AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of June 5, 1998 (this
"Agreement") by and among ROCKY MOUNTAIN INTERNET, INC., a Delaware corporation
("Purchaser"), INTERNET ACQUISITION CORPORATION, a Colorado corporation and
wholly-owned subsidiary of Purchaser ("Acquisition"), and INTERNET
COMMUNICATIONS CORPORATION, a Colorado corporation (the "Company").
(Acquisition and the Company are hereinafter collectively referred to as the
"Constituent Corporations.")
WHEREAS, the Board of Directors of each Constituent Corporation
believes that the merger of Acquisition with and into the Company (the "Merger")
is in the best interests of such Constituent Corporation and its shareholders;
and
WHEREAS, Purchaser and the Boards of Directors of the Constituent
Corporations (a) desire to enter into this Agreement and (b) have approved the
Merger, all upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 THE MERGER. Upon the terms and subject to the conditions
hereof, on the Effective Date, Acquisition shall be merged with and into the
Company, which shall be the surviving corporation (the Company in such capacity
being hereinafter sometimes called the "Surviving Corporation"). From and after
the Effective Date, the status, rights and liabilities of, and the effect of the
Merger on, each of the Constituent Corporations in the Merger and the Surviving
Corporation shall be as provided in Section 0-000-000 of the Colorado Business
Corporation Act ("CBCA").
Section 1.2 CONSUMMATION OF THE MERGER. As soon as practicable (but
in any event within five business days) after the receipt of approval by the
Company's shareholders and satisfaction of the other conditions hereinafter set
forth, the parties hereto shall cause the Merger to be consummated by the
approval and filing with the Secretary of the State of Colorado of articles of
merger in such form as required by and executed in accordance with the relevant
provisions of applicable law (the time of such filing being the "Effective
Date").
ARTICLE II
ARTICLES OF INCORPORATION AND BY-LAWS
OF THE SURVIVING CORPORATION
Section 2.1 ARTICLES OF INCORPORATION. The Articles of Incorporation
of Acquisition in effect on the Effective Date shall be the Articles of
Incorporation of the Surviving Corporation, until thereafter amended as provided
by law.
Section 2.2 BY-LAWS. The By-Laws of Acquisition in effect on the
Effective Date shall be the By-Laws of the Surviving Corporation, until
thereafter amended as provided by law and the Surviving Corporation's Articles
of Incorporation.
Section 2.3 OFFICERS AND BOARD OF DIRECTORS. The directors of
Acquisition on the Effective Date shall become the directors of the Surviving
Corporation until their respective successors are duly elected and qualified.
The officers of the Company on the Effective Date shall continue as the officers
of the Surviving Corporation, to serve in accordance with the By-Laws thereof
until their respective successors are duly elected and qualified.
ARTICLE III
CONVERSION OF SHARES
Section 3.1 CONVERSION OF SHARES. As of the Effective Date, by
virtue of the Merger and without any action on the part of Purchaser,
Acquisition, the Company or the holders of any securities of the Company:
(a) All outstanding shares of the Company's common stock (the
"Shares") which are held by the Company as treasury shares, all authorized and
unissued Shares and any Shares owned by Purchaser, Acquisition or any other
direct or indirect subsidiary of Purchaser, shall be canceled.
(b) Each other outstanding Share (other than Shares held by
Dissenting Shareholders (as defined in Section 3.3)) shall be converted into the
right to receive $6.80 in cash, reduced by an amount equal to the quotient of
(i) 50% of the difference between (A) the lesser of (I) the Xxxxxxx Fee (as
defined below) and (II) $876,000 and (B) $250,000; divided by (ii) the total
number of shares of the Company outstanding or issuable upon exercise of options
or warrants on the date hereof, regardless of whether or not they are currently
vested (the "Merger Consideration").
(c) Each issued and outstanding share of capital stock of
Acquisition shall be converted into one validly issued, fully paid and
non-assessable share of common stock of the Surviving Corporation.
Section 3.2 PAYMENT FOR SHARES. The Purchaser shall authorize one or
more persons to act as paying agent in connection with the Merger (the "Paying
Agent"). At or prior to the Effective Date, the Purchaser shall deposit the
Merger Consideration with the Paying Agent, in trust for the benefit of holders
of Shares. Upon or as soon as practicable after the Effective Date, the Paying
Agent shall distribute to each former holder of Shares, upon surrender to the
Paying Agent of the certificate or certificates which immediately prior to the
Effective Date represented such outstanding Shares, for cancellation, the
aggregate amount of cash into which such holder's Shares shall have been
converted in the Merger. Until so surrendered, each certificate, which
immediately prior to the Effective Date represented outstanding Shares, shall
represent solely the right to receive, upon surrender, the aggregate amount of
cash into which the Shares represented thereby shall have been converted and
such shares shall not be entitled to any other rights with respect to the
Company. No interest shall accrue or be paid on the cash payable upon the
surrender of the certificate or certificates. The Paying Agent shall pay on the
Effective Date the amounts due in respect of the outstanding stock options
granted by the Company (the "Outstanding Options") referred to in Section 6.6.
