EXHIBIT 10.5
MERGER AGREEMENT BETWEEN THE COMPANY
AND TELECOM INVESTMENT CORPORATION
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made and entered into as of
January 31, 1997, by and between WIRELESS CABLE & COMMUNICATIONS, INC., a Nevada
corporation (the "Parent"), NEWWCCI, INC., a Delaware corporation and a
wholly-owned subsidiary of Parent ("Subsidiary"), and TELECOM INVESTMENT
CORPORATION, a Delaware corporation (the "Company").
RECITALS:
WHEREAS, the respective Boards of Directors of the Company, the
Subsidiary and Parent deem it advisable and in the best interests of their
shareholders to effect the merger (the "Merger") of the Subsidiary with and into
the Company pursuant to this Agreement.
WHEREAS, the respective Boards of Directors of the Company, Parent
and Subsidiary, and all of the shareholders of the Company and the Subsidiary
have approved the Merger.
WHEREAS, for federal income tax purposes, the Merger is intended
to constitute a reorganization within the meaning of Sections 368(a) and
368(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the "Code").
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, together with other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I - THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions
hereof, at the Effective Time (as defined in Section 1.2), (a) the separate
existence of Subsidiary shall cease and Subsidiary shall be merged with and into
the Company (the Subsidiary and the Company are sometimes referred to herein as
the "Constituent Corporation" and the Company is sometimes referred to herein as
the "Surviving Corporation"). The Merger shall have all the effects of a merger
as provided by Section 259 of the Delaware General Business Laws (the "Act").
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1.2 Effective Date and Time of the Merger. On the Closing Date and
subject to the terms and conditions hereof, articles or certificate of merger
(the "Articles of Merger") shall be duly prepared, executed and acknowledged by
each of the Subsidiary and the Company in compliance with the applicable
provisions of the Act and shall be delivered for filing to the Secretary of
State of Delaware (the "Secretary") as provided in the Act as soon as
practicable on or after the Closing Date. The Merger shall become effective on
the date (the "Effective Date") and at the time (the "Effective Time") that the
Articles of Merger are so filed, or at such time thereafter as is provided in
such Articles of Merger by mutual agreement of Parent and the Company. If the
Secretary requires any changes in the Articles of Merger as a condition to
filing the Articles of Merger or to issuing a certificate of merger, the
Subsidiary and the Company will execute necessary revisions incorporating such
changes, provided they are not inconsistent with, or result in any material
change to, the terms of this Agreement.
1.3 Articles of Incorporation of the Surviving Corporation. The
Certificate of Incorporation of the Company, as in effect immediately prior to
the Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation.
1.4 Bylaws of the Surviving Corporation. The Bylaws of the
Company, as in effect immediately prior to the Effective Time, shall be the
Bylaws of the Surviving Corporation until thereafter amended as provided
therein, in the Certificate of Incorporation of the Surviving Corporation, or by
the Act.
1.5 Board of Directors of the Surviving Corporation. The directors
of the Company immediately prior to the Effective Time shall be the directors of
the Surviving Corporation, without change, until their successors have been duly
elected and qualified or until their earlier death, resignation or removal, in
accordance with the applicable provisions of the Certificate of Incorporation of
the Surviving Corporation and the Bylaws of the Surviving Corporation.
1.6 Officers of the Surviving Corporation. The officers of the
Company immediately prior to the Effective Time shall be and become the officers
of the Surviving Corporation, without change, until their successors have been
duly elected and qualified or until their earlier death, resignation or removal,
in accordance with the Certificate of Incorporation of the Surviving Corporation
and the Bylaws of the Surviving Corporation.
1.7 Closing and Closing Date. Prior to the filing of the Articles
of Merger, a closing (the "Closing") of the transactions herein contemplated
shall take place for the purpose of confirming the satisfaction of, or if
permissible, waiver, of the conditions set forth in Article VI hereof. The
Closing will take place as soon as practicable after the satisfaction, or, if
permissible, waiver, of the conditions set forth in Article VI hereof (such time
and date being referred to herein as the "Closing Date"), at the offices of
Xxxxxxx Xxxxx & Xxxxxxx, 000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000, Xxxx Xxxx Xxxx,
Xxxx, or at such other place as Parent and the Company shall agree. At the
Closing, each of the parties shall take all such actions and execute and deliver
all such documents, instruments, certificates and other items as may be required
under this Agreement or otherwise, in order to perform or fulfill all covenants,
conditions and agreements on its part to be performed at or prior to the Closing
Date and to cause all conditions precedent to the other party's obligations
under this Agreement to be satisfied in full.
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ARTICLE II - CONVERSION OF SECURITIES
2.1 Conversion of Company Shares. As of the Effective Date, by
virtue of the Merger and without any action on the part of any of the parties or
any holder of any shares of the Company or Subsidiary, all of the outstanding
common shares of the Company (the "Company Common Shares"), shall, in the
aggregate, be converted into the right to receive 2,397,732 fully paid and
nonassessable shares of the Parent's Series A Preferred Stock (the "Parent
Shares") upon surrender of the certificates formerly representing such Company
Common Shares.
