Investment Agreement

INVESTMENT AGREEMENT


INVESTMENT AGREEMENT (this "Agreement"), dated as of April 3, 2000, by and among VODAFONE AIRTOUCH PLC, an English public limited company
("Vodafone"), BELL ATLANTIC CORPORATION, a Delaware corporation ("Bell Atlantic"), and CELLCO PARTNERSHIP, a Delaware general partnership ("Wireless" or the "Partnership").


W I T N E S S E T H:


WHEREAS, Vodafone and Bell Atlantic are parties to that certain U.S. Wireless Alliance Agreement, dated as of September 21, 1999 (as amended, the "Alliance Agreement"), providing for a series of transactions involving, among other things, the formation of, and contribution of certain wireless communications assets to, Wireless; and


WHEREAS, in connection with the foregoing, Vodafone, Bell Atlantic and Wireless desire to set forth herein certain terms regarding the possible monetization of Vodafone's and Bell Atlantic's respective interests in Wireless;


NOW, THEREFORE, Vodafone, Bell Atlantic and Wireless agree as follows:


ARTICLE I
DEFINITIONS


1.1 Defined Terms. (a) As used in this Agreement, the following terms shall have the following meanings (unless indicated otherwise, all Article and Section references are to Articles and Sections of this Agreement):


"1940 Act Opinion" shall mean an unqualified opinion of a nationally recognized law firm with special expertise in regulation of entities under the Investment Company Act of 1940 (the "1940 Act") to the effect that either (a) it is not necessary for Pubco to register as an investment company under the 1940 Act or (b) if Pubco were to be required to so register, such registration would not adversely affect the rights and obligations of Pubco, Wireless, Vodafone and Bell Atlantic between and among each other.


"Affiliate" shall have the meaning set forth in the Alliance Agreement.


"Alliance Agreement" shall have the meaning set forth in the first recital of this Agreement.


"Applicable Rate" shall mean, for purposes of determining accretion in Market Value pursuant to Section 5.2(c)(ii)(A), (a) for the thirty-day period following the Valuation Date, a rate per annum equal to the LIBO Rate (as defined in the Alliance Agreement) plus 100 basis points and (b) thereafter through the applicable Monetization Closing Date, a rate per annum equal to the LIBO Rate plus 200 basis points.


"Bell Atlantic Backstop" shall mean,


(a) in the case of any exercise of the Phase I Option, (i) $5 billion,
minus (ii) the aggregate amount by which the Bell Atlantic Allocated
Amount shall have been increased pursuant to Section 5.1(c)(ii)(B) in
connection with all prior exercises of the Phase I Option (the "Phase
I Backstop Amount"); and


(b) in the case of any exercise of the Phase II Option, (i) the sum of $5
billion plus the amount of any remaining Phase I Backstop Amount,
minus (ii) the aggregate amount by which the Bell Atlantic Allocated
Amount shall have been increased pursuant to Section 5.1(c)(ii)(B) in
connection with all prior exercises of the Phase II Option.


"Bell Atlantic Common Stock" shall mean Bell Atlantic's Common Stock, par value $0.10 per share.


"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and any successor federal statute, and the rules and regulations thereunder, all as the same shall be in effect from time to time.


"GAAP" shall mean United States generally accepted accounting principles.


"Included Affiliate" means any Wholly Owned Subsidiary of Vodafone and any Affiliate Transferee (as defined in the Partnership Agreement) to which Vodafone transfers a Partnership Interest pursuant to Section 8.2(b)(ii) of the Partnership Agreement.


"Interests" shall mean "Partnership Interests" as such term is defined in the Partnership Agreement.


"Market Value" shall mean, subject to the following sentence, the hypothetical aggregate, fully distributed market value as of the applicable Valuation Date of Interests assuming (a) all Interests were of a single class of common stock, (b) such common stock were publicly tradable, and (c) a regular and active market existed for such common stock on the New York Stock Exchange or the NASDAQ/NMS, whichever market would provide the greater liquidity and value for such common stock. In the event Pubco has consummated an IPO and the Public Common Stock trades in a regular and active market, "Market Value" shall be based on the market price of the Public Common Stock for which Interests are exchangeable, such market price shall equal the volume-weighted average daily trading price on the principal exchange on which the Public Common Stock is then traded for the ten consecutive trading day period ending two days prior to the Valuation Date.


"Measurement Date" shall mean, for any Monetization Closing, the last day of the month preceding such Monetization Closing.


"Monetization Amount" shall mean the U.S. dollar amount of Interests specified by Vodafone in a Monetization Notice.