Section 3.3 SHARES OF DISSENTING SHAREHOLDERS. Notwithstanding
anything in this Agreement to the contrary, any issued and outstanding shares of
capital stock of the Company held by a shareholder who has not voted in favor of
nor consented to the Merger and who complies with all the provisions of the CBCA
concerning the right of holders of such stock to dissent from the Merger and
require appraisal of their shares (a "Dissenting Shareholder"), shall not be
converted as described in Section 3.1 but shall become, at the Effective Date,
by virtue of the Merger and without any further action, the right to receive
such consideration as may be determined to be due to such Dissenting Shareholder
pursuant to the CBCA; PROVIDED, HOWEVER, that Shares outstanding immediately
prior to the Effective Date and held by a Dissenting Shareholder who shall,
after the Effective Date, withdraw his demand for appraisal or lose his right of
appraisal, in either case pursuant to the CBCA, shall be deemed to be converted
as of the Effective Date, into the right to receive the Merger Consideration.
The Company shall give Purchaser (a) prompt notice of any written demands for
appraisal of shares of capital stock of the Company received by the Company and
(b) the opportunity to direct all negotiations and proceedings with respect to
any such demands. The Company shall not, without the prior written consent of
Purchaser, voluntarily make any payment with respect to, or settle, offer to
settle or otherwise negotiate, any such demands.
Section 3.4 CLOSING OF THE COMPANY'S TRANSFER BOOKS. Upon the
Effective Date, the stock transfer books of the Company shall be closed and no
transfer of Shares (other than shares of common stock into which the capital
stock of Acquisition is to be converted pursuant to the Merger) shall thereafter
be made.
Section 3.5 STATUS OF SHARE CERTIFICATES. From and after the
Effective Date, the holders of certificates evidencing ownership of Shares
outstanding immediately prior to the Effective Date shall cease to have any
rights with respect to such Shares except as otherwise provided for herein or by
applicable law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND ACQUISITION
Except as set forth in the disclosure schedule delivered to the
Company by the Purchaser on the date hereof (the "Purchaser Disclosure
Schedule") or in the Purchaser Reports (as defined below), the Purchaser and
Acquisition jointly and severally represent and warrant to the Company as
follows:
Section 4.1 ORGANIZATION. Each of Purchaser and its subsidiaries is
a corporation duly organized, validly existing and in good standing under the
laws of the state of its organization and has the requisite corporate power to
carry on its business as it is now being conducted. Acquisition is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Colorado and is a wholly-owned subsidiary of Purchaser.
Section 4.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Purchaser and
Acquisition have the requisite corporate power and authority to execute and
deliver this Agreement, to perform their obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement by Purchaser and Acquisition and the consummation by Purchaser and
Acquisition of the transactions contemplated hereby have been duly authorized by
all necessary corporate and, to the extent necessary, shareholder action of
Purchaser and Acquisition and no other acts or corporate proceedings on the part
of Purchaser or Acquisition are necessary to authorize the Merger or this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by Purchaser and Acquisition and is a valid
and binding obligation of Purchaser and Acquisition, enforceable against them in
accordance with its terms, subject to bankruptcy remedies and rights of
creditors and general principles of equity.
Section 4.3 NO CONFLICTS; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by Purchaser
and Acquisition does not, and the consummation of the transactions contemplated
hereby will not (i) conflict with or violate the certificate of incorporation or
bylaws of Purchaser, (ii)in any material respect, conflict with or violate any
federal, state, foreign or local law, statute, ordinance, rule, regulation,
order, judgment or decree (collectively, "Laws") applicable to Purchaser or any
of its subsidiaries or by which any of their properties is bound or subject or
(iii)result in any material breach of or constitute a material default (or an
event that with notice or lapse of time or both would become a material default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or require payment under, or result in the creation of a lien
or encumbrance on any of the properties or assets of Purchaser or any of its
subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Purchaser or any of its subsidiaries is a party or by or to which
Purchaser or any of its subsidiaries or any of their properties is bound or
subject, except for any such conflicts, violations, breaches, defaults, events,
rights of termination, amendment, acceleration or cancellation, payment
obligations or liens or encumbrances described in clauses (ii) or (iii) that
would not, in the aggregate, prevent the Purchaser and Acquisition from
performing, in any material respect, their respective obligations under this
Agreement or would not have a material adverse effect on the business or
financial condition of Purchaser and its subsidiaries, taken as a whole (a
"Purchaser Material Adverse Effect").
(b) The execution and delivery of this Agreement by Purchaser
and Acquisition does not, and consummation of the transactions contemplated
hereby will not, require either Purchaser or Acquisition to obtain any consent,
license, permit, approval, waiver, authorization or order of, or to make any
filing with or notification to, any governmental or regulatory authority,
domestic or foreign (collectively, "Governmental Entities"), except (i) for
applicable requirements, if any, of the Securities Act of 1933, as amended (the
"Securities Act"), the Exchange Act, state securities or blue sky laws ("Blue
Sky Laws"), and the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "Xxxx-Xxxxx-Xxxxxx Act"), and the filing and recordation of
appropriate merger documents as required by the CBCA, and (ii) where the failure
to obtain such consents, licenses, permits, approvals, waivers, authorizations
or orders, or to make such filings or notifications, would not, either
individually or in the aggregate, constitute a Purchaser Material Adverse
Effect.