2.2 Conversion of Subsidiary Shares. As of the Effective Date, by
virtue of the Merger and without any action on the part of any of the parties or
any holder of any shares of the Company or Subsidiary, each of the issued and
outstanding common shares of the Subsidiary shall be converted into and become
1,000 validly issued, fully paid and nonassessable common shares of the
Surviving Corporation.
2.3 Options for Company Shares. All outstanding options or
warrants to acquire Company Common Shares shall, as of the Effective Date and by
virtue of the Merger and without any action on the part of the parties or any
holder of such options or warrants, be converted into the right to acquire (upon
substantially the same terms and conditions as the outstanding options or
warrants to acquire the Company Common Shares, as adjusted to reflect the
relative rights and preferences thereof and the relative dilution resulting from
the exercise of such options and warrants to the existing shareholders of the
Company assuming no consummation of the Merger) Parent Shares.
ARTICLE III - PAYMENT AND SURRENDER
3.1 Ownership and Delivery of Certificates.
(a) Payment Schedule. At or prior to the Closing, the
Company shall deliver to the Subsidiary a schedule (the "Ownership Schedule")
containing, to the best knowledge of the Company, the names and addresses of all
holders of shares of the Company and rights in respect thereof. The schedule
shall also set forth all option or warrant holders of the Company Common Shares.
With respect to each holder, the Ownership Schedule shall indicate (i) the
number of Company Common Shares currently owned or subject to acquisition by the
holder, and (ii) the aggregate number of shares of Parent Shares to be received
by such holder.
(b) Delivery of Certificates. The Company shall use its
reasonable efforts to obtain prior to the Closing Date, the surrender of the
certificates representing as many of the Company Common Shares as possible. All
such certificates shall be duly endorsed in blank, or accompanied by blank stock
powers. In the case of Company Common Shares, the certificates representing
shares which have been lost, mutilated or destroyed, the Company will use its
reasonable efforts to obtain from the owners of such shares an affidavit of lost
certificate, in such form as shall be approved by the Subsidiary. As to any
certificates representing Company Common Shares which are surrendered to the
Company by a person, firm or entity other than the record holder thereof as
shown on the books and records of the Company, the Company shall accept the
surrender of such certificates only when such certificates are accompanied by
such documents and instruments confirming the ownership rights
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in such shares as shall be satisfactory to the Subsidiary. The Company shall
hold all shares surrendered to it pursuant to this Section 3.1(b) in escrow
until the Closing.
(c) Delivery of Parent Shares. At the Closing, on the
basis of the Payment Schedule, Subsidiary shall deliver, to each holder that has
theretofore surrendered its certificates or acceptable evidences thereof to the
Company in accordance with Section 3.1(b) hereof, that number of Parent Shares
referred to in clause 4.1(a) (ii) above. Any part or portion of the total number
of Parent Shares which are not so distributed to shareholders of the Company
upon the Closing Date in accordance with this Section 4.1(c) shall be held by
Parent. Parent shall send to any holders of Company Common Shares who shall not
have so surrendered stock certificates, or acceptable evidences thereof, at or
prior to the Closing Date, a letter of transmittal instructing such holders to
surrender to Parent their certificates, duly endorsed in blank, or acceptable
evidences thereof. Upon delivery thereof, the holders shall be entitled to, and
the Parent shall distribute to such holders, the Parent Shares for the shares of
Company Common Shares held by such holders.
3.2 Closing of Transfer Records. After the close of business on
the Closing Date, transfers of the Company Common Shares outstanding prior to
the Effective Time shall not be made on the stock transfer books of the
Surviving Corporation.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the Subsidiary. Subsidiary
represents and warrants to the Company as follows:
(a) Organization; Good Standing. Subsidiary is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
own, operate and lease its properties and to carry on its business as now being
conducted.
(b) Execution and Validity of Agreements. The execution
and delivery by Subsidiary of this Agreement, and the consummation of the
transactions provided for herein have been duly authorized by all requisite
corporate and shareholder action. This Agreement has been duly and validly
executed and delivered by Subsidiary, and, assuming due authorization, execution
and delivery of this Agreement by the other parties to it, is a legal, valid and
binding obligation of Subsidiary, enforceable against it in accordance with its
terms, subject only to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and to general
equity principles.
(c) Effect of this Agreement. The execution, delivery and
performance of this Agreement by Subsidiary, and the consummation by it of the
transactions contemplated hereunder, do not and will not conflict with or result
in a breach or termination of any term or provision of, or constitute a default
under, or result in the creation of any lien, charge or encumbrance upon any of
its properties or assets pursuant to any corporate charter, bylaw, mortgage,
deed of trust, indenture or other agreement or instrument, or any order,
judgment, decree or like restriction, statute or regulation by which it or any
of its assets and properties may be bound.
