (a) or (b) of Section 1, be required to pay all expenses that, under Section 3, would be required to be paid by TDS and in the case of a request under paragraph (e) of Section 1, be -16- required to pay all expenses that, under Section 3(b), would be required to be paid by TDS. Section 6. TERMINATION OF OBLIGATIONS. Section 1 of this Agreement shall terminate and cease to be of any force and effect in respect of TDS at such time as TDS, and in respect of any assignee of TDS under Section 9(c) at such time as such assignee, shall cease beneficially to own any Securities; PROVIDED, HOWEVER, that such termination shall not affect the rights of any transferee under Section 5. Section 7. REPRESENTATION AND WARRANTIES. As an inducement to enter into this Agreement, each party represents to and agrees with the other that: (a) it is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has all requisite corporate power to own, lease and operate its properties, to carry on its business as presently conducted and to carry out the transactions contemplated by this Agreement; (b) it has duly and validly taken all corporate action necessary to authorize the execution, delivery and performance -17- of this Agreement and the consummation of the transactions contemplated hereby; (c) this Agreement has been duly executed and delivered by it and constitutes its legal, valid and binding obligation enforceable in accordance with its terms (subject, as to the enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditors' rights generally from time to time in effect, and subject to equitable limitations on the availability of the remedy of specific performance); and (d) none of the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby or the compliance with any of the provisions of this Agreement will (i) conflict with or result in a breach of any provision of its corporate charter or bylaws, (ii) breach, violate or result in a default under any of the terms of any agreement or other instrument or obligation to which it is a party or by which it or any of its properties or assets may be bound, or (iii) violate any order, writ, injunction, decree, statute, rule or regulation applicable to it or affecting any of its properties or assets. -18- Section 8. CERTAIN AGREEMENTS AND DEFINITIONS. (a) CALCULATION OF AMOUNTS. For purposes of this Agreement, the amount of any Securities outstanding at any time (and the amount of any Securities then beneficially owned by TDS or any other person) shall be calculated on the basis of the information contained in API's most recent report filed with the SEC. For purposes of calculating the amount of Securities outstanding at any time (and the amount of Securities then beneficially owned by TDS or any other person) all outstanding securities convertible into or exchangeable for such Securities, including outstanding securities that in the future will become so convertible or exchangeable, shall be deemed to have been fully converted at such time. (b) "PERSON"; "AFFILIATE". As used in this Agreement, the term "person" shall mean any individual, partnership, corporation, trust or other entity. As used in this Agreement, the term "affiliate" shall mean, with respect to any specified person, any other person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified person. (c) "SECURITIES". As used in this Agreement, the term "Securities" shall include any security of API now owned or -19- hereafter acquired by TDS, whether acquired in any transaction with API or another person, in any recapitalization of API, as a dividend or other distribution, as a result of any "split" or "reverse split", upon conversion or exercise of another security of API or any other person, or otherwise. (d) NO LEGEND. No Security held or to be transferred by TDS shall bear any legend, nor shall API cause or permit any transfer agent or registrar appointed by API with respect to such Security to refuse or fail to effect a transfer or registration with respect to such Security, provided that TDS provides to API a certificate of an officer to TDS in connection with such transfer or registration to the effect that such transfer or registration is not in violation of any applicable securities or other law. (e) STOCK BOOKS. Except as otherwise provided by law for all holders of securities, API will not close its stock books or other registries against the transfer of any Security held by TDS. (f) SECURITIES EXCHANGE ACT OF 1934. API shall at all times (whether or not it is required to do so) timely file such information, documents and reports as the SEC may require or prescribe under the Securities Exchange Act of 1934 (the "Exchange Act") and shall provide TDS with two copies of each thereof or any -20- other communication with or from the SEC. API shall, whenever requested by TDS, notify TDS in writing whether API has, as of the date specified by TDS, complied with the Exchange Act reporting requirements to which it is subject for such period to such date as shall be specified by TDS. API acknowledges and agrees that one of the purposes of the requirements contained in this Section 8(f) is to enable TDS to comply with the current public information requirements contained in Paragraph (c) of Rule 144 under the Act (or any corresponding rule hereafter in effect) should TDS ever wish to dispose of any Securities without registration under the Act in reliance upon Rule 144. In addition, API shall take such other measures and file such other information, documents and reports as shall hereafter be required by the SEC as a condition to the availability of Rule 144. API covenants, represents and warrants that all such information, documents and reports filed with the SEC shall not contain any untrue statement of a material fact or fail to state therein a material fact required to be stated therein or necessary to make the statements contained therein not misleading, and API shall indemnify and hold TDS, its officers and directors and each broker, dealer, underwriter or other person acting for TDS (and any controlling person of any of the foregoing) harmless from and against any and all claims, liabilities, losses, damages, expenses and judgments and shall promptly reimburse them, as and when incurred, for any legal or other expenses incurred by them in connection with investigating any claims and defending any -21- actions insofar as such claims, liabilities, losses, damages expenses and judgments arise out of or based upon any breach of the foregoing covenants, representations or warranties. The procedure for indemnification set forth in Section 4(c) hereof shall apply to the indemnification provided under this Section 8(f). (g) LISTING. Once initially listed, API shall maintain in effect any listing of Securities on any securities exchange (domestic or foreign) or quotation system, shall make all filings and take all other actions required under the rules of such exchange or quotation system and any applicable listing agreement, shall provide TDS with two copies of each such filing or any other communication with such exchange or quotation system at the time at which such filing is made, and shall notify TDS of any proceeding or other action taken by such exchange, quotation system or any other person which might have the effect of terminating or otherwise changing the status of such listing, forthwith upon the occurrence thereof. (h) LIMITATION ON OTHER SECURITIES TO BE REGISTERED. In case of any registration, offering or sale contemplated by paragraph (a) or (b) of Section 1, API shall not include in such registration, offering or sale any Securities other than those beneficially owned by TDS, and in case of any registration, offering or sale contemplated by paragraph (e) of Section 1, API -22- shall not include in such registration, offering or sale any Securities other than those being offered by API and TDS. (i) FILINGS; PRESS RELEASES. As far in advance as is practicable of (but in any event no later than two business days before) (i) the publication of any press release containing information material to API's stockholders or (ii) the filing of any document or report with the SEC or with any securities exchange or quotation system, API shall send a reasonably final draft of such press release, document or report to TDS at the address set forth in Section 9(m) hereof. TDS shall have the right to request amendments, modifications or supplements to any such release, document or report and API shall not unreasonably withhold its consent thereto. The obligations of API under this Section 8(i) shall terminate and cease to