Section 4.4 INFORMATION. (a) None of the information to be supplied
by Purchaser or Acquisition for inclusion in a proxy statement in connection
with the meeting of the Company's shareholders described in Section 6.2 hereof
(the "Proxy Statement") or any amendments thereof or supplements thereto, will,
at the time of the meeting of shareholders to be held in connection with the
Merger or the mailing to shareholders, as the case may be, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(b) Since their inception, Purchaser and its subsidiaries have
filed all forms, reports, statements and other documents required to be filed
with the Securities and Exchange Commission ("SEC"), except where the failure to
file such documents would not have a Purchaser Material Adverse Effect (all such
forms, reports, statements and other documents being referred to herein,
collectively, as the "Purchaser Reports"). The Purchaser Reports, including all
Purchaser Reports filed after the date of this Agreement and prior to the
Effective Date, (i) were or will be prepared in all material respects in
accordance with the requirements of applicable Law (except that some filings
were made late) and (ii) did not at the time they were filed, or will not at the
time they are filed, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, except where any such statement or omission would not have
a Purchaser Material Adverse Effect. Notwithstanding this Section 4.4(b),
Purchaser shall not be deemed to represent or warrant the preparation or
accuracy of any Purchaser Report, statement, document or other information
included in the Purchaser Reports that were provided to the Purchaser for
inclusion therein by a third party. Since the date of the last Purchaser Report
(x) there has occurred no Purchaser Material Adverse Effect and the Purchaser
has incurred no material liabilities outside the ordinary course of the
Purchaser's business, (y) the Purchaser has not entered into any material
contracts that would be required to be filed with the Purchaser's next Form 10-Q
and (z) the Purchaser has had no transactions with related parties that would be
required to be reported in the Purchaser's next proxy statement in accordance
with Section 404 of Regulation S-K. The list of the Purchaser's subsidiaries
set forth in the Purchaser Reports is accurate and complete as of the date
hereof, with the addition of Acquisition and Rocky Mountain Broadband, Inc.,
both Colorado corporations.
Section 4.5 LITIGATION. There is no claim, action, suit, litigation,
proceeding, arbitration or, to the knowledge of Purchaser, any investigation of
any kind at law or in equity (including actions or proceedings seeking
injunctive relief), pending or, to the knowledge of Purchaser, threatened
against Purchaser or any of its subsidiaries or any properties or rights of
Purchaser or any of its subsidiaries (except for claims, actions, suits,
litigation, proceedings, arbitrations or investigations which would not
reasonably be expected to have a Purchaser Material Adverse Effect), and neither
Purchaser nor any of its subsidiaries is subject to any continuing order of,
consent decree, settlement agreement or other similar written agreement with,
any Governmental Entity, or any judgment, order, writ, injunction, decree or
award of any Governmental Entity or arbitrator, including, without limitation,
cease and desist or other orders, except for matters which would not have a
Purchaser Material Adverse Effect.
Section 4.6 FINANCING. The commitment letter dated June 5, 1998 from
ING Barings (U.S.) Capital Corporation ET AL. to Purchaser in the form delivered
to and approved by the Company for $42 million to fund the acquisition of Shares
hereunder (the "Commitment") is in full force and effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule delivered to Purchaser
by the Company on the date hereof (the "Company Disclosure Schedule") or in the
Company Reports (as defined below), the Company represents and warrants to
Purchaser and Acquisition as follows:
Section 5.1 ORGANIZATION. Each of the Company and its subsidiaries
is a corporation duly organized, validly existing and in good standing under the
laws of the state of its organization and has the requisite corporate power to
carry on its business as it is now being conducted.
Section 5.2 AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has
all requisite corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby (subject to the approval of the Merger, this
Agreement and the transactions contemplated hereby by the affirmative vote of
the holders of a majority of the outstanding shares of common stock of the
Company ("Shareholder Approval")). The Company's Board of
Directors has unanimously recommended approval and adoption of this Agreement by
the Company's shareholders entitled to vote on the Merger. Subject to
Shareholder Approval, the execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby have been duly 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. This Agreement
has been duly executed and delivered by the Company and is a valid and binding
obligation of the Company, enforceable against it in accordance with its terms,
subject to bankruptcy remedies and rights of creditors and general principles of
equity.
Section 5.3 NO CONFLICTS; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by the Company
does not, and the consummation of the transactions contemplated hereby will not
(i) conflict with or violate the articles of incorporation or bylaws of the
Company, (ii) in any material respect, conflict with or violate any federal,
state, foreign or local law, statute, ordinance, rule, regulation, order,
judgment or decree (collectively, "Laws") applicable to the Company or any of
its subsidiaries or by which any of their properties is bound or subject or
(iii) result in any material breach of or constitute a material default (or an
event that with notice or lapse of time or both would become a material default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or require payment under, or result in the creation of a lien
or encumbrance on any of the properties or assets of the Company or any of its
subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by or to which the
Company or any of its subsidiaries or any of their properties is bound or
subject, except for the Company's debt to Norwest Bank of Colorado, N.A., and
except for any such conflicts, violations, breaches, defaults, events, rights of
termination, amendment, acceleration or cancellation, payment obligations or
liens or encumbrances described in clauses (ii) or (iii) that would not, in the
aggregate, prevent the Company from performing, in any material respect, its
obligations under this Agreement or would not have a material adverse effect on
the business or financial condition of the Company and its subsidiaries taken as
a whole (a "Company Material Adverse Effect").
(b) The execution and delivery of this Agreement by the Company
does not, and consummation of the transactions contemplated hereby will not,
require the Company to obtain any consent, license, permit, approval, waiver,
authorization or order of, or to make any filing with or notification to, any
governmental or regulatory authority, domestic or foreign (collectively,
"Governmental Entities"), except (i) for applicable requirements, if any, of the
Securities Act of 1933, as amended (the "Securities Act"), the Exchange Act,
state securities or blue sky laws ("Blue Sky Laws"), and the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "Xxxx-Xxxxx-Xxxxxx Act"),
and the filing and recordation of appropriate merger documents as required by
the CBCA, and (ii) where the failure to obtain such consents, licenses, permits,
approvals, waivers, authorizations or orders, or to make such filings or
notifications, would not, either individually or in the aggregate, constitute a
Company Material Adverse Effect.