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(d) No Approvals or Notices Required: No Conflicts With
Instruments. The execution, delivery and performance of this Agreement by
Subsidiary and the consummation by it of the transactions contemplated hereby
will not (i) constitute a violation (with or without the giving of notice or
lapse of time) of any provision of applicable law, (ii) require any consent,
approval or authorization of any person or governmental authority which it has
not obtained, (iii) result in a default under, acceleration or termination of,
or the creation in any person or entity of the right to accelerate, terminate,
modify or cancel, any agreement, lease, franchise, permit, note or other
restriction, encumbrance, obligation or liability to which Subsidiary is a party
or by which it is bound or to which any of its assets are subject, (iv) result
in the creation of any lien or encumbrance upon Subsidiary's assets, (v)
conflict with or result in a breach of or constitute a default under any
provision of Subsidiary's Certificate of Incorporation or Bylaws, or (vi)
conflict with, result in tortious interference as a result of such conflict
with, or otherwise violate, any contract or arrangement between Subsidiary and
any other person.
(e) Broker. Neither Subsidiary nor any of its affiliates
(including Parent) or anyone acting on behalf of it, has taken any action
relating to any broker, finder, consultant or other expert which could result in
the imposition upon the Company, or any of its affiliates, of any obligation to
pay a fee to any broker, finder, consultant or other similar expert in
connection with this Agreement or the transactions contemplated hereby.
4.2 Representations and Warranties of the Company. The Company
hereby represents and warrants to Subsidiary and Parent as follows:
(a) Disclosure Schedule. Prior hereto (and updated on the
date hereof) the Company has delivered to Subsidiary and Parent a schedule (the
"Disclosure Schedule"), which is incorporated by reference herein and which
represents, except as otherwise provided therein, a correct and complete listing
of the information called for and copies of all documents called for and setting
forth as of the date hereof (unless otherwise specifically indicated) the
following:
(i) A true and complete copy of the Company's
Certificate of Incorporation, together with all amendments and restatements
thereto through the date hereof, and a true and complete copy of the Bylaws of
the Company as in effect on the date hereof;
(ii) A listing of all jurisdictions where the
Company has qualified to do business as a foreign corporation, with true and
complete copies of all certificates of authority to do business as a foreign
corporation, certified by the appropriate governmental authorities;
(iii) The unaudited financial statements (the
"Unaudited Financial Statements") of the Company for the fiscal year ended
August 31, 1996 and for the 3 months ended November 30, 1996, including the
Company's balance sheet (the "Balance Sheet") dated November 30, 1996 (the
"Balance Sheet Date");
(iv) A complete list of any real property owned
or leased by the Company, together with a materially complete legal description
of such real property;
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(v) A materially correct list and description of
all items of machinery, tools and equipment owned or leased by the Company
(pursuant to capital and operating leases);
(vi) Copies of all issued patents, pending
patent applications, registered trademarks, trade names, servicemarks,
brandmarks, brand names or copyrights owned or used by the Company, together
with copies of all registrations, licenses and royalty agreements for any of the
foregoing, owned in whole or in part by the Company; copies of all written, and
a description of all oral, licenses granted by or to the Company and all other
agreements to which the Company is a party which relate, in whole or in part, to
any of the above; and a list describing all trade secrets, know-how or processes
owned and presently utilized by the Company;
(vii) Copies of all business licenses and
permits, approvals or similar notices (including without limitation all
environmental and health licenses, permits, approvals and notices) issued to and
held by the Company from any Federal, foreign, state or local governmental body;
(viii) Copies of any policies of insurance
(including without limitation fidelity bonds covering officers and employees and
policies on the life of any directors, officers or key employees) in force now
and insuring the liabilities, risks, or properties or other assets of the
Company;
(ix) Copies of all written, or a description of
the material terms of all oral, existing contracts and agreements (including,
without limitation, mortgages, leases, loan agreements, and credit agreements),
to which the Company is a party or by which it or any of its properties or
assets may be bound other than (A) contracts involving less than $50,000 each or
(B) contracts or commitments which are terminable by the Company upon no more
than thirty (30) days' notice without penalty (collectively, the "Material
Contracts");
(x) Copies of any and all agreements between the
Company and any other party relating to the purchase or sale of capital stock or
any other security of the Company;
(xi) Copies of all written, or a description of
all oral employment and consulting agreements, executive compensation plans,
incentive compensation plans, employee stock purchase and stock option plans,
and other plans or arrangements providing for benefits for the employees of the
Company;
(xii) The name of each bank or other financial
institution from which credit commitments, loans or financing to the Company are
outstanding, together with complete copies of any existing credit agreements
and/or other banking documentation related thereto;
(xiii) The name of each bank or other financial
institution where the Company has an account or safe deposit box and the names
of all persons authorized to draw thereon or to have access thereto;
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(xiv) The names of all persons, firms,
associations, corporations or business organizations holding general or special
powers of attorney from the Company and a summary of the terms thereof;
(xv) The names of the plaintiffs, defendants,
claimants or other parties, the court, agency or other forum and the applicable
docket numbers of all pending claims, actions, suits, or legal, administrative,
arbitrations or other proceedings or investigations to which the Company or any
officer or director of the Company (with respect to matters relating to the
Company) has received service of process or other official notification; and
(xvi) A list of all accounts receivable of the
Company.