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"Monetization Notice" shall mean a written notice delivered by Vodafone pursuant to Section 5.1(a) or (b).


"Partnership Agreement" means the Amended and Restated Partnership Agreement of Wireless Partnership to be entered into as of the Stage I Closing as it may be amended from time to time.


"Person" shall mean any individual, partnership, limited liability company, corporation, trust, unincorporated organization or other entity, or a government or agency or political subdivision thereof.


"Realizable Value" means, with respect to any Bell Atlantic Common Stock delivered to Vodafone in connection with any Monetization Closing, the cash proceeds (net of all associated discounts, commissions, fees and other transaction costs and expenses) that would reasonably be expected to be realized, on a per-share basis, from a sale of all of such Bell Atlantic Common Stock, in one or more block trades and in a manner designed to realize cash proceeds as soon as possible following the applicable Monetization Closing Date, taking into account (among other things) the then current trading price and trading volume of Bell Atlantic Common Stock, the expected delay (if any) following the Monetization Closing Date until such Bell Atlantic Common Stock is disposed of, the amount of Bell Atlantic Common Stock to be sold, and the transfer rights and transfer restrictions (whether imposed by contract or law) applicable to Vodafone's ownership of such Bell Atlantic Common Stock.


"SEC" shall mean the Securities and Exchange Commission or its successor.


"Securities Act" shall mean the Securities Act of 1933, as amended, and any successor federal statute, and the rules and regulations thereunder, all as the same shall be in effect from time to time.


"Stage I Closing" shall have the meaning set forth in the Alliance Agreement.


"Stage II Closing" shall have the meaning set forth in the Alliance Agreement; provided that if the Stage II Closing shall not occur, it shall be deemed to have occurred as of the Stage I Closing.


"Valuation Date" shall mean, with respect to any sale of Interests pursuant to Section 5.1(a) or (b), the date of delivery of a Monetization Notice with respect to such Interests.


"Wholly Owned Subsidiary" shall have the meaning set forth in the Partnership Agreement.


(b) Each of the following terms is defined in the Section set forth opposite such term:


Term Section
---- ------- Alternative Structure Section 5.3(e)


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Appraiser's Certificate Section 5.2(a)(i)(B)(2) Assumed Debt Section 5.3(d) Assumed Debt Option Section 5.3(d) Bell Atlantic Allocation Amount Section 5.1(c) Bell Atlantic Appraiser Section 5.2(a)(i)(B)(1) Consideration Notice Section 5.3(a) Deferral Amount Section 5.3(d) Exchanged Shares Section 6.1(a) Higher Number Section 5.2(a)(i)(B)(2) HSR Act Section 2.3 Initiating Party Section 6.1(c) IPO Section 6.1(a) IPO Notice Section 6.1(b) IP Structure Section 6.1(c) Lower Number Section 5.2(a)(i)(B)(2) NIP Structure Section 6.1(c) Non-Initiating Party Section 6.1(c) Phase I Option Section 5.1(a) Phase II Option Section 5.1(b) Pubco Section 6.1(a) Public Common Stock Section 6.1(a) Monetization Closing Section 5.4 Monetization Closing Date Section 5.4 Monetizable Interests Percentage Section 5.2(a) Tax Postponement Amount Section 5.3(e) Third Appraiser Section 5.2(a)(i)(B)(4) Third Number Section 5.2(a)(i)(B)(4) Vodafone Appraiser Section 5.2(a)(i)(B)(1) Wireless Allocated Amount Section 5.1(c)


(c) All references to dollar amounts herein are references to U.S. dollars.


ARTICLE II
REPRESENTATIONS AND WARRANTIES OF VODAFONE


Vodafone hereby makes the following representations and warranties to Bell Atlantic and Wireless:


2.1 Organization and Qualification. Vodafone is a corporation duly organized and existing in good standing under the laws of England and has the corporate power to own its properties and to carry on its business as now being conducted.


2.2 Authorization; Enforcement. (a) Vodafone has full legal right, power and authority to enter into and perform this Agreement, (b) the execution and delivery of this Agreement by Vodafone and the consummation by it of the transactions contemplated hereby have been duly authorized by it, (c) this Agreement has been duly executed and delivered by


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Vodafone and (d) this Agreement constitutes a valid and binding obligation of Vodafone enforceable against Vodafone in accordance with its terms, except that (i) such enforcement is subject to the effect of any bankruptcy, insolvency, reorganization, moratorium, liquidation or similar law relating to, or affecting generally the enforcement of, creditors' rights and remedies and (ii) the remedies of specific performance and injunctive relief may be subject to general principles of equity.