Section 5.4 INFORMATION. (a) None of the information to be included
in the Proxy Statement or any amendments thereof or supplements thereto, will,
at the time of the meeting of shareholders to be held in connection with the
Merger or the mailing to shareholders, as the case may be, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The Proxy Statement and any amendments thereof
or supplements thereto will comply as to form in all material respects with the
provisions of the Exchange Act.
(b) Since their inception, the Company has filed all forms,
reports, statements and other documents required to be filed with the SEC,
except where the failure to file such documents would not have a Company
Material Adverse Effect (all such forms, reports, statements and other documents
being referred to herein, collectively, as the "Company Reports"). The Company
Reports, including all Company Reports filed after the date of this Agreement
and prior to the Effective Date, (i) were or will be prepared in all material
respects in accordance with the requirements of applicable Law (except that some
filings were made late) and (ii) did not at the time they were filed, or will
not at the time they are filed, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, except where any such statement or omission
would not have a Company Material Adverse Effect.
Notwithstanding this Section 5.4(b), the Company shall not be deemed to
represent or warrant the preparation or accuracy of any Company Report,
statement, document or other information included in the Company Reports that
were provided to the Company for inclusion therein by a third party. Since the
date of the last Company Report (x) there has occurred no Company Material
Adverse Effect and the Company has incurred no material liabilities outside the
ordinary course of the Company's business, (y) the Company has not entered into
any material contracts that would be required to be filed with the Company's
next Form 10-Q and (z) the Company has had no transactions with related parties
that would be required to be reported in the Company's next proxy statement in
accordance with Section 404 of Regulation S-K. The list of the Company's
subsidiaries set forth in the Company Reports is accurate and complete as of the
date hereof.
Section 5.5 LITIGATION. There is no claim, action, suit, litigation,
proceeding, arbitration or, to the knowledge of the Company or any of its
subsidiaries, any investigation of any kind at law or in equity (including
actions or proceedings seeking injunctive relief), pending or, to the knowledge
of the Company, threatened against the Company or any properties or rights of
the Company or any of its subsidiaries (except for claims, actions, suits,
litigation, proceedings, arbitrations or investigations which would not
reasonably be expected to have a Company Material Adverse Effect), and neither
the Company nor or any of its subsidiaries is subject to any continuing order
of, consent decree, settlement agreement or other similar written agreement
with, any Governmental Entity, or any judgment, order, writ, injunction, decree
or award of any Governmental Entity or arbitrator, including, without
limitation, cease and desist or other orders, except for matters which would not
have a Company Material Adverse Effect.
Section 5.6 CAPITALIZATION. (a) The authorized capital stock of the
Company consists of (A) 20,000,000 shares of Common Stock, no par value, and (B)
100,000,000 shares of preferred stock, par value $.0001 per share, of which no
shares are issued and outstanding;
(b) The numbers of shares of Common Stock as of the date hereof
(i) issued and outstanding, (ii) held in the treasury of the Company and (iii)
reserved for issuance upon exercise of outstanding stock options, warrants and
other derivative securities granted by the Company (the "Outstanding Options"),
together with the exercise prices therefor, are set forth in the Company
Disclosure Schedule. Except as set forth in the Company Disclosure Schedule,
the Company has no outstanding subscriptions, options, calls, commitments,
rights, warrants, rights plans or antitakeover plans obligating the Company to
issue capital stock. All of the Company's outstanding capital stock is validly
issued, fully paid and nonassessable and free of preemptive rights.
Section 5.7 COMPLIANCE. The Company is not in conflict with, or in
default or violation of any Law applicable to the Company or by or to which any
of its material properties is bound or subject (including, without limitation,
the Worker Adjustment and Retraining Notification Act of 1988, as amended),
except for any such conflicts, defaults or violations which would not have a
Company Material Adverse Effect.
Section 5.8 PARACHUTE, CHANGE OF CONTROL PAYMENTS. The Company has
no contracts, arrangements or understandings pursuant to which any person may
receive any amount or entitlement from the Company or any of its subsidiaries
that may be characterized as an "excess parachute payment" within the meaning of
the Internal Revenue Code as a result of any of the transactions contemplated by
this Agreement, nor is any person entitled to receive any additional payment
from the Company or its subsidiaries in the event that the 20% parachute excess
tax is imposed on such person. Neither the Company nor any of its subsidiaries
has or will have any obligation to pay any person or entity any amount under any
agreement or arrangement as a result of the transactions contemplated hereby,
except for the repayment of the Anschutz Note and the Bank Note (as defined
below) and except for payments to financial, accounting and legal advisors.
ARTICLE VI
COVENANTS
Section 6.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER.
Subsequent to the date hereof and prior to the Effective Date, unless Purchaser
shall otherwise consent in writing, which consent shall not be unreasonably
withheld, and except as otherwise specifically contemplated by this Agreement:
(a) the businesses of the Company and its subsidiaries shall be
conducted only in, and neither the Company nor any of its subsidiaries shall
take any action except in, the ordinary and usual course of business.
(b) the Company shall use reasonable efforts to preserve its
business, organization and goodwill.
(c) the Company shall confer on a regular basis with the
Purchaser regarding material positive and negative developments respecting the
Company's business.