be of any force and effect at such time as TDS shall cease to beneficially own any Securities, or if at any time less than 500,000 Series A Common Shares, par value $1.00 per share, of API are outstanding. (j) COUNSEL. In any case where legal counsel is to be employed to represent the parties for any purpose under this Agreement, TDS shall have the right to select such counsel. If in the judgment of TDS it would be appropriate to do so, TDS may select the same counsel to represent both parties in connection with any matter, and API hereby consents in advance to any such -23- joint representation; PROVIDED, HOWEVER, that if any counsel selected for such joint representation is of the opinion at any time that, in light of the circumstances then existing, it would not be able to discharge its professional responsibilities properly in undertaking or in continuing such joint representation, then TDS shall select separate counsel to represent API in the matter. Except as otherwise specifically provided in Section 4(b) hereof, API shall be solely responsible for the fees and expenses of any separate counsel so selected, and TDS shall have no responsibility or liability whatsoever with respect thereto. If the parties use the same counsel, each of the parties shall be responsible for the portion of the fees and expenses of such counsel determined by such counsel to be allocable to each of the parties. Section 9. MISCELLANEOUS. (a) INJUNCTIONS. Irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Therefore, the parties hereto shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any court having jurisdiction, such remedy being in addition to any other remedy to which they may be entitled at law or in equity. -24- (b) SEVERABILITY. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, void or enforceable. In the event that any such term, provision, covenant or restriction is so held to be invalid, void or unenforceable, the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. (c) ASSIGNMENT. Except in the case of a transaction as a result of which API ceases to be an affiliate of TDS or except as provided otherwise in Section 5 hereof, and except by operation of law or in connection with the sale of all or substantially all the assets of a party hereto, this Agreement shall not be assignable, in whole or in part, directly or indirectly, by either party hereto without the prior written consent of the other, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void; PROVIDED, HOWEVER, that the -25- provisions of the Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto (including, solely for purposes of Section 4 hereof, their officers and directors) and their respective successors and permitted assigns. In the case of a transaction as a result of which API ceases to be an affiliate of TDS, this Agreement and all of TDS's rights and obligations hereunder shall be deemed to be automatically assigned to any person who acquires Securities in connection with the transaction and who API and TDS are affiliates of both before and after the transaction. (d) FURTHER ASSURANCES. Subject to the provisions hereof, the parties hereto shall make, execute, acknowledge and deliver such other instruments and documents, and take all such other actions as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby. Subject to the provisions hereof, each of the parties shall, in connection with entering into this Agreement, performing its obligations hereunder and taking any and all actions relating hereto, comply with all applicable laws, regulations, orders and decrees, obtain all required consents and approvals and make all required filings with any governmental agency, other regulatory or administrative agency, commission or similar authority and promptly provide the other with all such information -26- as the other may reasonably request in order to be able to comply with the provisions of this sentence. (e) PARTIES IN INTEREST. Nothing in this Agreement expressed or implied is intended or shall be construed to confer any right or benefit upon any person, firm or corporation other than the parties and their respective permitted successors and assigns. (f) WAIVERS, ETC. No failure or delay on the part of the parties in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. No amendment, modification or waiver of any provision of this Agreement nor consent to any departure by the parties therefrom shall in any event be effective unless the same shall be in writing and signed by the chief executive officer or the chief financial officer of each party in the case of amendments or modifications, or by the chief executive officer or the chief financial officer of the waiving or consenting party, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. -27- (g) SETOFF. All payments to be made by either party under this Agreement shall be made without setoff, counterclaim or withholding, all of which are expressly waived. (h) CHANGES OF LAW. If, due to any change in applicable law or regulations or the interpretation thereof by any court of law or other governing body having jurisdiction subsequent to the date of this Agreement, performance of any provision of this Agreement or any transaction contemplated hereby shall become impracticable or impossible, the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such provision. (i) CONFIDENTIALITY. Subject to any contrary requirement of law and the right of each party to enforce its rights hereunder in any legal action, each party shall keep strictly confidential and shall cause its employees and agents to keep strictly confidential, any information which it or any of its agents or employees may acquire pursuant to, or in the course of performing its obligations under, any provision of this Agreement; PROVIDED, HOWEVER, that such obligation to maintain confidentiality shall not apply to information which (x) at the time of disclosure was in the public domain not as a result of acts by the receiving -28- party or (y) was in the possession of the receiving party at the time of disclosure. (j) ENTIRE AGREEMENT. This Agreement contains the entire understanding of the parties with respect to the transactions contemplated hereby. (k) HEADINGS. Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement. (l) COUNTERPARTS. For the convenience of the parties, any number of counterparts of this Agreement may be executed by the parties hereto, and each such executed counterpart shall be, and shall be deemed to be, an original instrument. (m) NOTICES. All notices, consents, requests, instructions, approvals and other communications provided for herein shall be validly given, made or served, if in writing and delivered personally, by telegram or sent by registered mail, postage prepaid to: -29- TDS at: 30 North LaSalle Street Suite 4000 Chicago, IL 60602-2507 Attention: President with separate copies at such address to the attention of the Chief Financial Officer and the Corporate Secretary API at: 1300 Godward Street, N.E. Suite 3100 Minneapolis, MN 55413-1767 Attention: President with separate copies at such address to the attention of the Chief Financial Officer and the Corporate Secretary or to such other address as any party may, from time to time, designate in a written notice given in a like manner. Any notice given under this Agreement shall be deemed delivered when received at the appropriate address. (n) GOVERNING LAW. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Illinois applicable to contracts made and to be performed therein. -30- IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective officers, each of whom is duly authorized, all as of the date and year first above written. TELEPHONE AND DATA SYSTEMS, INC. By: /s/ LeRoy T. Carlson, Jr. -------------------------------- Name: LeRoy T. Carlson, Jr. ------------------------------ Title: President ----------------------------- AMERICAN PAGING, INC. By: /s/ John R. Schaaf -------------------------------- Name: John R. Schaaf ------------------------------ Title: President ----------------------------- Signature Page of Registration Rights Agreement dated as of January 1, 1994. -31- EX-99.C12 11 EX-99(C)(12)/EMPLOYEE BENEFIT PLANS AGREEMENT EMPLOYEE BENEFIT PLANS AGREEMENT This Employee Benefit Plans Agreement, dated as of January 1, 1994, is entered into between Telephone and Data Systems, Inc., an Iowa corporation (herein called "TDS"), and American Paging, Inc., a Delaware corporation (herein called "API"). WHEREAS, TDS owns all of the issued and outstanding shares of the capital stock of API; WHEREAS, in connection with the execution and delivery of this Agreement, API is selling in an underwritten public offering (the "Offering") a number of its Common Shares, par value $1.00 per share; WHEREAS, in connection with the foregoing, certain employees of API will continue to participate in TDS's 1993 Employees' Stock Purchase Plan; WHEREAS, in connection with the foregoing, certain senior managers of API will continue to participate in the American Paging, Inc. Long-Term Incentive Program; and WHEREAS, for purposes of this Agreement, unless the context otherwise requires, "TDS" shall mean TDS and any of its subsidiaries, including those which become subsidiaries after the date hereof (other than API and API's subsidiaries), and API shall mean API and any of its subsidiaries, including those which become subsidiaries after the date hereof; NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows: ARTICLE I DEFINITIONS As used in this Agreement, the terms set out below shall have the indicated meanings (such meanings applying equally to the singular and plural forms thereof); "API LTIP" means the American Paging, Inc. Long-Term Incentive Program. "API LTIP PARTICIPANT" means each individual who is or was a participant in the API LTIP. "ERISA" means the Employment Retirement Income Security Act of 1974, as amended. "TDS ESPP" means the TDS 1993 Employees' Stock Purchase Plan. "TDS ESPP - API PARTICIPANT" means each individual who is or was a participant in the TDS ESPP and an employee and/or officer of API. Any capitalized term not otherwise defined in this Agreement shall have the meaning set forth for such term in the employee benefit plan to which such term relates. ARTICLE II TDS ESPP In connection with the purchase of TDS Common Shares under the TDS ESPP by a TDS ESPP - API Participant, API shall pay in cash to TDS an amount equal to the excess of the fair market value of the TDS Common Shares on the date of purchase over the amount paid therefor by the TDS ESPP - API Participant and any other amounts paid or to be paid by TDS to any government or governmental agency for taxes, if any, with respect thereto, less any amounts paid to TDS by a API ESPP Participant for withholding taxes. Any payments by API to TDS pursuant to this Article shall be made within 10 days after the date of purchase under the TDS ESPP. For purposes of this Article, the fair market value of a TDS Common Share is the closing price of a TDS Common Share on the American Stock Exchange on the date of reference or, if the reference date is not a trading date, the closing price of a TDS -3- Common Share on the American Stock Exchange on the next preceding trading date. ARTICLE III API LTIP API currently maintains the API LTIP which provides for the granting of Stock Appreciation Rights ("SAR's") utilizing shares of phantom API stock to selected senior managers of API. Upon the exercise of vested SAR's, an API LTIP Participant may elect to receive cash or TDS Common Shares having a value (as determined under the API LTIP) equal to the difference between the most recently computed value of the shares of phantom API stock for which the SAR's are being exercised and the initial price of the related shares of phantom API stock at the date the SAR's were granted. Although API LTIP Participants can elect to receive payment of a vested SAR in cash or TDS Common Shares, the President of TDS or the Board of Directors of TDS has the final determination as to whether payment will be made in TDS Common Shares or cash. It is understood by TDS and API that any payment under the API LTIP has been and continues to be the sole obligation of API. If as a result of an exercise of an SAR, the President of TDS or the Board of Directors of TDS agrees to have TDS pay a portion or all of the value of an exercised SAR in TDS Common Shares, API shall pay in -4- cash to TDS an amount equal to the fair market value on the date of the exercise of the SAR of the TDS Common Shares distributed to the participants by TDS on behalf of API. In addition, API shall pay to TDS any other amounts paid or to be paid by TDS to any government or governmental agency for taxes, if any, relating to the exercise of an SAR under the API LTIP less any amounts paid to TDS by an API LTIP Participant for withholding taxes. Any payments by API to TDS pursuant to this Article shall be made within 10 days after the date of exercise under the API LTIP. For purposes of this Article, the fair market value of a TDS Common Share on the date of the exercise of an SAR is the closing price of a TDS Common Share on the American Stock Exchange on such date or, if the date of the exercise is not a trading date, the closing price of a TDS Common Share on the American Stock Exchange on the next preceding trading day. ARTICLE IV INDEMNIFICATION Section 4.01. INDEMNIFICATION. (a) API shall indemnify and hold harmless TDS, and each person, if any, who controls TDS, from and against any and all losses, claims, damages or liabilities and any costs and expenses (including without limitation reasonable attorneys' fees and any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any -5- litigation, commenced or threatened, or any claim whatsoever) (1) arising out of or related in any manner to API's failure to comply with any of its obligations under this Agreement, (2) arising out of the negligence or misconduct of API in connection with the participation of (A) the TDS ESPP - API Participants or any present or former employees of API, in the TDS ESPP or (B) the API LTIP Participants or any present or former employees of API, in the API LTIP, or (3) subject to TDS's compliance with its obligations under this Agreement, arising out of the transactions contemplated by this Agreement and incurred by any TDS ESPP - API Participant or API LTIP Participant. (b) TDS shall indemnify and hold harmless API from and against any and all losses, claims, damages or liabilities and any costs and expenses (including without limitation reasonable attorneys' fees and any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever) (1) arising out of or related in any manner to TDS's failure to comply with any of the terms of this Agreement, or (2) arising out of the negligence or misconduct of TDS in connection with the participation of (A) the TDS ESPP - API Participants or any present or former employees of API, in the TDS ESPP or (B) the API LTIP Participants or any present or former employees of API, in the API LTIP. -6- Section 4.02. PROCEDURE FOR INDEMNIFICATION. Each party indemnified under paragraph (a) or (b) of Section 4.01 shall, promptly after receipt of notice of the commencement of any action against such indemnified party in respect of which indemnity may be sought, notify the indemnifying party in writing of the commencement thereof. The omission of any indemnified party so to notify an indemnifying party of any such action shall not relieve the indemnifying party from any liability in respect of such action which it may have to such indemnified party on account of the indemnity agreement contained in paragraph (a) or (b) of Section 4.01, unless the indemnifying party was prejudiced by such omission, and in no event shall relieve the indemnifying party from any other liability which it may have to such indemnified party. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it may wish, to assume the defense thereof, with counsel satisfactory in any case to TDS. If the indemnifying party so assumes the defense thereof, it may not agree to any settlement of such action as the result of which any remedy or relief, other than monetary damages for which the indemnifying party shall be responsible hereunder, shall be applied to or against the indemnified party, without the prior written consent of the indemnified party. If the indemnifying party does not assume the defense thereof, it shall be bound by any settlement to which -7- the indemnified party agrees, irrespective of whether the indemnifying party consents thereto. If any settlement of any claim is effected by the indemnified party prior to commencement of any action relating thereto, the indemnifying party shall be bound thereby only if it has consented in writing thereto. In any action hereunder, the indemnified party shall continue to be entitled to participate in the defense thereof, with counsel satisfactory to TDS, even if the indemnifying party has assumed the defense thereof, and the indemnifying party shall not be relieved of the obligation hereunder to reimburse the indemnified party for the costs thereof. Section 4.03. OFFICERS, DIRECTORS, ETC. For purposes of this Article