2.3 No Conflicts. The execution, delivery and performance of this Agreement and the consummation by Vodafone of the transactions contemplated hereby will not conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or other encumbrance on any property or asset of Vodafone pursuant to any agreement, indenture or instrument to which Vodafone is a party, or by which any property or asset of Vodafone is bound or affected, or result in a violation of its charter and bylaws or any law, rule, regulation, order, judgment or decree of any court or governmental agency applicable to Vodafone or by which any property or asset of Vodafone is bound or affected. Except for such filings as may be required by the Exchange Act, the Hart-Scott-Rodino Antitrust Improvement Act of 1978 (the "HSR Act") or as specifically contemplated hereby, no consent, authorization or order of, or filing or registration with, any court or governmental agency is required for the execution, delivery and performance by Vodafone of this Agreement.


ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BELL ATLANTIC


Bell Atlantic hereby makes the following representations and warranties to Vodafone and Wireless:


3.1 Organization and Qualification. Bell Atlantic is a corporation duly organized and existing in good standing under the laws of the State of Delaware and has the corporate power to own its properties and to carry on its business as now being conducted.


3.2 Authorization; Enforcement. (a) Bell Atlantic has full legal right, power and authority to enter into and perform this Agreement, (b) the execution and delivery of this Agreement by Bell Atlantic and the consummation by it of the transactions contemplated hereby have been duly authorized by it, (c) this Agreement has been duly executed and delivered by Bell Atlantic and (d) this Agreement constitutes a valid and binding obligation of Bell Atlantic enforceable against Bell Atlantic in accordance with its terms, except that (i) such enforcement is subject to the effect of any bankruptcy, insolvency, reorganization, moratorium, liquidation or similar law relating to, or affecting generally the enforcement of, creditors' rights and remedies and (ii) the remedies of specific performance and injunctive relief may be subject to general principles of equity.


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3.3 No Conflicts. The execution, delivery and performance of this Agreement and the consummation by Bell Atlantic of the transactions contemplated hereby will not conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or other encumbrance on any property or asset of Bell Atlantic pursuant to any agreement, indenture or instrument to which Bell Atlantic is a party, or by which any property or asset of Bell Atlantic is bound or affected, or result in a violation of its charter and by-laws or any law, rule, regulation, order, judgment or decree of any court or governmental agency applicable to Bell Atlantic or by which any property or asset of Bell Atlantic is bound or affected. Except for such filings as may be required by the Exchange Act, the HSR Act or as specifically contemplated hereby, no consent, authorization or order of, or filing or registration with, any court or governmental agency is required for the execution, delivery and performance by Bell Atlantic of this Agreement.


ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF CELLCO PARTNERSHIP


Wireless hereby makes the following representations and warranties to Vodafone and Bell Atlantic:


4.1 Organization and Qualification. Wireless is a general partnership duly organized and existing under the laws of the State of Delaware and has the power to own its properties and to carry on its business as now being conducted.


4.2 Authorization; Enforcement. (a) Wireless has full legal right, power and authority to enter into and perform this Agreement, (b) the execution and delivery of this Agreement by Wireless and the consummation by it of the transactions contemplated hereby have been duly authorized by it, (c) this Agreement has been duly authorized, executed and delivered by Wireless and (d) this Agreement constitutes a valid and binding obligation of Wireless enforceable against Wireless in accordance with its terms, except that (i) such enforcement is subject to the effect of any bankruptcy, insolvency, reorganization, moratorium, liquidation or similar law relating to, or affecting generally the enforcement of, creditors' rights and remedies and (ii) the remedies of specific performance and injunctive relief may be subject to general principles of equity.


4.3 No Conflicts. The execution, delivery and performance of this Agreement and the consummation by Wireless of the transactions contemplated hereby will not conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or other encumbrance on any property or asset of


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Wireless pursuant to any agreement, indenture or instrument to which Wireless is a party, or by which any property or asset of Wireless is bound or affected, or result in a violation of Wireless's Partnership Agreement or any law, rule, regulation, order, judgment or decree of any court or governmental agency applicable to Wireless or by which any property or asset of Wireless is bound or affected. Except for such filings as may be required under the HSR Act or as specifically contemplated hereby, no consent, authorization or order of, or filing or registration with, any court or governmental agency is required for the execution, delivery and performance by Wireless of this Agreement.


