EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into this
23rd day of May, 1997, by and among XXXXXX WIRELESS, INC., a Delaware
corporation (the "Company"), PRICE COMMUNICATIONS CORPORATION, a New York
corporation ("Acquiror"), and PRICE COMMUNICATIONS CELLULAR MERGER CORP., a
Delaware corporation ("Merger Sub").
WHEREAS, the Boards of Directors of the Company, Acquiror and Merger Sub
have each determined that it is fair to, and in the best interests of their
respective stockholders that Merger Sub, a wholly-owned subsidiary of
Acquiror, merge with and into the Company, pursuant to and subject to the
terms and conditions of this Agreement and the Delaware General Corporation
Law ("Delaware Law"); and
WHEREAS, concurrently with the execution of this Agreement and as an
inducement to Acquiror to enter into this Agreement, Xxxxxx Communications
Incorporated, a Delaware corporation ("PCI"), has entered into a voting
agreement with Acquiror (the "Voting Agreement") pursuant to which, among
other things, PCI has agreed to vote its shares of common stock of the Company
in favor of this Agreement, the Merger (as defined below) and the other
transactions contemplated by this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agrees as follows:
ARTICLE I
The Merger
Section 1.1. The Merger.
Upon the terms and subject to the conditions set forth in this Agreement
(including approval of the Federal Communications Commission (the "FCC")), and
in accordance with Delaware Law, at the Effective Time (as defined in Section
1.2) Merger Sub shall be merged with and into the Company (the "Merger"). As a
result of the Merger, the separate corporate existence of Merger Sub shall
cease and the Company shall continue as the surviving corporation of the
Merger (sometimes referred to herein as the "Surviving Corporation") and a
wholly-owned subsidiary of Acquiror. The name of the Company shall continue as
the name of the Surviving Corporation.
Section 1.2. Effective Time.
At the Closing, the parties hereto shall cause the Merger to be consummated
by filing a certificate of merger (the "Certificate of Merger") with the
Secretary of State of the State of Delaware, in such form as required by, and
executed in accordance with the relevant provisions of, Delaware Law and in
such form as approved by the Company and Acquiror prior to such filing (the
date and time of the filing of the Certificate of Merger or the time specified
therein being the "Effective Time").
Section 1.3. Effect of the Merger.
At the Effective Time, the effect of the Merger shall be as provided in the
applicable provisions of Delaware Law. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, except as otherwise
provided herein, all the rights, privileges, powers and franchises of Merger
Sub and the Company, shall vest in the Surviving Corporation, and all debts,
liabilities and duties of Merger Sub and the Company shall become the debts,
liabilities and duties of the Surviving Corporation.
1
Section 1.4. Certificate of Incorporation; Bylaws.
At the Effective Time, subject to the terms and conditions of Section 7.8
hereof, (a) the certificate of incorporation of Merger Sub, as in effect
immediately prior to the Effective Time and as amended by the Certificate of
Merger, shall be the certificate of incorporation of the Surviving
Corporation, and (b) the bylaws of Merger Sub, as in effect immediately prior
to the Effective Time, shall be the bylaws of the Surviving Corporation.
Section 1.5. Directors and Officers.
The directors of Merger Sub (or such other or additional individuals as
Acquiror may designate prior to Closing) shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the certificate
of incorporation and bylaws of the Surviving Corporation; and the officers of
the Company shall continue as the officers of the Surviving Corporation, in
each case until their respective successors are duly elected or appointed and
qualified.
Section 1.6. Closing.
Subject to the terms and conditions of this Agreement, the closing of the
Merger (the "Closing") will take place as promptly as practicable after
satisfaction of the latest to occur or, if permissible, waiver of the
conditions set forth in Article VIII hereof (the "Closing Date"), at the
offices of Xxxxx & Xxxxxxx L.L.P., Columbia Square, 000 00xx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000, unless another date or place is agreed to in writing
by the parties hereto.
Section 1.7. Subsequent Actions.
If, at any time after the Effective Time, the Surviving Corporation shall
consider or be advised that any deeds, bills of sale, assignments, assurances
or any other actions or things are necessary or desirable to continue in,
vest, perfect or confirm of record or otherwise in the Surviving Corporation
its right, title or interest in, to or under any of the rights, properties,
privileges, franchises or assets of either of its constituent corporations
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger or otherwise to carry out this Agreement, the
officers and directors of the Surviving Corporation shall be directed and
authorized to execute and deliver, in the name and on behalf of either of such
constituent corporations, all such deeds, bills of sale, assignments and
assurances and to take and do, in the name and on behalf of each of such
corporations or otherwise, all such other actions and things as may be
necessary or desirable to vest, perfect or confirm any and all right, title
and interest in, to and under such rights, properties, privileges, franchises
or assets in the Surviving Corporation or otherwise to carry out this
Agreement.
ARTICLE II
Conversion of Securities; Exchange of Certificates
Section 2.1. Conversion of Securities.
At the Effective Time, by virtue of the Merger and without any action on the
part of Acquiror, Merger Sub, the Company or the holders of any of the
following securities:
(a) Company Common Stock. Subject to the other provisions of this Section
2.1, each share of (i) Class A common stock, par value $.01 per share, of
the Company ("Class A Common Stock"), issued and outstanding immediately
prior to the Effective Time (excluding any shares described in Sections
2.1(b) and (c) and any Dissenting Shares (as hereinafter defined)), and
(ii) Class B common stock, par value $.01 per share, of the Company ("Class
B Common Stock"; together with the Class A Common Stock, the "Common
Stock"), shall be converted into the right to receive Seventeen Dollars and
Fifty Cents ($17.50) in cash, without interest (the "Per Share Amount").
All such shares of Common Stock shall cease to be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each
certificate previously evidencing any such shares shall thereafter
represent only the right to receive the Merger
2
Consideration as described below. The holders of certificates previously
evidencing such shares of Common Stock outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such shares
of Common Stock, except as otherwise provided herein or by law. Each such
certificate previously evidencing such shares of Common Stock shall be
exchanged for the Per Share Amount multiplied by the number of shares
previously evidenced by the canceled certificate upon the surrender of such
certificate in accordance with the provisions of Section 2.2, without
interest;
(b) Acquiror-Owned Shares. All shares of capital stock of the Company
owned, directly or indirectly, by Acquiror, Merger Sub or any Acquiror
Subsidiary (as defined in Section 5.1) shall be canceled and extinguished
without any conversion thereof and no cash shall be delivered or
deliverable in exchange therefor;
(c) Treasury Stock. All shares of capital stock of the Company held in
the treasury of the Company immediately prior to the Effective Time shall
be canceled and extinguished without any conversion thereof and no cash
shall be delivered or deliverable in exchange therefor; and
(d) Merger Sub Stock. Each share of common stock, par value $.01 per
share, of Merger Sub issued and outstanding immediately prior to the
Effective Time shall be converted into and exchanged for one (1) duly and
validly issued, fully paid and nonassessable share of common stock of the
Surviving Corporation.
Section 2.2. Payment.
(a) Paying Agent. As of the Effective Time, Acquiror shall, on behalf of
Merger Sub, deposit with a bank theretofore designated by the Company and
Acquiror (the "Paying Agent"), for the benefit of the holders of shares of
Common Stock (excluding any shares described in Sections 2.1(b) and (c) and
any Dissenting Shares), for payment in accordance with this Article II,
through the Paying Agent, cash in an amount equal to the Per Share Amount
multiplied by the number of shares of Common Stock outstanding immediately
prior to the Effective Time (excluding any shares described in Sections 2.1(b)
and (c) and any Dissenting Shares) (such cash being hereinafter referred to as
the "Payment Fund"). Acquiror shall cause the Paying Agent, pursuant to
irrevocable instructions, to deliver the cash contemplated to be paid pursuant
to Section 2.1(a) out of the Payment Fund. The Payment Fund shall not be used
for any other purpose.
(b) Payment Procedures. Promptly after the Effective Time, Acquiror shall
cause the Paying Agent to mail to each record holder, as of the Effective
Time, of an outstanding certificate (each a "Certificate" and collectively,
the "Certificates") that immediately prior to the Effective Time evidenced
outstanding shares of Common Stock (excluding any shares described in Sections
2.1(b) and (c) and any Dissenting Shares), a form letter of transmittal and
instructions for use in effecting the surrender of the Certificates for
payment therefor. Upon surrender to the Paying Agent of a Certificate,
together with such letter of transmittal duly executed, and any other required
documents, the holder of such Certificate shall be entitled to receive in
exchange therefor the consideration set forth in Section 2.1(a) (the "Merger
Consideration"), and such Certificate shall forthwith be canceled. No interest
will be paid or accrued on the cash payable upon the surrender of the
Certificates. Until surrendered in accordance with the provisions of this
Section 2.2, each Certificate shall represent for all purposes only the right
to receive the consideration set forth in Section 2.1(a), without any interest
thereon.
(c) No Further Rights in Common Stock. All cash paid upon conversion of the
shares of Common Stock in accordance with the terms of this Article II, and
all cash paid pursuant to Section 2.5, shall be deemed to have been paid in
full satisfaction of all rights pertaining to such shares of Common Stock.
(d) Termination of Payment Fund. Any portion of the Payment Fund that
remains undistributed to the holders of Common Stock for one hundred eighty
(180) days after the Effective Time shall be delivered to Acquiror, upon
demand, and any holders of Common Stock that have not theretofore complied
with this Article II shall thereafter look only to the Surviving Corporation
and Acquiror for the Merger Consideration to which they are entitled.
3
(e) No Liability. Neither Acquiror nor the Surviving Corporation shall be
liable to any holder of shares of Common Stock for any cash delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
(f) Lost, Stolen or Destroyed Certificates. In the event any Certificate
evidencing shares of Common Stock shall have been lost, stolen or destroyed,
upon the making of an affidavit setting forth that fact by the person claiming
such lost, stolen or destroyed Certificate(s) and granting a reasonable
indemnity against any claim that may be made against Acquiror or the Paying
Agent with respect to such Certificate(s), Acquiror shall cause the Paying
Agent to pay to such person the Merger Consideration with respect to such
lost, stolen or destroyed Certificate(s).
Section 2.3. Company Options; Stock Purchase Plan.
(a) Company Options. Immediately prior to the Effective Time, (i) each
outstanding stock option to purchase shares of Class A Common Stock (a "Plan
Option") granted under the Company's 1995 Stock Option Plan and 1995
Directors' Stock Option Plan, each as amended to the date of this Agreement
(collectively, the "Company Stock Option Plans"), and (ii) each phantom option
to purchase shares of Class A Common Stock described on Schedule 3.3 hereto (a
"Phantom Option"; together with the Plan Options, the "Options"), whether or
not any such Options are exercisable, shall be terminated by the Company, and
Acquiror shall, on behalf of Merger Sub, pay to the holder thereof at the
Effective Time, in consideration for such termination, an amount in cash equal
to the excess, if any, of the Per Share Amount over the per share exercise
price of such Option, multiplied by the number of shares of Class A Common
Stock into which the Option remains unexercised. Any such payment shall be
subject to all applicable federal, state and local tax withholding
requirements. The Company shall terminate the Company Stock Option Plans as of
the Effective Time, and take all such action as is necessary to terminate the
Options as of the Effective Time, so that on and after the Effective Time no
holder of an Option shall have any option to purchase shares of Class A Common
Stock or any other equity interest in the Company under the Company Stock
Option Plans or the Phantom Option agreements.
(b) Employee Stock Purchase Plan. Effective as of the Effective Time, the
Company's 1995 Employee Stock Purchase Plan (the "Employee Stock Purchase
Plan") shall be terminated and the then applicable Payroll Deduction Period
(as defined in the Employee Stock Purchase Plan) shall be deemed to have ended
on the last trading day of the Class A Common Stock immediately prior to the
Effective Time. At the Effective Time, Acquiror shall, on behalf of Merger
Sub, pay to each Company employee who is a participant in the Employee Stock
Purchase Plan as of the Effective Time, an amount in cash equal to the Per
Share Amount multiplied by the number of shares of Class A Common Stock which
the accumulated funds in such employee's account would have been entitled to
purchase under the terms of the Employee Stock Purchase Plan as of the end of
such Payroll Deduction Period. Such payments shall be deemed to satisfy all
obligations of the Company and the Surviving Corporation to the participants
in the Employee Stock Purchase Plan. Such payments shall be subject to all
applicable federal, state and local tax withholding requirements. All funds in
the accounts of the participants as of the Effective Time after such payments,
shall belong to and be disbursed in accordance with the instructions of
Acquiror. The Company shall terminate the Employee Stock Purchase Plan as of
the Effective Time so that on and after the Effective Time no former
participant in the Employee Stock Purchase Plan shall have any right to
purchase shares of Class A Common Stock or any other equity interest in the
Company under the Employee Stock Purchase Plan.