(d) the Company shall not
(1) (i) increase the compensation payable to or to become
payable to any director or executive officer, except for increases in
salary or wages payable or to become payable in the ordinary course of
business and consistent with past practice; (ii) grant any severance
or termination pay (other than pursuant to the normal severance policy
of the Company or its subsidiaries as in effect on the date of this
Agreement) to, or enter into or amend any employment or severance
agreement with, any director, officer or employee; (iii) establish,
adopt or enter into any new employee benefit plan or arrangement; or
(iv) except as may be required by applicable law, amend, or take any
other actions (other than the acceleration of vesting or waiving of
performance criteria permitted pursuant to the Company's employee
benefit plans upon a change in control of the Company) with respect
to, any of the Company's employee benefit plans;
(2) declare or pay any dividend on, or make any other
distribution in respect of, outstanding shares of capital stock,
except for dividends by a subsidiary to the Company or another
subsidiary;
(3) (i) redeem, purchase or otherwise acquire any shares of its
capital stock or any securities or obligations convertible into or
exchangeable for any shares 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 Outstanding Options 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;
(4) (i) issue, deliver, award, grant or sell, or authorize or
propose the issuance, delivery, award, grant or sale (including the
grant of any security interests, liens, claims, pledges, limitations
in voting rights, charges or other 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, or any rights, warrants or options to acquire
any such shares (except as permitted for the issuance of shares upon
the exercise of Outstanding Options as of the date of this Agreement);
or (ii) amend or otherwise modify the terms of any such rights,
warrants or options the effect of which shall be to make such terms
more favorable to the holders thereof;
(5) 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
thereof, or otherwise acquire or agree to acquire any assets of any
other person (other than the purchase of assets from suppliers or
vendors in the ordinary course of business) in each case which are
material, individually or in the aggregate, to the Company and its
subsidiaries, taken as a whole;
(6) 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
or any material assets of any of its subsidiaries, except for
dispositions in the ordinary course of business and consistent with
past practice;
(7) solicit, initiate or knowingly encourage any inquiries,
discussions or negotiations with any person (other than Purchaser or
Acquisition) concerning any Acquisition Proposal (as defined in
Section 8.1(c)) or solicit, initiate or knowingly encourage any effort
or attempt by any other person to do, make or seek an Acquisition
Proposal or, unless required in order for the Board of Directors of
the Company to comply with its fiduciary responsibilities, with a view
to pursuing an Acquisition Proposal with such person, engage in
discussions or negotiations with or disclose any nonpublic information
relating to the Company or any of its subsidiaries to such person or
authorize or permit any of the officers, directors or employees of the
Company or any of its subsidiaries or any investment banker, financial
adviser, attorney, accountant or other representative retained by the
Company or any of its subsidiaries to take any such action. The
Company shall immediately communicate to Purchaser in writing the
terms of any Acquisition Proposal which it may receive and shall not
accept any such Acquisition Proposal unless the Purchaser has had
three days notice of such Acquisition Proposal and its terms;
(8) adopt or propose to adopt any amendments to its Articles of
Incorporation or By-Laws which would alter the terms of its capital
stock or would have an adverse impact on the consummation of the
transactions contemplated by this Agreement;
(9) incur any obligation for borrowed money or purchase money
indebtedness in excess of $25,000, whether or not evidenced by a note,
bond, debenture or similar instrument;
(10) enter into any arrangement, agreement or contract with any
third party (other than customers in the ordinary course of business)
in excess of $25,000 that provides for an exclusive arrangement with
that third party or is substantially more restrictive on the Company
or substantially less advantageous to the Company than arrangements,
agreements or contracts existing on the date hereof unless such
arrangement is entered into in the ordinary course of business; or
(11) agree in writing or otherwise to do any of the foregoing;
provided, however, that notwithstanding any other provision of this Agreement,
the Company's Convertible Promissory Note dated March 20, 1998 in the original
principal amount of $1,600,000 to Anschutz Company (the "Anschutz Note") may be
amended to provide that (x) if the Purchaser and its affiliates shall have
obtained debt financing at or before the Closing in the aggregate principal
amount greater than $50,000,000 in one transaction or a series of related
transactions, then such note shall be due and payable in full at the Closing and
(y) if the Purchaser and its affiliates shall have obtained debt financing in
the aggregate principal amount greater than $50,000,000 in one transaction or a
series of related transactions after the Closing but before the scheduled
maturity of such note, then such note shall be due and payable in full on the
date of the closing of such transaction or series of related transactions.
Section 6.2 SHAREHOLDERS' MEETING AND PROXY STATEMENT. Except as
provided in Section 8.1 of this Agreement, the Company shall take all action
necessary in accordance with applicable law and its Articles of Incorporation
and By-Laws to convene a meeting of the holders of the shares of Common Stock of
the Company as promptly as practicable after the date hereof to consider and
vote upon the adoption of this Agreement. In connection with any shareholders'
meeting, if required, the
Company shall prepare and file the Proxy Statement with the SEC and Purchaser
shall furnish all information concerning Purchaser and Acquisition as the
Company may reasonably request in connection with the preparation of the Proxy
Statement. The Company shall in the Proxy Statement, through its Board of
Directors, recommend that the Company's shareholders adopt this Agreement, if
such vote is required, except to the extent that the Board of Directors shall
have withdrawn or modified its approval or recommendation of this Agreement as
contemplated by Section 8.1(c). The Company acknowledges that any breach of
this Section 6.2 would cause the Purchaser irreparable harm and entitle the
Purchaser to specific performance of the covenants contained in this Section
6.2.