ARTICLE V
VODAFONE'S MONETIZATION OPTION


5.1 Monetization Option. Vodafone shall have the right to require that Bell Atlantic and Wireless purchase Interests from Vodafone and its Included Affiliates as follows:


(a) Phase I Option. Upon written notice from Vodafone delivered to Bell Atlantic and Wireless during the period commencing thirty (30) days before, and ending thirty (30) days after, either one or both of the third anniversary date and the fourth anniversary date of the Stage II Closing (it being agreed that no more than one such notice may be delivered with respect to either such anniversary), Vodafone may elect to require that Wireless (subject to paragraph (c) below) purchase from Vodafone or Included Affiliates of Vodafone specified in the written notice, that percentage of Interests which have an aggregate Market Value equal to the amount (stated in U.S. dollars) specified by Vodafone in such written notice (the "Phase I Option"); provided that in no event shall the aggregate amount actually paid to Vodafone and its Included Affiliates pursuant to the Phase I Option exceed $10 billion.


(b) Phase II Option. Upon written notice from Vodafone delivered to Bell Atlantic and Wireless during the period commencing thirty (30) days before, and ending thirty (30) days after, any one or more of the fifth anniversary date, the sixth anniversary date and the seventh anniversary date of the Stage II Closing (it being agreed that no more than one such notice may be delivered with respect to any such anniversary), Vodafone may elect to require that Wireless (subject to paragraph (c) below) purchase from Vodafone or Included Affiliates of Vodafone specified in the written notice that percentage of Interests which have an aggregate Market Value equal to the amount (stated in U.S. dollars) specified by Vodafone in such written notice (the "Phase II Option"); provided that (i) in no event shall the aggregate amount actually paid to Vodafone and its Included Affiliates pursuant to the Phase II Option exceed (x) $20 billion, minus (y) the amount actually paid to Vodafone and its Included Affiliates pursuant to the Phase I Option, and (ii) the Monetization Amount specified in any Monetization Notice delivered with respect to any single exercise of the Phase II Option shall not exceed $10 billion.


(c) Allocation of Obligations.


(i) Bell Atlantic shall have the right, exercisable by written notice to Vodafone within thirty (30) days after a determination of the Monetizable Interests Percentage pursuant to Section 5.2, to obligate itself or its designee (for whose obligations Bell Atlantic shall be primarily liable) rather than Wireless to purchase pursuant to the Phase I Option or the Phase II Option some or all of the percentage of Interests covered by the applicable Monetization Notice. Such written notice shall specify that portion of the Monetization Amount as to which Bell


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Atlantic is exercising the foregoing right and such notice may not be modified or revoked by Bell Atlantic after it is delivered to Vodafone. That portion of the Monetization Amount allocated to Wireless and Bell Atlantic after giving effect to this Section 5.1(c) shall be the "Wireless Allocated Amount" and the "Bell Atlantic Allocated Amount," respectively. In the event that the Wireless Allocated Amount for all transactions effected pursuant to the Phase I Option exceeds $5 billion, then a "Monetization Imbalance" shall be deemed to exist for purposes of Section 7.1(c) of the Partnership Agreement.


(ii) Notwithstanding Bell Atlantic's proposed allocation of the Monetization Amount pursuant to subparagraph (i) above, (A) at the option of Vodafone, Wireless (and not Bell Atlantic) shall be obligated to purchase pursuant to the Phase II Option a portion of the Monetization Amount, not to exceed a total of $7.5 billion, in one or more transactions as provided in Sections 5.3(d) and 5.3(e) and (B) in the event that Wireless defaults on its obligations pursuant to the Phase I Option or Phase II Option to purchase some or all of the Interests covered by a Monetization Notice, the Bell Atlantic Allocated Amount shall be increased to the extent necessary to cure such default, but in no event by more than the Bell Atlantic Backstop with respect to the applicable Monetization Closing.


5.2 Determination of Monetizable Interests Percentage and Partnership Interests in Wireless.


(a) Valuation. The percentage of Interests which have a Market Value as of the applicable Valuation Date equal to the Monetization Amount (the "Monetizable Interests Percentage") shall be determined (i) if Pubco has consummated an IPO and Public Common Stock trades in a regular and active market, in accordance with the last sentence of the definition of Market Value set forth in Section 1.1 above or (ii) in circumstances where clause (i) is not applicable, (A) by mutual agreement of the parties to such transaction or (B) if no such agreement is reached within thirty (30) days of the Valuation Date, as follows:


(1) Selection of Appraisers. Each of Vodafone and Bell Atlantic shall designate by written notice to the other an internationally recognized investment banking firm to serve as an Appraiser pursuant to this Section 5.2 (the firms designated by Vodafone and Bell Atlantic being referred to herein as the "Vodafone Appraiser" and the "Bell Atlantic Appraiser," respectively) within five business days after the failure to reach agreement in accordance with the terms of Section 5(a)(ii)(B) above. In the event that either Vodafone or Bell Atlantic fails to designate its Appraiser within the foregoing time period, the other shall have the right to designate such Appraiser by notifying the failing party in writing of such designation (and the Appraiser so designated shall be the Vodafone Appraiser or the Bell Atlantic Appraiser, as the case may be).