(c) Non-Employee Director Stock Purchase Plan. Effective as of the Effective
Time, the Company's 1995 Non-Employee Director Stock Purchase Plan (the
"Director Stock Purchase Plan"; together with the Employee Stock Purchase
Plan, the "Company Stock Purchase Plans"), shall be terminated and the then
applicable Accumulation Period (as defined in the Director Stock Purchase
Plan) shall be deemed to have ended on the last trading day of the Class A
Common Stock immediately prior to the Effective Time. At the Effective Time,
Acquiror shall, on behalf of Merger Sub, pay to each member of the Company's
Board of Directors who is a participant in the Director Stock Purchase Plan as
of the Effective Time, an amount in cash equal to the Per Share Amount
multiplied by the number of shares of Class A Common Stock which the
accumulated funds in
4
such director's account would have been entitled to purchase under the terms
of the Director Stock Purchase Plan as of the end of such Accumulation Period.
Such payments shall be deemed to satisfy all obligations of the Company and
the Surviving Corporation to the participants in the Director Stock Purchase
Plan. Such payments shall be subject to all applicable federal, state and
local tax withholding requirements. All funds in the accounts of the
participants as of the Effective Time after such payments, shall belong to and
be disbursed in accordance with the instructions of Acquiror. The Company
shall terminate the Director Stock Purchase Plan as of the Effective Time so
that on and after the Effective Time no former participant in the Director
Stock Purchase Plan shall have any right to purchase shares of Class A Common
Stock or any other equity interest in the Company under the Director Stock
Purchase Plan.
Section 2.4. Stock Transfer Books.
At the Effective Time, the stock transfer books of the Company with respect
to all shares of capital stock of the Company shall be closed and no further
registration of transfers of such shares of capital stock shall thereafter be
made on the records of the Company. On or after the Effective Time, any
Certificates for shares of Common Stock (excluding any shares described in
Sections 2.1(b) and (c) and Dissenting Shares) presented to the Paying Agent,
the Surviving Corporation or Acquiror for any reason shall be converted into
the Merger Consideration.
Section 2.5. Dissenting Shares.
Notwithstanding any other provisions of this Agreement to the contrary,
shares of Class A Common Stock that are issued and outstanding immediately
prior to the Effective Time and that are held by stockholders who shall not
have voted in favor of the Merger or consented thereto in writing and who
shall have demanded properly in writing appraisal for such shares in
accordance with Section 262 of Delaware Law (collectively, the "Dissenting
Shares") shall not be converted into or represent the right to receive the
Merger Consideration. Such stockholders shall be entitled to receive payment
of the appraised value of such shares of Class A Common Stock held by them in
accordance with the provisions of such Section 262, except that all Dissenting
Shares held by stockholders who shall have failed to perfect or who
effectively shall have withdrawn or lost their rights to appraisal of such
shares of Class A Common Stock under such Section 262 shall thereupon be
deemed to have been converted into and to have become exchangeable, as of the
Effective Time, for the right to receive, without any interest thereon, the
Merger Consideration, upon surrender, in the manner provided in Section 2.2,
of the certificate or certificates that formerly evidenced such shares of
Class A Common Stock.
ARTICLE III
Representations and Warranties of the Company
The Company hereby represents and warrants to Acquiror and Merger Sub as
follows:
Section 3.1. Organization and Qualification; Subsidiaries.
(a) The Company and each Subsidiary (as defined below) of the Company (each
a "Company Subsidiary" and collectively, the "Company Subsidiaries") is a
corporation or partnership duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization. The Company
and each Company Subsidiary is duly qualified to conduct its business, and is
in good standing, in each jurisdiction where the character of its properties
owned, operated or leased or the nature of its activities makes such
qualification necessary, except for such failure which would not have a
Company Material Adverse Effect (as defined below). The Company and each
Company Subsidiary has the requisite power and authority and any necessary
governmental authority, franchise, license or permit to own, operate, lease
and otherwise to hold and operate its assets and properties and to carry on
the businesses as now being conducted, except for such failures which would
not in the aggregate have a Company Material Adverse Effect. The Company has
no Subsidiaries (as defined below) or any equity or similar interest in any
entity other than those listed in Schedule 3.1. As used herein, the term
"Company Material Adverse Effect" means any material adverse effect on the
business, assets, financial condition or results of operations of the Company
and the Company Subsidiaries taken as a whole.
5
(b) For purposes of this Agreement, a "Subsidiary" of any person means any
corporation, partnership, joint venture or other legal entity of which such
person (either alone or through or together with any other Subsidiary) (i)
owns, directly or indirectly, fifty percent (50%) or more of the stock,
partnership interests or other equity interests the holders of which are
generally entitled to vote for the election of the board of directors or other
governing body of such corporation, partnership, joint venture or other legal
entity; or (ii) possesses, directly or indirectly, control over the direction
of management or policies of such corporation, partnership, joint venture or
other legal entity (whether through ownership of voting securities, by
agreement or otherwise).
Section 3.2. Certificate of Incorporation and Bylaws.
The Company has heretofore made available to Acquiror a complete and correct
copy of the certificate or articles of incorporation and the bylaws of the
Company and each Company Subsidiary that is a corporation, and a correct copy
of the partnership agreement for each Company Subsidiary that is a
partnership, each as amended to date. Each such certificate or articles of
incorporation, bylaws and partnership agreement is in full force and effect.
Neither the Company nor any Company Subsidiary is in violation of any of the
provisions of its respective certificate or articles of incorporation, bylaws,
partnership agreement or other organizational document.
Section 3.3. Capitalization.
The authorized capital stock of the Company consists, as of the date of this
Agreement, of: (a) seventy-three million (73,000,000) shares of Class A Common
Stock, of which ten million five hundred nineteen thousand six hundred and
eighty-one (10,519,681) shares are issued and outstanding; (b) eighteen
million (18,000,000) shares of Class B Common Stock, of which seventeen
million two hundred ninety-three thousand five hundred and seventy-eight
(17,293,578) shares are issued and outstanding; and (c) ten million
(10,000,000) shares of preferred stock, par value $.01 per share, of which no
shares are issued and outstanding. One million nine hundred thousand
(1,900,000) shares of Class A Common Stock have been reserved for issuance
upon the exercise of Plan Options granted under the Company Stock Option
Plans, of which seven hundred forty-five thousand eight hundred and thirty-
four (745,834) shares are issuable upon the exercise of Plan Options
outstanding under the Company Stock Option Plans as of the date hereof. The
Phantom Options assume the issuance of twenty thousand (20,000) shares of
Class A Common Stock upon exercise thereof. One hundred sixty thousand
(160,000) shares of Class A Common Stock are reserved for issuance under the
Company's 1995 Employee Stock Purchase Plan and twenty-five thousand (25,000)
shares of Class A Common Stock are reserved for issuance under the Company's
1995 Non-Employee Director Stock Purchase Plan. Seventeen million two hundred
ninety-three thousand five hundred and seventy-eight (17,293,578) shares of
Class A Common Stock are reserved for purposes of effecting conversions of
Class B Common Stock into Class A Common Stock. Since December 31, 1996, no
shares of Class A Common Stock or Class B Common Stock have been issued,
except for shares of Class A Common Stock issued upon the exercise of options
granted under the Company's Stock Option Plans and shares of Class A Common
Stock issued pursuant to the Company's Stock Purchase Plan. Except as set
forth in Schedule 3.3, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character relating to the
issued or unissued capital stock of the Company or any Company Subsidiary or
obligating the Company or any Company Subsidiary to issue or sell any shares
of capital stock of, or other equity interests in the Company or any Company
Subsidiary. Except as set forth in Schedule 3.3, there are no outstanding
contractual obligations of the Company to repurchase, redeem or otherwise
acquire any shares of its capital stock or make any material investment (in
the form of a loan, capital contribution or otherwise) in any other person.
All of the issued and outstanding shares of Class A Common Stock and Class B
Common Stock have been duly authorized and validly issued and are fully paid
and nonassessable and not subject to preemptive rights. Except as set forth in
Schedule 3.3, with respect to each Company Subsidiary that is a corporation,
all of the outstanding shares of capital stock of such Company Subsidiary have
been duly authorized and validly issued and are fully paid and nonassessable.
Except as set forth in Schedule 3.3, with respect to each Company Subsidiary
that is a partnership, all of the partnership interests owned by the Company,
and with respect to each Company Subsidiary that is a corporation, all of the
outstanding shares of capital stock owned by the Company, are owned by the
Company free and clear of any liens, security interests, pledges, agreements,
options, rights, claims, charges or encumbrances (the "Encumbrances"). As of
the date hereof, the only
6
outstanding indebtedness for borrowed money of the Company and the Company
Subsidiaries is as set forth in Schedule 3.3 and all such indebtedness is
prepayable in full without premium or penalty in accordance with its terms.
Section 3.4. Authority.
The Company has the necessary corporate power and authority to enter into
this Agreement and subject to obtaining any necessary stockholder approval of
the Merger, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part of the Company
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby, other than the approval of this Agreement by the
stockholders of the Company in accordance with Delaware Law. This Agreement
has been duly executed and delivered by the Company and, assuming the due
authorization, execution and delivery by Acquiror and Merger Sub, constitutes
a legal, valid and binding obligation of the Company, enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditors' rights generally and
by the application of general principles of equity.
Section 3.5. No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Company do not, and
the performance by the Company of its obligations under this Agreement will
not, subject to compliance with the requirements set forth in Section 3.5(b)
below, (i) conflict with or violate the certificate or articles of
incorporation, bylaws, partnership agreement or other organizational document
of the Company or any Company Subsidiary, (ii) conflict with or violate any
law, statute, ordinance, rule, regulation, order, judgment or decree
applicable to the Company or any Company Subsidiary or by which any of their
respective properties is bound or affected, (iii) result in any breach of 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 an
Encumbrance on any of the properties or assets of the Company or any Company
Subsidiary pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any Company Subsidiary is a party or by which the
Company, any Company Subsidiary or any of their respective properties or
assets is bound or affected, or (iv) result in any material breach of or
constitute a material default (or an event which with notice or lapse of time
or both would become a material default) or give rise to any material rights
to other parties under any Material Contract described in Section 3.12(a)(i),
except, in the case of clauses (ii) and (iii) above for any such conflicts,
violations, breaches, defaults or other alterations or occurrences that in the
aggregate (A) would not prevent or delay consummation of the Merger in any
material respect, or otherwise prevent the Company from performing its
obligations under this Agreement in any material respect, and (B) would not
have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, domestic or foreign (each a
"Governmental Entity"), except (i) for (A) applicable requirements, if any, of
the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), state
takeover laws, the exchange on which the Company's securities are traded, the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), the Communications Act of 1934, as amended, together with the rules,
regulations and published decisions of the FCC (collectively, the
"Communications Act"), (B) applicable requirements, if any, of the consents,
approvals, authorizations or permits described in Schedule 3.5, and (C) filing
and recordation of appropriate merger documents as required by Delaware Law
and (ii) where failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not in the aggregate
prevent or delay consummation of the Merger in any material respect, or
otherwise prevent the Company from performing its obligations under this
Agreement in any material respect, and would not in the aggregate have a
Company Material Adverse Effect.
7
Section 3.6. SEC Filings; Financial Statements.
(a) The Company has filed all forms, reports, statements and other documents
required to be filed with the Securities and Exchange Commission (the "SEC")
since March 21, 1995, and has heretofore made available to Acquiror, in the
form filed with the SEC since such date, together with any amendments thereto,
its (i) Annual Reports on Form 10-K, (ii) all Quarterly Reports on Form 10-Q,
(iii) all proxy statements relating to meetings of stockholders (whether
annual or special), (iv) all reports on Form 8-K, and (v) all other reports or
registration statements filed by the Company (collectively, the "Company SEC
Reports"). As of their respective filing dates the Company SEC Reports (i)
complied as to form in all material respects with the requirements of the
Exchange Act and the Securities Act of 1933, as amended (the "Securities Act")
and (ii) did not at the time they were filed contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(b) The financial statements, including all related notes and schedules,
contained in the Company SEC Reports (or incorporated by reference therein)
fairly present the consolidated financial position of the Company and the
Company Subsidiaries as at the respective dates thereof and the consolidated
results of operations and cash flows of the Company and the Company
Subsidiaries for the periods indicated in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as may be noted therein) and subject in the case of interim
financial statements to normal year-end adjustments.