Except as otherwise indicated in the Disclosure Schedule, true and
complete copies of all documents, including all amendments thereto, and a
description of all oral agreements referred to in the Disclosure Schedule shall
be attached thereto. Except as otherwise noted in the Disclosure Schedule, there
is not, under any of the documents, rights, obligations and commitments referred
to in the Disclosure Schedule (including without limitation any of the Material
Contracts) any existing breach, default or event which with notice and/or lapse
of time would constitute a default thereunder by the Company or, to the
Company's knowledge, by any other party thereto, nor has any party thereto given
notice of or made a claim with respect to any such breach or default.
(b) Organization; Good Standing; No Subsidiaries.
(i) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
has all requisite corporate power and authority to own, operate and lease its
properties and to carry on its business as now being conducted, and is duly
qualified to do business as a foreign corporation in every jurisdiction wherein
the failure to so qualify would have a material and adverse effect on the
Company or its business, and the Company has not been requested to so qualify in
any jurisdiction.
(ii) The Company has one subsidiary, Telecom
Investment Corporation del Peru, S.A. ("TICP"), a Peruvian corporation, which is
owned 89% by the Company. TICP's other shareholders are Xxx Xxxxxxxx, a member
of the Company's board of directors, who holds 10% of TICP and a Peruvian
national who is a shareholder in Xxxxxxx X.X., which has a joint venture
agreement with TICP.
(c) Execution and Validity of Agreements. The Company has
all requisite power and authority to enter into this Agreement and to perform
its obligations hereunder. This Agreement has been duly and validly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery by Subsidiary and Parent, is a legal, valid and binding obligation of
the Company, enforceable against it in accordance with its terms, subject only
to bankruptcy, insolvency, reorganization, moratorium and other laws relating to
or affecting creditors' rights generally and to general equity principles.
(d) Capital Stock.
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(i) Schedule 5.2(d)(i) hereto accurately (A)
describes the authorized capital stock of the Company, (B) lists the number of
shares of such capital stock presently issued and outstanding and (C)
identifies, to the best knowledge of the Company, the true and lawful owner of
each of the shares of such capital stock. All of the outstanding shares of
capital stock have been duly and validly authorized and issued and are fully
paid and nonassessable, with no personal liability attaching to the ownership
thereof. The Company does not have any capital stock outstanding other than as
listed in Schedule 5.2(d)(i) hereto;
(ii) Schedule 5.2(d)(ii) hereto accurately
describes the number of shares of Company Common Stock with respect to which
warrants are outstanding, and with respect to which stock options have been
granted and are outstanding, and identifies the holder and owner of such
warrants and stock options. Except for the conversion rights of such outstanding
warrants and stock options, the Company has no outstanding subscriptions,
options, rights, warrants, calls, commitments or agreements of any kind to issue
or acquire any shares of capital stock of the Company, or any securities
convertible into any shares of such capital stock and, other than this
Agreement, there are no shareholder or other agreements or understandings with
respect to the sale or transfer of any shares of such capital stock or other
securities;
(e) Financial Statements. The Unaudited Financial
Statements are true and correct and fairly present, in all material respects,
the financial position of the Company as of the dates indicated and the results
of operations for the periods therein indicated.
(f) Accounts Receivable and Accounts Payable. All
accounts receivable and all other receivables reflected on the Balance Sheet and
all such receivables arising after the Balance Sheet Date are bona fide
receivables and are current and enforceable and arose in the ordinary course of
business. No material counterclaims or offsetting claims with respect to such
receivables are pending or, to the Company's knowledge have been, threatened.
All accounts payable and all other payables reflected in the Balance Sheet are
bona fide payables which arose in the ordinary course of business and have been
paid or are not yet due and payable.
(g) Undisclosed Liabilities. The Company has no material
debts or liabilities or obligations of any nature whatsoever, whether accrued,
absolute or contingent, determined or undetermined, known or unknown, and
whether due or to become due (including, without limitation, liability for
taxes, assessments, penalties, fees or interest), except (i) liabilities or
obligations specifically reflected and, if appropriate, reserved against on the
Balance Sheet, (ii) liabilities or obligations arising in the ordinary course of
business since the date of the Balance Sheet, none of which, individually or in
the aggregate, involves or will involve, individually or in the aggregate, more
than $50,000, (iii) liabilities or obligations set forth in the Disclosure
Schedule, and (iv) contractual obligations of the Company under contracts
incurred in the ordinary course of business which are not required to be
disclosed in the Disclosure Schedule.