Section 6.3 CERTAIN FILINGS AND CONSENTS. Purchaser, Acquisition and
the Company shall (a) cooperate with each other in determining whether any
filings are required to be made or consents, approvals, permits or
authorizations are required to be obtained under any federal or state law or
regulation or whether any consents, approvals or waivers are required to be
obtained from other parties to loan agreements or other contracts material to
the business of the Company and its subsidiaries taken as a whole in connection
with the consummation of the Merger and (b) actively assist each other in making
any such filings and obtaining any consents, permits, authorizations, approvals
or waivers that are required.
Section 6.4 ACCESS. Upon reasonable notice, the Company shall afford
Purchaser and Acquisition, and their respective representatives, full access
during normal business hours until the Effective Date to all of its properties,
books, contracts, commitments and records (including, but not limited to, tax
returns) and, during that period, the Company and each of its subsidiaries shall
furnish promptly to Purchaser and Acquisition, and their respective
representatives, all information concerning its business, properties, assets,
liabilities, operations, financial condition and personnel as Purchaser or
Acquisition may reasonably request; except that in the case of all written
materials for which the Company asserts an attorney client privilege, the
Company shall provide Purchaser with a list of such materials and a summary of
their contents, and the Company shall cooperate with Purchaser to provide
Purchaser with access to such materials if such access can be provided without
violation of the attorney client privilege. Purchaser and Acquisition shall,
and shall use their reasonable best efforts to cause their consultants and
advisors to, hold in confidence all such information until such time as such
information is otherwise publicly available (unless otherwise
required to disclose such information by law), and if this Agreement is
terminated, Purchaser and Acquisition shall deliver to the Company all
documents, work papers and other material obtained by them from the Company
pursuant to the terms of this Agreement.
Section 6.5 EXPENSES.
(a) Except as provided in Article VIII hereof, all Expenses (as
defined in Section 6.5(b) hereof) incurred by the parties hereto shall be borne
solely and entirely by the party which has incurred such Expenses.
(b) "Expenses" as used in this Agreement shall include all
out-of-pocket expenses (including, without limitation, all fees and expenses of
counsel, accountants, investment bankers, experts and consultants to a party
hereto and its affiliates) incurred by a party or on its behalf in connection
with or related to the authorization, preparation, negotiation, execution and
performance of this Agreement, the Proxy Statement and all other matters related
to the consummation of the transactions contemplated hereby; provided, however,
that "Expenses" shall not include any fees of legal counsel or advisors of any
shareholder of any party.
Section 6.6 OUTSTANDING OPTIONS. On or before the Effective Date of
the Merger, the Company shall use its best efforts to cause all Outstanding
Options to be converted by the Merger into the right to receive for each Share
covered thereby a cash amount equal to the excess of the Merger Consideration
over the option exercise price. Such amount shall be paid by the Paying Agent
on the Effective Date.
Section 6.7 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
The Surviving Corporation shall cause to be maintained in effect (i) in its
articles of incorporation and by-laws for a period of six years after the
Effective Date, the current provisions regarding elimination of liability of
directors and indemnification of officers, directors and employees contained in
the articles of incorporation and by-laws of the Company and (ii) for a period
of six years, the current policies of directors' and officers' liability
insurance and fiduciary liability insurance maintained by the Company (provided
that the Surviving Corporation may substitute therefor policies of at least the
same coverage and amounts containing terms and conditions which are, in the
aggregate, no less advantageous to the insured) with respect to claims arising
from facts or events that occurred on or before the Effective Date.
Section 6.8 MAINTENANCE OF COMMITMENT. Purchaser and Acquisition
shall cause the Commitment to remain in full force and effect.
Section 6.9 RESIGNATION OF DIRECTORS. The Company will obtain the
resignations of all of the Directors of the Company on the Effective Date.
Section 6.10 CONTROL OF OTHER PARTY'S BUSINESS. Nothing contained in
this Agreement shall give the Purchaser, directly or indirectly, the right to
control or direct the Company's operations prior to the Effective Date. Nothing
contained in this Agreement shall give the Company, directly or indirectly, the
right to control or direct the Purchaser's operations prior to the Effective
Date. Prior to the Effective Date, each of the Purchaser and the Company shall
exercise, consistent with the terms and conditions of this Agreement, complete
control and supervision over its respective operations.
ARTICLE VII
CONDITIONS
Section 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Date of the following
conditions:
(a) The holders of the Common Stock of the Company entitled to
vote shall have duly approved the Merger if required by applicable law.
(b) No preliminary or permanent injunction or other order by a
court of competent jurisdiction which prevents the consummation of the Merger
shall have been issued and remain in effect (each party agreeing to use its
reasonable best efforts to have any such injunction lifted).
(c) No action shall have been taken nor shall any statute, rule
or regulation have been enacted by the government of the United States or any
state thereof that makes the consummation of the Merger illegal in any material
respect.
(d) The applicable waiting period under the Xxxx-Xxxxx-Xxxxxx
Act with respect to the transactions contemplated by this Agreement shall have
expired or been terminated.
Section 7.2 CONDITIONS TO OBLIGATIONS OF PURCHASER AND ACQUISITION TO
EFFECT THE MERGER. The obligations of Purchaser and Acquisition to effect the
Merger shall be subject to the fulfillment at or prior to the Effective Date of
the following additional conditions:
(a) The representations and warranties of the Company set forth
in Article V shall be true and correct in all material respects on the Effective
Date (or on such other date specified in Article V) with the same force and
effect as though made on and as of such date, except for any such untrue or
incorrect representations and warranties that would not have a Company Material
Adverse Effect, and Purchaser and Acquisition shall have received a certificate
to that effect from the Chief Executive Officer and the Treasurer of the
Company.