Section 3.7. Absence of Certain Changes or Events.
Except as disclosed in the Company SEC Reports filed prior to the date of
this Agreement or as set forth in Schedule 3.7, since December 31, 1996, the
Company and the Company Subsidiaries have not incurred any material liability,
except in the ordinary course of the businesses consistent with their past
practices, and there has not been any change in the business, financial
condition or results of operations of the Company or any of the Company
Subsidiaries or the occurrence of any other event, which has had, or is
reasonably likely to have, a Company Material Adverse Effect, and the Company
and the Company Subsidiaries have conducted their respective businesses in the
ordinary course consistent with their past practices.
Section 3.8. Absence of Litigation.
Except as set forth in Schedule 3.8, as of the date hereof there are (a) no
claims, actions, suits, investigations, or proceedings pending or, to the
Company's knowledge, threatened against the Company or any of the Company
Subsidiaries before any court, administrative, governmental, arbitral,
mediation or regulatory authority or body, domestic or foreign, that (i) if
adversely determined would individually involve the payment of more than One
Hundred Thousand Dollars ($100,000) by the Company or any Company Subsidiary,
(ii) if adversely determined would individually or in the aggregate be
reasonably likely to have a Company Material Adverse Effect, (iii) challenge
or seek to prevent, enjoin, alter or materially delay the transactions
contemplated hereby, or (iv) seek material injunctive relief against the
Company or any Company Subsidiary, and (b) no material judgments, decrees,
injunctions or orders of any Governmental Entity or arbitrator outstanding
against the Company or any Company Subsidiary.
Section 3.9. Licenses and Permits; Compliance with Laws.
The Company and the Company Subsidiaries hold all permits, licenses and
approvals (none of which has been modified or rescinded and all of which are
in full force and effect) from all Governmental Entities (collectively, the
"Permits") necessary for the Company and the Company Subsidiaries to own,
lease and operate their respective properties and to carry on their respective
businesses as now being conducted, except for the Permits for which the
failure to obtain would not have a Company Material Adverse Effect. The
businesses of the Company and the Company Subsidiaries are not being conducted
in violation of any applicable law, statute, ordinance, regulation, judgment,
Permits, order, decree, concession, grant or other authorization of any
Governmental Entity, except for violations that would not be reasonably likely
to have a Company Material Adverse Effect.
8
Section 3.10. Taxes.
Except as set forth in Schedule 3.10, the Company and the Company
Subsidiaries have prepared and filed on a timely basis with all appropriate
Governmental Entities all material returns in respect of taxes that they are
required to file on or prior to the Effective Time or by the date therefor
including extensions, and all such returns are correct and complete in all
material respects. Except as set forth in Schedule 3.10, the Company and the
Company Subsidiaries have paid in full all taxes due on or before the
Effective Time and, in the case of taxes accruing on or before the Effective
Time that are not due on or before the Effective Time, the Company has made
adequate provision in its books and records and financial statements for such
payment. Except as set forth in Schedule 3.10, the Company and the Company
Subsidiaries have withheld from each payment made to any of its present or
former employees, officers and directors all amounts required by law to be
withheld and has, where required, remitted such amounts within the applicable
periods to the appropriate Governmental Entities. In addition, except as set
forth in Schedule 3.10, (a) there are no assessments of the Company or any
Company Subsidiary with respect to taxes that have been issued and are
outstanding; (b) no Governmental Entity has examined or audited the Company or
any Company Subsidiary in respect of taxes; (c) neither the Company nor any
Company Subsidiary has executed or filed any agreement extending the period of
assessment or collection of any taxes; and (d) neither the Company nor any
Company Subsidiary has received written notification from any Governmental
Entity of its intention to commence any audit or investigation. Except as set
forth in Schedule 3.10, neither the Company nor any Company Subsidiary is a
party to, is bound by or has any obligation under any tax sharing or tax
indemnification agreement, provision or arrangement, whether formal or
informal, and no power of attorney, which is currently in effect, has been
granted with respect to any matter relating to taxes of the Company or any
Company Subsidiary. Except as set forth in Schedule 3.10, neither the Company
nor any Company Subsidiary is presently required or will be required to
include any adjustment in taxable income under Section 481 of the Internal
Revenue Code of 1986, as amended (the "Code"), (or any similar provision of
the tax laws of any jurisdiction) as a result of any change in method of
accounting or otherwise. Except as set forth in Schedule 3.10, neither the
Company nor any Company Subsidiary has entered into any "intercompany
transaction" as to which any item of deferred gain or loss has not been
restored, and no "excess loss account" exists with respect to the stock of any
Company Subsidiary, as those terms are defined in the Treasury Regulations
issued under Section 1504 of the Code. For the purpose of this Agreement, the
term "tax" (including, with correlative meaning, the terms "taxes" and
"taxable") shall include except where the context otherwise requires, all
federal, state, local and foreign income, profits, franchise, gross receipts,
payroll, sales, employment, use, property, withholding, excise, occupancy and
other taxes, duties or assessments of any nature whatsoever, together with all
interest, penalties and additions imposed with respect to such amounts.
Section 3.11. Intellectual Property.
Except as set forth in Schedule 3.11, the Company or one of the Company
Subsidiaries owns or possesses all rights to use of the service marks,
copyrights, franchises, trademarks, trade names, jingles, slogans, logotypes
and other similar intangible assets (the "Intellectual Property") maintained,
owned, used, held for use or otherwise held by the Company and the Company
Subsidiaries, and all of the rights, benefits and privileges associated
therewith material to the conduct of the business of the Company and the
Company Subsidiaries as currently conducted. To the knowledge of the Company,
neither the Company nor any Company Subsidiary is infringing upon any
Intellectual Property right or other legally protectable right of another. To
the knowledge of the Company, no person is materially infringing upon any
Intellectual Property right of the Company or any Company Subsidiary.
Section 3.12. Material Contracts.
(a) Schedule 3.12 sets forth a complete and correct list, as of the date of
this Agreement, of all agreements of the following type to which the Company
or a Company Subsidiary is a party or may be bound (collectively, the
"Material Contracts"): (i) agreements filed as an exhibit to the Company SEC
Reports and each agreement that would have been required to be filed as an
exhibit to the Company SEC Reports had such agreement been entered into as of
the date of filing any such SEC Report; (ii) employment, severance,
termination, consulting and retirement agreements; (iii) loan agreements,
indentures, letters of credit, mortgages, notes and other debt
9
instruments evidencing indebtedness in excess of Five Hundred Thousand Dollars
($500,000); (iv) agreements that require aggregate future payments to or by
the Company or any Company Subsidiary of more than Five Hundred Thousand
Dollars ($500,000) (other than purchase orders and advertising sales contracts
entered into in the ordinary course of business); (v) agreements containing
any "change of control" provisions which, if triggered, would involve payments
by the Company or any Company Subsidiary in excess of Two Hundred Fifty
Thousand Dollars ($250,000) or other material rights or obligations; (vi)
material agreements with any key employee, director, officer, or person known
to the Company to be a direct or indirect stockholder of the Company; (vii)
agreements prohibiting the Company or any Company Subsidiary from engaging or
competing in any line of business or limiting such competition; (viii) except
for the partnership agreements of the Company Subsidiaries, any joint venture,
partnership and similar agreements involving a sharing of profits; (ix)
acquisition or divestiture agreements relating to the (A) sale of assets or
stock of the Company or any Company Subsidiary (other than sales of inventory
in the ordinary course of business) or (B) the purchase of assets or stock of
any other person (other than the purchase of inventory in the ordinary course
of business and acquisitions of additional interests in Company Subsidiaries
involving payments by the Company of less than Five Hundred Thousand Dollars
($500,000) in the aggregate); (x) brokerage, finder's or financial advisory
agreements; (xi) guarantees of indebtedness for borrowed money of any person
(other than a Company Subsidiary); (xii) interconnection agreements and switch
sharing agreements; and (xiii) agreements under which the Company or any
Company Subsidiary manages a cellular system of any third party.
(b) Except as set forth in Schedule 3.12, all the Material Contracts are
valid and in full force and effect on the date hereof except to the extent
they have previously expired in accordance with their terms, and neither the
Company nor any Company Subsidiary has (or has any knowledge that any other
party thereto has) violated any provision of, or committed or failed to
perform any act which with or without notice, lapse of time or both would
constitute a default under the provisions of, any Material Contract, except
for defaults which would not in the aggregate reasonably be expected to have a
Company Material Adverse Effect. True and complete copies of all Material
Contracts have been delivered to Acquiror or made available for inspection.
Section 3.13. Employee Benefit Plans.
(a) Schedule 3.13 sets forth a list of all of the pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus or other material incentive plans, all other
material written employee programs, arrangements or agreements and all other
material employee benefit plans or fringe benefit plans, including, without
limitation, all "employee benefit plans" as that term is defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), currently adopted, maintained by, sponsored in whole or in part by,
or contributed to by the Company or for which the Company could incur a
liability or any entity required to be aggregated with the Company (each, a
"Commonly Controlled Entity") pursuant to Section 414 of the Code for the
benefit of present and former employees or directors of the Company and of
each Company Subsidiary or their beneficiaries, or providing benefits to such
persons in respect of services provided to any such entity (collectively, the
"Benefit Plans"). Any of the Benefit Plans which is an "employee pension
benefit plan", as that term is defined in Section 3(2) of ERISA, is referred
to herein as an "ERISA Plan".
(b) Each of the Benefit Plans intended to be "qualified" within the meaning
of Section 401(a) or 501 of the Code has been determined by the Internal
Revenue Service to be so qualified and to the Company's knowledge, no
circumstances exist that could reasonably be expected by the Company to result
in the revocation of any such determination. Each of the Benefit Plans is in
compliance with their terms and the applicable terms of ERISA and the Code and
any other applicable laws, rules and regulations the breach or violation of
which could result in a material liability to the Company or any Commonly
Controlled Entity.
(c) No ERISA Plan which is a defined benefit pension plan has any "unfunded
current liability", as that term is defined in Section 302(d)(8)(A) of ERISA,
and the present fair market value of the assets of any such plan equals or
exceeds the plan's "benefit liabilities", as that term is defined in Section
4001(a)(16) of ERISA, when determined under actuarial factors that would apply
if the plan terminated in accordance with all applicable legal requirements.
10
(d) Except as disclosed in Schedule 3.13, no Benefit Plan is or has been a
multiemployer plan within the meaning of Section 3(37) of ERISA (a
"Multiemployer Plan"). Neither the Company nor any Commonly Controlled Entity
has completely or partially withdrawn from any Multiemployer Plan. No
termination liability to the Pension Benefit Guaranty Corporation or
withdrawal liability to any Multiemployer Plan that is material in the
aggregate has been or is reasonably expected to be incurred with respect to
any Multiemployer Plan by the Company or any Commonly Controlled Entity.
(e) The Company has made available to Acquiror complete copies, as of the
date hereof, of all of the Benefit Plans that have been reduced to writing,
together with all documents establishing or constituting any related trust,
annuity contract, insurance contract or other funding instrument. The Company
has made available to Acquiror complete copies of current plan summaries,
employee booklets, personnel manuals and other material documents or written
materials concerning the Benefit Plans that are in the possession of the
Company as of the date hereof.
(f) To the Company's knowledge, except as set forth in Schedule 3.13 and
except for claims for benefits in the ordinary course of business, no claim,
lawsuit, arbitration or other action has been threatened or instituted against
any Benefit Plan.
(g) Except as set forth in Schedule 3.13, Schedule 7.9 or as otherwise
contemplated by the terms of this Agreement, the consummation of the
transactions contemplated by this Agreement will not give rise to any
liability, including, without limitation, liability for severance pay or
termination pay, or accelerate the time of payment or vesting or increase the
amount of compensation or benefits due to any employee, director or
stockholder of the Company (whether current, former, or retired) or their
beneficiaries solely by reason of such transactions. No amounts payable under
any Benefit Plan will fail to be deductible for federal income tax purposes by
virtue of Section 280G or 162(m) of the Code.
(h) Except as set forth in Schedule 3.13 or Schedule 7.9, neither the
Company nor any Company Subsidiary maintains, contributes to, or in any way
provides for any benefits of any kind (other than under Section 4980B of the
Code, the Federal Social Security Act, or a plan qualified under Section
401(a) of the Code) to any current or future retiree or terminee.