(2) Evaluation Procedures. Each Appraiser shall be directed to determine the Monetizable Interests Percentage. Each Appraiser will also be directed to deliver a certificate stating its determination of the Monetization Interests Percentage (an "Appraiser's Certificate") to Vodafone and Bell Atlantic on or before the 30th day after the date of designation of the Vodafone Appraiser or the Bell Atlantic Appraiser, whichever is later (the "Certificate Date"), upon the conclusion of its evaluation, and each Appraiser's Certificate once delivered may not be retracted or modified in any respect. Each Appraiser will keep confidential all information


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disclosed by Wireless in the course of conducting its evaluation, and, to that end, will execute such customary documentation as Wireless may reasonably request with respect to such confidentiality obligation. Vodafone and Bell Atlantic will cooperate in causing Wireless to provide each Appraiser with such information within Wireless's possession that may be reasonably requested in writing by such Appraiser for purposes of its evaluation hereunder. The Appraisers shall consult with each other in the course of conducting their respective evaluations. Each of Vodafone and Bell Atlantic shall have full access to each Appraiser's work papers and shall be entitled to make presentations to each such Appraiser. Each Appraiser will be directed to comply with the provisions of this Section 5.2, and to that end each of Vodafone and Bell Atlantic will provide to its respective Appraiser a complete and correct copy of this Section 5.2 (and the definitions of capitalized terms used in this Section 5.2 that are defined elsewhere in this Agreement.)


(3) Monetizable Interests Percentage Determination. The Monetizable Interests Percentage shall be determined on the basis of the Appraisers' Certificates in accordance with the provisions of this subparagraph (3). The higher of the Monetizable Interests Percentage set forth on the Appraisers' Certificates is hereinafter referred to as the "Higher Number" and the lower Monetizable Interests Percentage set forth on the Appraisers' Certificates is hereinafter referred to as the "Lower Number." If the Higher Number is not more than 105% of the Lower Number, the Monetizable Interests Percentage will be the arithmetic average of such two Numbers. If the Higher Number is more than 105% of the Lower Number, a third appraiser shall be selected in accordance with the provisions of subparagraph (4) below, and the Monetizable Interests Percentage will be determined in accordance with the provisions of subparagraph (5) below.


(4) Selection of and Procedure for Third Appraiser. If the Higher Number is more than 105% of the Lower Number, within seven days thereafter the Vodafone Appraiser and the Bell Atlantic Appraiser shall agree upon and jointly designate a third internationally recognized investment banking firm to serve as an appraiser pursuant to this Section 5.2 (the "Third Appraiser"), by written notice to each of Vodafone and Bell Atlantic. Vodafone and Bell Atlantic shall direct the Third Appraiser to determine the Monetizable Interests Percentage (the "Third Number") in accordance with the provisions of subparagraph (2) above, and to deliver to Vodafone and Bell Atlantic an Appraiser's Certificate on or before the 30th day after the designation of such Appraiser hereunder. The Third Appraiser will be directed to comply with the provisions of this Section 5.2, and to that end the parties will provide to the Third Appraiser a complete and correct copy of this Section 5.2 (and the definitions of capitalized terms used in this Section 5.2 that are defined elsewhere in this Agreement).


(5) Alternative Determination of Monetizable Interests Percentage. Upon the delivery of the Appraiser's Certificate of the Third Appraiser, the Monetizable Interests Percentage will be determined as provided in this subparagraph (5). The Monetizable Interests Percentage will be (w) the Higher Number, if the Third Number is greater than the Higher Number, (x) the Lower Number, if the Third Number is less than the Lower Number, (y) the arithmetic average of the Third Number and the other Number (Higher or Lower) that is closer to the Third Number if the Third Number falls within the range between (and including) the Lower


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Number and the Higher Number and (z) the Third Number, if the Lower Number and the Higher Number are equally close to the Third Number.


(6) Costs.


(x) Each of Vodafone and Bell Atlantic will bear the cost of the
Appraiser designated by it or on its behalf. If the Higher Number is not
more than 110% of the Lower Number, or if the Higher Number and the Lower
Number are equally close to the Third Number, each of Vodafone and Bell
Atlantic shall bear 50% of the cost of the Third Appraiser; otherwise, the
party whose Appraiser's determination of the Monetizable I ...