IV, losses, claims, damages, liabilities, costs and expenses of past, present or future officers, directors, employees, agents (in each case, acting in their capacities as such) or subsidiaries (or past, present or future officers, directors, employees and agents of subsidiaries) of TDS or API, as the case may be, shall be deemed to have been suffered by TDS or API, as the case may be. Section 4.04. SURVIVAL OF INDEMNIFICATION; PRIOR KNOWLEDGE. The indemnification provisions of this Article IV shall survive the Offering and any investigation made at any time by either of the parties hereto. Actual prior knowledge by any -8- indemnified party with respect to any matter as to which indemnification may be sought shall not constitute a defense to any indemnified party's rights to indemnification pursuant to the provisions hereof. ARTICLE V LEGAL COUNSEL In any case where legal counsel is to be employed to represent the parties for any purpose under this Agreement, TDS shall have the right to select such counsel. If in the judgment of TDS it would be appropriate to do so, TDS may select the same counsel to represent both parties in connection with any matter, and API hereby consents in advance to any such joint representation; PROVIDED, HOWEVER, that if any counsel selected for such joint representation is of the opinion at any time that, in light of the circumstances then existing, it would not be able to discharge its professional responsibilities properly in undertaking or in continuing such joint representation, then TDS shall select separate counsel to represent API in the matter. Except as otherwise specifically provided in Section 4.01(b), API shall be solely responsible for the fees and expenses of any separate counsel so selected, and TDS shall have no responsibility or liability whatsoever with respect thereto. If the parties use the same counsel, each of the parties shall be responsible for the -9- portion of the reasonable fees and expenses of such counsel determined by such counsel to be allocable to each of the parties. ARTICLE VI REPRESENTATIONS AND WARRANTIES As an inducement to enter into this Agreement, each party represents to and agrees with the other that: (a) it is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has all requisite corporate power to own, lease and operate its properties, to carry on its business as presently conducted and to carry out the transactions contemplated by this Agreement; (b) it has duly and validly taken all corporate action necessary to authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby; (c) this Agreement has been duly executed and delivered by it and constitutes its legal, valid and binding obligation enforceable in accordance with its terms (subject, as to the enforcement of remedies, to -10- applicable bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditors' rights generally from time to time in effect, and subject to equitable limitations on the availability of the remedy of specific performance); and (d) none of the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby or the compliance with any of the provisions of this Agreement will (i) conflict with or result in a breach of any provision of its corporate charter or by-laws, (ii) breach, violate or result in a default under any of the terms of any agreement or other instrument or obligation to which it is a party or by which it or any of its properties or assets may be bound, or (iii) violate any order, writ, injunction, decree, statute, rule or regulation applicable to it or affecting any of its properties or assets. -11- ARTICLE VII MISCELLANEOUS Section 7.01. DISPOSAL OF API SHARES. API acknowledges that TDS may at any time and from time to time dispose of any Series A Common Shares or Common Shares of API held by it in any manner which it deems fit without regard to the effect of any such disposition on any provision or term of any employee benefit plan as that term is defined in Section 3(3) of ERISA, or other arrangements with employees of API or TDS. API hereby expressly waives any claim which it might otherwise at any time have or have had against TDS with respect to any such disposition of API Series A Common Shares or Common Shares. Section 7.02. INJUNCTIONS. Irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Therefore, the parties hereto shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any court having jurisdiction, such remedy being in addition to any other remedy to which they may be entitled at law or in equity. -12- Section 7.03. ASSIGNMENT. Except, with respect to TDS, by operation of law or in connection with the sale or transfer of all or substantially all of the assets of a party hereto or of all or substantially all of the capital stock of API beneficially owned by TDS, this Agreement shall not be assignable, in whole or in part, directly or indirectly, by either party hereto without the prior written consent of the other, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void; PROVIDED, HOWEVER, that the provisions of this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective permitted successors and assigns. Section 7.04. FURTHER ASSURANCES. Subject to the provisions hereof, the parties hereto shall make, execute, acknowledge and deliver such other instruments and documents, and take all such other actions as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby. Subject to the provisions hereof, each of the parties shall, in connection with entering into this Agreement, performing its obligations hereunder and taking any and all actions relating hereto, comply with all applicable laws, regulations, orders and decrees, obtain all required consents and approvals and make all required filings with any governmental agency, other regulatory or administrative agency, commission or -13- similar authority and promptly provide the other with all such information as the other may reasonably request in order to be able to comply with the provisions of this sentence. Section 7.05. SEVERABILITY. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, void or unenforceable. In the event that any such term, provision, covenant or restriction is so held to be invalid, void or unenforceable, the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. Section 7.06. WAIVERS, ETC. No failure or delay on the part of the parties in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any -14- other or further exercise thereof or the exercise of any other right or power. No amendment, modification or waiver of any provision of this Agreement nor consent to any departure by the parties therefrom shall in any event be effective unless the same shall be in writing and signed by the chief executive officer or the chief financial officer of each party in the case of amendments or modifications, or by the chief executive officer or the chief financial officer of the waiving or consenting party, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Section 7.07. CHANGES OF LAW. If, due to any change in applicable law or regulations or the interpretation thereof by any court of law or other governing body having jurisdiction subsequent to the date of this Agreement, performance of any provision of this Agreement or any transaction contemplated by this Agreement shall become impracticable or impossible, the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such provision. Section 7.08. PARTIES IN INTEREST. Except for the rights of the parties indemnified pursuant to Section 4.01(a) and (b) hereof, nothing in this Agreement expressed or implied is intended or shall be construed to confer any right or benefit upon -15- any person, firm or corporation other than the parties and their respective permitted successors and assigns. Section 7.09. CONFIDENTIALITY. Subject to any contrary requirement of law and the right of each party to enforce its rights hereunder in any legal action, each party shall keep strictly confidential and shall cause its employees and agents to keep strictly confidential, any information which it or any of its agents or employees may acquire pursuant to, or in the course of performing its obligations under, any provision of this Agreement; PROVIDED, HOWEVER, that such obligation to maintain confidentiality shall not apply to information which (a) at the time of disclosure was in the public domain not as a result of acts by the receiving party or (b) was in the possession of the receiving party at the time of disclosure. Section 7.10. ENTIRE AGREEMENT. This Agreement contains the entire understanding of the parties with respect to the transactions contemplated hereby. Section 7.11. HEADINGS. Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement. -16- Section 7.12. COUNTERPARTS. For the convenience of the parties, any number of counterparts of this Agreement may be executed by the parties hereto, and each such executed counterpart shall be, and shall be deemed to be, an original instrument. Section 7.13. NOTICES. All notices, consents, requests, instructions, approvals and other communications provided for herein shall be validly given, made or served, if in writing and delivered personally, by telegram or sent by registered mail, postage prepaid to: TDS at: 30 North LaSalle Street Suite 4000 Chicago, Illinois 60602-2507 Attention: President with separate copies at such address to the attention of the Chief Financial Officer and the Corporate Secretary API at: 1300 Godward Street N.E. Suite 3100 Minneapolis, MN 55413-1767 Attention: President with separate copies at such address to the attention of the Chief Financial officer and the Corporate Secretary or to such other address as any party may, from to time to time, designate in a written notice given in a like manner. Any notice given under this Agreement shall be deemed delivered when received at the appropriate address. -17- Section 7.14. GOVERNING LAW. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Illinois applicable to contracts made and to be performed therein. -18- IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective officers, each of whom is duly authorized, all as of the day and year first above written. TELEPHONE AND DATA SYSTEMS, INC. By: /s/ LeRoy T. Carlson, Jr. -------------------------------------- Name: LeRoy T. Carlson, Jr. ------------------------------------- Title: President ------------------------------------ AMERICAN PAGING, INC. By: /s/ John R. Schaaf -------------------------------------- Name: John R. Schaaf ------------------------------------- Title: President ------------------------------------ Signature Page of Employee Benefit Plans Agreement dated as of January 1, 1994. -19- EX-99.C13 12 EX-99(C)(13)/AMENDMENT TO REVOLVING CREDIT AGREEME [Letterhead of TDS] February 27, 1995 American Paging, Inc. 1300 Godward Street NE Minneapolis, MN 55413 RE: Revolving Credit Agreement dated January 1, 1994, (the "Revolving Credit Agreement"), between American Paging, Inc. ("API") and Telephone and Data Systems, Inc. ("TDS") Gentlemen: This letter will constitute TDS's agreement to amend the Revolving Credit Agreement by changing all of the references to "$60,00,000" in the Revolving Credit Agreement to "$90,000,000." All of the other terms and conditions of the Revolving Credit Agreement shall remain in full force and effect. Please acknowledge your agreement to this amendment by executing the copy of this letter and return it to the undersigned. Very truly yours, TELEPHONE AND DATA SYSTEMS, INC. By: /s/ Murray L. Swanson -------------------------------------- Murray L. Swanson Executive Vice President - Finance Accepted and agreed to as of the date set forth above. AMERICAN PAGING, INC. By: /s/ Terry M. Busse -------------------------------------- Terry M. Busse Vice President, Finance EX-99.C14 13 EX-99(C)(14)AMENDMENT TO REVOLVING CREDIT AGRMNT. [Letterhead of TDS] August 10, 1995 American Paging, Inc. 1300 Godward Street NE Suite 3100 Minneapolis, MN 55413 RE: Revolving Credit Agreement dated January 1, 1994, as amended February 27, 1995, (the "Revolving Credit Agreement"), between American Paging, Inc. ("API") and Telephone and Data Systems, Inc. ("TDS") Gentlemen: This letter will constitute TDS's agreement to amend the Revolving Credit Agreement by changing all of the references to "$90,00,000" in the Revolving Credit Agreement to "$100,000,000." All of the other terms and conditions of the Revolving Credit Agreement shall remain in full force and effect. Please acknowledge your agreement to this amendment by executing the copy of this letter and return it to the undersigned. Very truly yours, TELEPHONE AND DATA SYSTEMS, INC. By: /s/ Murray L. Swanson -------------------------------------- Murray L. Swanson Executive Vice President, Finance Accepted and agreed to as of the date set forth above. AMERICAN PAGING, INC. By: /s/ Terry M. Busse -------------------------------------- Terry M. Busse Vice President, Finance EX-99.C15 14 EX-99(C)(15)AMENDMENT TO REVOLVING CREDIT AGRMNT. [Letterhead of TDS] December 31, 1995 American Paging, Inc. 1300 Godward Street NE Suite 3100 Minneapolis, MN 55413 RE: Revolving Credit Agreement dated January 1, 1994, as amended August 10, 1995, (the "Revolving Credit Agreement"), between American Paging, Inc. ("API") and Telephone and Data Systems, Inc. ("TDS") Gentlemen: This letter will constitute TDS's agreement to amend the Revolving Credit Agreement by changing all of the references to $100,000,000" in the Revolving Credit Agreement to "$125,000,000." All of the other terms and conditions of the Revolving Credit Agreement shall remain in full force and effect. Please acknowledge your agreement to this amendment by executing the copy of this letter and return it to the undersigned. Very truly yours, TELEPHONE AND DATA SYSTEMS, INC. By: /s/ Murray L. Swanson -------------------------------------- Murray L. Swanson Executive Vice President, Finance Accepted and agreed to as of the date set forth above. AMERICAN PAGING, INC. By: /s/ Terrence T. Sullivan -------------------------------------- Terrence T. Sullivan Vice President - Finance EX-99.C16 15 EX-99(C)(16)AMENDMENT TO REVOLVING CREDIT AGRMNT. [Letterhead of TDS] April 15, 1996 American Paging, Inc. Suite 3100 1300 Godward Street, N.E. Minneapolis, Minnesota 55413 Re: Revolving Credit Agreement dated January 1, 1994, as last amended December 31, 1995 (the "Revolving Credit Agreement"), between American Paging, Inc. (the "Company") and Telephone and Data Systems, Inc. ("TDS") ---------------------------------------------------------------------- Gentlemen: This letter will constitute TDS's agreement to correct the Revolving Credit Agreement by amending and restating Section 7(b)(2) thereof in its entirety to read as follows: "(2) the Company shall not permit its consolidated equity to be less than 30% of its consolidated liabilities (including, without limitation, the Note, accounts payable and other liabilities, but excluding customer deposits and unearned revenues);" All other terms and conditions of the Revolving Credit Agreement shall remain in full force and effect. Please acknowledge your agreement to this amendment by executing a copy of this letter and return it to the undersigned. Very truly yours, TELEPHONE AND DATA SYSTEMS, INC. By: /s/ Ronald D. Webster -------------------------------------- Ronald D. Webster Vice President and Treasurer American Paging, Inc. April 15, 1996 Page 2 Accepted and agreed to as of the date set forth above. AMERICAN PAGING, INC. By: /s/ Terrence T. Sullivan -------------------------------------- Terrence T. Sullivan Vice President - Finance (Chief Financial Officer) and Treasurer EX-99.C17 16 EX-99(C)(17)AMENDMENT TO REVOLVING CREDIT AGRMNT. [Letterhead of TDS] August 2, 1996 American Paging, Inc. 1300 Godward Street NE #3100 Minneapolis, MN 55413 RE: Revolving Credit Agreement dated January 1, 1994, (the "Revolving Credit Agreement"), as amended December 31, 1995, between American Paging, Inc. ("API") and Telephone and Data Systems, Inc. ("TDS") Gentlemen: This letter will constitute TDS's agreement to amend the Revolving Credit Agreement by changing all of the references to "$125,000,000" in the Revolving Credit Agreement to "$140,000,000." All of the other terms and conditions of the Revolving Credit Agreement shall remain in full force and effect. Please acknowledge your agreement to this amendment by executing the copy of this letter and return it to the undersigned. Very truly yours, TELEPHONE AND DATA SYSTEMS, INC. By: /s/ Murray L. Swanson -------------------------------------- Murray L. Swanson Executive Vice President - Finance Accepted and agreed to as of the date set forth above. AMERICAN PAGING, INC. By: /s/ Terrence T. Sullivan -------------------------------------- Terrence T. Sullivan Vice President - Finance EX-99.C18 17 EX-99(C)(18)AMENDMENT TO REVOLVING CREDIT AGRMNT. [Letterhead of TDS] November 13, 1996 American Paging, Inc. Suite 3100 1300 Godward Street, N.E. Minneapolis, Minnesota 55413 Re: Revolving Credit Agreement dated January 1, 1994, as amended (the "Revolving Credit Agreement"), between American Paging, Inc. (the "Company") and Telephone and Data Systems, Inc. ("TDS") ----------------------------------------------------------------- Ladies