(i) Neither the Company, any Company Subsidiary nor any Commonly Controlled
Entity has (or could incur) any liability under Title IV of ERISA.
Section 3.14. Properties; Assets.
Except as set forth in Schedule 3.14, the Company or one of the Company
Subsidiaries (a) has good and marketable title to all the properties and
assets reflected in the latest consolidated balance sheet of the Company dated
as of March 31, 1997 (the "Balance Sheet") as being owned by the Company or
one of the Company Subsidiaries (except properties sold or otherwise disposed
of since the date thereof in the ordinary course of business), or acquired
after the date thereof which are material to the Company's business on a
consolidated basis, free and clear of all Encumbrances except (i) statutory
liens securing payments not yet due, and (ii) such imperfections or
irregularities of title, claims, liens, charges, security interests or
encumbrances as do not materially affect the use of the properties or assets
subject thereto or affected thereby or otherwise materially impair business
operations at such properties, and (b) is the lessee of all leasehold estates
which are material to its business on a consolidated basis and is in
possession of the properties purported to be leased thereunder, and to the
knowledge of the Company, each such lease is valid without default thereunder
by the lessee or lessor. The assets and properties of the Company and the
Company Subsidiaries, taken as a whole, are in good operating condition and
repair (ordinary wear and tear excepted), and constitute all of the assets and
properties which are required for the businesses and operations of the Company
and the Company Subsidiaries as presently conducted.
Section 3.15. Labor Relations.
Neither the Company nor any Company Subsidiary is a party to any collective
bargaining agreement or other contract or agreement with any labor
organization or other representative of any of the employees of the
11
Company or any Company Subsidiary. Except as set forth in Schedule 3.15, the
Company and each Company Subsidiary is in compliance in all material respects
with all laws relating to the employment or the workplace, including, without
limitation, provisions relating to wages, hours, collective bargaining, safety
and health, work authorization, equal employment opportunity, immigration and
the withholding of income taxes, unemployment compensation, worker's
compensation, employee privacy and right to know and social security
contributions.
Section 3.16. Environmental Matters.
(a) Except as specifically set forth in those environmental reports
previously made available to Acquiror in the Company's due diligence data room
(the "Environmental Reports"), and except for matters which would not in the
aggregate have a Company Material Adverse Effect, (i) the Company and each
Company Subsidiary is in compliance with all applicable Environmental Laws (as
defined below) in effect on the date hereof; (ii) all Permits and other
governmental authorizations currently held by the Company and each Company
Subsidiary pursuant to the Environmental Laws are in full force and effect,
the Company and each Company Subsidiary is in compliance with all of the terms
of such Permits and authorizations, and no other Permits or authorizations are
required by the Company or any Company Subsidiary for the conduct of their
respective businesses on the date hereof; and (iii) the management, handling,
storage, transportation, treatment, and disposal by the Company and each
Company Subsidiary of any Hazardous Materials (as defined below) has been in
compliance with all applicable Environmental Laws. Neither the Company nor any
Company Subsidiary has received any written communication that alleges that
the Company or any Company Subsidiary is not in compliance in all material
respects with all applicable Environmental Laws in effect on the date hereof.
As of the date hereof, the Environmental Reports do not set forth any facts or
circumstances which have had or are reasonably likely to have a Company
Material Adverse Effect.
(b) Except as specifically set forth in the Environmental Reports, there is
no material Environmental Claim (as defined below) pending or, to the
knowledge of the Company, threatened against or involving the Company or any
of the Company Subsidiaries or against any person or entity whose liability
for any material Environmental Claim the Company or any of the Company
Subsidiaries has or may have retained or assumed either contractually or by
operation of law.
(c) Except as specifically set forth in the Environmental Reports and except
for matters which would not in the aggregate have a Company Material Adverse
Effect, to the knowledge of the Company, there are no past or present actions
or activities by the Company or any Company Subsidiary including the storage,
treatment, release, emission, discharge, disposal or arrangement for disposal
of any Hazardous Materials, that could reasonably form the basis of any
Environmental Claim against the Company or any of the Company Subsidiaries or
against any person or entity whose liability for any Environmental Claim the
Company or any Company Subsidiary may have retained or assumed either
contractually or by operation of law.
(d) As used herein, these terms shall have the following meanings:
(i) "Environmental Claim" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims,
liens, investigations, proceedings or notices of noncompliance or violation
(written or oral) by any person or governmental authority alleging
potential liability arising out of, based on or resulting from the
presence, or release or threatened release into the environment, of any
Hazardous Materials at any location owned or leased by the Company or any
Company Subsidiary or other circumstances forming the basis of any
violation or alleged violation of any Environmental Law.
(ii) "Environmental Laws" means all applicable foreign, federal, state
and local laws (including the common law), rules, requirements and
regulations relating to pollution, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or protection of human health as it relates to the
environment including, without limitation, laws and regulations relating to
releases of Hazardous Materials, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials or relating to management of asbestos in
buildings.
12
(iii) "Hazardous Materials" means wastes, substances, or materials
(whether solids, liquids or gases) that are deemed hazardous, toxic,
pollutants, or contaminants, including without limitation, substances
defined as "hazardous substances", "toxic substances", "radioactive
materials", or other similar designations in, or otherwise subject to
regulation under, any Environmental Laws.
Section 3.17. Insurance.
Schedule 3.17 contains a list of all insurance policies of title, property,
fire, casualty, liability, life, workmen's compensation, libel and slander,
and other forms of insurance in force at the date thereof with respect to the
Company and the Company Subsidiaries. All such insurance policies: (a) insure
against such risks, and are in such amounts, as appropriate and reasonable
considering the Company and the Company Subsidiaries' properties, businesses
and operations; (b) are in full force and effect; and (c) are valid,
outstanding, and enforceable. Neither the Company nor any of the Company
Subsidiaries has received or given notice of cancellation with respect to any
of the material insurance policies.
Section 3.18. FCC Matters and Governmental Matters.
(a) The Company and the Company Subsidiaries hold all licenses, permits and
other authorizations issued by the FCC to the Company and the Company
Subsidiaries for the operation of their respective businesses (the "FCC
Licenses") as set forth in Schedule 3.18. The FCC Licenses constitute all of
the licenses, permits and authorizations from the FCC that are required for
the operations and businesses of the Company and the Company Subsidiaries as
they are now operated, except where the FCC has not issued a written microwave
authorization. Without limiting the foregoing, the Company and the Company
Subsidiaries have received all necessary authorizations from the Federal
Aviation Administration ("FAA") for all existing towers that are part of the
cellular systems operated by the Company and the Company Subsidiaries and for
any facilities the construction of which have been approved by the FCC or of
which applications or notifications have been filed for such approval.
(b) Schedule 3.18 sets forth each application and notification that the
Company and the Company Subsidiaries have pending before the FCC and sets
forth the expiration date for each of the cellular FCC Licenses. The Company
and the Company Subsidiaries have provided a copy to Acquiror of each of the
FCC Licenses and the applications and notifications listed in Schedule 3.18,
except where the FCC has not issued a written microwave authorization.
(c) The FCC Licenses are valid and in full force and effect, unimpaired by
any condition or restriction or any act or omission by the Company or any of
the Company Subsidiaries which would reasonably be likely to have a Company
Material Adverse Effect. Except as set forth in Schedule 3.18, there are no
modifications, amendments, applications, revocations, or other proceedings, or
complaints pending or, to the knowledge of the Company, threatened, with
respect to the FCC Licenses (other than proceedings that apply to the cellular
industry generally). All fees due and payable to the FCC have been paid and no
event has occurred which, with or without the giving of notice or lapse of
time or both, would constitute grounds for revocation or modification of the
FCC Licenses.
(d) All material reports required by the Communications Act or required to
be filed with the FCC by the Company and the Company Subsidiaries have been
timely filed and are accurate and complete in all material respects. All
material reports required to be filed by the Company and the Company
Subsidiaries with all other governmental or administrative authorities,
federal, state and local, have been timely filed and are accurate and complete
in all material respects.
(e) Except where a lack of compliance would not have a Company Material
Adverse Effect, the Company and the Company Subsidiaries are in compliance
with, and their cellular systems have been operated in compliance with, the
Communications Act and the rules, regulations, policies and orders of the
relevant state public utilities commissions and the FAA, including, without
limitation, the FCC's time and coverage requirements of 47 C.F.R. (S)(S)
22.142, 22.911, 22.912 and 22.946 (the "Statutes"). The Company and the
13
Company Subsidiaries have in operation validly licensed and adequate cellular
base stations required to provide 32 dBu contour coverage, as calculated under
the formula prescribed by the FCC in 47 C.F.R. (S) 22.911, to all areas of
their cellular markets except for coverage gaps that are less than 50
contiguous square miles in size. Except as set forth in Schedule 3.10 and
3.18, the Company and the Company Subsidiaries have not received any written
notice to the effect, or otherwise been advised in writing, that they are not
in compliance with any Statutes and do not have any reason to anticipate that
any presently existing circumstances are reasonably likely to result in
violations of any Statutes.
(f) Without limiting the generality of the foregoing, except as set forth in
Schedule 3.8, no adverse finding has been made, no consent decree entered, no
adverse action has been approved or taken by the FCC or any court or other
administrative body, and no admission of liability has been made with respect
to the Company or any of the Company Subsidiaries or any of the Company's
stockholders or any management employee of the Company or the Company
Subsidiaries concerning any civil or criminal suit, action or proceeding
brought under the provision of any federal, state, territorial or local law
relating to any of the following: any felony; unlawful restraint of trade or
monopoly; unlawful combination; contract or agreement in restraint of trade;
the use of unfair methods of competition; fraud; unfair labor practice; or
discrimination.
(g) Neither the Company nor any of the Company Subsidiaries has engaged in
any course of conduct that could reasonably be expected to impair the ability
of Merger Sub or its subsidiaries to be the holder of the FCC Licenses or is
aware of any reason why the FCC Licenses might not be renewed in the ordinary
course, why any of the FCC Licenses might be revoked, or why any pending
applications or notifications might not be approved.
Section 3.19. Board Approval; Vote Required.
The Board of Directors of the Company has determined that the transactions
contemplated by this Agreement are in the best interests of the Company and
its stockholders and has resolved to recommend to such stockholders that they
vote in favor thereof. The affirmative vote of a majority of the votes
entitled to be cast by the holders of outstanding shares of the Class A Common
Stock and Class B Common Stock (voting as a single class) is the only vote of
any class or series of capital stock of the Company necessary to approve the
transactions contemplated under this Agreement and the Merger.
Section 3.20. Opinion of Financial Advisor.
The Company's Board of Directors has received the opinion of Xxxxxxx, Xxxxx
& Co. that the consideration to be received in the Merger by the stockholders
of the Company is fair to such stockholders from a financial point of view, a
written copy of which opinion will be provided to Acquiror when received by
the Company, and such opinion has not been withdrawn or modified in any
material respect.
Section 3.21. Brokers.
Except for Xxxxxxx, Sachs & Co., no broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company.
ARTICLE IV
Representations and Warranties of Merger Sub
Acquiror and Merger Sub jointly and severally represent and warrant to the
Company as follows:
Section 4.1. Organization and Qualification.
Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. Merger Sub
was formed solely for the purpose of engaging in the transactions contemplated
by this Agreement. As of the date of this Agreement, except for obligations or
liabilities incurred
14
in connection with its incorporation or organization and the transactions
contemplated by this Agreement, Merger Sub has not incurred, directly or
indirectly, any obligations or liabilities or engaged in any business
activities of any type or kind whatsoever or entered into any agreements or
arrangements with any person.
Section 4.2. Certificate of Incorporation and Bylaws.
Merger Sub has heretofore made available to the Company a complete and
correct copy of the certificate of incorporation and the bylaws of Merger Sub,
each as amended to date. Such certificate of incorporation and bylaws are in
full force and effect. Merger Sub is not in violation of any of the provisions
of its certificate of incorporation or bylaws.
Section 4.3. Authority.
Merger Sub has the necessary corporate power and authority to enter into
this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Merger Sub and the consummation by Merger Sub of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part of Merger Sub
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Merger Sub and, assuming the due authorization, execution and delivery by the
Company and Acquiror, constitutes a legal, valid and binding obligation of
Merger Sub, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general applicability relating to or
affecting creditors' rights generally and by the application of general
principles of equity.