(h) Absence of Certain Changes or Events. Since the
Balance Sheet Date, there has been no material adverse change in the assets,
liabilities, operations or business prospects of the Company, and the Company
has not (i) declared any dividend or made any payment or other distribution in
respect of its shares of capital stock, (ii) acquired or disposed of any shares
of its capital stock, (iii) entered into any transaction with any officer,
director, employee, or any known
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relative thereof or any entity in which any such person has an interest, except
the payment of rent, salaries, wages and expenses reimbursement in the ordinary
course of business at the same levels in effect prior to such date, (iv)
incurred any obligation or liability (contingent or otherwise), except (A) this
Agreement, (B) normal trade and other obligations incurred in the ordinary
course of business, and (C) obligations under contracts, agreements and leases,
the performance of which have not and will not, individually or in the aggregate
exceed $50,000, (v) discharged or satisfied any lien or other encumbrance or
paid any obligation or liability (fixed or contingent), except in the ordinary
course of business or required by the terms thereof or in connection with the
transactions contemplated herein, (vi) mortgaged, pledged or subjected to any
lien or other encumbrance any of its assets (whether tangible or intangible),
(vii) sold, assigned, transferred, conveyed, leased or otherwise disposed of or
agreed to sell, lease or otherwise dispose of any of its assets except for sales
of assets for fair consideration in the ordinary course of business, (viii)
canceled or compromised any debt or claim, except in the ordinary course of
business, (ix) waived or released any rights, except for waivers or releases
made in the ordinary course of business, (x) transferred or granted any rights
under any of its concessions, leases, licenses, agreements, patents, trademarks,
trade names, servicemarks, brandmarks, brand names, copyrights, or with respect
to any of its inventions or know-how, (xi) made any single capital expenditure
in excess of $50,000, or entered into any commitment therefor, (xii) suffered
any casualty loss or damage, whether or not covered by insurance, or (xiv)
except as otherwise provided in this Subsection (h), entered into any other
transaction, contract or commitment other than in the ordinary course of
business.
(i) Taxes. The Company has not yet filed any federal,
state, local or foreign returns in any jurisdiction relating to any taxes,
assessments, penalties, fees, interest and other governmental charges on the
Company's properties, income or franchises ("Taxes"). The provision for Taxes
payable reflected on the Unaudited Financial Statements is adequate for the
payment of all liabilities of the Company for Taxes through the date of such
Unaudited Financial Statements. In addition, the Company has made or by the
Closing Date, will have made, adequate provision for the payment of Taxes
accrued or accruable through the end of the month preceding the Closing. None of
the income tax returns of the Company have been audited. The Company has not
executed or filed with any applicable taxing authority any agreement or other
document having the effect of extending the period for assessment or collection
of any taxes. The Company is not a party to any action or proceeding pending, or
threatened, by any governmental authority for assessment or collection of taxes
and no claim for assessment or collection of taxes has been asserted against the
Company. The Company is not part of an Affiliated Group (as defined in the
Code).
(j) Litigation. There are no claims, actions, suits or
legal or administrative arbitrations or other proceedings or investigations
relating to or pending against the Company, or, to the Company's knowledge,
threatened against or affecting the Company, or to which the Company is a party,
before or by any Federal, foreign, state, local or other governmental or
non-governmental department, commission, board, bureau, agency, court or other
instrumentality, or by any private person or entity, and, to the Company's
knowledge, there are no facts which would provide a basis for any such claim,
action, suit or proceeding. There are no existing or, to the knowledge of the
Company, threatened orders, judgments or decrees of any court or governmental
agency which specifically apply to the Company or any of its properties or
assets.
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(k) Labor Controversies. The Company has complied in all
material respects with all applicable Federal, foreign, state or local laws or
regulations thereof relating to wages, hours, collective bargaining and the
payment of Social Security and similar taxes; and the Company is not liable for
any arrears of wages or any taxes or penalties for failure to comply with any of
the foregoing. The Company has complied in all material respects with all
applicable Federal, foreign, state or local laws or regulations thereof relating
to occupational safety; and the Company is not liable for any penalties for
failure to comply therewith.
(l) Patents; Trademarks, etc. The Company possesses all
those patents, patent licenses, trade names, trademarks, servicemarks,
brandmarks, brand names, copyrights, know-how, formulae and other proprietary
and trade rights necessary for the conduct of its business as now conducted,
subject to no restrictions and without any known conflict with the rights of
others, and to the knowledge of the Company, no person or entity has made any
claims or threatened that the Company is in violation or infringement of any
patent, patent license, trade name, trademark, servicemark, brandmark, brand
name, copyright, know-how, formula or other proprietary or trade rights of such
third party, and no assignments, grants, or licenses to use such marks,
copyright, know-how, formulae or trade rights have been granted by the Company.
(m) Compliance with Law.
(i) The Company has all governmental licenses
and permits (Federal, foreign, state and local) necessary to conduct its
business, and such licenses and permits are in full force and effect. No notices
of violation are or have been received with respect to any such licenses or
permits, and no proceeding is pending or, to the Company's knowledge, threatened
looking toward the revocation or limitation of any such license or permit;
(ii) The Company has duly complied in all
material respects with all applicable Federal, foreign, state and local laws and
regulations relating to the operation of its business; and
(iii) The Company has duly complied in all
material respects with all applicable Federal, foreign, state and local laws and
regulations which have been enacted or adopted relating to the protection of the
environment.
