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 ByLaws 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.
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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.
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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
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(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
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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
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("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
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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.
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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.
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(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;
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(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
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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
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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.
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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,
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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.
-15-
(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
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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
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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.
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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
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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.
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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: /s/ Xxxx Xxxxxxx
Title: President
INTERNET ACQUISITION CORPORATION
By: /s/
Title: Vice President
ROCKY MOUNTAIN INTERNET, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Title: President
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