Section 4.4. No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Merger Sub do not, and
the performance by Merger Sub of its obligations under this Agreement will
not, subject to compliance with the requirements set forth in Section 4.4(b)
below, (i) conflict with or violate the certificate of incorporation or bylaws
of Merger Sub, (ii) conflict with or violate any law, statute, ordinance,
rule, regulation, order, judgment or decree applicable to Merger Sub or by
which any of its properties is bound or affected, or (iii) result in any
breach of 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 any Encumbrance on any of the properties or assets of Merger Sub
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Merger
Sub is a party or by which Merger Sub or any of its properties or assets is
bound or affected, except, in the case of clauses (ii) and (iii) above for any
such conflicts, violations, breaches, defaults or other alterations or
occurrences that would not prevent or delay consummation of the Merger in any
material respect, or otherwise prevent Merger Sub from performing its
obligations under this Agreement in any material respect.
(b) The execution and delivery of this Agreement by Merger Sub does not, and
the performance of this Agreement by Merger Sub will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Entity, except (i) for (A) applicable requirements, if any, of
the Exchange Act, state takeover laws, exchanges on which Acquiror's
securities are traded, the HSR Act and the Communications Act, (B) applicable
requirements, if any, of the consents, approvals, authorizations or permits
described in Schedule 4.4, and (C) filing and recordation of appropriate
merger documents as required by Delaware Law and (ii) where failure to obtain
such consents, approvals, authorizations or permits, or to make such filings
or notifications, would not prevent or delay consummation of the Merger in any
material respect.
Section 4.5. Vote Required.
The affirmative vote of Acquiror, the sole stockholder of Merger Sub, is the
only vote of the holders of any class or series of Merger Sub capital stock
necessary to approve any of the transactions contemplated hereby.
15
ARTICLE V
Representations and Warranties of Acquiror
Acquiror represents and warrants to the Company as follows:
Section 5.1. Organization and Qualification; Subsidiaries.
Acquiror is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation. Acquiror is duly
qualified to conduct its business, and is in good standing, in each
jurisdiction where the character of its properties owned, operated or leased
or the nature of its activities makes such qualification necessary, except for
such failure which would not have an Acquiror Material Adverse Effect (as
defined below). Acquiror has the requisite power and authority and any
necessary governmental authority, franchise, license or permit to own,
operate, lease and otherwise to hold and operate its assets and properties and
to carry on the business as now being conducted, except for such failure which
would not have an Acquiror Material Adverse Effect. As used herein, the term
"Acquiror Material Adverse Effect" means any material adverse effect on the
business, assets, financial condition or results of operations of Acquiror and
its subsidiaries (collectively, the "Acquiror Subsidiaries") taken as a whole.
Section 5.2. Organizational Documents.
Acquiror has heretofore made available to the Company a complete and correct
copy of the certificate of incorporation and bylaws of Acquiror, each as
amended to date. Such certificate of incorporation and bylaws are in full
force and effect. Acquiror is not in violation of any of the provisions of its
certificate of incorporation or bylaws.
Section 5.3. Authority.
Acquiror has the necessary power and authority to enter into this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Acquiror
and the consummation by Acquiror of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action and no
other proceedings on the part of Acquiror are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Acquiror and, assuming the
due authorization, execution and delivery by the Company, constitutes a legal,
valid and binding obligation of Acquiror, enforceable in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors' rights generally and by the application of
general principles of equity.
Section 5.4. No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Acquiror do not, and the
performance by Acquiror of its obligations under this Agreement will not,
subject to compliance with the requirements set forth in Section 5.4(b) below,
(i) conflict with or violate the certificate of incorporation or bylaws of
Acquiror, (ii) conflict with or violate any law, statute, ordinance, rule,
regulation, order, judgment or decree applicable to Acquiror or by which any
of its properties is bound or affected, or (iii) result in any breach of 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 an
Encumbrance on any of the properties or assets of Acquiror pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Acquiror is a party or by
which Acquiror or any of its properties or assets is bound or affected,
except, in the case of clauses (ii) and (iii) above for any such conflicts,
violations, breaches, defaults or other alterations or occurrences that would
not prevent or delay consummation of the Merger in any material respect, or
otherwise prevent Acquiror from performing its obligations under this
Agreement in any material respect, and would not have an Acquiror Material
Adverse Effect.
16
(b) The execution and delivery of this Agreement by Acquiror does not, and
the performance of this Agreement by Acquiror will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Entity, except (i) for (A) applicable requirements, if any, of
the Exchange Act, state takeover laws, exchanges on which Acquiror's
securities are traded, the HSR Act and the Communications Act, (B) applicable
requirements, if any, of the consents, approvals, authorizations or permits
described in Schedule 5.4, and (C) filing and recordation of appropriate
merger documents as required by Delaware Law and (ii) where failure to obtain
such consents, approvals, authorizations or permits, or to make such filings
or notifications, would not prevent or delay consummation of the Merger in any
material respect, or otherwise prevent Acquiror from performing its
obligations under this Agreement in any material respect, and would not have
an Acquiror Material Adverse Effect.
Section 5.5. Vote Required.
No vote of the stockholders of Acquiror is necessary to approve any of the
transactions contemplated hereby.
Section 5.6. Financing.
Acquiror will have available on the Effective Time sufficient funds to
consummate the Merger and to make all the payments necessary to consummate the
transactions contemplated hereby, including, without limitation, payments
under Article II hereof for the Common Stock, Options and Dissenting Shares,
and payments necessary to satisfy all amounts outstanding as of the Closing
Date under the Company's credit facilities described on Schedule 3.3 hereto.
Section 5.7. Qualification of Acquiror.
Acquiror is and pending the Effective Time will be legally, technically,
financially and otherwise qualified under the Communications Act and all
rules, regulations and policies of the FCC to acquire, own and operate the
assets and business of the Company and the Company Subsidiaries. There are no
facts or proceedings which would reasonably be expected to disqualify Acquiror
under the Communications Act or otherwise from acquiring or operating any of
the assets and business of the Company and the Company Subsidiaries or would
cause the FCC not to approve the FCC Application (as defined in Section
7.5(a)). Acquiror has no knowledge of any fact or circumstance relating to
Acquiror or any of its affiliates that would reasonably be expected to (a)
cause the filing of any objection to the FCC Application, or (b) lead to a
delay in the processing by the FCC of the FCC Application. No waiver of any
FCC rule or policy is necessary to be obtained for the approval of the FCC
Application, nor will processing pursuant to any exception or rule of general
applicability be requested or required in connection with the consummation of
the transactions herein.
Section 5.8. Absence of Litigation.
Except as set forth in Schedule 5.8, there are (a) no claims, actions,
suits, investigations, or proceedings pending or, to Acquiror's knowledge,
threatened against Acquiror or any of its properties or assets before any
court, administrative, governmental, arbitral, mediation or regulatory
authority or body, domestic or foreign, that challenge or seek to prevent,
enjoin, alter or materially delay the transactions contemplated hereby, and
(b) no judgments, decrees, injunctions or orders of any Governmental Entity or
arbitrator outstanding against Acquiror or any of its properties or assets
that would prevent or materially delay the transactions contemplated hereby.
Section 5.9. Brokers.
No broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Acquiror.
Section 5.10. SEC Filings; Financial Statements.
(a) Acquiror has filed all forms, reports, statements and other documents
required to be filed with the SEC since December 31, 1996, and has heretofore
made available to the Company, in the form filed with the SEC
17
since such date, together with any amendments thereto, its (i) Annual Reports
on Form 10-K, (ii) all Quarterly Reports on Form 10-Q, (iii) all proxy
statements relating to meetings of stockholders (whether annual or special),
(iv) all reports on Form 8-K, and (v) all other reports or registration
statements filed by Acquiror (collectively, the "Acquiror SEC Reports"). As of
their respective filing dates the Acquiror SEC Reports (i) complied as to form
in all material respects with the requirements of the Exchange Act and the
Securities Act and (ii) did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(b) The financial statements, including all related notes and schedules,
contained in the Acquiror SEC Reports (or incorporated by reference therein)
fairly present the consolidated financial position of Acquiror and Acquiror
Subsidiaries as at the respective dates thereof and the consolidated results
of operations and cash flows of Acquiror and Acquiror Subsidiaries for the
periods indicated in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except as may
be noted therein) and subject in the case of interim financial statements to
normal year-end adjustments.
Section 5.11. Absence of Certain Changes or Events.
Except as disclosed in the Acquiror SEC Reports filed prior to the date of
this Agreement or as set forth in Schedule 5.11, since March 31, 1997,
Acquiror and Acquiror Subsidiaries have not incurred any material liability,
except in the ordinary course of their businesses consistent with their past
practices, and there has not been any change in the business, financial
condition or results of operations of Acquiror or any of Acquiror
Subsidiaries, which has had, or is reasonably likely to have, an Acquiror
Material Adverse Effect, and Acquiror and Acquiror Subsidiaries have conducted
their respective businesses in the ordinary course consistent with their past
practices. The representations and warranties contained in this Section 5.11
shall be deemed to speak only as of the date hereof.
ARTICLE VI
Covenants
Section 6.1. Affirmative Covenants of the Company.
The Company hereby covenants and agrees that, prior to the Effective Time,
unless otherwise expressly contemplated by this Agreement or consented to in
writing by Acquiror, the Company shall, and shall cause each Company
Subsidiary to, (a) operate its business in the usual and ordinary course
consistent with past practices; (b) use its reasonable efforts to preserve
substantially intact its business organization, maintain its rights and
franchises, retain the services of its respective principal officers and key
employees and maintain its relationship with its respective principal
customers and suppliers; (c) use its reasonable efforts to maintain and keep
its properties and assets in as good repair and condition as at present,
ordinary wear and tear excepted; and (d) use its reasonable efforts to keep in
full force and effect insurance comparable in amount and scope of coverage to
that currently maintained; provided, however, that in the event the Company or
any of the Company Subsidiaries deems it necessary to take certain actions
that would otherwise be prohibited by clauses (a)-(d) of this Section 6.1, the
Company shall consult with Acquiror and Acquiror shall consider in good faith
the Company's request to take such action and not unreasonably withhold or
delay its consent for such action.
Section 6.2. Negative Covenants of the Company.
Except as expressly contemplated by this Agreement and except as set forth
in Schedule 6.2, or otherwise consented to in writing by Acquiror, from the
date hereof until the Effective Time, the Company shall not, and shall cause
each Company Subsidiary not to, do any of the following:
(a) (i) increase the compensation payable to or to become payable to any
of its directors, executive officers or employees, except for increases in
salary, wages or bonuses payable or to become payable in the ordinary
course of business and consistent with past practice; (ii) grant any
severance or termination pay
18
(other than pursuant to existing severance arrangements or policies as in
effect on the date of this Agreement) to, or enter into or modify any
employment or severance agreement with, any of its directors, officers or
employees; or (iii) adopt or amend any employee benefit plan or
arrangement, except as may be required by applicable law;
(b) declare or pay any dividend on, or make any other distribution in
respect of, outstanding shares of its capital stock;
(c) (i) redeem, repurchase or otherwise reacquire any share of its
capital stock or any securities or obligations convertible into or
exchangeable for any share of its capital stock, or any options, warrants
or conversion or other rights to acquire any shares of its capital stock or
any such securities or obligations (except in connection with the exercise
of outstanding Options referred to in Schedule 3.3 in accordance with their
terms); (ii) effect any reorganization or recapitalization; or (iii) split,
combine or reclassify any of its capital stock or issue or authorize or
propose the issuance of any other securities in respect of, in lieu of, or
in substitution for, shares of its capital stock;
(d) (i) issue, deliver, award, grant or sell, or authorize or propose the
issuance, delivery, award, grant or sale (including the grant of any
Encumbrances) of, any shares of any class of its capital stock (including
shares held in treasury), any securities convertible into or exercisable or
exchangeable for any such shares (including any phantom options or stock
appreciation rights), or any rights, warrants or options to acquire, any
such shares (except for the issuance of shares upon the exercise of
outstanding Options and the issuance of shares under the Company Stock
Purchase Plans); or (ii) amend or otherwise modify the terms of any such
rights, warrants or options in a manner inconsistent with the provisions of
this Agreement or the effect of which shall be to make such terms more
favorable to the holders thereof;
(e) acquire or agree to acquire, by merging or consolidating with, by
purchasing an equity interest in or a portion of the assets of, or by any
other manner, any business or any corporation, partnership, association or
other business organization or division (other than a wholly-owned
Subsidiary) thereof, or otherwise acquire or agree to acquire any assets of
any other person (other than the purchase of assets in the ordinary course
of business and consistent with past practice), or make or commit to make
any capital expenditures other than capital expenditures in the ordinary
course of business consistent with past practice;
(f) sell, lease, exchange, mortgage, pledge, transfer or otherwise
dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer
or otherwise dispose of, any of its material assets except for the grant of
purchase money security interests not to exceed Five Hundred Thousand
Dollars ($500,000) in the aggregate and dispositions in the ordinary course
of business and consistent with past practice;
(g) propose or adopt any amendments to its certificate of incorporation
or, as to its bylaws or partnership agreement, as the case may be, any
amendments that would have an adverse impact on the consummation of the
transactions contemplated by this Agreement or would be adverse to
Acquiror's interests;
(h) (i) change any of its methods of accounting in effect at January 1,
1997, or (ii) make or rescind any express or deemed election relating to
taxes, settle or compromise any claim, action, suit, litigation,
proceeding, arbitration, investigation, audit or controversy relating to
taxes (except where the amount of such settlements or controversies,
individually or in the aggregate, does not exceed Five Hundred Thousand
Dollars ($500,000), or change any of its methods of reporting income or
deductions for federal income tax purposes from those employed in the
preparation of the federal income tax returns for the taxable year ending
December 31, 1996, except, in the case of clause (i) or clause (ii), as may
be required by law or generally accepted accounting principles;
(i) incur any obligation for borrowed money, whether or not evidenced by
a note, bond, debenture or similar instrument, other than (i) purchase
money indebtedness not to exceed Five Hundred Thousand Dollars ($500,000)
in the aggregate, (ii) indebtedness incurred in the ordinary course of
business under the existing loan agreements described on Schedule 3.3
hereto, and (iii) capitalized leases not to exceed One Million Dollars
($1,000,000) in the aggregate;
19
(j) without the written consent of Acquiror (which consent shall not be
unreasonably withheld, delayed or conditioned), enter into or modify in any
material respect any agreement which, if in effect as of the date hereof,
would have been required to be disclosed on Schedule 3.12 as a Material
Contract; or
(k) agree in writing or otherwise to do any of the foregoing.
Section 6.3. Negative Covenants of Acquiror.
From the date hereof until the Effective Time, Acquiror shall not (a)
declare or pay any dividend on or make any other distribution of cash or
property in respect of, outstanding shares of its capital stock; or (b)
redeem, repurchase or otherwise reacquire any shares of its capital stock or
any securities or obligations convertible into or exchangeable for any shares
of its capital stock.
Section 6.4. Control of Operations.
Nothing contained in this Agreement shall give Acquiror or Merger Sub,
directly or indirectly, except as expressly provided in this Agreement, the
right to control or direct the Company's operations prior to the Effective
Time. Prior to the Effective Time, each of the Company and Acquiror shall
exercise, consistent with the terms and conditions of this Agreement, complete
control and supervision over its respective operations.
ARTICLE VII
Additional Agreements
Section 7.1. Access and Information.
From the date hereof to the Effective Time, the Company shall, and shall
cause the Company Subsidiaries to, afford to Acquiror and its officers,
employees, accountants, consultants, legal counsel, representatives of current
and prospective sources of financing for the Merger and other representatives
of Acquiror (collectively, the "Acquiror Representatives"), reasonable access
during normal business hours to the properties, executive personnel and all
information concerning the business, properties, contracts, records and
personnel of the Company and the Company Subsidiaries as Acquiror may
reasonably request. The Company further agrees to reasonably cooperate with
Acquiror in connection with Acquiror's obtaining financing for this
transaction (including making appropriate officers of the Company available on
a reasonable basis for road show presentations).
Section 7.2. Confidentiality.
Acquiror acknowledges and agrees that all information received from or on
behalf of the Company or any of the Company Subsidiaries in connection with
the Merger shall be deemed received pursuant to the confidentiality agreement,
dated as of May 21, 1997, between the Company and Acquiror (the
"Confidentiality Agreement") and Acquiror shall, and shall cause the Acquiror
Representatives to comply with the provisions of the Confidentiality Agreement
with respect to such information and the provisions of the Confidentiality
Agreement are hereby incorporated herein by reference with the same effect as
if fully set forth herein.
Section 7.3. Stockholder Approval.
The Company shall, promptly after the date of this Agreement, take all
action necessary in accordance with Delaware Law and its certificate of
incorporation and bylaws to convene a meeting of the Company's stockholders
(the "Stockholders' Meeting"), to approve and adopt this Agreement and the
Merger. The Company shall use its best efforts to solicit from stockholders of
the Company proxies in favor of the approval and adoption of this Agreement
and the Merger and to take all other actions reasonably necessary or in
Acquiror's reasonable judgment advisable to secure such vote as promptly as
practicable, unless otherwise required by applicable fiduciary duties of the
directors of the Company, as determined by such directors in good faith after
consultation with independent legal counsel.
20
Section 7.4. Proxy Statement.
(a) As promptly as practicable after the execution and delivery of this
Agreement, the Company shall prepare and file with the SEC a proxy statement
in connection with the matters to be considered at the Stockholders' Meeting
(the "Proxy Statement"). The Company shall use its best efforts to cause the
Proxy Statement to be "cleared" by the SEC for mailing to the stockholders of
the Company as promptly as practicable and shall mail the Proxy Statement to
its stockholders as promptly as practicable thereafter. Acquiror shall furnish
all information concerning it and the holders of its capital stock as the
Company may reasonably request in connection with such actions. The Proxy
Statement shall include the recommendation of the Company's Board of Directors
in favor of approval and adoption of this Agreement and the Merger, unless
otherwise required by applicable fiduciary duties of the directors of the
Company, as determined by such directors in good faith after consultation with
independent legal counsel. Acquiror shall have the right to review the Proxy
Statement before it is filed with the SEC.
(b) The information supplied by Acquiror for inclusion in the Proxy
Statement shall not, at the date the Proxy Statement (or any supplement
thereto) is first mailed by stockholders or at the time of the Stockholders'
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they are
made, not misleading. If at any time prior to the Stockholders' Meeting any
event or circumstance relating to Acquiror or any of its affiliates, or its or
their respective officers or directors, should be discovered by Acquiror that
should be set forth in a supplement to the Proxy Statement, Acquiror shall
promptly inform the Company.
(c) All information contained in the Proxy Statement (other than information
provided by Acquiror for inclusion therein) shall not, at the date the Proxy
Statement (or any supplement thereto) is first mailed to stockholders or at
the time of the Stockholders' Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. If at any time prior
to the Stockholders' Meeting any event or circumstance relating to the Company
or any of the Company Subsidiaries, or to its or their respective officers or
directors, should be discovered by the Company that should be set forth in a
supplement to the Proxy Statement, the Company shall promptly inform Acquiror.
All documents that the Company is responsible for filing with the SEC in
connection with the transactions contemplated herein will comply as to form
and substance in all material respects with the applicable requirements of the
Exchange Act and the rules and regulations thereunder.
Section 7.5. FCC Application.
(a) As promptly as practicable after the execution and delivery of this
Agreement, Acquiror, Merger Sub and the Company shall prepare all appropriate
applications for FCC consent, and such other documents as may be required,
with respect to the transfer of control of the Company to Acquiror
(collectively, the "FCC Application"). Not later than the fifth (5th) business
day following execution and delivery of this Agreement, Acquiror and Merger
Sub shall deliver to the Company their respective completed portions of the
FCC Application. Not later than the tenth (10th) business day following the
execution and delivery of this Agreement, the Company shall file, or cause to
be filed, the FCC Application. Acquiror, Merger Sub and the Company shall
prosecute the FCC Application in good faith and with due diligence in order to
obtain such FCC consent as expeditiously as practicable. If the Closing shall
not have occurred for any reason within the initial effective period of the
granting of approval by the FCC of the FCC Application, and neither Acquiror
nor the Company shall have terminated this Agreement pursuant to Section 9.1,
Acquiror and the Company shall jointly request one or more extensions of the
effective period of such grant. No party hereto shall knowingly take, or fail
to take, any action the intent or reasonably anticipated consequence of which
action or failure to act would be to cause the FCC not to grant approval of
the FCC Application.
(b) Acquiror and the Company shall each pay one-half ( 1/2) of any FCC fees
that may be payable in connection with the filing or granting of approval of
the FCC Application. Acquiror and the Company shall each
21
oppose any request for reconsideration or judicial review of the granting of
approval of the FCC Application. The Company shall pay any cost incurred in
connection with complying with the FCC notice and advertisement requirements
in connection with the transfer of control of the Company.
Section 7.6. Further Action; Best Efforts.
(a) Each of the parties shall use best efforts to take, or cause to be
taken, all appropriate action, and do, or cause to be done, all things
necessary, proper or advisable under applicable laws or otherwise to
consummate and make effective the transactions contemplated by this Agreement
as promptly as practicable, including, without limitation, using its best
efforts to obtain all licenses, permits, consents, approvals, authorizations,
qualifications and orders of Governmental Entities and parties to contracts
with the Company and Acquiror as are necessary for the transactions
contemplated herein. In case at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this Agreement,
the proper officers and directors of each party to this Agreement shall use
commercially reasonable efforts to take all such action.
(b) From the date of this Agreement until the Effective Time, each of the
parties shall promptly notify the other in writing of any pending or, to the
knowledge of such party, threatened action, proceeding or investigation by any
Governmental Entity or any other person (i) challenging or seeking damages in
connection with the Merger or the conversion of the Common Stock into the
Merger Consideration pursuant to the Merger or (ii) seeking to restrain or
prohibit the consummation of the Merger or otherwise limit the right of
Acquiror to own or operate all or any portion of the business or assets of the
Company.
(c) The Company shall give prompt written notice to Acquiror, and Acquiror
and Merger Sub shall give prompt written notice to the Company, of the
occurrence, or failure to occur, of any event, which occurrence or failure to
occur would be likely to cause any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect at any time
from the date of this Agreement to the Effective Time. Each party shall use
its best efforts to not take any action, or enter into any transaction, which
would cause any of its representations or warranties contained in this
Agreement to be untrue or result in a breach of any covenant made by it in
this Agreement.
Section 7.7. Public Announcements.
Acquiror and the Company shall consult with each other before issuing any
press release or otherwise making any public statements with respect to the
Merger and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by law or any
listing agreement of Acquiror or the Company with any exchange on which the
securities of the Company or Acquiror are traded.
Section 7.8. Indemnification; Directors' and Officers' Insurance.
(a) The certificate of incorporation and bylaws of the Surviving Corporation
shall contain the provisions with respect to indemnification set forth in the
certificate of incorporation and bylaws of the Company on the date of this
Agreement, which provisions shall not be amended, repealed or otherwise
modified for a period of six (6) years after the Effective Time in any manner
that would adversely affect the rights thereunder of persons who at any time
prior to the Effective Time were identified as prospective indemnities under
the certificate of incorporation or bylaws of the Company in respect of
actions or omissions occurring at or prior to the Effective Time (including,
without limitation, the transactions contemplated by this Agreement), unless
such modification is required by applicable law.
(b) From and after the Effective Time, the Surviving Corporation shall
indemnify, defend and hold harmless the present and former officers, directors
and employees of the Company and the Company Subsidiaries (collectively, the
"Indemnified Parties") against all losses, expenses, claims, damages,
liabilities or amounts that are paid in settlement of, with the approval of
Acquiror and the Surviving Corporation (which approval shall not be
unreasonably withheld), or otherwise in connection with, any claim, action,
suit, proceeding or investigation (a "Claim"), based in whole or in part on
the fact that such person is or was such a director, officer or employee and
arising out of actions or omissions occurring at or prior to the Effective
Time (including, without limitation,
22
the transactions contemplated by this Agreement), in each case to the fullest
extent permitted under Delaware Law (and shall pay expenses in advance of the
final disposition of any such action or proceeding to each Indemnified Party
to the fullest extent permitted under Delaware Law, upon receipt from the
Indemnified Party to whom expenses are advanced of the undertaking to repay
such advances contemplated by Section 145(e) of Delaware Law).
(c) Without limiting the foregoing, in the event any Claim is brought
against any Indemnified Party (whether arising before or after the Effective
Time) after the Effective Time (i) the Indemnified Parties may retain its
regularly engaged independent legal counsel as of the date of this Agreement,
or other independent legal counsel satisfactory to them provided that such
other counsel shall be reasonably acceptable to Acquiror and the Surviving
Corporation, (ii) the Surviving Corporation shall pay all reasonable fees and
expenses of such counsel for the Indemnified Parties promptly as statements
therefor are received, and (iii) the Surviving Corporation will use its
reasonable efforts to assist in the vigorous defense of any such matter,
provided that the Surviving Corporation shall not be liable for any settlement
of any Claim effected without its written consent, which consent shall not be
unreasonably withheld. Any Indemnified Party wishing to claim indemnification
under this Section 7.8, promptly upon learning of any such Claim, shall notify
the Surviving Corporation (although the failure so to notify the Surviving
Corporation shall not relieve the Surviving Corporation from any liability
which the Surviving Corporation may have under this Section 7.8, except to the
extent such failure prejudices the Surviving Corporation), and shall deliver
to the Surviving Corporation the undertaking contemplated by Section 145(e) of
Delaware Law. The Indemnified Parties as a group may retain one law firm (in
addition to local counsel) to represent them with respect to each such matter
unless there is, under applicable standards of professional conduct (as
reasonably determined by counsel to such Indemnified Parties) a conflict on
any significant issue between the position of any two or more of such
Indemnified Parties, in which event, an additional counsel as may be required
may be retained by such Indemnified Parties.
(d) Acquiror shall cause to be maintained in effect for not less than six
(6) years after the Effective Time the current policies of directors' and
officers' liability insurance and fiduciary liability insurance maintained by
the Company with respect to matters occurring prior to the Effective Time;
provided, however, that (i) Acquiror may substitute therefor policies of
substantially the same coverage containing terms and conditions that are
substantially the same for the Indemnified Parties to the extent reasonably
available and (ii) Acquiror shall not be required to pay an annual premium for
such insurance in excess of three hundred percent (300%) of the last annual
premium paid prior to the date of this Agreement, but in such case shall
purchase as much coverage as possible for such amount.
(e) This Section 7.8 is intended to be for the benefit of, and shall be
enforceable by, the Indemnified Parties referred to herein, their heirs and
personal representatives and shall be binding on Acquiror and Merger Sub and
the Surviving Corporation and their respective successors and assigns.
Acquiror hereby guarantees the Surviving Corporation's obligations pursuant to
this Section 7.8.
Section 7.9. Employee Benefits Matters.
(a) For a period of two (2) years after the Effective Time, Acquiror shall
cause the Surviving Corporation to provide employee benefits under plans,
programs and arrangements, which, in the aggregate, will provide benefits to
the employees of the Company and the Company Subsidiaries which are no less
favorable, in the aggregate, than those provided pursuant to the plans,
programs and arrangements of the Company in effect and disclosed to Acquiror
on the date hereof; provided, however, that nothing herein shall interfere
with the Surviving Corporation's right or obligation to make such changes to
such plans, programs or arrangements as are necessary to conform with
applicable law; provided, further, however, that with respect to any such
plan, program or arrangement that provides for the issuance of the Company's
Common Stock, or options or securities exercisable or convertible into the
Company's Common Stock, the Surviving Corporation shall be required to adopt
equity compensation programs providing for the issuance of common stock of
Acquiror to such employees.
(b) In furtherance of the provisions of Section 7.9(a), Acquiror shall cause
the Surviving Corporation to provide to those executives listed on Schedule
7.9 hereto with the employee benefits provided to each such
23
executive on the date hereof and for the time period set forth in the
Company's employment and/or severance agreements with such executives as set
forth on Schedule 7.9 hereto; provided, however, that notwithstanding the
foregoing, to the extent that any contributions under a qualified retirement
plan would be prohibited by applicable law, Acquiror shall cause the Surviving
Corporation to make cash payments from time to time to such executives equal
to the value of such contributions which can not be so made under applicable
law, as and when such contributions would have been made as noted on Schedule
7.9. The employee benefits provided to such executives on the date hereof
under the Company's employment and/or severance agreements with such
executives are detailed on Schedule 7.9 hereto.
(c) Acquiror acknowledges and agrees that prior to the Effective Time, the
Company will take all such actions as may be necessary to cause (i) all
participants to become fully vested in their benefits under the Company's
401(k) Plan, and (ii) employer contributions to be made with respect to
periods prior to the Effective Time to the Company's 401(k) Plan to the extent
that such contributions would be made if the participants were employed by the
Company on the last day of the calendar year in which the Closing occurs.
Acquiror will allow employees of PCI to continue to participate in the
Company's 401(k) Plan at least until the end of the calendar year in which the
Closing occurs.
(d) On or prior to the Effective Time, the Company shall pay a pro-rated
portion of the annual bonuses and gainshare that would have otherwise been
payable to the eligible employees of the Company after the end of the year,
such bonuses and gainshare to be consistent with the Company's 1997 Management
and Professional Bonus Plan and the Company's Gainshare Program, with past
practice, and the estimates contained in Schedule 7.9(d).
(e) Acquiror agrees that it will not allow the Surviving Corporation to
amend or terminate the Xxxxxx Wireless, Inc. Change of Control Severance
Program for a period of one (1) year after the Effective Time.
(f) Prior to Closing, the Company shall make, or shall make accruals on its
financial statements for, all payments required to be made by the Company
under the terms of any Benefit Plan or by any law applicable to any Benefit
Plan with respect to all periods through the Closing Date.
(g) On or prior to the Effective Time, the Company shall take, or cause to
be taken, such actions as are reasonably necessary to:
(i) cause the Company to adopt the PCI plans providing medical, dental,
vision, prescription drug, flexible spending account, pre-tax premium
contribution, travel accident, accidental death and dismemberment, long
term disability, and life insurance benefits for the benefit of Company
employees;
(ii) add the Company as a contractholder under insurance contracts
providing insurance coverage, and administrative contracts relating to, for
one or more of the benefits listed in the immediately preceding paragraph
(i) above as well as workers compensation liability coverage and provide
that such contracts continue as to the Company after the Effective Time;
(iii) substitute the Company for PCI as the party to the Xxxxxx
Communications Health Care Expense Fund which is a Code Section 501(c)(9)
trust used to fund certain of the benefits listed in paragraph (i) above
and any other trust or account which is used with respect to flexible
spending accounts or pre-tax premium contributions for Company employees;
and
(iv) except as provided in Section 7.9(c) hereof, cease participation and
coverage in the Company plans, trusts and insurance contracts referred to
in paragraphs (i) through (iii) above with respect to all individuals who
are not Company employees as of the Effective Time.
Section 7.10. HSR Act Matters.
Acquiror, Merger Sub and the Company (as may be required pursuant to the HSR
Act) promptly will complete all documents required to be filed with the
Federal Trade Commission and the United States Department of Justice in order
to comply with the HSR Act and, not later than fifteen (15) days after the
date
24
hereof, together with the persons who are required to join in such filings,
shall file the same with the appropriate Governmental Entities. Acquiror,
Merger Sub and the Company shall promptly furnish all materials thereafter
required by any of the Governmental Entities having jurisdiction over such
filings, and shall take all reasonable actions and shall file and use best
efforts to have declared effective or approved all documents and notifications
with any such Governmental Entity, as may be required under the HSR Act or
other Federal antitrust laws for the consummation of the Merger and the other
transactions contemplated hereby.
Section 7.11. Negotiation With Others.
(a) Unless and until this Agreement shall have been terminated in accordance
with its terms, the Company shall not, through any officer, director,
employee, representative, agent or direct or indirect stockholder of the
Company or any Company Subsidiaries, directly or indirectly, encourage or
solicit any proposal that constitutes an Acquisition Proposal (as defined
below), engage in any discussions or negotiations or provide any information
to any person relating thereto or in furtherance thereof or accept any
Acquisition Proposal; provided, however, that nothing contained in this
Section 7.11 shall prohibit the Company, or its Board of Directors, from
making any disclosure to its stockholders that, in the judgment of its Board
of Directors in accordance with, and based upon, the advice of outside
counsel, is required under applicable law. For purposes of this Agreement,
"Acquisition Proposal" means any offer to acquire (or meaningful indication of
interest in the acquisition of) all or any substantial part of the business
and properties or capital stock of the Company or the Company Subsidiaries,
whether by merger, consolidation, sale of assets or stock, tender offer or
similar transaction or series of transactions involving the Company, the
Company Subsidiaries or their direct or indirect stockholders.
(b) Notwithstanding Section 7.11(a), the Board of Directors of the Company,
in the exercise of and as required by its fiduciary duties as determined in
good faith by the Board of Directors of the Company in accordance with and
based upon the advice of outside counsel, may (i) furnish information
(including, without limitation, confidential information) concerning the
Company to a third party who makes an unsolicited request for such information
for the purpose of making an Acquisition Proposal, provided that such third
party executes and delivers a confidentiality agreement substantially the same
as the Confidentiality Agreement, and (ii) engage in discussions or
negotiations with a third party who submits in writing an interest in making
an Acquisition Proposal that the Board of Directors believes, based on advice
of its financial advisors, is reasonably capable of being consummated and is
reasonably likely to be superior to the transactions contemplated by this
Agreement from a financial point of view to all stockholders of the Company,
provided, however, that in the case of clause (i) or (ii) hereof, the Company
shall promptly notify Acquiror in writing of such request for information or
Acquisition Proposal, providing reasonable details with respect thereto, and
shall keep Acquiror informed as to the status of any discussions or
negotiations referred to in clause (ii) above.
ARTICLE VIII
Closing Conditions
Section 8.1. Conditions to Obligations of Acquiror, Merger Sub and the
Company to Effect the Merger.
The respective obligations of Acquiror, Merger Sub and the Company to effect
the Merger and the other transactions contemplated herein shall be subject to
the satisfaction at or prior to the Effective Time of the following
conditions, any or all of which may be waived, in whole or in part, to the
extent permitted by applicable law:
(a) Stockholder Approval. This Agreement and the Merger shall have been
approved and adopted by the requisite vote of the stockholders of the
Company in accordance with applicable law.
(b) No Order. No Governmental Entity or federal or state court of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree, judgment,
injunction or other order (whether temporary, preliminary or permanent), in
any case which is in effect and which prevents or prohibits consummation of
the Merger or any other transactions contemplated in this Agreement;
provided, however, that the parties shall use their reasonable efforts to
cause any such decree, judgment, injunction or other order to be vacated or
lifted.
25
(c) HSR Act. Any waiting period with any extensions thereof under the HSR
Act shall have expired or been terminated.
(d) FCC Approval. All consents, waivers, approvals and authorizations
(the "FCC Transfer Approvals") required to be obtained, and all filings or
notices required to be made, by Acquiror, Merger Sub and the Company prior
to consummation of the transactions contemplated in this Agreement shall
have been obtained from, and made with, the FCC. Each of the FCC Transfer
Approvals shall have become a Final Order. For purposes of this Agreement,
"Final Order" shall mean an action by the FCC: (i) that is not reversed,
stayed, enjoined, set aside, annulled or suspended within the deadline, if
any, provided by applicable statute or regulation; (ii) with respect to
which no request for stay, motion or petition for reconsideration or
rehearing, application or request for review, or notice of appeal or other
judicial petition for review that is filed within such period is pending,
and (iii) as to which the deadlines, if any, for filing any such request,
motion, petition, application, appeal or notice, and for the entry of
orders staying, reconsidering or reviewing on the FCC's own motion have
expired. Notwithstanding anything to the contrary contained herein or
otherwise, Acquiror may, at is option by written notice to the Company: (i)
waive on behalf of the parties the requirement that each of the FCC
Transfer Approvals shall have become a Final Order; and (ii) acquire the
microwave licenses pursuant to special temporary authority granted to
Acquiror by the FCC.
Section 8.2. Additional Conditions to Obligations of Acquiror.
The obligations of Acquiror to effect the Merger and the other transactions
contemplated in this Agreement are also subject to the following conditions,
any or all of which may be waived, in whole or in part, to the extent
permitted by applicable law:
(a) Representations and Warranties. The representations and warranties of
the Company made in this Agreement shall be true and correct in all
material respects, on and as of the Effective Time with the same effect as
though such representations and warranties had been made on and as of the
Effective Time (provided that any representation or warranty contained
herein that is qualified by a materiality standard shall not be further
qualified hereby), except for representations and warranties that speak as
of a specific date or time other than the Effective Time (which need only
be true and correct in all material respects as of such date or time).
Acquiror shall have received a certificate of the Chief Executive Officer
or Chief Financial Officer of the Company to that effect.
(b) Agreements and Covenants. The agreements and covenants of the Company
required to be performed on or before the Effective Time shall have been
performed in all material respects. Acquiror shall have received a
certificate of the Chief Executive Officer or Chief Financial Officer of
the Company to that effect.
(c) Legal Opinions. Acquiror shall have received (i) an opinion from
Xxxxx & Xxxxxxx L.L.P., counsel to the Company, in form and substance
reasonably satisfactory to Acquiror, and (ii) an opinion from the Company's
FCC counsel in substantially the form attached hereto as Exhibit A.
(d) Dissenting Shares. The Dissenting Shares shall constitute not greater
than ten percent (10%) of the shares of Class A Common Stock outstanding on
the Closing Date.
(e) No Company Material Adverse Effect. Since the date of this Agreement,
no Company Material Adverse Effect shall have occurred and be continuing.
Section 8.3. Additional Conditions to Obligations of the Company.
The obligations of the Company to effect the Merger and the other
transactions contemplated in this Agreement are also subject to the following
conditions any or all of which may be waived, in whole or in part, to the
extent permitted by applicable law:
(a) Representations and Warranties. The representations and warranties of
Acquiror and Merger Sub made in this Agreement shall be true and correct in
all material respects, on and as of the Effective
26
Time with the same effect as though such representations and warranties had
been made on and as of the Effective Time (provided that any representation
or warranty contained herein that is qualified by a materiality standard
shall not be further qualified hereby), except for representations and
warranties that speak as of a specific date or time other than the
Effective Time (which need only be true and correct in all material
respects as of such date or time). The Company shall have received a
certificate of the Chief Executive Officer or Chief Financial Officer of
Acquiror to that effect.
(b) Agreements and Covenants. The agreements and covenants of Acquiror
and Merger Sub required to be performed on or before the Effective Time
shall have been performed in all material respects. The Company shall have
received a certificate of the Chief Executive Officer or Chief Financial
Officer of Acquiror to that effect.
(c) Legal Opinion. The Company shall have received an opinion from
Proskauer Xxxx Xxxxx & Xxxxxxxxxx LLP, counsel to Acquiror and Merger Sub,
in form and substance reasonably satisfactory to the Company.
ARTICLE IX
Termination, Amendment and Waiver
Section 9.1. Termination.
This Agreement may be terminated at any time prior to the Effective Time,
whether before or after approval of this Agreement and the Merger by the
stockholders of the Company:
(a) by mutual written consent of each of Acquiror and the Company;
(b) by Acquiror if the Company shall have breached, or failed to comply
with, in any material respect any of its obligations under this Agreement
or any representation or warranty made by the Company shall have been
incorrect in any material respect when made or shall have since ceased to
be true and correct in any material respect, such that as a result of such
breach, failure or misrepresentation the conditions set forth in Section
8.2(a), 8.2(b) or 8.2(e) would not be satisfied, and such breach, failure
or misrepresentation is not cured within thirty (30) days after notice
thereof;
(c) by the Company if Acquiror or Merger Sub shall have breached, or
failed to comply with, in any material respect any of its obligations under
this Agreement or any representation or warranty made by Acquiror or Merger
Sub shall have been incorrect in any material respect when made or shall
have since ceased to be true and correct in any material respect, such that
as a result of such breach, failure or misrepresentation the conditions set
forth in Section 8.3(a) or 8.3(b) would not be satisfied, and such breach,
failure or misrepresentation is not cured within thirty (30) days after
notice thereof;
(d) by either Acquiror or the Company if any decree, permanent
injunction, judgment, order or other action by any court of competent
jurisdiction or any Governmental Entity preventing or prohibiting
consummation of the Merger shall have become final and nonappealable;
(e) by either Acquiror or the Company if the Agreement shall fail to
receive the requisite vote for approval and adoption by the stockholders of
the Company at the Stockholders' Meeting and the Merger shall not have been
consummated within forty-five (45) days thereafter; and
(f) by either the Company or Acquiror if the merger shall not have been
consummated before December 31, 1997 (the "Termination Date"); provided,
however, that the right to terminate this Agreement under this Section
9.1(f) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Effective Time to occur on or before the Termination Date.
27
Section 9.2. Effect of Termination.
Except as provided in Section 9.3 or Section 10.1, in the event of the
termination of this Agreement pursuant to Section 8.1, this Agreement shall
forthwith become void, there shall be no liability on the part of Acquiror,
Merger Sub or the Company or any of their respective officers or directors to
the other parties hereto and all rights and obligations of any party hereto
shall cease, except that nothing herein shall relieve any party for any breach
of this Agreement.
Section 9.3. Expenses; Fee.
(a) Except as otherwise expressly provided herein, all expenses incurred by
the parties hereto shall be borne solely by the party that has incurred such
expenses. All FCC annual regulatory fees which are due and payable prior to
Closing shall be paid by the Company prior to Closing.
(b) Without in any way limiting the Company's obligations under this
Agreement (including without limitation under Sections 1.1, 1.2, 1.6, 2.3,
6.1, 6.2, 7.1, 7.3, 7.4, 7.5, 7.6, 7.10 and 7.11 hereof) or Acquiror's rights
under Section 10.7 hereof, the Company shall pay, or shall cause to be paid
to, Acquiror a Fee (the "Fee") of Fifteen Million Dollars ($15,000,000), if
this Agreement is (i) terminated either (A) by Acquiror under Section 9.1(b)
as a result of the Company's breach of its obligations under Sections 1.1,
1.2, 1.6, 2.3, 6.1, 6.2, 7.1, 7.3, 7.4, 7.5, 7.6, 7.10 or 7.11, (B) by the
Company or Acquiror under Section 9.1(e) and (ii) either (A) an Alternative
Transaction (as defined below) has been publicly announced and has not been
withdrawn at the time of such termination (in which event the Fee shall be
paid simultaneously with such termination) or (B) an Alternative Transaction
is consummated on or prior to the date that is one (1) year after the date of
this Agreement (in which event the Fee shall be paid simultaneously with such
consummation); provided, however, that payment of such Fee shall be deemed to
satisfy in full all of the liabilities and obligations of the Company under
this Agreement. As used herein, an "Alternative Transaction" shall mean any
transaction or proposed transaction or related series of transactions
(including without limitation any merger, consolidation, sale of assets or
stock, tender offer or other transaction) providing for the receipt by the
Company and/or the holders of more than fifty percent (50%) of its Common
Stock of consideration equivalent to a value in excess of Seventeen Dollars
and Fifty Cents ($17.50) per share of Common Stock.
Section 9.4. Amendment.
This Agreement may be amended by the parties hereto by action taken by or on
behalf of their respective Boards of Directors at any time prior to the
Effective Time; provided, however, that, after approval of this Agreement and
the Merger by the stockholders of the Company, no amendment may be made which
would reduce the amount or change the type of consideration into which each
share of Common Stock shall be converted pursuant to this Agreement upon
consummation of the Merger. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
Section 9.5. Waiver.
At any time prior to the Effective Time, the parties may (a) extend the time
for the performance of any of the obligations or other acts of the other
party, (b) waive any inaccuracies in the representations and warranties
contained in this Agreement or in any document delivered pursuant to this
Agreement and (c) waive compliance by the other party with any of the
agreements or conditions contained in this Agreement. Any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
ARTICLE X
General Provisions
Section 10.1. Nonsurvival of Representations, Warranties and Agreements.
The representations, warranties and agreements in this Agreement (and in any
certificate delivered in connection with the Closing) shall be deemed to be
conditions to the Merger and shall not survive the Effective Time or
termination of this Agreement, except for the agreements set forth in Articles
I (the Merger) and II
28
(Conversion of Securities; Exchange of Certificates) and Sections 7.8
(Indemnification and Insurance) and 7.9 (Employee Benefits Matters), each of
which shall survive the Effective Time indefinitely, and Sections 7.2
(Confidentiality), 9.2 (Effect of Termination) and 9.3 (Expenses; Fee), each
of which shall survive termination of this Agreement indefinitely.
Section 10.2. Notices.
All notices and other communications given or made pursuant hereto shall be
in writing and shall be deemed to have been duly given or made as of the date
delivered, mailed or transmitted, and shall be effective upon receipt, if
delivered personally, mailed by registered or certified mail (postage prepaid,
return receipt requested) to the parties at the following addresses (or at
such other address for a party as shall be specified by like changes of
address) or sent by electronic transmission to the telecopier number specified
below:
(a) If to Acquiror:
Price Communications Corporation
00 Xxxxxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx Xxxxx
With a copy (which shall not constitute notice) to:
Proskauer Xxxx Xxxxx & Xxxxxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
(b) If to the Company:
Xxxxxx Wireless, Inc.
00000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxx Xxxxxx, Esq.
With a copy (which shall not constitute notice) to:
Xxxxx & Xxxxxxx L.L.P.
Columbia Square
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx X.X. Xxxxxx, Xx., Esq.
Section 10.3. Certain Definitions.
For purposes of this Agreement, the term:
(a) "affiliate" means a person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common
control with, the first mentioned person;
(b) "beneficial owner" means with respect to any shares of Common Stock a
person who shall be deemed to be the beneficial owner of such shares (i)
which such person or any of its affiliates or associates beneficially owns,
directly or indirectly, (ii) which such person or any of its affiliates or
associates (as such term is defined in Rule 12b-2 of the Exchange Act) has,
directly or indirectly, (A) the right to acquire (whether such right is
exercisable immediately or subject only to the passage of time), pursuant
to any agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights,
29
warrants or options, or otherwise, or (B) the right to vote pursuant to any
agreement, arrangement or understanding, (iii) which are beneficially
owned, directly or indirectly, by any other persons with whom such person
or any of its affiliates or associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding voting or disposing of
any such shares or (iv) pursuant to Section 13(d) of the Exchange Act and
any rules or regulations promulgated thereunder;
(c) "business day" shall mean any day other than a day on which banks in
the State of Florida are authorized or obligated to be closed;
(d) "control" (including the terms "controlled by" and "under common
control with") means, other than for purposes of the Communications Act,
the possession, directly or indirectly or as trustee or executor, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of stock or as trustee or executor,
by contract or credit arrangement or otherwise; and
(e) "person" means an individual, corporation, partnership, association,
trust, unincorporated organization, other entity or group (as defined in
Section 13(d) of the Exchange Act).
Section 10.4. Headings.
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Section 10.5. Severability.
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the
end that transactions contemplated hereby are fulfilled to the extent
possible.
Section 10.6. Entire Agreement.
This Agreement (together with the Exhibits, the Schedules and the other
documents delivered pursuant hereto) and the Confidentiality Agreement
constitute the entire agreement of the parties and supersede all prior
agreements and undertakings, both written and oral, between the parties, or
any of them, with respect to the subject matter hereof and, except as
otherwise expressly provided herein, are not intended to confer upon any other
person any rights or remedies hereunder.
Section 10.7. Specific Performance.
The transactions contemplated by this Agreement are unique. Accordingly,
each of the parties acknowledges and agrees that, in addition to all other
remedies to which it may be entitled, each of the parties hereto is entitled
to a decree of specific performance, provided such party is not in material
default hereunder.
Section 10.8. Assignment.
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto (whether by operation
of law or otherwise) without the prior written consent of the other party.
Subject to the preceding sentence, this Agreement shall be binding upon, inure
to the benefit of and be enforceable by the parties and their respective
successors and assigns.
Section 10.9. Third Party Beneficiaries.
This Agreement shall be binding upon and inure solely to the benefit of each
party hereto, and nothing in this Agreement, express or implied, is intended
to or shall confer upon any other person any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement except for (a) the
Indemnified Parties
30
under Section 7.8, (b) the rights of the holders of Common Stock to receive
the Merger Consideration payable in the Merger pursuant to Article II, and (c)
the rights of the individuals listed on Schedule 7.9 under Section 7.9.
Section 10.10. Governing Law.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law.
Section 10.11. Counterparts.
This Agreement may be executed and delivered in one or more counterparts,
and by the different parties hereto in separate counterparts, each of which
when executed and delivered shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
In Witness Whereof, the parties hereto have caused this Agreement and Plan
of Merger to be executed and delivered as of the date first written above.
Price Communications Corporation
By: /s/ Xxxxxx Xxxxx
----------------------------------
Name: Xxxxxx Xxxxx
Title:President
Price Communications Cellular Merger
Corp.
By: /s/ Xxxxxx Xxxxx
----------------------------------
Name: Xxxxxx Xxxxx
Title:Xxxxxxxxx
Xxxxxx Wireless, Inc.
By: /s/ Xxxxxxx X. Xxxx
----------------------------------
Xxxxxxx X. Xxxx
President and Chief Executive
Officer
31