(n) No Approvals or Notices Required; No Conflicts With
Instruments. The execution, delivery and performance of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby will
not (i) constitute a violation (with or without the giving of notice or lapse of
time) of any provision of applicable law, (ii) require any consent, approval or
authorization of any person or governmental authority, (iii) result in a default
under, acceleration or termination of, or the creation in any party of the right
to accelerate, terminate, modify or cancel, any agreement, lease, franchise,
permit, note or other restriction, encumbrance, obligation or liability to which
the Company is a party or by which it is bound or to which any of its assets are
subject, (iv) result in the creation of any lien or encumbrance upon the
Company's assets, (v) conflict with or result in a breach of or constitute a
default under any provision of the Company's Certificate of Incorporation or
Bylaws, or (vi) conflict with, result in tortious interference as a result of
such conflict with, or otherwise violate, any contract or arrangement between
the Company and any other person.
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(o) Disclosure. The Company has not failed to disclose to
Subsidiary or Parent any fact which could reasonably be anticipated to impact
negatively upon Subsidiary's or Parent's decision to enter into this Agreement.
(p) Title to Properties; Absence of Liens and
Encumbrances. The Company has good and merchantable title to the properties and
assets owned by it, including all property reflected in the Balance Sheet, free
and clear of all liens, security interests, charges, claims and encumbrances,
other than (i) as may be referred to in the Balance Sheet or described in the
Disclosure Schedule, (ii) any liens for taxes not yet due and payable or being
contested in good faith by appropriate proceedings.
(q) Employee Benefit Plans.
(i) The Company does not currently have or
maintain, and has not in the past maintained, employee benefit plans ("Benefit
Plans") as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or any other bonus, incentive, retirement or
other employee benefit plans, programs or arrangements, under which the Company
has any present or future obligation or liability or under which any current or
former employee of the Company has any present or future rights to benefits;
(ii) The Company does not contribute to or have
any present or future obligation or liability in connection with any
multiemployer plans, as defined in Section 4001(a)(3) of ERISA, or with any
employee pension benefit plan, as defined in Section 3(2) of ERISA, subject to
Title IV of ERISA.
ARTICLE V - COVENANTS
5.1 Pre-Closing Covenants. The Company and Parent, as the case
may be, covenant and agree to take the following actions between the date hereof
and the Closing Date:
(a) Operation of the Business. Between the date hereof
and the Closing Date, the Company shall:
(i) operate the business of the Company in the
ordinary course, consistent with past practices;.
(ii) maintain such insurance on the assets and
properties of the Company, and with respect to the conduct of the business of
the Company, in such amounts and of such kinds as may be in effect on the date
of this Agreement;
(iii) comply with all laws applicable to it, the
violation of which would have a material adverse effect on its operations.
Furthermore, the Company shall not, between the date hereof and
the Closing Date, without the express written consent of Parent:
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(i) assume or create a mortgage, security
interest, pledge, lien or encumbrance of or upon any of the assets of the
Company, except for security interests or liens arising in the ordinary course
of business as a matter of law or contract for the purchase of goods not yet
paid for;
(ii) amend, renew or terminate any of the
Company's contracts, agreements, franchises, permits or licenses, other than in
the ordinary course of business or as may be required by the terms hereof;
(iii) sell, lease, transfer or otherwise dispose
of any of the properties or assets of the Company, other than in the ordinary
course of business, or cancel or compromise any debt or claim owing to the
Company or waive, compromise or release any right relating to the Company;
(iv) institute or amend any Benefit Plan or any
other bonus, stock option, profit sharing, pension, retirement or other similar
arrangement or plan, except amendments required by law or amendments required to
prevent the expiration or termination thereof (of which the Company shall notify
Parent);
(v) enter into any employment contract;
(vi) institute or increase any compensation or
benefits payable to any officer or employee of the Company, or pay or accrue any
bonus to any such officers or employees, except as required by the policies or
agreements listed on the Disclosure Schedule;
(vii) knowingly take any action which would
cause any of the representations and warranties of the Company contained in this
Agreement to be untrue as of the Closing Date;
(viii) transfer or grant any right under, or
enter into any settlement regarding the breach or infringement of, any license,
patent, copyright, trademark, trade name, invention, franchise or similar right,
or modify any existing right with the respect thereto;
(ix) institute, settle or agree to settle any
litigation, action or proceeding before any court or governmental body relating
to its business;
(x) suffer any change, event or condition which
materially adversely affects the condition (financial or otherwise) of the
properties, assets, liabilities, business or prospects of the Company;
(xi) incur any obligation, or liability,
absolute or contingent or otherwise relating to the Company, whether due or to
become due, except liabilities incurred in the ordinary course of business and
which, individually or in the aggregate, involve less than $50,000; and
(xii) amend, modify or alter the Certificate of
Incorporation or Bylaws of the Company.
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(b) Investigation. The Company shall permit Parent to
make or cause to be made such investigation of the business and properties of
the Company and its financial and legal condition as Parent deems necessary or
advisable to familiarize itself therewith. Parent and its accountants,
contractors, counsel and other representatives shall have full access to the
premises, real property, books and records of the Company during normal business
hours. The officers of the Company shall promptly furnish Parent with access to
such financial and operating data, including bank records, information
concerning the ownership of, title to and restrictions upon the use of the
Company's property, and other similar information with respect to business and
properties of the Company as may be in their possession and as Parent shall from
time to time reasonably request.