and Gentlemen: This letter will constitute TDS's agreement to amend the Revolving Credit Agreement by changing all references to "$140,000,000" in the Revolving Credit Agreement to "$150,000,000." All other terms and conditions of the Revolving Credit Agreement shall remain in full force and effect. TDS also hereby waives all defaults or events of default by the Company under the Revolving Credit Agreement resulting from the violation of the covenant in Section 7(b)(2) of the Revolving Credit Agreement or the insolvency of the Company from the respective dates from any such default or event of default through January 2, 1998. Please acknowledge your agreement to this amendment by executing a copy of this letter and return it to the undersigned. Very truly yours, TELEPHONE AND DATA SYSTEMS, INC. By: /s/ Murray L. Swanson -------------------------------------- Murray L. Swanson Executive Vice President- Finance American Paging, Inc. November 13, 1996 Page 2 Accepted and agreed to as of the date set forth above by Terrence T. Sullivan, President of the Company, as acknowledged by Michelle M. Haupt, Controller of the Company. AMERICAN PAGING, INC. By: /s/ Michelle M. Haupt -------------------------------------- Michelle M. Haupt Controller EX-99.C19 18 EXHIBIT 99C19AMENDMENT TO VOTING TRUST AGREEMENT AMENDMENT DATED AS OF NOVEMBER 20, 1992, TO THE VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989 A Voting Trust Agreement ("Agreement") was entered into as of June 30, 1989, between certain holders of the Series A Common Shares, par value $1.00 per share, of Telephone and Data Systems, Inc., an Iowa corporation ("Certificate Holders"), and WALTER C.D. CARLSON, LETITIA G.C. CARLSON, LEROY T. CARLSON, JR., MELANIE J. HEALD AND DONALD C. NEBERGALL, as Trustees. Paragraph 8.5 of the Agreement provides that the Agreement may be amended upon the consent in writing of an eight-vote majority of the Trustees and no less than ninety percent (90%) in interest of the Certificate Holders of record. Pursuant to paragraph 8.5 of the Agreement, the Agreement is hereby amended as follows: LEROY T. CARLSON shall be permitted to withdraw up to 1,500 Series A Common Shares from the voting trust, by written instrument delivered to the Trustees prior to June 30, 1993, and upon his surrender of the corresponding number of Voting Trust Certificates, without the conversion of such shares into Common Shares and without notice of such withdrawal to the Trustees (other than such written instrument) or to any other Certificate Holder. Furthermore, paragraph 3.2 of the Agreement (relating to the granting of options) shall not apply to any withdrawal pursuant to the preceding sentence. IN WITNESS WHEREOF, the following Trustees signify their approval of the foregoing amendment as of the date set opposite the name of each such Trustee. Dated: NOVEMBER 20,1992 /s/ Walter C.D. Carlson ___________________________________________ Walter C.D. Carlson, Trustee (2 votes) Dated: NOVEMBER 24, 1992 /s/ Letitia G.C. Carlson ___________________________________________ Letitia G.C. Carlson, Trustee (2 votes) Dated: NOV. 24, 1992 /s/ LeRoy T. Carlson, Jr. ___________________________________________ LeRoy T. Carlson, Jr., Trustee (2 votes) Dated: 11-24-92 /s/ Melanie J. Heald __________________________________________ Melanie J. Heald, Trustee (1 vote) Dated: 11/20/92 /s/ Donald C. Nebergall, trustee ____________________________________________ Donald C. Nebergall, Trustee (2 votes) SIGNATURE PAGE TO THE AMENDMENT DATED AS OF NOVEMBER 20, 1992, TO THE VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989. -2- IN WITNESS WHEREOF, the following Certificate Holders signify their approval of the foregoing amendment as of the date set opposite the name of each such Certificate Holder. Dated: 12/3/92 /s/ Arthur Anderson __________ ___________________________________________ Arthur Anderson, custodian for Jacob Anderson, Certificate Holder Dated: 12/3/92 /s/ Arthur Andeerson __________ ____________________________________________ Arthur Anderson, custodian for Samuel Keith, Certificate Holder Dated: __________ ____________________________________________ Eric Anderson, Certificate Holder /s/ Kendrick Anderson, custodian for Dated: 11/29/92 Eve Anderson ____________________________________________ Kendrick Anderson, custodian for Eve Anderson, Certificate Holder /s/ Kendrick Anderson, custodian for Dated: 11/29/92 Jill Anderson ____________________________________________ Kendrick Anderson, custodian for Jill Anderson, Certificate Holder Dated: /s/ K.C. August ___________ ____________________________________________ K.C. August, Certificate Holder Dated: /s/ LeRoy T. Carlson ____________ ____________________________________________ LeRoy T. Carlson, Certificate Holder Dated: /s/ Margaret D. Carlson ____________ ____________________________________________ Margaret D. Carlson, Certificate Holder Dated:Nov. 24, 1992 /s/ LeRoy T. Carlson, Jr. ____________________________________________ LeRoy T. Carlson, Jr., Certificate Holder SIGNATURE PAGE TO THE AMENDMENT DATED AS OF NOVEMBER 20, 1992, TO THE VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989. -3- /s/ LeRoy T. Carlson, Jr., custodian Dated: NOV. 24, 1992 for Anthony Carlson _______________ ____________________________________________ LeRoy T. Carlson, Jr., custodian for Anthony J.M. Carlson, Certificate Holder /s/ Catherine Mouly, custodian for Dated: 11/25/92 Anthony J.M. Carlson, Certificate Holder _________ ____________________________________________ Catherine Mouly, custodian for Anthony J.M. Carlson, Certificate Holder Dated: 11/23/92 /s/ Byron Wertz, Trustee _________ ____________________________________________ Byron Wertz, trustee for Anthony J.M. Carlson, Certificate Holder /s/ LeRoy T. Carlson, Jr., custodian for Dated: NOV. 24, 1992 Leo Carlson ______________ ____________________________________________ LeRoy T. Carlson, Jr., custodian for Leo P.M. Carlson, Certificate Holder Dated: 11/23/92 /s/ Byron Wertz, Trustee ___________ ____________________________________________ Byron Wertz, trustee for Leo P.M. Carlson, Certificate Holder Dated: 11/25/92 /s/ Catherine Mouly __________ ____________________________________________ Catherine Mouly, Certificate Holder Dated: 11/24/92 /s/ Letitia G. C. Carlson _________ ____________________________________________ Letitia G. C. Carlson, Certificate Holder Dated: 11/28/92 /s/ Edwin Himwich __________ ____________________________________________ Edwin Himwich, Certificate Holder Dated: /s/ Prudence E. Carlson ___________ ____________________________________________ Prudence E. Carlson, Certificate Holder Dated: /s/ Richard Beckett ___________ ___________________________________________ Richard Beckett, Certificate Holder Dated: 11/23/92 /s/ Walter C.D. Carlson __________ ____________________________________________ Walter C.D. Carlson, Certificate Holder SIGNATURE PAGE TO THE AMENDMENT DATED AS OF NOVEMBER 20, 1992, TO THE VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989. -4- Dated: 11/23/92 /s/ Walter C.D. Carlson, Custodian _________ ____________________________________________ Walter C.D. Carlson, custodian for Amanda Liv de Hoyos Carlson, Certificate Holder Dated: 11/23/92 /s/ Byron Wertz, Trustee __________ ____________________________________________ Byron Wertz, trustee for Amanda L. de Hoyos, Certificate Holder Dated: 11/23/92 /s/ Walter C.D. Carlson, Custodian __________ ____________________________________________ Walter C.D. Carlson, custodian for Greta M. de Hoyos Carlson, Certificate Holder Dated: 11/23/92 /s/ Byron Wertz, Trustee __________ ____________________________________________ Byron Wertz, trustee for Greta M. de Hoyos Carlson, Certificate Holder Dated: 11/23/92 /s/ Walter C.D. Carlson, Custodian __________ ____________________________________________ Walter C.D. Carlson, custodian for Linnea Faith de Hoyos Carlson, Certificate Holder Dated:___________ ____________________________________________ Debora M. de Hoyos, Certificate Holder Dated: ___________ ____________________________________________ Yvonne M. Carlson, Certificate Holder Dated: 11-24-92 /s/ Melanie J. Heald __________ ____________________________________________ Melanie J. Heald, Certificate Holder Dated: 12/16/92 /s/ Dorothea Hopkins __________ ____________________________________________ Dorothea Hopkins, Certificate Holder Dated: 12/1/92 /s/ Lester O. Johnson __________ ____________________________________________ Lester O. Johnson Trust, Certificate Holder Dated: 12/1/92 /s/ Frances M. Johnson __________ ____________________________________________ Frances Johnson Trust, Certificate Holder SIGNATURE PAGE TO THE AMENDMENT DATED AS OF NOVEMBER 20, 1992, TO THE VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989. -5- Dated: /s/ Graham Johnson & Sharon Johnson __________ ____________________________________________ Graham Johnson & Sharon Johnson, Certificate Holder Dated: 12/1/92 /s/ Kent Johnson __________ ____________________________________________ Kent Johnson, Certificate Holder Dated: /s/ Laurel Ann Johnson __________ ____________________________________________ Laurel Ann Johnson, Certificate Holder Dated: __________ ____________________________________________ Dana Dougherty, Certificate Holder Dated: __________ ____________________________________________ Dagmar Maldonado, custodian for Dana Dougherty, Certificate Holder Dated: /s/ Ross Carlson __________ ____________________________________________ Ross Carlson, custodian for Dana Dougherty, Certificate Holder Dated: __________ ____________________________________________ Dagmar Maldonado, custodian for Adam Maldonado, Certificate Holder Dated: /s/ Ross Carlson __________ ____________________________________________ Ross Carlson, custodian for Adam Maldonado, Certificate Holder Dated: __________ ____________________________________________ Dagmar Maldonado, custodian for Nicole Maldonado, Certificate Holder Dated: /s/ Ross Carlson __________ ____________________________________________ Ross Carlson, custodian for Nicole Maldonado, Certificate Holder Dated: 11/20/92 /s/ Donald C. Nebergall __________ ____________________________________________ Donald C. Nebergall, Certificate Holder SIGNATURE PAGE TO THE AMENDMENT DATED AS OF NOVEMBER 20, 1992, TO THE VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989. -6- Dated: 11/20/92 /s/ Donald C. Nebergall __________ ____________________________________________ Donald C. Nebergall, Trustee U/A dated 1/1/56 for Walter C.D. Carlson, Certificate Holder Dated: 11/20/92 /s/ Donald C. Nebergall __________ ____________________________________________ Donald C. Nebergall, Trustee U/A dated 10/24/60 for Letitia G.C. Carlson, Certificate Holder Dated: 11/20/92 /s/ Donald C. Nebergall __________ ____________________________________________ Donald C. Nebergall, Trustee U/A 12/28/72, Certificate Holder Dated: 11/20/92 /s/ Donald C. Nebergall __________ ____________________________________________ Donald C. Nebergall, Trustee U/A date 12/31/76, Certificate Holder Dated: 11/20/92 /s/ Donald C. Nebergall __________ ____________________________________________ Donald C. Nebergall, Trustee Lead Annuity Trust for Wellesley College, Certificate Holder Dated: __________ ____________________________________________ Byron Wertz, custodian for Allison M. Wertz, Certificate Holder Dated: __________ ____________________________________________ Byron Wertz, custodian for Joseph E. Wertz, Certificate Holder Dated: /s/ Florence Wertz John E. Wertz __________ ____________________________________________ Florence Wertz & John E. Wertz '81 Trust, Certificate Holder Dated: 11/27/92 /s/ John Alan Wertz __________ ____________________________________________ John Alan Wertz, Certificate Holder SIGNATURE PAGE TO THE AMENDMENT DATED AS OF NOVEMBER 20, 1992, TO THE VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989 -7- Dated: 11-23-92 /s/ Kristin Wertz __________ ____________________________________________ Kristin Wertz, Certificate Holder /s/ Paul G. Wertz cust for Elizabeth Dated: / /92 D. Wertz __________ ____________________________________________ Paul G. Wertz, custodian for Elizabeth D. Wertz, Certificate Holder /s/ Paul G. Wertz cust for Jessica Dated: / /92 A. Wertz __________ ____________________________________________ Paul G. Wertz, custodian for Jessica A. Wertz, Certificate Holder SIGNATURE PAGE TO THE AMENDMENT DATED AS OF NOVEMBER 20, 1992, TO THE VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989. -8- EX-99.C20 19 EXHIBIT 99C20/AMENDMENT TO VOTING TRUST AGREEMENT AMENDMENT DATED AS OF MAY 9, 1991, TO THE VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989 A Voting Trust Agreement ("Agreement") was entered into as of June 30, 1989, between certain holders of the Series A Common Shares, par value $1.00 per share, of Telephone and Data Systems, Inc., an Iowa corporation ("Certificate Holders"), and WALTER C.D. CARLSON, LETITIA G.C. CARLSON, LEROY T. CARLSON, JR., MELANIE J. HEALD AND DONALD C. NEBERGALL, as Trustees. Paragraph 8.5 of the Agreement provides that the Agreement may be amended upon the consent in writing of an eight-vote majority of the Trustees and no less than ninety percent (90%) in interest of the Certificate Holders of record. Pursuant to paragraph 8.5 of the Agreement, the Agreement is hereby amended as follows: LEROY T. CARLSON shall be permitted to withdraw up to 650 Series A Common Shares from the voting trust, by written instrument delivered to the Trustees prior to December 31, 1991, and upon his surrender of the corresponding number of Voting Trust Certificates, without the conversion of such shares into Common Shares and without notice of such withdrawal to the Trustees (other than such written notice) or to any other Certificate Holder. Furthermore, paragraph 3.2 of the Agreement (relating to the granting of options) shall not apply to any withdrawal pursuant to the preceding sentence. IN WITNESS WHEREOF, the following Trustees signify their approval of the foregoing amendment as of the date set opposite the name of each such Trustee. Dated: 6/13/91 /s/ Walter C.D. Carlson __________ ____________________________________________ Walter C.D. Carlson, Trustee (2 votes) Dated: 6/19/91 /s/ Letitia G.C. Carlson __________ ____________________________________________ Letitia G.C. Carlson, Trustee (2 votes) Dated: 6/17/91 /s/ LeRoy T. Carlson, Jr. __________ ____________________________________________ LeRoy T. Carlson, Jr., Trustee (2 votes) Dated: 6/24/91 /s/ Melanie J. Heald __________ ____________________________________________ Melanie J. Heald, Trustee (1 vote) Dated: 6/17/91 /s/ Donald C. Nebergall __________ ____________________________________________ Donald C. Nebergall, Trustee (2 votes) SIGNATURE PAGE TO THE AMENDMENT DATED AS OF MAY 9, 1991, TO THE VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989 -2- IN WITNESS WHEREOF, the following Certificate Holders signify their approval of the foregoing amendment as of the date set opposite the name of each such Certificate Holder. Dated: 7/22/91 /s/ Arthur Anderson __________ ____________________________________________ Arthur Anderson, custodian for Jacob Anderson, Certificate Holder Dated: 7/22/91 /s/ Arthur Anderson __________ ____________________________________________ Arthur Anderson, custodian for Samuel Keith, Certificate Holder Dated: __________ ____________________________________________ Eric Anderson, Certificate Holder Dated: 7/13/91 /s/ Kendrick Anderson, Custodian __________ ____________________________________________ Kendrick Anderson, custodian for Eve Anderson, Certificate Holder Dated: 7/13/91 /s/ Kendrick Anderson, Custodian __________ ____________________________________________ Kendrick Anderson, custodian for Jill Anderson, Certificate Holder Dated: 7/10/91 /s/ K.C. August __________ ____________________________________________ K.C. August, Certificate Holder Dated: 6/17/91 /s/ LeRoy T. Carlson __________ ____________________________________________ LeRoy T. Carlson, Certificate Holder Dated: 6/30/91 /s/ Margaret D. Carlson __________ ____________________________________________ Margaret D. Carlson, Certificate Holder Dated: 6/17/91 /s/ LeRoy T. Carlson, Jr. __________ ____________________________________________ LeRoy T. Carlson, Jr., Certificate Holder SIGNATURE PAGE TO THE AMENDMENT DATED AS OF MAY 9, 1991, TO THE VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989 -3- /s/ LeRoy T. Carlson, Jr., custodian Dated: 6/17/91 for Anthony J.M. Carlson __________ ____________________________________________ LeRoy T. Carlson, Jr., custodian for Anthony J.M. Carlson, Certificate Holder /s/ Catherine Mouly, custodian for Dated: 7/7/91 Anthony J.M. Carlson __________ ____________________________________________ Catherine Mouly, custodian for Anthony J.M. Carlson, Certificate Holder /s/ Byron Wertz, trustee for Anthony Dated: J.M. Carlson __________ ____________________________________________ Byron Wertz, trustee for Anthony J.M. Carlson, Certificate Holder /s/ LeRoy T. Carlson, Jr., custodian for Dated: 7/17/91 Leo P.M. Carlson __________ ____________________________________________ LeRoy T. Carlson, Jr., custodian for Leo P.M. Carlson, Certificate Holder /s/ Byron Wertz, trustee for Leo P.M. Dated: Carlson __________ ____________________________________________ Byron Wertz, trustee for Leo P.M. Carlson, Certificate Holder Dated: 7/7/91 /s/ Catherine Mouly __________ ____________________________________________ Catherine Mouly, Certificate Holder Dated: 6/19/91 /s/ Letitia G. C. Carlson __________ ____________________________________________ Letitia G. C. Carlson, Certificate Holder Dated: 6/19/91 /s/ Edwin Himwich __________ ____________________________________________ Edwin Himwich, Certificate Holder Dated: 6/27/91 /s/ Prudence E. Carlson __________ ____________________________________________ Prudence E. Carlson, Certificate Holder Dated: 6/27/91 /s/ Richard Beckett __________ ____________________________________________ Richard Beckett, Certificate Holder Dated: 6/13/91 /s/ Walter C.D. Carlson __________ ____________________________________________ Walter C.D. Carlson, Certificate Holder SIGNATURE PAGE TO THE AMENDMENT DATED AS OF MAY 9, 1991, TO THE VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989 -4- Dated: 6/13/91 /s/ Walter C.D. Carlson, Custodian __________ ____________________________________________ Walter C.D. Carlson, custodian for Amanda Liv de Hoyos Carlson, Certificate Holder /s/ Byron Wertz, trustee for Amanda L. Dated: de Hoyos __________ ____________________________________________ Byron Wertz, trustee for Amanda L. de Hoyos, Certificate Holder Dated: 6/13/91 /s/ Walter C.D. Carlson, Custodian __________ ____________________________________________ Walter C.D. Carlson, custodian for Greta M. de Hoyos Carlson, Certificate Holder /s/ Byron Wertz, trustee for Greta M. Dated: de Hoyos Carlson __________ ____________________________________________ Byron Wertz, trustee for Greta M. de Hoyos Carlson, Certificate Holder Dated: 6/13/91 /s/ Walter C.D. Carlson, Custodian __________ ____________________________________________ Walter C.D. Carlson, custodian for Linnea Faith de Hoyos Carlson, Certificate Holder Dated: 7/15/91 /s/ Debora M. de Hoyos __________ ____________________________________________ Debora M. de Hoyos, Certificate Holder Dated: 7/18/91 /s/ Yvonne M. Carlson __________ ____________________________________________ Yvonne M. Carlson, Certificate Holder Dated: 6/24/91 /s/ Melanie J. Heald __________ ____________________________________________ Melanie J. Heald, Certificate Holder Dated: 7/6/91 /s/ Dorothea Hopkins __________ ____________________________________________ Dorothea Hopkins, Certificate Holder Dated: 6/25/91 /s/ Lester O. Johnson __________ ____________________________________________ Lester O. Johnson Trust, Certificate Holder Dated: 7/7/91 /s/ Frances Johnson __________ ____________________________________________ Frances Johnson Trust, Certificate Holder SIGNATURE PAGE TO THE AMENDMENT DATED AS OF MAY 9, 1991, TO THE VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989 -5- Dated: 9/05/91 /s/ Graham Johnson Sharon Johnson __________ ____________________________________________ Graham Johnson & Sharon Johnson, Certificate Holder Dated: 7/7/91 /s/ Kent Johnson __________ ____________________________________________ Kent Johnson, Certificate Holder Dated: 7/7/91 /s/ Laurel Ann Johnson __________ ____________________________________________ Laurel Ann Johnson, Certificate Holder Dated: 7/18/91 /s/ Dana Dougherty __________ ____________________________________________ Dana Dougherty, Certificate Holder Dated: __________ ____________________________________________ Dagmar Maldonado, custodian for Dana Dougherty, Certificate Holder Dated: 7/18/91 /s/ Ross Carlson __________ ____________________________________________ Ross Carlson, custodian for Dana Dougherty, Certificate Holder Dated: __________ ____________________________________________ Dagmar Maldonado, custodian for Adam Maldonado, Certificate Holder Dated: 7/18/91 /s/ Ross Carlson __________ ____________________________________________ Ross Carlson, custodian for Adam Maldonado, Certificate Holder Dated: __________ ____________________________________________ Dagmar Maldonado, custodian for Nicole Maldonado, Certificate Holder Dated: 7/18/91 /s/ Ross Carlson __________ ____________________________________________ Ross Carlson, custodian for Nicole Maldonado, Certificate Holder Dated: 6/17/91 /s/ Donald C. Nebergall __________ ____________________________________________ Donald C. Nebergall, Certificate Holder SIGNATURE PAGE TO THE AMENDMENT DATED AS OF MAY 9, 1991, TO THE VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989 -6- Dated: 6/17/91 /s/ Donald C. Nebergall __________ ____________________________________________ Donald C. Nebergall, Trustee U/A dated 1/1/56 for Walter C.D. Carlson, Certificate Holder Dated: 6/17/91 /s/ Donald C. Nebergall __________ ____________________________________________ Donald C. Nebergall, Trustee U/A dated 10/24/60 for Letitia G.C. Carlson, Certificate Holder Dated: 6/17/91 /s/ Donald C. Nebergall __________ ____________________________________________ Donald C. Nebergall, Trustee U/A 12/28/72, Certificate Holder Dated: 6/17/91 /s/ Donald C. Nebergall __________ ____________________________________________ Donald C. Nebergall, Trustee U/A date 12/31/76, Certificate Holder Dated: 6/17/91 /s/ Donald C. Nebergall __________ ____________________________________________ Donald C. Nebergall, Trustee Lead Annuity Trust for Wellesley College, Certificate Holder /s/ Byron Wertz, Custodian for Allison Dated: M. Wertz __________ ____________________________________________ Byron Wertz, custodian for Allison M. Wertz, Certificate Holder /s/ Byron Wertz, Custodian for Joseph Dated: E. Wertz __________ ____________________________________________ Byron Wertz, custodian for Joseph E. Wertz, Certificate Holder Dated: Sept. 4, 1991 /s/ Florence Wertz John E. Wertz __________ ____________________________________________ Florence Wertz & John E. Wertz '81 Trust, Certificate Holder Dated: 7/15/91 /s/ John Alan Wertz __________ ____________________________________________ John Alan Wertz, Certificate Holder SIGNATURE PAGE TO THE AMENDMENT DATED AS OF MAY 9, 1991, TO THE VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989 -7- Dated: 9-9-91 /s/ Kristin Wertz __________ ____________________________________________ Kristin Wertz, Certificate Holder Dated: 7/21/91 /s/ Paul G. Wertz cust for Elizabeth __________ ____________________________________________ Paul G. Wertz, custodian for Elizabeth D. Wertz, Certificate Holder Dated: 7/21/91 /s/ Paul G. Wertz cust for Jessica __________ ____________________________________________ Paul G. Wertz, custodian for Jessica A. Wertz, Certificate Holder SIGNATURE PAGE TO THE AMENDMENT DATED AS OF MAY 9, 1991, TO THE VOTING TRUST AGREEMENT DATED AS OF JUNE 30, 1989 -8- EX-99.C21 20 EXHIBIT 99C21 JOINT FILING AGRMT/PWR OF ATTORNEY JOINT FILING AGREEMENT AND POWER OF ATTORNEY By signing below, the parties hereto hereby agree and consent, pursuant to Rule 13d-1(f)(1), to the joint filing of Schedules 13G and/or Schedules 13D (including any amendments thereto) on behalf of such parties in their capacities as trustees of the Voting Trust Agreement dated June 30, 1989, as amended. Each of the undersigned persons further hereby constitutes and appoints each of LeRoy T. Carlson, Jr. and Walter C.D. Carlson, acting singly, as their true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for the undersigned and in the name, place and stead of the undersigned, in their capacities as trustees of such voting trust, to execute for and on behalf of the undersigned, all Schedules 13G and/or Schedules 13D and all amendments thereto as required by the Securities Exchange Act of 1934, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, the issuer and relevant stock exchanges. The powers hereby conferred upon the said attorneys-in-fact and agents shall continue in force until notice of the revocation of this Power of Attorney has been received by the said attorneys-in-fact. IN WITNESS WHEREOF, the undersigned have hereunto subscribed this Joint Filing Agreement and Power of Attorney as of the 10th day of February, 1997. /s/ LeRoy T. Carlson, Jr. ------------------------------- LeRoy T. Carlson, Jr. /s/ Walter C.D. Carlson* ------------------------------- Walter C.D. Carlson /s/ Letitia G.C. Carlson* ------------------------------- Letitia G.C. Carlson /s/ Donald C. Nebergall* ------------------------------- Donald C. Nebergall /s/ Melanie J. Heald* ------------------------------- Melanie J. Heald -----END PRIVACY-ENHANCED MESSAGE-----