(b) All of the covenants and agreements of the Company to be
performed or complied with pursuant to this Agreement prior to the Effective
Date shall have been duly performed and complied with in all material respects,
except for any such failure of performance or compliance that would not have a
Company Material Adverse Effect, and Purchaser and Acquisition shall have
received a certificate to that effect from the Chief Executive Officer and the
Treasurer of the Company.
(c) Holders of no more than 10% of the outstanding Shares, in
the aggregate, shall have filed with the Company a written objection to the
Merger and made a written demand for payment of the fair value of his shares in
the manner permitted by the CBCA.
(d) All of the Directors of the Company on the Effective Date
shall have resigned.
(e) Since the date of this Agreement, there shall have been no
Company Material Adverse Effect.
(f) The Company shall have received an opinion from a reputable
investment banking firm satisfactory to the Company as to the fairness, from a
financial point of view, of the Merger Consideration to be paid to the Company's
shareholders.
Section 7.3 CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT THE
MERGER. The obligation of the Company to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Date of the following additional
conditions.
(a) The representations and warranties of Purchaser and
Acquisition set forth in Article IV shall be true and correct in all material
respects on the Effective Date (or on such other date specified in Article IV)
with the same force and effect as though made on and as of such date, except for
any such untrue or incorrect representations and warranties that would not have
a Purchaser Material Adverse Effect, and the Company shall have received
certificates to that effect from the Chief Executive Officer and the Treasurer
of Purchaser and the President of Acquisition.
(b) All of the covenants and agreements of Purchaser and
Acquisition to be performed or complied with pursuant to this Agreement prior to
the Effective Date shall have been duly performed and complied with in all
material respects, except for any such failure of performance or compliance that
would not have a Purchaser Material Adverse Effect, and the Company shall have
received certificates to that effect from the Chief Executive Officer and the
Treasurer of Purchaser and the President of Acquisition.
(c) The Commitment shall remain in full force and effect and
shall be funded.
(d) Xxxxxxx X. Xxxxxx shall have provided $7,800,000 in debt or
equity financing to the Purchaser.
(e) If the Purchaser and its affiliates shall have obtained debt
financing at or before the Closing in the aggregate principal amount greater
than $50,000,000 in one transaction or a series of related transactions, then
the Anschutz Note shall have been paid in full.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 TERMINATION. This Agreement shall be subject to
termination at any time prior to the Effective Date, whether before or after
approval by the shareholders of the Company, if required, as follows:
(a) by mutual consent of Purchaser and the Board of Directors of
the Company;
(b) by Purchaser or the Company if the Merger shall not have
been consummated on or before September 15, 1998, which date may be extended by
mutual agreement of the Boards of Directors of the Company and Purchaser;
(c) by the Company if, prior to the Effective Date, the Company,
its Board of Directors or its shareholders shall receive a bona fide written
proposal or offer from a third party (each an "Acquisition Proposal") relating
to:
(i) the acquisition or purchase of all or substantially all
of the assets of, or more than a 50% equity interest (including any
Shares theretofore acquired) in the Company;
(ii) a merger, consolidation or similar business combination
with the Company;
(iii) a tender or exchange offer for the Company
conditioned on ownership of more than 50% of the outstanding Shares
following such tender or exchange offer;
and the Board of Directors of the Company determines, after consultation with
the Company's legal advisors and after receiving advice of the Company's
financial advisors that the alternative transaction is more favorable than the
Merger from a financial point of view, that it has a duty in the proper
discharge of its fiduciary responsibilities under applicable law to consider
such other proposal or offer, and then such Board of Directors either (A)
accepts such proposal or offer, (B) recommends to the shareholders acceptance of
such proposal or offer, or (C) in the case of a tender or exchange offer, takes
no position with respect thereto and all conditions (other than terminating this
Agreement) of such tender or exchange offer have been satisfied, in which event
this Agreement shall be terminated without any liability to the Company or the
Company's Board of Directors as a result of such termination other than as set
forth herein.
(d) by Purchaser upon a breach of any material representation,
warranty, covenant or agreement on the part of the Company set forth in this
Agreement or if any representation or warranty of the Company shall have become
untrue and such breach or untruth shall have caused a Company Material Adverse
Effect.
(e) by the Company upon a breach of any material representation,
warranty, covenant or agreement on the part of the Purchaser set forth in this
Agreement or if any representation or warranty of the Purchaser shall have
become untrue and such breach or untruth shall have caused a Purchaser Material
Adverse Effect.
Section 8.2 BREAK-UP FEE; EFFECT OF TERMINATION.
(a) If the Company shall have terminated this Agreement by
reason of the failure of any condition set forth in Sections 7.3(a), (b), (c) ,
(d) or (e), except for a failure of the condition set forth in Sections 7.3(c)
by reason of a failure of any condition set forth in Sections 7.1(c) or 7.2(a),
(b) or (d), the Purchaser shall pay to the Company $1,050,000 in cash or, at the
Purchaser's election, that number of shares of the Purchaser's common stock
equal to $1,050,000 divided by the "Fair Market Value" (as defined below) of
such stock.
(b) If the Purchaser shall have terminated this Agreement by
reason of the failure of any condition set forth in Sections 7.1(c) or 7.2(a),
(b) or (d), the Company shall pay to the Purchaser $1,050,000 in cash.