5.2 Regulatory Authorizations, Third Party Consents. Each Party
will use its reasonable efforts to obtain as soon as practicable all consents,
authorizations, orders and approvals of any governmental commission, board or
other regulatory body or any other person required for, or in connection with
the performance by it of, this Agreement and the consummation by it of the
transactions contemplated hereby and will cooperate fully with the other party
hereto in assisting it to obtain any such consent, authorizations, orders and
approvals.
5.3 Additional Agreements. Subject to the terms and conditions
provided herein, each of the parties agrees to use its reasonable efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective, as soon as reasonably practicable, the
transactions contemplated by this Agreement. In case at any time after the
Closing Date any further action is necessary, proper or advisable to carry out
the purposes of this Agreement, as soon as reasonably practicable each party
shall take all such necessary action.
5.4 No Public Announcement. Except as may be required by law, or
as contemplated by Sections 6.6 and 6.7 hereof, no party hereto shall make any
public announcement concerning the transactions contemplated by this Agreement
without the prior written approval of the other Party, which approval shall not
be unreasonably withheld.
5.5 Update of Disclosure Schedule. The Company shall promptly
disclose to Parent and update the Disclosure Schedule to indicate any
developments which make inaccurate any of the representations and warranties of
the Company contained herein.
ARTICLE VI - CONDITIONS PRECEDENT
6.1 Parent's Conditions Precedent. Parent and Subsidiary shall
have no obligation hereunder unless prior to or simultaneously with the Closing
each of the conditions set forth in each of the clauses below shall have been
satisfied or waived.
(a) Stockholder Approval. This Agreement shall have been
approved by the holders of the Company Common Shares in accordance with the Act.
(b) Representations and Warranties of the Company. The
representations and warranties of the Company contained in this Agreement were
true and correct in all material respect
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as of date of this Agreement and shall also be true and correct in all material
respect at and as of the Closing Date with the same force and effect as if then
initially made.
(c) Performance of Covenants. The Company shall have
performed in all material respects all obligations and agreements and complied
in all material respects with all covenants required to be performed or complied
with at or prior to the Closing.
(d) Bring-Down Certificate. The Company shall have
delivered to Parent a certificate, dated the Closing Date, certifying that all
of the conditions set forth in this Section 7.1 have been satisfied.
(e) No Adverse Changes. Between the Balance Sheet Date
and the Closing Date, there shall have been no material adverse change in the
condition (financial or otherwise), operations, business or prospects of the
Company.
(f) Authorizations: Consents. All governmental
authorizations and all consents of other parties required pursuant to the terms
and provisions of any leases, franchises, agreements, instruments, licenses and
permits in connection with consummation of the transactions contemplated hereby
shall have been obtained and delivered to Parent, all in form satisfactory to
Parent.
(g) Legal Proceedings: Injunctions, etc. At the Closing
Date, there shall be no judgment, decree, injunction, rule or order of any
court, governmental department, commission, agency, instrumentality or
arbitrator outstanding against Parent, Subsidiary or the Company which
prohibits, restricts or delays the consummation of the transactions contemplated
by this Agreement; and at the Closing Date there shall be no pending lawsuit,
claim or legal action involving Parent, the Subsidiary or the Company relating
to the transactions contemplated by this Agreement which could or would
adversely affect such transaction or Parent, the Subsidiary or the Company.
(h) Resolutions. The Company shall have delivered to
Parent copies of resolutions of its Board of Directors and shareholders
authorizing and approving the execution of this Agreement and the consummation
of the transactions contemplated hereby.
6.2 Conditions Precedent of the Company. The Company shall not
have any obligation hereunder unless prior to or simultaneously with the Closing
each of the conditions set forth in the clauses below shall have been satisfied
or waived.
(a) Board of Director Approval. This Agreement shall have
been approved by the Board of Directors of Parent and Subsidiary and the sole
shareholder of Subsidiary.
(b) Parent's Representations and Warranties. The
representations and warranties of Parent contained in this Agreement were true
and correct at the date of this Agreement and shall also be true and correct at
and as of the Closing Date with the same force and effect as if then initially
made.
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(c) Parent's Certificate. Parent shall have delivered to
the Company a certificate, dated the Closing Date, certifying that all of the
conditions set forth in this Section 7.2 have been satisfied.
(d) Legal Proceedings; Injunctions. etc. At the Closing
Date, there shall be no judgment, decree, injunction, rule or order of any
court, governmental department, commission, agency, instrumentality or
arbitrator outstanding against the Company Parent or the Subsidiary which
prohibits, restricts or delays the consummation of the transactions contemplated
by this Agreement; and at the Closing Date there shall be no pending lawsuit,
claim or legal action involving the Company or Parent or the Subsidiary relating
to the transactions contemplated by this Agreement which could or would
adversely affect such transaction or the Company.
(e) Resolutions. Parent shall have delivered to the
Company copies of the resolutions of its and the Subsidiary's Board of Directors
authorizing and approving the execution of this Agreement and the consummation
of the transactions contemplated hereby.
ARTICLE VII - SURVIVAL
7.1 Survival of Representations and Warranties. The
representation and warranties of the Parties shall not survive the Closing.
ARTICLE VIII - TERMINATION
8.1 Termination By Parties. This Agreement may be terminated at
any time prior to the Closing Date:
(a) Mutual Consent. By the mutual consent of the
Purchaser and the Company;
(b) By Parent. By Parent, if any of the conditions
provided in Section 7.1 shall not have been satisfied, complied with or
performed in any material respect, and Parent shall not have waived such failure
or satisfaction, noncompliance or nonperformance;
(c) By the Company. By the Company, if any of the
conditions provided in Section 7.2 shall not have been satisfied, complied with
or performed in any material respect, and the Company shall not have waived such
failure of satisfaction, noncompliance or nonperformance.
(d) Upset Date. By the Parent or the Company if the
Closing shall not have occurred by February 28, 1997; providing that such
terminating party shall not be in default hereunder.
In the event of any termination pursuant to Subsections (b), (c)
or (d) above, written notice setting forth the reasons therefor shall forthwith
be given by the terminating party to the other party.
Any termination pursuant to Subsections (b) or (c) above shall not
be a waiver of any rights or remedies otherwise available under this Agreement,
by operation of law or otherwise to the party who so terminates.
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ARTICLE IX - MISCELLANEOUS
9.1 Headings. Section and other headings contained in this
Agreement are for reference purposes only and will not affect in any way the
making of this Agreement or its interpretation.
9.2 Governing Law. It is the intention of the Parties that the
laws of the State of Utah (without giving effect to the choice of law rules
thereof) will govern the validity of this Agreement, the construction of its
terms and the interpretation of the rights and duties of the parties.
9.3 Entire Agreement. This Agreement, the Exhibits hereto and the
Disclosure Schedule constitute the entire Agreement between the parties
pertaining to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions whether oral or written of the
Parties. All Exhibits to this Agreement and the Disclosure Schedule constitute
an integral part of this Agreement as if fully written herein.
9.4 Assignment. Neither this Agreement nor any rights hereunder
may be assigned by either Party hereto without the express written consent of
the other Party.
9.5 Binding Effect. Subject to the provisions of Section 10.4
hereof, this Agreement will be binding upon and inure to the benefit of the
respective heirs, personal representatives, successors and assigns of the
Parties.
9.6 Notices. Any notices or communications required or permitted
herein will be deemed to have been sufficiently given if delivered personally or
sent by registered or certified mail, postage prepaid, or sent by facsimile
(fax) transmission as follows:
If to Parent or Subsidiary: Wireless Cable & Communications, Inc.
000 Xxxx 000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
If to Company: Telecom Investment Company
0000 Xxxxxx Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Either party may change the address to which notices, requests, demands, claims
and other communications hereunder are to be delivered by giving the other party
notice in the manner set forth herein. Any notice, request, demand, claim or
other communication hereunder shall be deemed delivered on the earlier to occur
of (i) its actual receipt, or (ii) the second business day following its deposit
in the United States mail with postage prepaid and return receipt requested, or
(iii) the second business day following its deposit with the overnight courier
service, or (iv) the date it is sent to the party in question by confirmed
telecopier transmission sent prior to 5:00 p.m. Mountain time on a regular
business day.
9.7 Expenses. Each party shall bear its own expenses incurred in
connection with the transactions contemplated by this Agreement, including legal
and accounting fees and expenses.
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9.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original instrument and all of
which together will constitute one and the same instrument.
9.9 Waivers and Amendments.
(a) Extension and Waiver. Parent, on the one hand, and
the Company, on the other, may, by notice to the other, (i) extend the time the
observance and performance of any term or provision of this Agreement on the
other's part to be observed and performed, (ii) waive compliance with, or permit
modified observance or performance of, any of the covenants or obligations of
the other contained in this Agreement.
(b) Amendments. This Agreement may be amended, modified
or supplemented only by a written instrument executed by Parent and the Company.
The waiver of a breach or default in the observance and performance of any terms
or provisions hereof shall not operate or be construed as a waiver of any
subsequent breach or default.
(c) Failure to Exercise Rights. No failure on the part of
any party to exercise, and no delay in exercising, any right or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right or remedy by it. All remedies
hereunder are cumulative and are not exclusive of any other remedies provided by
law or in equity.
IN WITNESS WHEREOF, each of the parties has executed this
Agreement on the date first above written.
PARENT:
WIRELESS CABLE & COMMUNICATIONS,
INC.
By: /s/ Xxxxx X'Xxxxxxxx
Its: President
SUBSIDIARY:
NEWWCCI, INC.
By: /s/ Xxxxxxx Xxxxxxx
Its: Secretary
COMPANY:
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TELECOM INVESTMENT CORPORATION
By: /s/ Xxxxxx X'Xxxxxxxx
Its: Chairman
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