(c) The "Fair Market Value" of the Purchaser's or the Company's
common stock shall be the average closing price of the stock reported by NASDAQ
for the 15 trading days after announcement of termination pursuant to this
Section 8.2(a). If either party elects to deliver shares of stock pursuant to
Section 8.2(a) or (b), such party shall file at its expense a registration
statement with respect to any such shares under the Securities Act of 1933
within 15 days after termination by the Company of this Agreement, shall use its
best efforts to have such registration statement be declared effective and to
keep it effective for not less than two years and shall indemnify the other
party and its affiliates pursuant to an indemnity agreement typical of a
registration rights agreement.
(d) Any payment required to be made pursuant to this Section 8.2
shall be made as promptly as practicable but not later than three business days
after termination of this Agreement.
(e) In the event of termination of this Agreement by Purchaser,
Acquisition or the Company (other than pursuant to Section 8.1(c)), there shall
be no liability under this Agreement on the part of either the Company,
Purchaser or Acquisition or their respective officers or directors, except for
any breach of the provisions of Section 6.2 and the confidentiality provisions
of Section 6.4 and except as provided in Sections 8.2(a) and (b).
Section 8.3 AMENDMENT. This Agreement may be amended by the parties
hereto, by action taken by the respective Boards of Directors of Purchaser,
Acquisition and the Company, at any time before or after approval hereof by the
shareholders of the
Company, but, after any such approval, if required, no amendment shall be made
which changes the Merger Consideration without the further approval of such
shareholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
Section 8.4 WAIVER. At any time prior to the Effective Date, the
parties hereto, by action taken by the respective Boards of Directors of
Purchaser, Acquisition or the Company, may (a) extend, for a reasonable time,
the time for the performance of any of the obligations or other acts of the
other parties hereto, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto and (c)
waive compliance with any of the agreements or conditions contained herein. Any
agreement on the part of the party hereto to any such extension or waiver shall
be valid if set forth in an instrument in writing signed on behalf of such
party.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 NOTICE OF BREACH. Each party shall promptly give
written notice to the other parties upon becoming aware of the occurrence, or
impending or threatened occurrence, of any event which would cause or constitute
a breach of any of its representations, warranties of covenants contained or
referred to in this Agreement and shall use its reasonable best efforts to
prevent or promptly remedy the same.
Section 9.2 COOPERATION. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use its reasonable best
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the Merger and the other
transactions contemplated by this Agreement. In case at any time after the
Effective Date any further action is necessary or desirable to carry out the
purpose of this Agreement, the proper officers and/or directors of Purchaser,
Acquisition or the Company shall take, or cause to be taken, all such necessary
action. Purchaser shall cause Acquisition to comply with all of Acquisition's
obligations hereunder.
Section 9.3 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. None
of the representations and warranties in this Agreement shall survive the
Effective Date of the Merger.
Section 9.4 BROKERS. The Company represents and warrants that no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the Merger, except that the Company
has agreed to pay to Xxxxxxx & Associates all amounts due to it for its efforts
in connection with the Merger (the "Xxxxxxx Fee").
Section 9.5 ENTIRE AGREEMENT. Other than the Voting Agreement of
even date herewith between the Purchaser and Interwest Group, Inc., this
Agreement contains the entire agreement among Purchaser, Acquisition and the
Company with respect to the Merger and the other transactions contemplated
hereby, and supersedes all prior agreements, understandings, representations,
and warranties with respect to the subject matter.
Section 9.6 APPLICABLE LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Colorado (without
giving effect to its choice of laws principles).
Section 9.7 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 9.8 SEPARABILITY. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction, shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
Section 9.9 PUBLICITY. Except as required by law or the rules of
any exchange on which the shares of Purchaser or Company are traded, as long as
this Agreement is in effect, neither the Company nor Purchaser shall issue or
cause the publication of any press release or other announcement with respect to
the Merger or this Agreement without the prior consent of the other, which
consent shall not be unreasonably withheld.
Section 9.10 NOTICES. All notices or other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered
personally or sent by first-class mail, postage prepaid, with return receipt
requested, addressed as follows:
If to Purchaser or Acquisition, to:
ROCKY MOUNTAIN INTERNET, INC.
Xxxxxxx X. Xxxxxx, President
0000 00xx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Fax # 000-000-0000
with copies to:
Xxxxxxx Xxxxxxx
XXXXXX XXXXX XXXXX XXXXXXXXX
& XXXXXX LLC
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Fax #000-000-0000
If to the Company, to:
INTERNET COMMUNICATIONS CORPORATION
Xxxx Xxxxxxx, President
0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Fax #000-000-0000
with copies to:
Xxxx Xxxxx
HOLME XXXXXXX & XXXX LLP
1700 Lincoln, Suite 4100
Xxxxxx, Xxxxxxxx 00000
Fax #(000) 000-0000
and
Drake S. Tempest
O'MELVENY & XXXXX LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax #(000) 000-0000
Section 9.11 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one agreement.
Section 9.12 NO THIRD PARTY BENEFICIARIES. No provision of this
Agreement is intended to benefit any person other than the parties hereto.
Section 9.13 SCHEDULES. Inclusion of, or reference to, matters in a
schedule to this Agreement does not constitute an admission of what is material
or the materiality of such matter.
IN WITNESS WHEREOF, Purchaser, Acquisition and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized
all as of the date first written above.
INTERNET COMMUNICATIONS
CORPORATION
By:
--------------------------------
Title:
INTERNET ACQUISITION CORPORATION
By:
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Title:
ROCKY MOUNTAIN INTERNET, INC.
By:
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Title:
