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EXHIBIT 10.55
AGREEMENT AND PLAN OF MERGER
AGREEMENT, dated April 24, 1997 (the "Agreement"), by and among
Western Wireless Corporation, a Washington corporation ("Western"), Minnesota
Cellular Corporation, a Delaware corporation ("Western Sub"), Triad Investment
Minnesota, Inc., a Delaware corporation ("XXX"), Xxxxx X. Xxxxx ("Xxxxx"),
Xxxxx X. Xxxxxxx ("Xxxxxxx"), Xxxxx X. Xxxxxx ("Xxxxxx"), (Xxxxx, Xxxxxxx and
Xxxxxx are hereinafter referred to individually as a "Stockholder" and
collectively as "the Stockholders"), Triad Cellular Corporation, a Delaware
corporation ("TCC"), Triad Cellular L.P., a Delaware limited partnership
("TCLP"), and Triad Minnesota, L.P., a Delaware limited partnership (the
"Partnership").
W I T N E S S E T H:
WHEREAS, Western is the owner of 1,000 shares of common stock, no par
value, of Western Sub;
WHEREAS, TCLP is the owner of a 25% general partnership interest and a
74% limited partnership interest (collectively, the "Partnership Interest") in
the Partnership, which is the owner of (i) the Authorizations (as hereinafter
defined) listed on Exhibit 5.01(k) annexed hereto to operate wireless telephone
communications businesses in the Minnesota 7, 8 and 9 Rural Service Areas
(the "Businesses") and (ii) the Businesses and the assets used in the
Businesses;
WHEREAS, XXX is the owner of a 99% limited partnership interest in
TCLP, which limited partnership interest relates to the Partnership Interest;
WHEREAS, TCLP and TCC, as the only partners of the Partnership, and
XXX, have approved the transfer and assignment of the Partnership Interest to
XXX upon the terms and conditions hereinafter set forth;
WHEREAS, the board of directors and the stockholders of TCC have
approved and adopted resolutions approving the transfer and assignment of TCC's
one (1%) percent general partnership interest in the Partnership to XXX upon
the terms and conditions hereinafter set forth;
WHEREAS, Xxxxx, Xxxxxxx and Xxxxxx are on the date hereof, and they,
together with Media/Communications Partners II Limited Partnership ("MCP") and
Media/Communications Investors Limited Partnership ("MCI") will on the
Effective Date (as hereinafter defined) be, the owners of all of the issued
and outstanding shares of common stock, par value $ .01 per share
(individually a "XXX Share" and collectively the "XXX Shares"), of XXX;
WHEREAS, the boards of directors and the stockholders of Western Sub
and XXX have approved and adopted resolutions approving the merger of Western
Sub with and into XXX on the terms and conditions hereinafter set forth and
have also approved and adopted this Agreement and Plan of Merger.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, conditions and promises hereinafter set forth, the parties hereby
agree as follows:
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ARTICLE 1
MERGER
1.01 The Merger. Subject to the terms and conditions hereof and in
reliance upon the representations, warranties, covenants and agreements herein
contained, on the Effective Date (as hereinafter defined), Western Sub shall,
pursuant to the General Corporation Law of the State of Delaware, be merged
(the "Merger") with and into XXX (Western Sub and XXX are sometimes hereinafter
referred to individually as a "Constituent Corporation" and collectively as the
"Constituent Corporations"), which shall be the surviving corporation (the
"Surviving Corporation") and whose name shall be changed to Minnesota Cellular
Corporation.
1.02 Capitalization. The number of authorized shares of the capital
stock of the Surviving Corporation shall be 3000 shares of Common Stock, par
value $.001 per share.
1.03 Certificate of Incorporation and By-laws. On the Effective
Date, the Certificate of Incorporation of XXX shall be amended in its entirety
to read as set forth in the Certificate of Incorporation of Western Sub in
effect immediately prior to the Effective Date, and said Certificate of
Incorporation as so amended shall, from and after the Effective Date, be, and
continue to be, the Certificate of Incorporation of the Surviving Corporation
until further amended as provided by law. On the Effective Date, the By-Laws
of Western Sub in effect immediately prior to the Effective Date shall
automatically be the By-Laws of the Surviving Corporation until altered,
amended or repealed.
1.04 Directors and Officers. The directors and officers of Western
Sub in office as of the Effective Date shall be the directors and officers of
the Surviving Corporation and shall continue to act as such and shall hold
office until their successors have been elected and have qualified in
accordance with law and the By-Laws of the Surviving Corporation.
1.05 Property and Liabilities of Constituent Corporations. When the
Merger shall have become effective, the separate existence of Western Sub shall
cease and Western Sub shall be merged with and into XXX which as the Surviving
Corporation shall possess all the rights, privileges, powers and franchises as
well of a public as of a private nature, and be subject to all the
restrictions, disabilities and duties of each of the Constituent Corporations;
and all and singular, the rights, privileges, powers and franchises of each of
the Constituent Corporations, and all property, real, personal and mixed,
tangible and intangible, and all debts due to either of the Constituent
Corporations on whatever account, as well for stock subscriptions as all other
things in action or belonging to each of such corporations shall be vested in
the Surviving Corporation; and all property, rights, privileges, powers and
franchises, and all and every other interest shall be thereafter as effectually
the property of the Surviving Corporation as they were of the several and
respective Constituent Corporations, and the title to any real estate vested by
deed or otherwise, under the laws of Delaware, in either of the Constituent
Corporations, shall not revert or be in any way impaired; but all rights of
creditors and all liens upon any property of either of the Constituent
Corporations shall be preserved unimpaired, and all debts, liabilities and
duties of the respective Constituent Corporations shall thenceforth attach to
the Surviving Corporation and may be
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enforced against it to the same extent as if said debts, liabilities and duties
had been incurred or contracted by it.
1.06 Further Assurances. If at any time the Surviving Corporation
shall consider or be advised that any further assignments, conveyances or
assurances in law are necessary or desirable to vest, perfect or confirm of
record in the Surviving Corporation the title to any property or rights of the
Constituent Corporations, or otherwise to carry out the provisions hereof, the
proper officers and directors of the Constituent Corporations immediately prior
to the Merger becoming effective shall, upon the Surviving Corporation's
reasonable request, execute and deliver any and all proper deeds, assignments
and assurances in law, and do all things necessary or proper to vest, perfect
or confirm title to such property or rights in the Surviving Corporation and
otherwise carry out the provisions hereof.
ARTICLE 2
EFFECTIVE DATE
2.01 Filing of Agreement of Merger; Effective Date.
(a) Each of Western, as the sole stockholder of Western
Sub, and Western Sub, by its execution and delivery of this Agreement, hereby
confirms and acknowledges that it has approved and adopted this Agreement in
accordance with the General Corporation Law of the State of Delaware and the
Certificate of Incorporation and By-Laws of Western Sub, and represents that
any and all actions required to approve and adopt this Agreement and the Merger
upon the terms and conditions herein set forth under the General Corporation
Law of the State of Delaware or such Certificate of Incorporation or By-Laws
have been or will be, on or prior to the Effective Date, taken.
(b) Xxxxx, Xxxxxxx and Xxxxxx, as the holders on the
date hereof of all of the issued and outstanding XXX Shares, by their execution
and delivery of this Agreement, hereby confirm and acknowledge that they have
approved and adopted this Agreement in accordance with the General Corporation
Law of the State of Delaware and the Certificate of Incorporation and By-Laws
of XXX, and represent that any and all actions required to approve and adopt
this Agreement and the Merger upon the terms and conditions herein set forth
under the General Corporation Law of the State of Delaware or such Certificate
of Incorporation or By-Laws have been or will be, on or prior to the Effective
Date, taken.
(c) Western Sub and XXX shall file a Certificate of
Merger in accordance with the General Corporation Law of the State of Delaware
on the latest to occur of (a) the last Business Day (as hereinafter defined) of
the month in which all Federal Communications Commission ("FCC") and state
regulatory approvals (if any) necessary in order to consummate lawfully the
transactions contemplated hereby have been received and shall have become Final
Orders (as hereinafter defined), (b) the last Business Day of the month in
which all applicable waiting periods under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), shall have expired or
been terminated without objection by the Federal Trade Commission (the events
described in clauses (a) and (b) above being hereinafter referred to as the
"Regulatory
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Approvals" and the later of the dates described in clauses (a) and (b) above
being referred to as the "Regulatory Approval Date"), and (c) October 31, 1997,
or at such other time or date to which the parties hereto mutually agree. As
used herein the term "Business Day" shall mean any day other than a Saturday,
Sunday or a legal holiday in New York, New York or in Seattle, Washington or
any other day on which commercial banks are authorized by law or governmental
decree to close. The day on which the Certificate of Merger is filed is herein
referred to as the "Effective Date."
(d) TCC, by its execution and delivery of this Agreement,
hereby acknowledges that (i) its board of directors and stockholders have
approved this Agreement and the transfer and assignment of its one (1%) percent
general partnership interest in the Partnership to XXX and (ii) in its capacity
as the sole general partner of TCLP, it has approved this Agreement and the
transfer and assignment of the Partnership Interest to XXX, in each case in
accordance with the General Corporation Law of the State of Delaware, the
Revised Uniform Limited Partnership Act of the State of Delaware, as amended
("RULPA"), the Certificate of Incorporation and By-Laws of TCC, the TMLP
Limited Partnership Agreement (as hereinafter defined) and the TCLP Limited
Partnership Agreement (as hereinafter defined), and represents that any and all
actions required to approve this Agreement and such transfer and assignment
upon the terms and conditions herein set forth under the General Corporation
Law of the State of Delaware, RULPA or such Certificate of Incorporation,
By-Laws, TMLP Limited Partnership Agreement or TCLP Limited Partnership
Agreement have been or will be, on or prior to the Effective Date, taken.
(e) TCLP, by its execution and delivery of this
Agreement, hereby acknowledges that its partners have approved this Agreement
and the transfer and assignment of the Partnership Interest to XXX in
accordance with the General Corporation Law of the State of Delaware, RULPA,
the Certificate of Incorporation and By-Laws of TCC, the TMLP Limited
Partnership Agreement and the TCLP Limited Partnership Agreement and represents
that any and all actions required to approve this Agreement and such transfer
and assignment upon the terms and conditions herein set forth under the General
Corporation Law of the State of Delaware, RULPA, or such Certificate of
Incorporation, By-Laws, TMLP Limited Partnership Agreement or TCLP Limited
Partnership Agreement have been or will be, on or prior to the Effective Date,
taken.
(f) XXX, by its execution and delivery of this Agreement,
hereby acknowledges that its board of directors and Xxxxx, Xxxxxxx and Xxxxxx,
as the holders on the date hereof of all of the issued and outstanding XXX
Shares, have approved this Agreement, the Merger and the transfer and
assignment of the Partnership Interest and the one (1%) percent general
partnership interest in the Partnership to it by TCLP and TCC, respectively,
in accordance with the General Corporation Law of the State of Delaware, RULPA,
the Certificate of Incorporation and By-Laws of XXX and the TMLP Limited
Partnership Agreement and represents that any and all actions required to
approve this Agreement, the Merger and such transfer and assignment upon the
terms and conditions herein set forth under the General Corporation Law of the
State of Delaware, RULPA, or such Certificate of Incorporation or By-Laws or
the TMLP Limited Partnership Agreement have been or will be, on or prior to the
Effective Date, taken.
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ARTICLE 3
CAPITAL STOCK OF THE SURVIVING CORPORATION
3.01 Stock of Western Sub. Each share of capital stock of Western
Sub issued and outstanding immediately prior to the Effective Date shall upon
the Effective Date, by virtue of the Merger and without any action on the part
of the holder thereof, be exchanged for and converted into one share of Common
Stock of the Surviving Corporation.
3.02 Stock of XXX. The XXX Shares issued and outstanding immediately
prior to the Effective Date, all of which shall on the Effective Date be owned
by the Stockholders (or if MCP and MCI exercise their options to acquire XXX
Shares prior to the Merger, by the Stockholders, MCP and MCI) (excluding shares
of XXX held by XXX as treasury stock, which shares shall be canceled and
extinguished on the Effective Date), shall, in the aggregate, upon the
Effective Date, by virtue of the Merger and without any action on the part of
the holder thereof, be exchanged for and converted into (i) an aggregate of One
Million Six Hundred Thousand (1,600,000) shares (as adjusted for stock splits,
stock dividends, stock reclassification and the like) of Western's Class A
Common Stock, no par value (the "Class A Common Stock"), and (ii) the Capital
Adjustment Amount (as hereinafter defined).
3.03 Exchange of Stock Certificate. On the Effective Date the
Stockholders shall surrender to the Surviving Corporation all outstanding
certificates theretofore representing the XXX Shares, together with stock
powers duly endorsed in blank with signatures appropriately guaranteed, and
shall thereupon receive, in the aggregate for all XXX Shares, in exchange
therefor (i) certificates representing 1,600,000 shares of Class A Common Stock
(the "Stock Consideration"), and (ii) the Capital Adjustment Amount (the Stock
Consideration and the Capital Adjustment Amount are referred to collectively as
the "Merger Consideration"). Each XXX share shall be converted into a
proportionate amount of the Merger Consideration. Until such surrender and
cancellation, each such outstanding certificate representing the XXX Shares
shall, after the Effective Date, be deemed for all purposes to evidence the
right, to only receive its proportionate share of the Merger Consideration into
which the same shall have been converted. If any certificate for Class A
Common Stock is to be issued in a name other than that in which the certificate
for XXX Shares surrendered shall have been registered, it shall be a condition
of such issuance that the certificate so surrendered shall be properly endorsed
for transfer or accompanied by an appropriate instrument of assignment and
transfer, and that the person requesting such issuance shall pay to the
Surviving Corporation any transfer or like taxes payable by reason thereof or
of any prior transfer of such certificate, or establish to the satisfaction of
the Surviving Corporation that such taxes have been paid or are not payable.
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3.04 Delivery of Shares of Class A Common Stock.
(a) As a condition to the Stockholders' obligation to
accept delivery of Western's shares of Class A Common Stock, Western shall, at
the time of delivery of such shares to the Stockholders, deliver to the
Stockholders an opinion of counsel to Western, in form and scope reasonably
satisfactory to the Stockholders and their counsel, stating that, based on
(among other things) the representations of the Stockholders contained in
Section 5.01(z) hereto, registration of such shares under the Securities Act of
1933 (as amended, and, together with the rules and regulations promulgated
thereunder, the "Securities Act"), is not required. If Western is unable to
deliver such an opinion solely by reason of the Stockholders' failure to
reconfirm at the Effective Date the Stockholder's representations contained in
Section 5.01(z) (such a failure being referred to as a "Stockholder's
Failure"), then Western shall at its option either (i) register the delivery of
the 1,600,000 shares of Class A Common Stock to the Stockholders as
contemplated by Section 3.03 hereof under the Securities Act on Form S-4 or
other appropriate registration form, (ii) deliver to the Stockholders on the
Closing Date the sum of $20,000,000 in immediately available funds in lieu of
1,600,000 shares of Class A Common Stock, or (iii) terminate this Agreement,
whereupon the provisions of Section 9.13(b) shall be effective.
(b) With respect to the 1,600,000 shares of Class A
Common Stock acquired by the Stockholders pursuant to the Merger (the
"Shares"), Western agrees to file a registration statement covering the re-sale
(pursuant to Rule 415 of the Securities Act) of the Shares on Form S-3 or on
any other form for which Western then qualifies which counsel to Western shall
deem appropriate, in order to permit (i) the disposition or distribution of the
Shares by the Stockholders to their respective stockholders or partners, and
(ii) the further disposition (by public offering and sale) by such partners or
stockholders of Shares obtained from the Stockholders as described in the
preceding clause (i) (each such person which is to receive a disposition from
the Stockholders being referred to as a "Beneficial Owner" and each such person
(whether a Stockholder or a Beneficial Owner) effecting such a disposition
being referred to as a "Selling Securityholder"); provided, however, that the
obligation to include a Selling Securityholder within the coverage of such
registration statement is contingent upon such Selling Securityholder providing
Western with all information regarding such Selling Securityholder or any of
their affiliates (as defined in the Securities Act) required
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by the Securities Act or SEC interpretations to be included in any such
registration statement and executing and delivering to Western the indemnity
agreement described in Section 3.04(f)(B) hereof. Western may, at its option,
include in said registration statement shares or other securities of Western to
be offered for the account of any persons other than Western or the Selling
Securityholders in secondary offerings. Western will use its commercially
reasonable efforts to cause the registration statement contemplated by this
Section 3.04(b) to become effective on the Effective Date or as soon thereafter
as practicable and keep effective such registration statement for a period
ending on the second anniversary of the Effective Date (or, if shorter, the
applicable holding period required under Rule 144(k)), after which Western may
withdraw the registration statement. In the event that the registration
statement contemplated by this Section 3.04 is not declared effective by the
SEC within ninety (90) days after the Effective Date, (unless the reason such
registration statement cannot so become effective is a result of either (A) the
failure of any Selling Securityholder to provide on a timely basis any
information regarding the Selling Securityholders or any of their Affiliates
(as defined under the Securities Act) required by the Securities Act or SEC
interpretations to be included in any registration statement described in this
Section 3.04(b), or (B) the existence of any state of facts with respect to the
Selling Securityholders, or any of their affiliates (as defined under the
Securities Act) which prevents the registration statement described in this
Section 3.04(b) from being declared effective on a timely basis), then :the
Stockholders shall have the right, exercisable at any time by the holders of a
majority of the Shares, to request that Western obtain all necessary consents
and approvals to permit it to purchase all, but not less than all, of the Stock
Consideration for an aggregate purchase price of Twenty Million ($20,000,000)
Dollars and, if so requested, Western shall use all diligent efforts to obtain
such consents and approvals, and if all such consents and approvals are
obtained, Western shall so purchase all, but not less than all, of such Stock
Consideration for a purchase price of Twenty Million ($20,000,000) Dollars.
Any such request made by the Stockholders shall be irrevocable. In the event
that the registration statement contemplated by this Section 3.04(b) is not
declared effective by the SEC within ninety (90) days after the Effective Date
(unless the reason such registration statement cannot so become effective is a
result of either (1) the failure of any Selling Securityholder to provide on a
timely basis any information regarding the Selling Securityholders or any of
their affiliates (as defined under the Securities Act) required by the
Securities Act or SEC interpretations to be included in any registration
statement described in this Section 3.04(b), or (2) the existence of any state
of facts with respect to the Selling Securityholders, or any of their
Affiliates (as defined under the Securities Act) which prevents the
registration statement described in this Section 3.04(b) from being declared
effective on a timely basis) and the Stockholders do not request in accordance
with the preceding sentence that Western purchase all of the Stock
Consideration for an aggregate of Twenty Million ($20,000,000) Dollars, Western
agrees that, until such registration statement is declared effective or the
Shares shall be purchased by Western as provided herein for Twenty Million
($20,000,000) Dollars, it will not register any shares of its capital stock,
whether for its own account or on behalf of any of its stockholders.
(c) In connection with any registration statement filed
pursuant to Section 3.04(b), Western shall (i) immediately notify the
Stockholders (who will have the responsibility of notifying the other Selling
Securityholders) of the effectiveness of the registration statement, (ii)
furnish to the Stockholders and the other Selling Securityholders such number
of copies of any prospectus as they may reasonably request, (iii) take such
commercially reasonable action as shall be necessary to qualify or register the
shares of Class A Common Stock covered by such registration under such blue sky
or other state securities laws for offer and sale as a Selling Securityholder
shall reasonably request; provided, however, that Western shall not be
obligated to qualify as a foreign corporation to do business under the laws of
or to become subject to taxation in, any jurisdiction in which it shall not be
then qualified, or to file any general consent to service of process, (iv) make
available to Western's security holders, not more than sixteen (16) months
after the first day of the month following the effective date of the
registration statement, an earnings statement (which need not be audited and
which may be satisfied in the manner set forth in Rule 158 under the Securities
Act) covering a period of at least twelve (12) months, which earnings statement
shall satisfy the requirements of Section 11(a) of the Securities Act; and (v)
use its commercially reasonable best efforts to cause such Class A Common Stock
to be listed, subject to notice of issuance, on The NASDAQ National Market
("NASDAQ"), or such exchange on which shares of Class A Common Stock are then
listed.
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(d) All costs and expenses relating to the
above-described registration statement (other than the fees and disbursements
of the Stockholders' (or any other Selling Securityholder's) counsel and
accountants, any stock transfer taxes, and any discounts and commissions or
other charges, if any, of any underwriter, broker or dealer) shall be borne by
Western.
(e) The Stockholders shall (i) furnish to Western
promptly upon request all such information regarding the Selling
Securityholders required by the Securities Act or SEC Interpretations to be
included in such registration statement, (ii) do all such things and execute
all such additional instruments as may be reasonably necessary or customary in
connection with such registration statement or offerings, and (iii) comply in
all respects with the Securities Act and the Securities Exchange Act of 1934
and all applicable rules and regulations thereunder and with the securities
laws of the states in which any such offerings are made. Western agrees to
take all necessary steps to comply in all respects with the Securities Act and
with the securities laws of the states in which any such public offering is
made pursuant to the foregoing paragraph (c)(iii).
(f) (A) In connection with such registration statement,
Western shall indemnify and hold harmless the Stockholders and the other
Selling Securityholders, their officers and directors and any controlling
persons of the Stockholders or the Selling Securityholders against and in
respect of any losses, claims, damages or liabilities, joint or several
(including legal or other fees and expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action) to which the Stockholders, Selling Securityholders or any
such persons may become subject under the Securities Act or otherwise insofar
as such losses, claims, damages or liabilities (or actions with respect
thereto) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any such registration statement, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except to the extent that any such untrue
statement or omission is based upon information supplied in writing by the
Stockholders or the Selling Securityholders or by any of their respective
authorized representatives specifically for use in such registration statement.
(B) In connection with such registration statement,
the Stockholders and (pursuant to agreements to be executed prior to the filing
of the registration statement) Selling Securityholders shall jointly and
severally indemnify and hold harmless Western, its officers and its directors
and any controlling persons of Western against and in respect of any losses,
claims, damages or liabilities, joint or several (including legal or other fees
and expenses reasonably incurred by any of them in connection with
investigating or defending any such loss, claim, damage, liability or action)
to which Western or any such persons may become subject under the Securities
Act or otherwise insofar as such losses, claims, damages or liabilities (or
actions with respect thereto) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in such
registration statement, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but only to the
extent that any such untrue statement or omission is based upon information
supplied in writing by the Stockholders or Selling
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Securityholders or any of their respective authorized representatives
specifically for use in such registration statement; provided, however, that
the obligation of the Stockholders or Selling Securityholders hereunder shall
be limited to an amount equal to the proceeds received by such Stockholders or
Selling Securityholders upon the sale of the Class A Common Stock in the
offering covered by such registration statement.
(C) The indemnification obligations of the parties
hereunder shall be subject to Section 7.05 hereof and, notwithstanding any
other provision of this Agreement, shall survive indefinitely and shall not be
subject to any of Section 7.02(b), 7.02(c) or 7.04(b) hereof.
(D) If for any reason the indemnification provided
for in the preceding clauses is unavailable to an indemnified party as
contemplated by the preceding clauses, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result
of such loss, claim, damage or liability in such proportion as is appropriate
to reflect not only the relative benefits received by the indemnified party and
the indemnifying party, but also the relative fault of the indemnified party
and the indemnifying party, as well as any other relevant equitable
considerations.
(g) (i) The Stockholders agree (and pursuant to
agreements to be executed prior to the filing of the registration statement,
each other Selling Securityholder shall agree) not to dispose of any shares of
Class A Common Stock acquired pursuant hereto (directly or indirectly) from
Western except pursuant to the above-described registration statement, pursuant
to a Subsequent Registration Statement as defined in Section 3.04(h)(iii)
hereof, or pursuant to an applicable exemption from registration under the
Securities Act, and agree that the initial share certificate(s) which the
Stockholders receive from Western (and any share certificates issued upon
transfers pursuant to an applicable exemption from registration under the
Securities Act) may be legended with one of the following legends, as
appropriate to reflect such resale restriction:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
BE REOFFERED AND SOLD ONLY IF SO REGISTERED OR IF AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE."
or
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE
BEEN REGISTERED FOR RESALE UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), PURSUANT TO A
REGISTRATION STATEMENT ON FORM S-3, NO. ________,
DECLARED EFFECTIVE BY THE SECURITIES AND EXCHANGE
COMMISSION ON ______, 1997. NO TRANSFER, SALE OR
OTHER DISPOSITION OF SUCH SECURITIES MAY BE MADE
UNLESS (A) A CURRENT PROSPECTUS IS DELIVERED IN
CONNECTION THEREWITH AS REQUIRED BY THE ACT OR (B) AN
EXEMPTION FROM SUCH REGISTRATION UNDER THE ACT IS
AVAILABLE,
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AND, IN EITHER CASE, AN EXEMPTION FROM STATE
SECURITIES LAWS IS AVAILABLE."
(ii) Western agrees that for a period of two years
from the Effective Date or for so long as the Stockholders or the Selling
Securityholders own any shares of Class A Common Stock issued to them
hereunder, whichever is shorter, but subject to the provisions of Section
4.02(c)(i), Western will (A) use its best efforts to file in a timely manner
all reports required to be filed by it pursuant to the Securities Exchange Act
of 1934, (B) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, and (C) at any
time during such period and upon request of a Selling Securityholder, furnish
such Selling Securityholder and others with such information and documents as
may be reasonably necessary to enable the restricted person to effect sales of
shares of Class A Common Stock received from Western or the Stockholders, in
compliance with Rule 144 under the Securities Act. During such period (subject
to Section 4.02(c)), Western will furnish any such Selling Securityholder, upon
its request, a written statement as to Western's compliance with the public
information requirements of Rule 144.
(h) (i) The registration statement shall, upon its
effectiveness but subject to paragraphs (ii), (iii) and (iv) below, be
available for transactions (as described in the plan of distribution to be
included in the registration statement) by Selling Securityholders (A) during
the ten (10) Business Day period immediately following the date on which such
registration statement shall be declared effective, and (B) subject to any
obligation of a Selling Securityholder to refrain from selling or offering to
sell any Shares during a Blackout Period (as hereinafter defined), for a period
of two (2) years from the Effective Date (or, if shorter, the applicable
holding period under Rule 144(k)). Subject to any obligation of a Selling
Securityholder to refrain from selling or offering to sell any Shares during a
Blackout Period, nothing contained in this Section 3.04 shall in any way limit
the ability of a Selling Securityholder to sell Shares pursuant to Rule 144.
(ii) Western shall be entitled to elect that the
registration statement not be usable, for a reasonable period of time, but not
in excess of ninety (90) consecutive days (a "Blackout Period") during any
twelve (12) month period, if Western determines in good faith that the use of
such registration statement or the related prospectus would interfere with any
pending financing, acquisition, corporate reorganization or any other corporate
development involving Western or any of its subsidiaries (other than a
corporate development described in paragraph (iii) below) or would require
premature disclosure thereof, and Western promptly gives the Selling
Securityholders written notice of such determination, containing a general
statement of the reasons for such postponement or restriction on use and an
approximation of the anticipated delay; provided, however, that Western shall
not be entitled to initiate a Blackout Period unless it shall concurrently
forbid purchases or sales in the open market by directors, senior executives
and other affiliates of Western. Western shall give written notice to each
Selling Securityholder of record of the commencement and the termination of any
Blackout Period.
(iii) If Western for itself or any of its security
holders shall at any time or times after the Effective Date register under the
Securities Act any shares of its Class A Common Stock in an underwritten
offering (other than in connection with the registration of
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securities issuable pursuant to an employee stock option, stock purchase or
similar plan or pursuant to a merger, exchange offer or a transaction of the
type specified in Rule 145(a) under the Securities Act) (a "Subsequent
Registration Statement") at a time when the Stockholders shall not have
disposed of all of the Shares, on each such occasion Western will notify the
Stockholders (who shall have the obligation to notify each Selling
Securityholder) of such registration at least fifteen (15) Business Days prior
to the filing of such Subsequent Registration Statement, and upon the request
of any Selling Securityholder given in writing within ten (10) Business Days
after the receipt of such notice by the Stockholders, Western will use its best
efforts to cause any of the Shares specified by any such Selling Securityholder
to be included in such Subsequent Registration Statement and underwritten
offering to the extent such registration and underwritten offering is
permissible under the Securities Act and subject to the conditions of the
Securities Act. In connection with any such underwriting, each Selling
Securityholder agrees to execute all agreements and instruments requested by
the underwriter of all of the participants in such offering and which are
typical in underwritten offerings, including custodial agreements, underwriting
agreements, powers of attorney, deposit agreements and lock-up agreements.
If the managing underwriters of such offering shall give written
advice to Western that, in their opinion, market conditions dictate that no
more than a specified maximum number of securities (the "Underwriter's Maximum
Number") could successfully be included in such Subsequent Registration
Statement, then: (i) Western shall be entitled to include in such Subsequent
Registration Statement that number of securities which Western proposes to
offer and sell for its own account in such Subsequent Registration Statement
and which does not exceed the Underwriter's Maximum Number; and (ii) subject to
any agreement in existence on the date hereof pursuant to which Western has
granted registration rights to any Person which conflicts with the rights being
granted to the Selling Securityholders pursuant to this clause (ii), Western
will be obligated and required to include in such Subsequent Registration
Statement that number of Shares which shall have been requested by the Selling
Securityholders and by other holders of Class A Common Stock having
registration rights to be included in such Subsequent Registration Statement
and which does not exceed the difference between the Underwriter's Maximum
Number and that number of securities which Western is entitled to include
therein pursuant to clause (i) above and such number of shares shall be
allocated pro rata between the Selling Securityholders and any other such
holders on the basis of the number of shares requested to be included therein
by the Selling Securityholders, on the one hand, and such other holders, on the
other hand.
If less than all of the Shares requested to be included in any such
Subsequent Registration Statement by the Selling Securityholders can be so
included due to these priority requirements, then each requesting Selling
Securityholder's request shall be granted on an pro rata basis with the other
requesting Selling Securityholders.
Any Selling Securityholder who has Shares included in such Subsequent
Registration Statement agrees, during the ten (10) day period prior to, and
during the ninety (90) day period beginning on, the effective date of the
Subsequent Registration Statement, not to sell any of its Shares pursuant to
the registration statement filed pursuant to Section 3.04(b) hereof.
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(iv) Western shall notify each Selling
Securityholder during the period that the registration statement is required
to be kept effective, of Western's becoming aware that the prospectus included
in such registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing, and at the request of any such Selling
Securityholder, Western shall prepare and furnish to such Selling
Securityholder a reasonable number of copies of any amendment or supplement to
such registration statement or related prospectus as may be necessary so that,
as thereafter delivered to the purchasers of such Shares, such Prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing.
3.05 Capital Adjustment Amount.
(a) On the Effective Date Western shall (i) (A)
contribute or cause to be contributed to the Surviving Corporation an amount in
cash equal to the amount of the Partnership's and TIM's long term indebtedness,
including accrued interest thereon and the current portion of any long term
indebtedness, on the Effective Date ("Reimbursable Indebtedness Amount") and
(B) cause to be paid all such long term indebtedness in full in cash and (ii)
cause to be paid to the Stockholders an amount of cash equal to the difference
between (A)(1) $35,000,000 plus (2) the estimated aggregate amount of all
capital expenditures (determined as set forth in Section 3.05(b)(i) below)
actually made by the Partnership and XXX in accordance with generally accepted
accounting principles, through the Effective Date (the "Reimbursable Capital
Expenditures") but only to the extent such capital expenditures are described
in Exhibit 4.01(r) annexed hereto or have been approved in writing by Western,
plus or minus (as the case may be) (3) the estimated Working Capital (as
hereinafter defined) determined as set forth in Section 3.05(b)(i) below) of
the Partnership and XXX at the Effective Date, minus (B) the estimated
Reimbursable Indebtedness Amount contributed to the Surviving Corporation in
accordance with clause (i)(A) of this Section 3.05(a) (such difference being
referred to as the "Estimated Capital Adjustment Amount").
(b) (i) At least five (5) Business Days prior to the
Effective Date, Stockholders shall deliver to Western (A) Stockholders' bona
fide written estimate of the Working Capital, the Reimbursable Capital
Expenditures and the Reimbursable Indebtedness Amount certified by the chief
financial officer of TCLP and XXX, which estimates, unless otherwise agreed to
in writing by Western, shall be, in the case of Working Capital, the Working
Capital of the Partnership and XXX as shown on the then most recently prepared
and available monthly balance sheets of the Partnership and XXX (such balance
sheets to be prepared by the Partnership and XXX on a basis consistent with
prior periods), and in the case of Reimbursable Capital Expenditures and the
Reimbursable Indebtedness Amount, the actual amount thereof, such actual amount
to be certified by the chief financial officer of TCLP and XXX as of the
Effective Date and such certification to be accompanied by evidence reasonably
satisfactory to Western as to accuracy and completedness of the amounts so
certified, and (B) the unaudited financial statements of the Partnership and
XXX as of, and for such portion (as requested by Western) of the fiscal year
ended through, the end of the month immediately preceding the
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Effective Date, certified by the chief financial officer of TCLP and XXX, which
financial statements shall have been prepared in accordance with generally
accepted accounting principles consistently applied.
(ii) The Stockholders shall deliver to Western
within forty-five (45) days after the end of the month in which the Effective
Date shall have occurred balance sheets of the Partnership and XXX as of the
Effective Date (the "Effective Date Balance Sheets") prepared by or on behalf
of the Stockholders on a basis consistent with prior periods, and a statement
of the amount of the Reimbursable Capital Expenditures, the Reimbursable
Indebtedness Amount and the Working Capital as of the Effective Date. In
calculating revenues and expenses for the period between the first day of the
month in which the Effective Date occurs and the Effective Date, items of
revenue and expense shall be calculated by multiplying the aggregate amount of
each such item realized or incurred during the month in which the Effective
Date occurs by a fraction, the numerator of which shall be the day of the month
on which the Effective Date occurs and the denominator of which shall be the
number of days in the month in which the Effective Date occurs. Western and
the Stockholders shall, as promptly as practicable but in no event later than
ninety (90) days following the Effective Date, determine the amount of the
Working Capital, the Reimbursable Capital Expenditures and the Reimbursable
Indebtedness Amount of the Partnership and XXX as of the close of business on
the Effective Date. As used herein "Working Capital" means the total of the
current assets of the Partnership and XXX minus the total of the current
liabilities of the Partnership and XXX (other than current maturities of the
Reimbursable Indebtedness Amount) at the Effective Date, as such terms are used
in accordance with generally accepted accounting principles. Western and the
Stockholders shall, and shall cause their respective independent certified
public accountants to, give each other and their respective representatives
full access to each other's books and records (which relate to or are necessary
for the determination of the Reimbursable Capital Expenditures, the
Reimbursable Indebtedness Amount and the Working Capital of the Partnership and
XXX) and representatives during regular business hours upon reasonable notice
for the purpose of determining the Working Capital, the Reimbursable Capital
Expenditures and the Reimbursable Indebtedness Amount of the Partnership and
XXX at the Effective Date. The parties shall in good faith attempt to resolve
any dispute concerning the amount of the Working Capital, the Reimbursable
Capital Expenditures and the Reimbursable Indebtedness Amount. If the parties
do not reach agreement concerning the amount of the Working Capital, the
Reimbursable Capital Expenditures and the Reimbursable Indebtedness Amount
within ninety (90) days following the Effective Date, then the parties shall
submit the matter for resolution to a nationally recognized firm of independent
certified public accountants which has not had a material relationship with
either Western and its Affiliates (as hereinafter defined) or the Stockholders
and their Affiliates within the preceding two years (the "Arbiter") and which
is mutually agreeable to the parties. If the parties cannot agree on the
selection of the Arbiter, the Arbiter shall be selected by mutual agreement of
the parties' respective independent certified public accountants, or, if they
cannot agree, the parties shall request the American Arbitration Association
(the "AAA") to appoint the Arbiter, and such appointment by the parties'
respective independent certified public accountants or the AAA, as the case may
be, shall be conclusive and binding on the parties. Promptly, but no later
than twenty (20) days after its acceptance of its appointment as Arbiter, the
Arbiter shall determine, based solely on presentations by Western and the
Stockholders, and not by independent review, only those issues concerning the
Reimbursable Capital
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Expenditures, the Reimbursable Indebtedness Amount and the Working Capital of
the Partnership and XXX at the Effective Date which are in dispute and shall
render a report as to the dispute and the resulting computation of the Working
Capital, the Reimbursable Capital Expenditures and the Reimbursable
Indebtedness Amount, which shall be conclusive and binding upon the parties.
The fees, costs and expenses of the Arbiter shall be paid one-half by Western
and one-half by the Stockholders; provided, however, that the Arbiter shall
have the right (but not the obligation) to reapportion the fees, costs and
expenses of the Arbiter between Western and the Stockholders in accordance with
the Arbiter's determination of the relative merit of the parties' respective
positions on the matters in dispute. Within five (5) Business Days of the
determination of the amount of the Working Capital, the Reimbursable Capital
Expenditures and the Reimbursable Indebtedness Amount, whether by mutual
agreement of the parties or by the Arbiter, the parties shall make the
following computation: The parties shall determine the amount by which (A)(1)
$35,000,000 plus (2) the Reimbursable Capital Expenditures of the Partnership
and XXX at the Effective Date (as determined in accordance with this Section
3.05(b)(ii)) plus or minus, as the case may be, (3) the Working Capital of the
Partnership and XXX at the Effective Date (as determined in accordance with
this Section 3.05(b)(ii)) exceeds (B) the Reimbursable Indebtedness Amount of
the Partnership and XXX (determined in accordance with this Section
3.05(b)(ii)); the amount so determined being referred to as the "Capital
Adjustment Amount". If the Estimated Capital Adjustment Amount exceeds the
Capital Adjustment Amount, the Stockholders, TCC and TCLP shall cause to be
paid to the Surviving Corporation such excess in cash. If the Capital
Adjustment Amount exceeds the Estimated Capital Adjustment Amount, then Western
shall cause such excess to be paid to the Stockholders in cash.
Notwithstanding anything to the contrary contained in this Agreement, Western
and the Stockholders agree that in determining the Working Capital and the
Reimbursable Capital Expenditures pursuant to this Section 3.05(b)(ii), the
amount of the accounts receivable of the Partnership at the Effective Date
shall be computed in accordance with the provisions of Exhibit 3.05(b) annexed
hereto. "Affiliate" shall mean, with respect to any party hereto, any
corporation or other business entity which directly or indirectly through stock
ownership or through any other arrangement either controls, is controlled by or
is under common control with, such party. The term "control" shall mean the
power to direct the affairs of such person by reason of ownership of voting
stock or other equity interests, by contract or otherwise.
3.06 TCC as Agent For Stockholders By their execution of this
Agreement, each of the Stockholders agrees that any cash payment required to be
made to the Stockholders hereunder may be made to TCC on behalf of and as agent
for all such Stockholders. Each of the Stockholders hereby authorizes and
directs the Surviving Corporation to make such payments to TCC on behalf of all
such Stockholders and agrees that neither Western nor the Surviving Corporation
shall have any obligation or liability with respect to the allocation of such
payments or any other Merger Consideration among the Stockholders.
3.07 Transfer Taxes. The Stockholders shall pay at the Effective
Date or, if due thereafter, promptly when due, all gross receipts taxes,
transfer taxes, sales taxes, stamp taxes and any other taxes (collectively,
"Transfer Taxes") payable in connection with the consummation of the
transactions contemplated hereby. The Stockholders shall prepare and file any
tax return with respect to such Transfer Taxes; provided, however, that Western
shall have the right of reasonable review and comment prior to such filing
(such right to be exercised by Western within five (5)
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Business Days after delivery of such returns to Western, and if such right is
not so exercised within such five (5) day period, Western shall be deemed to
have waived such right).
3.08 Options. If for any reason whatsoever, MCP and MCI shall have
not prior to the Closing exercised or sold to the Stockholders all of their
options to acquire issued and outstanding voting capital stock of XXX, all such
unexercised and unsold options shall at the Effective Date automatically and
without any further action on the part of XXX or the Surviving Corporation
become a right solely to acquire from the Stockholders (and not Western, XXX or
the Surviving Corporation) a portion of the Merger Consideration and shall no
longer represent a right to acquire capital stock in XXX or the Surviving
Corporation. By their execution of this Agreement each of MCP and MCI agrees
to be bound by the terms of this Section 3.08 and confirm that on and after the
Effective Date they shall have no further rights of any nature whatsoever as an
option holder or securityholder of the Surviving Corporation. Each of MCP, MCI
and the Stockholders hereby agree that on or prior to the Effective Date,
neither XXX nor the Surviving Corporation shall have any further rights or
obligations under the Securityholders' Agreement whatsoever.
3.09 Inter-company Accounts Receivable and Accounts Payable. On or
prior to the Effective Date, but in any event prior to the consummation of the
Merger, XXX, each of the Stockholders, TCC, TCLP and the Partnership shall, and
each of them shall cause each of their respective Affiliates to, cause all
accounts receivable, accounts payable and other inter-company indebtedness owed
to or by the Partnership or XXX to any of the Partnership's or TIM's Affiliates
to be canceled, satisfied and released in all respects so that no further
liabilities or obligations with respect thereto shall survive the Merger;
provided, however, that the foregoing provision of this Section 3.09 shall in
no event require the Stockholders, XXX, TCC, TCLP or the Partnership to satisfy
any indebtedness that is to be satisfied in accordance with Section 3.05(a)
hereof.
ARTICLE 4
COVENANTS AND AGREEMENTS
4.01 Covenants of XXX, the Partnership, the Stockholders, TCC and
TCLP. Each of XXX, the Partnership, each of the Stockholders, TCC and TCLP,
jointly and severally, covenant and agree from and after the execution and
delivery of this Agreement to and including the Effective Date as follows:
(a) Consummate Transactions. Each of XXX, the
Partnership, each of the Stockholders, TCC and TCLP shall use its best efforts
to cause the transactions contemplated by this Agreement to be consummated in
accordance with the terms hereof, and, without limiting the generality of the
foregoing, use its best efforts to obtain all necessary approvals, consents,
permits, licenses and other authorizations required in connection with this
Agreement and the transactions contemplated hereby of third parties including
all governmental authorities and agencies such as the FCC, and any state public
utilities or public service commission, and to make all filings with and to
give all notices to third parties which may be necessary or reasonably required
of XXX, the Partnership, the Stockholders, TCC or TCLP in order to consummate
the transactions contemplated hereby, including the Merger.
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(b) Full Access. Each of XXX, the Partnership, the
Stockholders, TCC and TCLP shall give to Western and its agents and
representatives (including its independent auditors and attorneys) reasonable
access (such access not to interfere unreasonably with the Businesses), during
normal business hours and upon reasonable notice as described below, to all of
TIM's, the Partnership's, the Stockholders', TCC's and TCLP's personnel,
premises, properties, assets, financial statements and records, books,
contracts, documents and commitments of or relating to XXX, the Partnership,
the Businesses or the assets used in the Businesses, and shall furnish Western
and its agents and representatives with all such information concerning the
affairs of XXX, the Partnership, the Stockholders, TCC and TCLP as Western may
reasonably request. In addition, each of XXX, the Partnership, each of the
Stockholders, TCC and TCLP shall permit Western's accountants to conduct an
audit (at Western's expense) of the books and records of XXX and the
Partnership and, to the extent relating to XXX and the Partnership, the books
and records of the Stockholders, TCC and TCLP, in each case in such detail as
Western may reasonably require. Western shall contact either Xxxxx, Xxxxxxx or
any other person(s) designated by TCC, on behalf of XXX, the Partnership, the
Stockholders, TCC and TCLP, to arrange for Western's personnel, agents and
representatives visiting any premises, personnel, agents or representatives of
XXX, the Partnership, the Stockholders, TCC or TCLP, such visits to be arranged
for by such persons not later than three (3) Business Days of Western's request
therefor.
(c) Ordinary Course. The Partnership and XXX shall, and
each of XXX, each of the Stockholders, TCC and TCLP shall cause the Partnership
and XXX to, conduct its Businesses only in the ordinary course and consistent
with past practices. Without limiting the foregoing, the Partnership and XXX
shall, and each of XXX, each of the Stockholders, TCC and TCLP shall cause the
Partnership and XXX to, (i) continue to expend funds for sales promotion and
marketing and to pay its bills and other obligations, all in the ordinary
course of business consistent with past practices; and (ii) make all capital
expenditures described on or set forth in Exhibit 4.01(r) annexed hereto or
which Western otherwise consents to in writing and agrees in writing to include
as Reimbursable Capital Expenditures hereunder. Without limiting the foregoing,
the Partnership and XXX shall not, and none of XXX, any of the Stockholders,
TCC or TCLP shall cause or permit the Partnership or XXX to, without the prior
written consent of Western, such consent not to be unreasonably withheld, (A)
incur any material liability, absolute or contingent, other than current
liabilities arising in the ordinary course of business or pursuant to Contracts
in existence on the date hereof and set forth or described in Exhibit 5.01(s)
annexed hereto or hereafter entered into as permitted pursuant to this
Agreement, including TIM's indebtedness to TCC in the original principal amount
of $200,000 upon TIM's acquisition of TCC's ownership interests in the
Partnership as contemplated hereby, and other than additional draws under the
Loan Agreement referenced in item 2 of Exhibit 5.01(p) hereto; (B) assume,
guarantee, change any existing guarantee, endorse or otherwise as an
accommodation become responsible for obligations of any other individual or
entity (except by endorsement for collection or deposit of negotiable
instruments received in the ordinary course of business and except pursuant to
agreements or binding commitments in existence on the date hereof and set forth
or described in Exhibit 5.01(s) annexed hereto); (C) other than in the ordinary
course of business and in amounts not exceeding $25,000 in the aggregate, make
any loans or advances to any individual or entity; (D) sell, transfer, convey,
mortgage, pledge, hypothecate or subject to any lien, claim, security interest,
charge, encumbrance, restriction, title retention agreement or any liability or
claim of any nature (all of the foregoing,
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collectively "Liens") any of the Businesses or the assets used in the
Businesses except for sales of subscriber equipment or retirements of old or
obsolete equipment (such retired equipment to be replaced with equipment of
equivalent cost and utility) in the ordinary course of business or pursuant to
agreements or binding commitments in existence on the date hereof and set forth
or described in Exhibit 5.01(s) annexed hereto or Liens which in the aggregate
are not material and have been incurred in the ordinary course of business and
which Liens will be released on or prior to the Effective Date; (E)
intentionally waive or compromise any right or claim for any amount in excess
of $25,000; (F) cancel, without fair consideration, any note, loan or other
material obligation owing to it; (G) enter into, or extend or renew, any
Contract with (1) except for Contracts having an annual cost of less than
$5,000 for any single Contract and $50,000 for all such Contracts, any Person
(as hereinafter defined) which is not terminable at will on not more than
thirty (30) days' notice and without material liability, or (2) except for
TIM's purchase of TCC's ownership interest in the Partnership (including the 1%
general partnership interest) for $200,000 as contemplated hereby, the
Partnership, XXX, any Stockholder, TCC or TCLP or any Affiliates of any of the
foregoing; (H) make any increase in the compensation payable or to become
payable by the Partnership or XXX to any of its officers, employees, agents or
consultants except for routine increases made in the ordinary course of
business consistent with past practices, which in any event shall not exceed
five (5%) percent; (I) make any arrangement for any new or additional, or amend
or extend any existing, profit-sharing plan, retirement plan, bonus plan,
severance arrangement, employee benefit plan, or any similar plan, or make or
agree to make any change to any such plan if the result thereof increases any
benefits paid or payable thereunder to any Person; (J) except as required by
law, enter into any collective bargaining agreement, or make any commitment
whatsoever to any union or other representative or party which intends to
represent any employees; (K) extend the maturity date of or renew any (1)
indebtedness for borrowed money or for the deferred purchase price of property
or services or evidenced by notes, bonds or other instruments, (2) lease
obligations which would normally be capitalized under generally accepted
accounting principles, or (3) obligations under direct or indirect guarantees
of (including obligations (contingent or otherwise) to assure a creditor
against loss in respect of) indebtedness or obligations of others of types
referred to in subclauses (1) and (2) above (the obligations specified in this
clause (K) are collectively referred to herein as "Indebtedness"), if such
Indebtedness will survive the Effective Date; (L) prior to its stated maturity
any Indebtedness or any lease or rental or any other amounts; or (M) enter into
any reseller agreements or any agent agreements other than in the ordinary
course of business consistent with past practice and only so long as such
agreements are terminable at will, without penalty, by the Partnership or XXX
upon not more than thirty (30) days' notice. As used herein the term "Person"
means any general or limited partnership, corporation, joint venture, trust,
business trust, governmental agency, cooperative, association, individual or
other entity, and heirs, executors, administrators, legal representatives,
successors and assigns of such person.
(d) TCC's and TCLP's Partnership Interests.
(i) Prior to the Effective Date, TCLP shall
transfer, assign and deliver all of its right, title and interest in and to
the Partnership Interest to XXX in exchange for and redemption of the limited
partnership interests in TCLP owned by XXX.
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(ii) Prior to the Effective Date, TCC shall
transfer , assign and deliver to XXX all of its right, title and interest in
and to its one (1%) percent general partnership interest in the Partnership in
exchange for $200,000, which amount may at TIM's election, be paid by
delivering TIM's promissory note in such principal amount, such note to be paid
and satisfied in full at or prior to the Closing Date.
(e) Preserve Goodwill. The Partnership and XXX shall, and
each of XXX, each of the Stockholders, TCC and TCLP shall cause the Partnership
and XXX to, use its diligent efforts to preserve the Businesses and the
goodwill of suppliers, subscribers and others dealing with the Partnership, and
to retain the services of the employees of the Partnership and XXX and to
maintain the goodwill of such employees.
(f) Compliance with Law. Each of XXX, the Partnership,
each of the Stockholders, TCLP and TCC shall comply in all material respects
with all applicable laws, rules, ordinances, regulations, codes, orders,
decrees, licenses and permits of all applicable jurisdictions and governmental
authorities or agencies relating to it, to its properties (including the
Businesses and the assets used in the Businesses) or to the conduct of the
Businesses.
(g) Approvals, Consents. Each of XXX, the Partnership,
each of the Stockholders, TCC and TCLP shall obtain and maintain in full force
and effect all approvals, consents, permits, licenses and other authorizations,
from all appropriate Federal, state and local governmental agencies or
authorities necessary or required for the operation of the Businesses as
presently conducted, as and when such approvals, consents, permits, licenses or
other authorizations are necessary or required except, in the case of
non-material approvals, consents, permits, licenses or other authorizations of
state and local governmental agencies and authorities, where such failure would
not have a material adverse effect on the Partnership, its financial condition,
prospects, the Businesses or the assets used in the Businesses. The parties
shall consult with one another as to the general approach to be taken with any
governmental authority or agency with respect to obtaining any necessary
consent of such governmental agency or authority to the transactions
contemplated hereby, and each of the parties shall keep each other party
reasonably informed as to the status of any such communications with any
governmental authority or agency. None of XXX, the Partnership, any of the
Stockholders, TCC or TCLP shall, with respect to the Businesses or the assets
used in connection with the Businesses, make any material commitments (other
than those typical in the wireless telephone industry) relating to any
approval, consent, permit or license to any governmental authority or agency
without the prior written consent of Western.
(h) No Transfer. Except as described herein, none of
XXX, the Partnership, the Stockholders, TCC or TCLP shall (i) sell, transfer,
assign or dispose of, or offer to, or enter into an agreement to, sell,
transfer, assign or dispose of any of the Businesses or any of the assets used
in the Businesses or negotiate therefor, other than sales of such of the assets
used in the Businesses that are immaterial or that are no longer useable in the
Businesses or which are being replaced with assets of comparable quality and
utility in the ordinary course of business consistent with past practice or
(ii) create, incur or suffer to exist any Lien of any nature whatsoever or
enter into any restriction on transfer or grant any right of first refusal
relating to the Businesses or the assets used
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in the Businesses, other than Liens not in the aggregate material to the
business or financial condition of such entity and which Liens will be
terminated on or prior to the Effective Date.
(i) Insurance. From the date hereof through the Effective
Date, the Partnership and XXX shall, and each of XXX, each of the Stockholders,
TCC and TCLP shall cause the Partnership and XXX to, maintain in full force and
effect (including necessary renewals thereof) all of the insurance policies
relating to the Partnership and XXX set forth on Exhibit 5.01(i) annexed hereto
existing on the date hereof. From and after the Effective Date, each of the
Stockholders shall take all action that may be necessary to cause the coverage
under such policies to continue in full force and effect after the Effective
Date with respect to occurrences prior to the Effective Date and shall take all
actions necessary to preserve or protect rights under any such policies with
respect to any claim against the Partnership or XXX arising out of the
Businesses or the assets used in the Businesses prior to the Effective Date.
The Partnership and XXX shall, and each of XXX, each of the Stockholders, TCC
and TCLP shall cause the Partnership and XXX to, provide Western with
information and records regarding all claims pending with respect to the
Businesses or the assets used in the Businesses and agree to provide to Western
any additional information and records Western may reasonably require regarding
such claims.
(j) No Amendments or Issuance of Additional Shares.
Neither of XXX or the Partnership shall, and none of XXX, any of the
Stockholders, TCC or TCLP shall cause or permit the Partnership or XXX to,
amend its charter, by-laws, partnership agreement, or comparable governing
instrument, which amendment would have a material adverse effect on the
Businesses, the assets used in the Businesses, or the transactions contemplated
by this Agreement or which would require any additional consents or approvals
of the transactions contemplated by this Agreement. Neither of XXX or the
Partnership shall, and none of XXX, any of the Stockholders, TCC or TCLP shall
cause or permit the Partnership or XXX to, issue or sell any shares of its
capital stock, partnership interests or other securities, or issue options,
warrants or rights of any kind to acquire, or any securities convertible into,
exchangeable for or representing a right to purchase or receive, or enter into
any contract, plan, understanding or arrangement with respect to the issuance
of, any stock-based or stock-related awards or other equity- based awards,
shares of its capital stock, partnership interests or other equity or other
securities, or enter into any arrangement or contract with respect to the
purchase or voting of shares of its capital stock, partnership interests or
other equity, or adjust, split, combine or reclassify any of its securities, or
make any other changes in its capital structure, if any such issuance, sale,
contract, plan, understanding, arrangement, adjustment, split, combination,
reclassification or changes would require any additional approvals of the
transactions contemplated by this Agreement or would otherwise adversely affect
the transactions contemplated by this Agreement.
(k) Condition of Assets. The Partnership and XXX shall,
and each of XXX, each of the Stockholders, TCC and TCLP shall cause the
Partnership and XXX to, use its diligent efforts to preserve the Partnership's
and TIM's assets intact and, from time to time, to make all necessary repairs
thereto, so that the Businesses may be conducted in the ordinary course of
business and consistent with past practices.
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20
(l) Books and Records. The Partnership and XXX shall,
and each of XXX, each of the Stockholders, TCC and TCLP shall cause the
Partnership and XXX to, maintain the Partnership's books, accounts and records
in the usual manner, on a basis consistent with prior years and in accordance
with generally accepted accounting principles.
(m) Notice of Claims. TCC shall give written notice to
Western promptly upon the commencement of any action, investigation,
arbitration or proceeding (including any proceeding before any governmental
agency), or promptly upon obtaining knowledge of any facts giving rise to a
threat of any such action, investigation, arbitration or proceeding (i) which
would, if adversely determined, materially and adversely affect (A) the ability
of any of the parties hereto to consummate the transactions contemplated hereby
or (B) the business or financial condition of the Partnership or XXX, any
Business or the assets used in the Businesses or (ii) where the amount involved
exceeds $25,000.
(n) Certain Actions. None of XXX, the Partnership, any
of the Stockholders, TCC or TCLP shall take any action or refrain from taking
any action which would materially interfere with or preclude the consummation
of the transactions contemplated by this Agreement, result in any of the
representations and warranties of any party hereto contained herein being
incorrect or incomplete in any material respect, or result in any of the
conditions to Western's obligation to consummate the transactions contemplated
by this Agreement as set forth in Section 6.01 hereof being unsatisfied in
accordance with the terms hereof.
(o) Distributions and Other Payments. Neither the
Partnership nor XXX shall, and none of XXX, the Stockholders, TCC or TCLP shall
cause or permit the Partnership or XXX to, declare or make any distributions or
other payments (whether of loans or otherwise) to any Stockholder or partner of
XXX or the Partnership or to any Affiliate of any thereof.
(p) Notice of Breaches. Each of XXX, the Partnership,
the Stockholders, TCC and TCLP shall, promptly after obtaining knowledge of the
occurrence of, or the impending or threatened occurrence of, any event which
would cause or constitute a breach of any warranties, representations,
covenants or agreements of any of XXX, the Partnership, any Stockholder, TCC or
TCLP contained in this Agreement, give notice in writing of such event or
occurrence or impending or threatened event or occurrence, to Western and use
its diligent efforts to prevent or promptly to remedy such breach.
(q) Material Contracts. Neither the Partnership nor XXX
shall, and none of XXX, any of the Stockholders, TCC or TCLP shall cause or
permit the Partnership or XXX to, default in any material respect under, or
breach any term or provision of, or suffer or permit to exist any condition or
event which, after notice or lapse of time, or both, would constitute a
material default under, any Contract listed on Exhibit 5.01(s) annexed hereto
or which are entered into after the date hereof and prior to the Effective Date
as permitted by Section 4.01(c) and which would have been listed on such
Exhibit if they were in effect on the date hereof.
(r) Capital Expenditures. Following the date hereof and
prior to the Effective Date, the Partnership and XXX shall, and each of XXX,
each of the Stockholders, TCC and TCLP shall cause the Partnership and XXX to,
make the capital expenditures of the type and in the
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amounts set forth on Exhibit 4.01(r) annexed hereto and such other Capital
Expenditures to which Western shall consent in writing and agree in writing to
include as Reimbursable Capital Expenditures hereunder.
(s) Notification of Change. Each of XXX, the
Partnership, each of the Stockholders, TCC and TCLP shall advise Western
promptly in writing of (i) any event, condition or state of facts, including
any action, suit or proceeding, which has had or would have a material adverse
effect on the business or financial condition of the Partnership or XXX or on
the Businesses, on the assets used in the Businesses or on the transactions
contemplated by this Agreement or (ii) the commencement of any action, suit or
proceeding which seeks to enjoin the consummation of the transactions
contemplated hereby.
(t) Retention of Records. On the Effective Date, each of
XXX, the Partnership, each of the Stockholders, TCC and TCLP shall deliver to
Western all books, contracts and records relating to XXX, the Partnership, the
Businesses or the assets used in the Businesses; provided, however, that the
Stockholders shall be entitled to retain a copy of all books, accounting and
other records following the Effective Date for all proper purposes incidental
to the transactions contemplated hereby. Western agrees that after the
Effective Date all books, contracts and records relating to XXX, the
Partnership, the Businesses and the assets used in the Businesses prior to the
Effective Date, shall for a period of five (5) years following the Effective
Date or, if later, up to the termination of the statute of limitations for any
matter with respect to which XXX, the Partnership, the Stockholders, TCC or
TCLP are indemnifying Western and its Affiliates hereunder, be available at the
written request of and at the expense of the Stockholders, TCC and TCLP during
regular business hours to the Stockholders, TCC and TCLP and their authorized
representatives, accountants and attorneys for any reasonable business purpose.
All information so made available to, or retained by, any Stockholder, TCC or
TCLP after the Effective Date shall be held in confidence by such Person in
accordance with Section 9.11 hereof. In addition, for a period of five (5)
years after the Effective Date, at the written request and expense of Western,
each of the Stockholders, TCC and TCLP shall make available to Western copies
of any documents not theretofore delivered to Western relating to any potential
or actual tax liabilities of the Partnership or XXX for any periods ending on
or prior to the Effective Date.
(u) Interim Financial Statements and Statistical
Summaries. Between the date of this Agreement and the Effective Date, TCC
shall cause the Partnership and XXX to deliver to Western (i) as soon as
practicable but no later than forty-five (45) days after the end of each
calendar month with respect to the Partnership and XXX unaudited financial
statements ("Interim Financial Statements") for the most recent month and the
interim period then ended and (ii) within ten (10) Business Days after the end
of each calendar month with respect to the Partnership and XXX interim
statistical summaries (the "Interim Statistical Summaries") for the most recent
month and interim period then ended, which summaries will be in scope and
format substantially identical to the Statistical Summaries (as hereinafter
defined).
(v) No Termination or Settlement. Without the prior
written consent of Western, which consent shall not be unreasonably withheld,
neither the Partnership nor XXX shall, and none of XXX, the Stockholders, TCC
or TCLP shall cause or permit the Partnership or XXX to,
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terminate any agent or settle any dispute with any agent if such termination or
settlement would cause Western to have any continuing obligation after the
Effective Date with respect thereto.
(w) Training. At the request of Western, TCC shall cause
Western's employees and agents to be trained in the use of the Partnership's or
TIM's billing system, such training to be provided at the Partnership's or
TCLP's premises at mutually convenient times so as not to disrupt the
Businesses and at no cost to Western. In addition, each of XXX, the
Partnership, each of the Stockholders, TCC and TCLP shall, at the request of
Western, use all commercially reasonable efforts to assist, and shall cause its
employees, agents, officers and subcontractors to assist, Western in converting
and transferring the Partnership's or TIM's subscribers to Western's billing
system so that at the Effective Date or as soon thereafter as is reasonably
practicable all of the Partnership's or TIM's subscriber information shall have
been transferred and converted to Western's billing system.
(x) No Actions by XXX. Prior to acquiring 100% of the
ownership interests in the Partnership as contemplated hereby, XXX shall not,
and the Stockholders shall not cause or permit XXX to, enter into any
Contracts, conduct any business or operations, hire any employees, acquire any
assets (other than the Partnership Interest and TCC's interest in the
Partnership (including the 1% general partnership interest)), take any actions
whatsoever or subject itself to any liability or obligation, whether accrued,
absolute or contingent, except (i) such actions as may be necessary to
consummate the transactions contemplated herein, which actions XXX shall, and
the Stockholders shall cause XXX to, perform, including accepting the
assignment and transfer of the Partnership Interest and TCC's partnership
interest in TCLP (including the 1% general partnership interest) prior to the
consummation of the Merger, or, (ii) following the transfer to XXX of the
Partnership Interest and TCC's partnership interest in the Partnership
(including the 1% general partnership interest), such actions as the
Partnership would be permitted to take pursuant to this Agreement as such
actions relate to the Businesses or assets of the Partnership.
(y) Reimbursable Indebtedness Amount. TCLP, TCC and the
Stockholders jointly and severally represent, warrant, covenant and agree that
the Reimbursable Indebtedness Amount of the Partnership and XXX at the
Effective Date shall not exceed the amount of $35,000,000 plus the Reimbursable
Capital Expenditures of the Partnership and XXX at the Effective Date, less, if
the estimated Working Capital on the Effective Date is a negative number, such
estimated amount.
4.02 Covenants of Western and Western Sub. Western and Western Sub,
jointly and severally, covenant and agree that from and after the execution and
delivery of this Agreement to and including the Effective Date as follows:
(a) Consummate Transactions. Western shall use its best
efforts to cause the transactions contemplated by this Agreement to be
consummated in accordance with the terms hereof, and, without limiting the
generality of the foregoing, to obtain all necessary consents and
authorizations of third parties, including the approval of this Agreement and
the transactions contemplated hereby by all governmental authorities and
agencies, including the FCC and any state public utilities or public service
commission, and to make all filings with and to give all notices to
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third parties which may be necessary or reasonably required of Western in order
to consummate the transactions contemplated hereby.
(b) Western and Western Sub Not to Control.
Notwithstanding any provision of this Agreement that may be construed to the
contrary, pending the Effective Date, XXX, the Stockholders, TCC and TCLP shall
maintain actual (de facto) and legal (de jure) control over the Partnership,
XXX and the Businesses. Specifically, the responsibility for the operation of
the Partnership, XXX and the Businesses shall, pending the Effective Date,
reside with XXX, the Stockholders, TCC and TCLP, including responsibility for
the following matters: (i) access to and the use of the facilities of and
equipment owned by the Partnership or XXX; (ii) control of the daily operation
of the Partnership or XXX; (iii) creation and implementation of policy
decisions; (iv) employment and supervision of employees; (v) payment of
financing obligations and expenses incurred in the operation of the Partnership
or XXX; (vi) receipt and distribution of monies and profits derived from the
operation of the Partnership or XXX; and (vii) execution and approval of all
contracts and applications prepared and filed before regulatory agencies.
(c) Class A Common Stock.
(i) Western shall not, for a period of two (2)
years from the Effective Date or for so long as the Stockholders or the Selling
Securityholders own any shares of such Class A Common Stock issued to them
hereunder, whichever is shorter, deregister the Class A Common Stock registered
pursuant to Section 12(b) or 12(g) of the Exchange Act or delist the Class A
Common Stock from trading on one of any of NASDAQ, NYSE or AMEX, unless
Western is concurrently listing such stock on another such exchange; provided,
however, that nothing contained in this Section 4.02(c) shall be deemed to
prevent Western from deregistering the Class A Common Stock registered pursuant
to Section 12(b) or 12(g) of the Exchange Act or delisting the Class A Common
Stock from trading on the NASDAQ, NYSE or AMEX in connection with a "going
private" transaction pursuant to Rule 13e-3 of the Exchange Act or as a result
of a merger or consolidation of Western or other transaction in which
substantially all of the assets or capital stock of Western is acquired by a
third party.
(ii) Western further covenants and agrees that at
the time of issuance of the shares of Class A Common Stock to the Stockholders
pursuant to Section 3.02 hereof and for so long as the registration statement
contemplated by Section 3.04(b) hereof is required to remain effective, Western
shall principally be engaged in the business of mobile communications. Western
agrees to provide Selling Securityholders with such quantity of prospectuses to
which such registration statement relates (each a "Prospectus") as Selling
Securityholders shall reasonably request. Western agrees to notify Selling
Securityholders of (A) the issuance or threatened issuance of any stop order or
other order preventing or suspending the use of any Prospectus, (B) any
suspension or threatened suspension of the use of any Prospectus in any state,
(C) any proceedings commenced or threatened to be commenced by the SEC or any
state securities commission which would result in the issuance of such stop
order or other order or suspension of use, or (D) request by the SEC to
supplement or amend any Prospectus after the effectiveness of such registration
statement. Western agrees to use its best efforts to prevent or promptly
remove any stop order or other order preventing or suspending the use of any
Prospectus during the required period of
Execution - 23 -
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effectiveness for a registration statement hereunder and to comply with any
such request by the SEC to amend or supplement any Prospectus.
4.03 Governmental Filings. Each of XXX, the Partnership, each of the
Stockholders, TCC and TCLP, jointly and severally, and Western covenant and
agree from and after the execution and delivery of this Agreement to and
including the Effective Date as follows:
(a) It is understood that the consummation of this
transaction is subject to prior approval of the FCC and may be subject to the
prior approval of one or more state regulatory commissions. The parties shall
use their best efforts to file with the FCC and any relevant state agency or
agencies, as soon as practicable following the date hereof and in no event
later than ten (10) Business Days from the date hereof, a joint application
requesting the approval of the FCC to the transactions contemplated hereby,
including the transfer of control of the Partnership. Each of the parties
hereto shall diligently take or cooperate in the taking of all steps which are
necessary or appropriate to expedite the prosecution and favorable
consideration of such applications. The parties covenant and agree to
undertake all actions reasonably requested by the FCC or other regulatory
authority and to file such material as shall be necessary or required to obtain
any necessary waivers or other authority from the FCC or such state agency or
agencies in connection with the foregoing applications.
(b) Within fifteen (15) Business Days of the date of
execution hereof, Western and the Stockholders shall file, or cause to be
filed, with the Federal Trade Commission and the Antitrust Division of the
Department of Justice any and all reports or notifications which are required
to be filed under the HSR Act or other Federal law or administrative
regulations.
4.04 Cooperation. Each of XXX, the Partnership, each of the
Stockholders, TCC and TCLP, jointly and severally, and Western agree to
cooperate with and to take all actions reasonably requested by the other so as
to minimize, to the extent possible, any disruption to any of the Partnership's
or TIM's operations upon the Effective Date and, in connection therewith, each
of XXX, the Partnership, each of the Stockholders, TCC and TCLP shall provide,
subject to the last sentence of Section 4.01(b) hereof, Western with reasonable
access to its employees and facilities prior to the Effective Date, and shall
cause such employees, agents, advisors, subcontractors and representatives to
work with Western and its employees, agents, advisors, subcontractors and
representatives for purposes of planning for and implementing the transfer of
control of the Businesses and the assets used in the Businesses to Western on
the Effective Date.
4.05 Stockholder Liability Prior to Effective Date. The obligations
of the Stockholders hereunder to perform their obligations hereunder prior to
the Effective Date shall, prior to the Effective Date and, except for Western's
rights under Section 9.02 hereof, be nonrecourse to the Stockholders except to
the extent of their respective ownership interests in XXX; it being the
agreement of the parties that neither Western nor Western Sub shall, prior to
the Effective Date, have recourse to the assets of the Stockholders other than
their ownership interests in XXX in order to satisfy any liabilities of the
Stockholders arising hereunder prior to the Closing Date.
Execution - 24 -
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.01 TIM's, the Partnership's, the Stockholders', TCC's and TCLP's
Representations and Warranties. Each of XXX, the Partnership, each of the
Stockholders, TCC and TCLP, jointly and severally, represent and warrant to
Western and Western Sub, which representations and warranties shall survive the
execution and delivery of this Agreement and the consummation of the
transactions herein contemplated, as follows:
(a) Due Organization. Each of TCC and XXX is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Each of TCLP and the Partnership is a limited
partnership, duly organized, validly existing and in good standing under the
laws of the State of Delaware. Each of XXX, the Partnership, the Stockholders,
TCC and TCLP has all requisite corporate or partnership, as the case may be,
power and authority, or in the case of the Stockholders who are natural
persons, the capacity, to own, operate and lease its property and to carry on
its business as now conducted. Each of XXX, the Partnership, TCC and TCLP is
duly qualified to do business and is in good standing in all states where the
conduct of its business or the ownership of its properties makes such
qualification necessary, except where the failure to so qualify would not have
a material adverse effect on such Person, its financial condition or business,
or the transactions contemplated hereby. The certificates of incorporation,
by-laws, minute books, stock certificate books, stock transfer ledgers or
partnership agreements, as applicable, of XXX, the Partnership, TCC and TCLP to
be delivered to Western pursuant to this Agreement will be true, correct and
complete as of the date of delivery thereof.
(b) XXX Shares. The Stockholders are the record and
beneficial owners of all of the XXX Shares and the XXX Shares constitute all of
the issued and outstanding shares of capital stock of XXX. The XXX Shares are
duly authorized, duly issued, fully paid and non-assessable. Except for
options held by MCP and MCI to purchase in the aggregate up to 80.31% of the
issued and outstanding capital stock of XXX and except for the Securityholders'
Agreement referenced in Exhibit 5.01(p), there are no outstanding
subscriptions, options, warrants, rights or convertible or exchangeable
securities issued by the Stockholders or XXX or other agreements or commitments
to which either the Stockholders or XXX is a party of any character relating to
the issued or unissued capital stock or other securities of XXX, including any
agreement or commitment obligating either the Stockholders or XXX to issue,
deliver or sell, or cause to be issued, delivered or sold, shares of capital
stock or other securities of XXX or obligating the Stockholders or XXX to
grant, extend or enter into any subscription, option, warrant, right or
convertible or exchangeable security, right of first refusal, right to receive
notification of the transactions contemplated hereby or other similar agreement
or commitment with respect to XXX, or obligating XXX to make any payments
pursuant to any stock based or stock related plan or award.
(c) TCC's and TCLP's Partnership Interests. On the date
hereof, TCC and TCLP are the sole general and limited partners of the
Partnership. On or prior to the Effective Date, all of the general and limited
partnership interest(s) in the Partnership will be transferred to XXX and as a
result XXX will be the owner of all Businesses and all of the assets of the
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Partnership. Each of TCC and TCLP owns its interest in the Partnership free
and clear of all Liens, voting rights agreements, restrictions on transfer and
rights of first refusal, direct or indirect, whether accrued, absolute,
contingent or otherwise except as disclosed on Exhibits annexed hereto, each of
which will be released and terminated on the Effective Date. Subject to the
approval of the FCC, the termination of the required waiting period (if any)
under the HSR Act, and the receipt of all other consents, approvals, orders or
authorizations of, or registrations, qualifications or filings with, any
governmental authority which are required to be obtained in connection with the
consummation of the transactions contemplated hereby and which are described on
Exhibits annexed hereto, TCC and TCLP have full right, power and authority
to consummate the transactions contemplated hereby. There are no outstanding
subscriptions, options, warrants, rights or convertible or exchangeable
securities issued by TCC, TCLP, XXX or the Partnership or other agreements or
commitments to which either TCC, TCLP, XXX, the Stockholders or the Partnership
is a party of any character relating to partnership interests in the
Partnership, including any agreement or commitment obligating TCC, TCLP, XXX,
the Stockholders or the Partnership to issue, deliver or sell, or cause to be
issued, delivered or sold, equity interests in the Partnership or obligating
TCC, TCLP, XXX, the Stockholders or the Partnership to grant, extend or enter
into any subscription, option, warrant, right or convertible or exchangeable
security, right of first refusal, right to receive notification of the
transactions contemplated hereby or other similar agreement or commitment with
respect to the Partnership, or obligating the Partnership to make any payments
pursuant to any equity-based plan or award. True and correct copies of (i) the
Agreement of Limited Partnership by and among Triad Cellular Corporation and
Triad Cellular L.P. dated May 3, 1993 (the "TMLP Limited Partnership
Agreement") and (ii) the Agreement of Limited Partnership by and among Triad
Cellular Corporation and Triad Investment Texas, Inc. dated September 25, 1992
(the "TCLP Limited Partnership Agreement") have heretofore been delivered to
Western.
(d) Power and Authority; No Violation. Each of XXX, the
Partnership, the Stockholders, TCC and TCLP has full power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. This Agreement and all
transactions contemplated hereby have been duly and validly authorized by all
necessary action on the part of each of XXX, the Partnership, each Stockholder,
TCC and TCLP and this Agreement constitutes a legal, valid and binding
obligation of each of such Persons enforceable in accordance with its terms
except as such enforceability may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to enforcement of
creditors' rights generally. Neither the execution, delivery or performance of
this Agreement by any of XXX, the Partnership, any Stockholder, TCC or TCLP,
nor the consummation of the transactions contemplated hereby will, with or
without the giving of notice or the passage of time, or both (i) conflict with,
result in a default or loss of rights (or give rise to any right of
termination, cancellation or acceleration) under, or result in the creation of
any Lien, pursuant to (A) any provision of the certificate of incorporation,
by-laws or partnership agreement, stockholders agreement or other constituent
documents of any of XXX, the Partnership, any Stockholder, TCC or TCLP,
including the TMLP Limited Partnership Agreement or the TLCP Limited
Partnership Agreement; (B) any material note, bond, indenture, mortgage, deed
of trust, Contract, agreement, lease or other instrument or obligation to which
any of XXX, the Partnership, any Stockholder, TCC or TCLP or its properties may
be bound or affected; or (C) any law, order, judgment, ordinance, rule,
regulation or decree to which any of XXX, the Partnership, any Stockholder,
TCC or TCLP is
Execution - 26 -
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a party or by which its properties are bound or affected; or (ii) give rise to
any right of first refusal or similar right with respect to any interest, or
any properties or assets, of any of XXX, the Partnership, any Stockholder, TCC
or TCLP. Except as described on Exhibit 5.01(d) annexed hereto, no permit,
consent, filing or approval of any third party is required to be obtained or
made by any of XXX, the Partnership, any Stockholder, TCC or TCLP in
connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby in order to (A) render
this Agreement and the transactions contemplated hereby valid and effective,
(B) enable XXX, TCC and TCLP to transfer the Partnership Interest owned by TCLP
and the one (1%) percent general partnership interest of TCC in the Partnership
to XXX as contemplated hereby (except that the consent of the lenders under the
Loan Agreement referenced in item 2 of Exhibit 5.01(p) hereto is necessary in
order for XXX to acquire the partnership interests in the Partnership) and (C)
enable the parties hereto to consummate the Merger and the transactions
contemplated hereby. None of XXX, the Partnership, any Stockholder, TCC or
TCLP has granted any powers of attorney granting to any Person the right to
bind such Person other than those to be released on or prior to the Effective
Date or those which do not relate to the Businesses, the assets used in the
Businesses or the transactions contemplated hereby. .
(e) Financial Statements. Exhibit 5.01(e) annexed hereto
contains a list of audited and unaudited financial statements of each of XXX
and the Partnership for the periods indicated on such Exhibit 5.01(e) (the
"Operating Financial Statements") and a list of Key Statistical Summaries of
each of XXX and the Partnership for the periods indicated on such Exhibit
5.01(e) (the "Statistical Summaries"). True and complete copies of each item
listed thereon have previously been delivered to Western. The Operating
Financial Statements are, and the Interim Financial Statements will be, true
and correct in all material respects, have been or will be prepared from the
books and records of each of XXX and the Partnership and fairly present or will
fairly present the financial position of XXX and the Partnership in a manner
consistent with prior periods as of the dates of such statements and the
results of its operations and statements of cash flow for the year or interim
period then ended, in each case in conformity with generally accepted
accounting principles applied on a basis consistent with past practices. The
Statistical Summaries are, and the Interim Statistical Summaries will be, true
and correct in all material respects and have been or will be prepared from the
books and records of XXX and the Partnership in a manner consistent with prior
periods. Neither the Partnership nor XXX has incurred nor is it subject to any
liabilities or obligations, whether accrued, absolute or contingent, which are
in the aggregate material to the Businesses or its financial condition which
have not been (i) reflected or accrued against in the Operating Financial
Statements, (ii) incurred since the date of the latest Operating Financial
Statements as permitted by Section 4.01(c) hereof and will be reflected on the
Interim Financial Statements or the Effective Date Balance Sheet, as the case
may be, or (iii) reflected in the Exhibits annexed hereto.
(f) Legal Matters. Except as set forth on Exhibit
5.01(f) annexed hereto, there is no claim, legal action, counterclaim, suit,
arbitration, governmental investigation or other legal, administrative or tax
proceeding, nor any order, writ, injunction, decree or judgment (collectively,
the "Legal Matters"), in progress or pending, or to the knowledge of any of
XXX, the Partnership, any of the
Execution - 27 -
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Stockholders, TCC or TCLP, threatened, against or relating to any of such
Persons or the Businesses or the assets used in the Businesses, nor does any of
XXX, the Partnership, any of the Stockholders, TCC or TCLP know or have reason
to be aware of any basis for the same, which would individually or in the
aggregate have a material adverse effect on (i) any of such Persons or the
Businesses or the assets used in the Businesses or the ability of the parties
hereto to consummate the Merger as herein contemplated, (ii) the business or
financial condition of or any of such Persons, or (iii) the transactions
contemplated by this Agreement.
(g) Accounts Receivable. The accounts receivable of the
Partnership shown on its Operating Financial Statements arose in the ordinary
course of business, are owned by the Partnership free and clear of any Lien
(other than Liens to be released on or prior to the Effective Date) and have
been collected or are collectible in the normal course at the aggregate
recorded amounts thereof, subject to no valid counter claims or set-offs, less
a reserve for uncollectible items as set forth on Exhibit 4.01(g) annexed
hereto. The accounts receivable acquired by the Partnership and shown on the
Interim Financial Statements or the Effective Date Balance Sheets, as the case
may be, will have arisen in the ordinary course of business, are or will be
owned by the Partnership free and clear of any Lien (other than Liens to be
released on or prior to the Effective Date) and have been collected or will be
collectible in the normal course of business at the aggregate recorded amounts
thereof, less a reserve for uncollectible items as set forth in Exhibit 4.01(g)
annexed hereto. Such percentage is based upon the historical collectibility of
the accounts receivable of the Partnership and represents TIM's, the
Partnership's, the Stockholders', TCC's and TCLP's good faith estimate of the
percentage of the Partnership's accounts receivable which will not be
collectible in the ordinary course of business.
(h) Title to the XXX Shares. The Stockholders have on
the date hereof and (together with MCP and MCI, if they exercise their options
to acquire XXX shares) will have on the Effective Date, good and marketable
title to the XXX Shares, free and clear of all Liens, voting rights agreements,
restrictions on transfer and rights of first refusal, direct or indirect,
whether accrued, absolute, contingent or otherwise except as disclosed on
Exhibit 5.01(h) annexed hereto, each of which will be released and terminated
on the Effective Date. Subject to the approval of the FCC, the termination of
the required waiting period (if any) under the HSR Act, and the receipt of all
other consents, approvals, orders or authorizations of, or registrations,
qualifications or filings with, any governmental authority which are required
to be obtained in connection with the consummation of the transactions
contemplated hereby and which are described on Exhibit 5.01(h) annexed hereto,
the Stockholders have full right, power and authority to consummate the Merger
and the transactions contemplated hereby.
(i) Compliance with Laws. Each of XXX, the Partnership,
the Stockholders, TCC and TCLP is in compliance with all applicable laws,
regulations and administrative orders of the United States and the states in
which such Persons transact business (including all applicable rules and
regulations of the FCC, any state public utilities or public service
commission, or any other Federal or state governmental agency or
instrumentality exercising jurisdiction over such Person or its properties or
businesses), and of each municipality, county or subdivision of any thereof, to
which any of its businesses or any of its properties may be subject, the
non-compliance with which would have a material adverse effect upon (i) the
Partnership's or TIM's ownership of the Businesses or the assets used in the
Businesses or the ability of the parties hereto to
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consummate the Merger as herein contemplated, or (ii) the Partnership, its
financial condition or business, or the transactions contemplated hereby.
(j) Environmental Matters. There has been no
manufacture, refining, storage, disposal or treatment of Hazardous Substances
(as hereinafter defined) by the Partnership (or, to the knowledge of XXX, the
Partnership, any Stockholder, TCC and TCLP, its predecessors in interest) at
any real property currently or in the past owned, operated, used, leased or
contracted for by the Partnership or otherwise in violation of any
Environmental Laws (as hereinafter defined) or which would require remedial
action under any Environmental Law; to the knowledge of XXX, the Partnership,
any Stockholder, TCC and TCLP, none of the soil, ground water, or surface water
of such real property is contaminated by any Hazardous Substance. During the
past five years none of XXX, the Partnership, any of the Stockholders, TCC or
TCLP has received any (i) notice of any such violation with respect to any
Hazardous Substance at or by any of such real property, (ii) notice from any
governmental agency that it, or any present or former owner, lessee or operator
of such real property is a potentially responsible party for cleanup liability
with respect to the emission, discharge or release of any Hazardous Substance
or for any other matter arising under the Environmental Laws or in any
litigation, administrative proceeding, finding, order, citation, notice,
investigation or complaint under any Environmental Law, or (iii) notice of
violation, citation, complaint, request for information, order, directive,
compliance schedule, notice of claim, proceeding or litigation from any party
concerning the compliance of any of XXX, the Partnership, any Stockholder, TCC
or TCLP with any Environmental Law. To the knowledge of XXX, the Partnership,
each of the Stockholders, TCC and TCLP, there are no incinerators, septic tanks
or cesspools located on such real property, all sewage is discharged into a
public sanitary sewer system (except that at certain switch sites the
Partnership contracts with third party providers for the siting and servicing
of portable sanitary toilet facilities) and no Hazardous Substances are
emitted, discharged or released, directly or indirectly, by any of XXX, the
Partnership, any Stockholder, TCC or TCLP into the atmosphere or any body of
water. No permits, licenses or other authorizations issued pursuant to the
Environmental Laws are required for Western's ownership, use or occupancy of,
or the Partnership's present ownership, use or occupancy of, such real
property. As used herein "Environmental Laws" means the Resource Conservation
Recovery Act, the Comprehensive Environmental Responsibility Compensation and
Liability Act, the Superfund Amendments and Reauthorization Act, the Toxic
Substances Control Act, the Hazardous Materials Transportation Act, the Clean
Air Act, the Clean Water Act, and other similar Federal and state laws, as
amended, together with all regulations issued or promulgated thereunder,
relating to pollution, the protection of the environment or the health and
safety of workers or the general public. As used herein "Hazardous Substance"
means any hazardous substance, hazardous or toxic waste, hazardous material,
pollutant or contaminant, as those or similar terms are used in the
Environmental Laws, including asbestos and asbestos-related products,
chlorofluorocarbons, oils or petroleum- derived compounds, polychlorinated
biphenyls, pesticides and radon. As used in this Section 5.01(j), the term
"knowledge" refers to actual and not constructive knowledge and is not intended
to impose upon XXX, the Partnership, any of the Stockholders, TCC or TCLP any
duty to investigate the condition of any real property other than in the
ordinary course of business and consistent with past practices.
Execution - 29 -
30
(k) Authorizations.
(i) The Partnership has (and upon transfer of the
Partnership Interest and the one (1%) percent general partnership interest in
the Partnership to XXX, XXX will have) (A) all requisite franchises, licenses,
authorizations, consents, permits and approvals of the FCC and of all state
public utility or public service commissions and (B) all other material
franchises, licenses, authorizations, consents, permits and approvals of
governmental agencies exercising jurisdiction over the Partnership (or XXX) or
its businesses or assets (all such franchises, licenses, authorizations,
consents, permits and approvals, as amended to the date hereof, are
collectively referred to as the "Authorizations"), required to carry on the
Businesses as now conducted or as contemplated to be conducted. All such
Authorizations are listed on Exhibit 5.01(k) annexed hereto.
(ii) The Authorizations are in full force and
effect and have not been suspended, modified in any material adverse respect,
canceled or revoked, and each of XXX, the Partnership, each of the
Stockholders, TCC and TCLP has operated in compliance with all terms thereof or
any renewals thereof applicable to it except where failure to so comply would
not have a material adverse effect on such Person, its financial condition or
the Businesses or the assets used in the Businesses. No event has occurred
with respect to any of the Authorizations which permits, or after notice or
lapse of time or both would permit, revocation or termination thereof or would
result in any other material impairment of the rights of the holder of any such
Authorizations. Except as set forth on Exhibit 5.01(k) annexed hereto, there
is not pending as of the date hereof any application, petition, objection or
other pleading with the FCC or any public service commission or similar body
having jurisdiction or authority over the communications operations of any of
XXX, the Partnership, any of the Stockholders, TCC or TCLP which questions the
validity of or contests any Authorization or which presents a substantial risk
that, if accepted or granted, would result in the revocation, cancellation,
suspension or any materially adverse modification of any Authorization.
(iii) Except as set forth on Exhibit 5.01(k)
annexed hereto, no permit, consent, approval, authorization, qualification or
registration of, or declaration to or filing with, any governmental or
regulatory authority or agency is required to be obtained or made by any party
hereto in connection with the execution and delivery of this Agreement or with
the consummation of the transactions contemplated hereby in order to (A) render
this Agreement and the transactions contemplated hereby valid and effective and
(B) enable the parties hereto to consummate the Merger and the other
transactions as herein contemplated.
(l) Title to Property.
(i) Except as disclosed in Exhibit 5.01(l)
annexed hereto, the Partnership has good and marketable title to all property
owned (including all property and assets, real and personal, included in the
Operating Financial Statements) and a good and valid leasehold interest in all
property leased by the Partnership, free and clear of all Liens except for (A)
Liens for taxes, assessments, governmental charges or levies which shall not at
this time be due and delinquent or which hereafter can be paid without penalty
or with respect to which the Partnership
Execution - 30 -
31
is currently contesting the validity thereof in good faith by appropriate
proceedings and with respect to which it has established adequate reserves, (B)
warehousemen's, mechanics', carriers', landlords', repairmen's, or other
similar Liens arising in the ordinary course of business, (none of which,
either singly or in the aggregate, is material) and (C) Liens which will be
released on or prior to the Effective Date in accordance with the provisions of
Section 3.05(a) hereof. Exhibit 5.01(l) annexed hereto correctly identifies
(A) each parcel of real property owned by the Partnership, (B) each lease by
the Partnership of any real property and each space allocation arrangement with
the Partnership covering any real or other material property used in the
Partnership's businesses, and (C) each guaranty by any Person of any such
lease. Exhibit 5.01(l) annexed hereto contains, with respect to the
Partnership, a list setting forth (1) the location of all cell and switch sites
and (2) the number of voice channels installed and operational at each site.
(ii) All of the buildings and other material
tangible personal property owned or leased by the Partnership are in good
working condition (normal wear and tear excepted), and are adequate and
suitable for the purposes for which they are presently being used. All such
property is being operated in conformity with applicable statutes, regulations,
and ordinances, the failure of which to so conform would have a material
adverse effect on the Partnership, its financial condition or business or the
transactions contemplated hereby. All such assets are, in the aggregate,
sufficient in all material respects to continue operating the business of the
Partnership as has been heretofore conducted.
(iii) Neither the whole nor any material portion of
any real property owned or leased by the Partnership has been condemned,
requisitioned or otherwise taken by any public authority, and none of XXX, the
Partnership, any of the Stockholders, TCC or TCLP has actual knowledge that any
such condemnation, requisition or taking is threatened or contemplated. None
of the real or personal properties owned, leased or operated by the
Partnership, or the ownership, occupancy or operation thereof, is in violation
in any material respect of any law or any building, zoning or other ordinance,
code, rule, regulation or requirement, and no notice from any governmental body
or other Person has been served upon any of XXX, the Partnership, any of the
Stockholders, TCC or TCLP claiming any violation of any such law, ordinance,
code, rule or regulation or requiring, or calling attention to the need for,
any work, repairs, construction, alterations or installation on or in
connection with said property which has not been complied with.
(m) Insurance. Exhibit 5.01(m) annexed hereto sets forth
a list and brief description of all policies of fire, liability and other forms
of insurance and material fidelity bonds held by the Partnership or XXX. The
Partnership's and TIM's assets, business, equipment, property and operations
are adequately insured against loss or damage and all other hazards or risks of
the character usually insured against by companies in the same or similar
business and such insurance shall be continued in full force and effect through
11:59 p.m. on the Effective Date. Each such policy and fidelity bond
referenced in such Exhibit 5.01(m) annexed hereto is in full force and effect,
all premiums due and payable under such policies and fidelity bonds have been
and on the Effective Date will be paid in full, and there are no disputed
claims arising under such policies or fidelity bonds.
Execution - 31 -
32
(n) Employees. Exhibit 5.01(n) annexed hereto contains a
list setting forth the name and current annual salary and other compensation
payable to each Employee, as hereinafter defined, and the profit sharing, bonus
or other form of additional compensation paid or payable by the Partnership or
XXX to or for the benefit of each such person for the current fiscal year.
Except as set forth on Exhibit 5.01(n) annexed hereto or under the employment,
consulting or other agreements listed thereon, there are no oral or written
contracts, agreements or arrangements obligating the Partnership to increase
the compensation or benefits presently being paid or hereafter payable to any
Employees. Exhibit 5.01(n) annexed hereto sets forth summaries of all oral
employment or consulting or similar arrangements regarding any Employee which
are not terminable without liability on thirty (30) days' or less prior notice
and lists all written employment and consulting agreements with respect to any
Employee, true and complete copies of which have been provided to Western.
Except for severance obligations to Employees set forth on Exhibit 5.01(n)
annexed hereto, there is not due or owing and there will not be due and owing
at the Effective Date to any Employees, any sick pay, severance pay (whether
arising out of the termination of an Employee prior to, on, or subsequent to
the Effective Date), compensable time or pay, including salary, commission and
bonuses, personal time or pay or vacation time or vacation pay attributable to
service rendered on or prior to the Effective Date. Except as disclosed in the
Exhibits annexed hereto, there is not now, and there will not be as of the
Effective Date, any liability arising out of claims made or suits brought
(including workers' compensation claims and claims or suits for contribution
to, or indemnification of, third parties, occupational health and safety,
environmental, consumer protection or equal employment matters) for injury,
sickness, disease, discrimination, death or termination of employment of any
Employee, or other employment matter to the extent attributable to an event
occurring or a state of facts existing on or prior to the Effective Date. The
Partnership and XXX employ no Employees and maintain no Employee Plans.
(o) Intellectual Property Rights. All of the patents,
trademarks, service marks, tradenames, trade secrets, copyrights, licenses and
other intellectual property rights material to the operation of any of the
Businesses or owned or held by the Partnership are described on Exhibit 5.01(o)
annexed hereto. Except as set forth on Exhibit 5.01(o) annexed hereto, the
conduct by the Partnership of its businesses does not to the knowledge of any
of XXX, the Partnership, any of the Stockholders, TCC or TCLP infringe upon or
violate any patents, trademarks, service marks, trade names, trade secrets,
copyrights, licenses or rights of anyone, and, except as set forth on Exhibit
5.01(o) annexed hereto, no claim is pending or threatened to the effect that
the conduct by the Partnership of its businesses infringes upon or violates any
patents, trademarks, service marks, trade names, trade secrets, copyrights,
licenses or rights of anyone.
(p) Indebtedness. Exhibit 5.01(p) annexed hereto lists
generally all indentures, trust deeds, loan agreements, or other instruments
pursuant to which either of XXX or the Partnership has incurred Indebtedness or
has guaranteed the Indebtedness of any Person all of which shall be terminated
and released with respect to XXX and the Partnership on or prior to the
Effective Date. Other than as set forth in Exhibit 5.01(p) annexed hereto,
neither XXX nor the Partnership is indebted to any Affiliate, stockholder,
director, officer, employee, agent or partner of XXX or the Partnership or of
any Affiliate of XXX or the Partnership and no Affiliate, stockholder,
Execution - 32 -
33
director, officer, employee, agent or partner of XXX or the Partnership or of
any Affiliate of XXX or the Partnership is indebted to any Stockholder.
(q) Tax Matters. Each of XXX, TCC, TCLP and the
Partnership has timely filed all Federal, state and local Tax (as defined in
Section 7.03(a)) returns and all information returns and reports required to be
filed by or with respect to it under the laws of the United States or any state
or other jurisdiction on or prior to the date hereof and will timely file all
such returns and reports required to be filed from the date hereof through the
Effective Date. True and complete copies of such reports and returns filed on
or before the date hereof have been or will be furnished or made available to
Western within thirty (30) days after the date hereof and true and complete
copies of all such returns and reports filed after the date hereof and on or
before the Effective Date will be furnished to Western within five (5) days
after they are filed. All such reports and returns were or will be accurately
prepared in accordance with all applicable statutes, rules and regulations and
are or will be correct as filed. Neither TCLP nor the Partnership is or was an
association taxable as a corporation for Federal, state or local tax purposes.
Each of XXX, TCC, TCLP and the Partnership has paid all Taxes (including Taxes
for which XXX, TCC, TCLP or the Partnership is a collection agent, e.g.,
withholding, excise, sales, use, Social Security and similar Taxes) which have
become due and payable (and will pay prior to the Effective Date all Taxes
which shall have become due and payable on or prior to the Effective Date) with
respect to XXX, TCC, TCLP and the Partnership for all taxable periods ending on
or prior to the Effective Date or will have set aside and reflected on the
Effective Date Balance Sheet adequate reserves therefor. None of XXX, TCC,
TCLP or the Partnership has ever been included in a consolidated Federal income
tax return or combined or unitary state tax return. None of XXX, TCC, TCLP or
the Partnership is a party to, nor has been notified that it is the subject of,
any pending, proposed or threatened action, investigation, proceeding, audit,
claim or assessment by or before the Internal Revenue Service or any other
governmental authority and no claim for assessment, deficiency or collection of
Taxes, or proposed assessment, deficiency or collection, for which XXX, TCC,
TCLP or the Partnership may be liable, has been asserted or threatened against
it. None of XXX, TCC, TCLP or the Partnership has received any notice of
deficiency, assessment or collection or proposed deficiency, assessment or
collection from the Internal Revenue Service or any other governmental
authority which has not been satisfied, nor, except as set forth on Exhibit
5.01(q) annexed hereto, does any of XXX, TCC, TCLP, the Partnership, any of the
Stockholders or TCC have any reason to believe that any such notice will be
received in the future. Except as set forth on Exhibit 5.01(q), the Internal
Revenue Service has never audited any Federal income tax return of XXX, TCC,
TCLP or the Partnership. The charges, accruals and reserves shown in the
Operating Financial Statements of the Partnership and XXX in respect of Taxes
for all fiscal periods to date are adequate. There are no material unpaid
assessments or proposals for additional Taxes for which XXX, TCC, TCLP and the
Partnership do not have adequate reserves, nor does any of XXX, TCC, TCLP, the
Partnership, any Stockholder or TCC know of any basis therefor for any such
period. There are no Tax rulings, requests for rulings or closing agreements
relating to either of XXX, TCC, TCLP or the Partnership which could affect its
liability for Taxes for any period after the Effective Date. Except as set
forth on Exhibit 5.01(q) annexed hereto (i) no power of attorney has been
granted by any of XXX, TCC, TCLP or the Partnership or any of its Affiliates
with respect to any matter relating to Taxes of such Person which is currently
in force, (ii) none of XXX, TCC, TCLP or the Partnership has filed any
agreement with the Internal Revenue Service described in Section
1.1503-2A(c)(3) of the Treasury
Execution - 33 -
34
Regulations, (iii) none of XXX, TCC, TCLP or the Partnership has filed a
consent or made any agreement with the Internal Revenue Service under Section
341(f) of the Internal Revenue Code of 1986, as amended (the "Code"), or any
comparable provision of state revenue statutes, and (iv) none of XXX, TCC, TCLP
or the Partnership and none of the partners of any of them which is a
partnership is a "foreign person" within the meaning of Section 1445(f)(3) of
the Code. None of XXX, TCC, TCLP or the Partnership has executed or filed with
the Internal Revenue Service or any other governmental authority any agreement
which is still in effect waiving or extending the period for assessment or
collection of any Taxes. The Stockholders and not Western, Xxx or the
Partnership shall be liable for any Taxes, payable by Western, XXX or the
Partnership by reason of the ownership of the Businesses or the assets used in
the Businesses on or prior to the Effective Date, the conduct of the Businesses
with respect to all periods ending on or prior to the Effective Date or payable
by Western, XXX or the Partnership by reason of the Merger.
(r) Employee Benefit Plans.
(i) Generally. Exhibit 5.01(r) annexed hereto
contains a true and complete list of each plan, program, policy, practice,
contract, agreement or other arrangement providing for compensation, severance,
termination pay, performance awards, stock or stock- related awards or other
equity based awards, fringe benefits or other employee benefits of any kind,
whether formal or informal, proposed or final, funded or unfunded and whether
or not legally binding, including each "employee benefit plan" within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") which is now, or ever has been, maintained, contributed
to, or required to be contributed to, for the benefit of any current or former
employee, independent contractor, agent or consultant of the Partnership or XXX
or engaged in the Businesses ("Employee"), or any current or former employee,
independent contractor, agent or consultant of any entity required to be
aggregated with the Partnership or XXX pursuant to Section 414(b), (c), (m), or
(o) of the Code and each management, employment, severance or consulting
agreement or contract with respect to any Employee or for which the Partnership
or XXX xxx have liability ("Employee Plan"). XXX, the Partnership, the
Stockholders, TCC and TCLP will provide to Western prior to the Effective Date
true and complete copies of all documents, if any, embodying each Employee
Plan, including all amendments thereto and written interpretations thereof; the
three most recent annual reports filed (Form 5500 Series with applicable
schedules) with respect to each Employee Plan required under ERISA; and the
most recent summary plan description, if any, with respect to each Employee
Plan required under ERISA.
(ii) Compliance. All obligations required to be
performed under each Employee Plan have been performed in all material respects
and each Employee Plan has been established and maintained in all material
respects in accordance with its terms and in compliance with all applicable
laws, statutes, orders, rules and regulations, including ERISA or the Code. No
Employee Plan that is an employee pension benefit plan within the meaning of
Section 3(2) of ERISA is subject to Title IV of ERISA or is a multiemployer
plan within the meaning of Section 3(37) of ERISA, and the Partnership and XXX
do not have any liability with respect to a pension plan and a multi-employee
plan as a result of having been part of a "controlled group" within the meaning
of Section 414(b), (c), (m), and (o) of the Code, nor is there any basis for
such liability being imposed. There are no investigations, proceedings,
actions, suits or claims pending, or, to the
Execution - 34 -
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best knowledge of any of XXX, the Partnership, any Stockholder, TCC or TCLP,
threatened or anticipated (other than routine claims for benefits) against any
Employee Plan or the assets of any Employee Plan; each Employee Plan can be
amended, terminated, or otherwise discontinued on or after the Effective Date
in accordance with its terms, without liability to the Partnership, XXX,
Western or any of Western's Affiliates; all premiums required by any Employee
Plan have been paid thereunder; all outstanding indebtedness for services
performed by an Employee or accrued vacation, holiday pay, earned commissions,
accrued bonuses or other benefits owed to any Employee has been paid when due
or accrued on the books of the Partnership or XXX; all contributions due to and
payments from, the Employee Plans that may have been required to be made have
been made; no "prohibited transaction" within the meaning of Section 4975 of
the Code or Section 406 of ERISA for which a statutory administrative or
regulatory exemption is not available has occurred with respect to any Employee
Plan; and no action or failure to act with respect to any Employee Plan will
subject the Partnership, XXX, Western or any of Western's Affiliates to any tax
or penalty or other liability.
Except as listed on Exhibit 5.01(r) annexed hereto, each
Employee Plan that is intended to be qualified under the Code has received a
determination letter from the Internal Revenue Service to the effect that such
Employee Plan and related trust are qualified and exempt from Federal income
taxes under Sections 401(a) and 501(a), respectively; such determination letter
includes any new or modified requirements under the Tax Reform Act of 1986 and
subsequent legislation enacted thereafter; and no such determination letter has
been revoked, nor to the knowledge of the Seller, has revocation been
threatened. To Seller's knowledge, nothing has occurred or is expected to
occur that would adversely affect the qualified status of any Plan or any
related trust subsequent to the issuance of such determination letter.
(iii) No Post-Employment Obligations. No Employee
Plan provides, or has any liability to provide, life insurance, medical or
other employee welfare benefits (other than severance and accrued vacation and
holiday pay) to any Employee upon his retirement or termination of employment,
except as may be required by Federal or state statute and no representation,
promise or contract (orally or in writing) has been made to any Employee
(individually or as a group) that life insurance, medical or other employee
welfare benefits (other than severance and accrued vacation and holiday pay)
would be provided upon their retirement or termination of employment, except to
the extent required by Federal or state statute.
(iv) COBRA. Each "group health plan" within the
meaning of Section 4980B(g)(2) of the Code maintained or contributed to by the
Partnership, XXX or any entity with which it is considered a "single employer"
within the meaning of Section 414(b), (c), (m) and (o) of the Code, has been
administered in good faith in compliance with the continuation coverage
requirements contained in the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA"), as set forth at Section 4980B of the Code and any
regulations promulgated or proposed (if such proposed regulations constitute
substantial authority within the meaning of Section 6662 of the Code and any
regulations promulgated thereunder) thereunder.
(v) Effect of Transaction. Except as set forth
on Exhibit 5.01(r)(v) annexed hereto, the execution of this Agreement and the
consummation of the
Execution - 35 -
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transactions contemplated hereby will not (either alone or when taken together
with any additional or subsequent events) constitute an event under any
Employee Plan that will or may result in any payment, upon a change in control
or otherwise, whether of severance, accrued vacations or otherwise,
acceleration, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any Employee. No payment or benefit which will or may
be made with respect to any Employee as a result of the transactions
contemplated hereby will be characterized as an "excess parachute payment"
within the meaning of Section 280G(b)(1) of the Code.
(vi) Employment Matters. Each relevant entity and
person (A) is in compliance with all applicable Federal and state laws, rules
and regulations respecting employment, employment practices, terms and
conditions of employment and wages and hours, in each case, with respect to
Employees, except where the failure to be in compliance would not, singly or in
the aggregate, have a material adverse effect on the Partnership or XXX, or
their financial condition or business; (B) has withheld all amounts required by
law or by agreement to be withheld from the wages, salaries and other payments
to Employees; (C) is not liable for any arrears of wages or any taxes or any
penalty for failure to comply with any of the foregoing, except as would not
have a material adverse effect on the Partnership or XXX, or their financial
condition or business; and (D) (other than routine payments to be made in the
normal course of business and consistent with past practice) is not liable for
any payment to any trust or other fund or to any governmental or administrative
authority, with respect to unemployment compensation benefits, Social Security
or other benefits for Employees.
(vii) Labor. No work stoppage or labor strike with
respect to Employees or against the Partnership or XXX is pending or, to the
best knowledge of any of XXX, the Partnership, any of the Stockholders, TCC or
TCLP, is threatened. Except as set forth on Exhibit 5.01(r)(vii) annexed
hereto, there is no involvement nor, to the best knowledge of any of XXX, the
Partnership, any Stockholder, TCC or TCLP, is there threatened, any labor
dispute, grievance or litigation relating to labor, safety or discrimination
matters involving any Employee including charges of unfair labor practices or
discrimination complaints, which, if adversely determined, would, individually
or in the aggregate, have a material adverse effect on the Partnership, XXX, or
their financial condition or business. There has been no engagement in any
unfair labor practices within the meaning of the National Labor Relations Act
which would, individually or in the aggregate, have a material adverse effect
on the Partnership or XXX, or their financial condition or business.
(viii) There is not presently nor has there been in
the past any collective bargaining agreement or union contract with respect to
Employees and no collective bargaining agreement with respect to Employees is
at the date hereof being negotiated.
(s) Contracts.
(i) Exhibit 5.01(s) annexed hereto contains a
list of all Contracts (other than subscriber agreements and agreements having
an annual cost of less than $5,000 for any single agreement and $50,000 for all
such agreements) to which XXX or the Partnership is a party and which in any
way relate to the operations or properties of the Partnership (including the
Businesses
Execution - 36 -
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and the assets used in the Businesses) or which will be binding upon the
Surviving Corporation, its operations or properties after the Effective Date.
As used herein "Contracts" means all leases, rental agreements, insurance
policies, collective bargaining agreements, union contracts, licenses,
agreements, permits, purchase orders, sales orders, agreements with suppliers,
reseller agreements, agreements with agents, agreements with customers,
commitments and any and all other contracts, consents or binding arrangements
or understandings (including capital commitments and arrangements with respect
to construction in progress), whether written or oral, express or implied.
Except for (i) the Contracts listed on Exhibit 5.01(s) annexed hereto (true and
complete copies of which agreements have been previously delivered to Western
or, in the case of oral agreements, descriptions of which are set forth on said
Exhibit 5.01(s)), (ii) subscriber agreements and agreements having an annual
cost of less than $5,000 for any single agreement and $50,000 for all such
agreements and (iii) Contracts entered into between the date hereof and the
Effective Date as permitted by Section 4.01(c) hereof, neither XXX nor the
Partnership is a party to nor is it or any of its property bound by any
Contract.
(ii) The Partnership has performed and will
perform, in all material respects all obligations required to be performed by
it under all Contracts, and will in all material respects perform all
obligations required to be performed by it under Contracts entered into after
the date hereof as permitted by Section 4.01(c) hereof; neither the Partnership
nor, to the best of the knowledge of any of XXX, the Partnership, the
Stockholders, TCC or TCLP, any party with whom the Partnership has an
agreement, is in material default under any Contract, and no event exists which
with the giving of notice or the passage of time, or both, would create such a
default; and none of XXX, the Partnership, any of the Stockholders, TCC or
TCLP knows of a meritorious basis for any claim of any such default.
(iii) Each of the Contracts has been, and each
Contract entered into after the date hereof as permitted by Section 4.01(c)
hereof will be, lawfully entered into and is or will be valid and in full force
and effect and is or will be enforceable in accordance with its terms for the
period stated in such Contract. There are no currently threatened
cancellations of, nor are there any outstanding disputes under, any Contracts.
None of XXX, the Partnership, any of the Stockholders, TCC or TCLP will modify,
amend or waive any provisions of any Contract in a manner that would materially
adversely affect the Businesses, the assets used in the Businesses or the
financial condition of Western after the Effective Date, or terminate any
Contract prior to the Effective Date without the prior written consent of
Western, which consent will not be unreasonably withheld.
(iv) Except as set forth on Exhibit 5.01(b)
annexed hereto, the consummation of the transactions contemplated by this
Agreement does not require any consent under any Contract listed on Exhibit
5.01(s) annexed hereto, and the consummation of the transactions contemplated
by this Agreement will not require any consent under any Contract (which will
survive the Effective Date) entered into after the date hereof as permitted by
Section 4.01(c) hereof, in each case which will not have been obtained by the
Effective Date (and copies of such consents will be given to Western on or
prior to the Effective Date), and such consummation will not result in the
termination of any right or privilege under any Contract listed on Exhibit
5.01(s) annexed hereto or any other Contract (which will survive the Merger)
entered into after the date hereof as permitted by Section 4.01(c) hereof;
provided, however, that XXX, the Partnership,
Execution - 37 -
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the Stockholders, TCC and TCLP shall not be deemed to be in default of any of
their obligations under this Agreement by reason of the failure to obtain any
such individual consent so long as the failure to obtain any such consent would
not individually or together with all such other failures to obtain consents
have a material adverse effect on the Businesses, the assets used in the
Businesses or their ownership or operation by the Surviving Corporation or the
consummation of the transactions contemplated hereby. None of XXX, the
Partnership, any of the Stockholders, TCC or TCLP has received notice that any
party to any Contract listed on Exhibit 5.01(s) annexed hereto intends to
cancel such Contract nor has any party given any of XXX, the Partnership, any
Stockholder, TCC or TCLP notice of any alleged breach of any Contract or of its
intent to take any legal action in order to enforce its rights thereunder. All
liabilities and obligations of the Partnership which are due and payable or
which are to be performed on or before the Effective Date under such Contracts
have been, or will have been on the Effective Date, duly paid in full or
performed in all material respects.
(v) Exhibit 5.01(s) annexed hereto contains true
and complete copies of all forms of subscriber agreements used by the
Partnership.
(vi) The Partnership has no Contracts with any
Person (or group of Affiliated Persons) which cover more than two (2%) percent
of the Partnership's wireless telephone subscribers.
(vii) Each of the agreements between the
Partnership and its agents or dealers, including those entered into between the
date hereof and the Effective Date as permitted by Section 4.01(c) hereof,
contains or will at the Effective Date contain a provision permitting the
Partnership or its successor or its assignee, in its sole discretion, to change
the amount and rate of the fees or other consideration to be paid to such agent
or dealer upon ninety (90) days or less written notice by the Partnership to
such agent or dealer.
(viii) Except for this Agreement, the TCLP
Partnership Agreement and the agreements described herein relating to the
transfer and assignment of the Partnership Interest and TCC's one (1%) percent
general partnership interest in the Partnership to XXX immediately prior to the
consummation of the Merger, XXX is not a party to nor is it or any of its
property bound by any Contract.
(t) No Sale. None of XXX, the Partnership, any of the
Stockholders, TCC or TCLP has entered into any contract to sell, mortgage or
encumber any of the Partnership's or TIM's material assets, the XXX Shares,
TIM's 99% limited partnership interest in TCLP, the Partnership Interest or
TCC's one (1%) percent general partnership interest in the Partnership, except
as described herein.
(u) No Material Adverse Change. Since the date of the
most recent Operating Financial Statements, there has not been
(i) any material adverse change in the rate of
the Partnership's generation of cash flow from operations, as opposed to cash
flow from financing operations and investment activities, after giving effect
to customary seasonal fluctuations of cash flow generation
Execution - 38 -
39
and after giving effect to agents' commissions and other marketing expenses
incurred in the ordinary course of business consistent with past practices;
(ii) any incurrence, assumption or guarantee by
the Partnership of Indebtedness other than pursuant to Contracts in existence
on the date hereof and set forth or described in Exhibit 5.01(s) annexed hereto
or as permitted pursuant to Section 4.01(c) hereof;
(iii) any creation by any of XXX, the Partnership,
the Stockholders, TCC or TCLP of any Lien on any of the assets used in the
Businesses other than pursuant to Contracts in existence on the date hereof and
set forth or described in Exhibit 5.01(s) annexed hereto or as permitted
pursuant to Section 4.01(c) hereof, each of which Liens will be terminated and
released on or prior to the Effective Date;
(iv) any making of any loan, advance or capital
contribution to or investment in any Person by the Partnership other than as
permitted pursuant to Section 4.01(c) hereof;
(v) any damage, destruction or other casualty
loss affecting any of the Businesses or the assets used in connection with the
operation of any of the Businesses which, after giving effect to payments to
the Partnership under applicable insurance policies, has had or is likely to
have a material adverse effect on the Partnership, its financial condition or
business;
(vi) any repurchase, redemption or other
acquisition by the Partnership of any outstanding interest in the Partnership;
(vii) any change by the Partnership in accounting
principles or methods; or
(viii) any other action taken by any of XXX, the
Partnership, any of the Stockholders, TCC or TCLP which, without the prior
written consent of Western, would not be permitted pursuant to Section 4.01(c)
hereof.
(v) Equipment. Except for that being replaced as set
forth on Exhibit 4.01(r) annexed hereto, substantially all of the Partnership's
(i) wireless telephone equipment, including system equipment, switch, cell site
and test equipment, (ii) mobile telephone equipment in inventory, and (iii)
equipment and software relating to any of the Partnership's billing systems are
in good working condition and are suitable for the use for which they are
intended.
(w) Bank Accounts. Exhibit 5.01(w) annexed hereto sets
forth a complete list of all bank accounts, savings deposits, money-market
accounts, certificates of deposit, safety deposit boxes, and similar investment
accounts with banks or other financial institutions maintained by or on behalf
of the Partnership showing the depository bank or institution address,
appropriate bank contact personnel, account number and names of signatories.
(x) Transactions with Affiliates. Neither the
Partnership, XXX nor any Affiliate of the Partnership, XXX nor any stockholder,
officer, director, partner, member, consultant or
Execution - 39 -
40
employee of any thereof, is at the date hereof a party to any transaction with
the Partnership which would survive the Effective Date, including any contract
or arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property (including intellectual property) to or
from, or otherwise requiring payments to or from, the Partnership, XXX or any
Affiliate thereof.
(y) No Other Business; No Subsidiaries. The Partnership
has not conducted any business other than the business of owning and
operating wireless telephone companies. The Partnership does not have any
subsidiaries nor is the Partnership a partner in any other partnership or joint
venture, nor does the Partnership own any equity interest in any other entity.
(z) Securities Representation. Each of the Stockholders
acknowledges that: (i) except as may otherwise be disclosed to Western prior to
the Effective Date, it is an accredited investor (as defined in Rule 501 under
the Securities Act; (ii) it has such knowledge and experience in financial and
business matters that it is capable of evaluating the merit and risks of the
investment in the Shares as contemplated hereby or, alternatively, that it has
engaged the services of a representative who has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of the proposed investment and who has reviewed the proposed investment
on its behalf; (iii) the Shares being delivered by Western to it have not been
registered under the Securities Act or under the securities laws of any state
in reliance upon Federal and state exemptions for transactions not involving a
public offering and are not being acquired with a view to the distribution
thereof except pursuant to a registration statement in compliance with Federal
and State securities laws or an exemption therefrom; (iv) such Shares must be
held by it indefinitely unless subsequently so registered or if an exemption
from such registration is available; and (v) it has received information
concerning Western and has had the opportunity to obtain additional information
as desired in order to evaluate the merits and risks inherent in holding such
Shares. Prior to distributing or transferring any Shares to any of its
stockholders or partners, each Stockholder agrees to obtain the representation
set forth in this paragraph (z) from the proposed transferee and to deliver
same to Western; provided, however, that any such transferee shall be a
accredited investor (as defined in Rule 501 under the Securities Act).
(aa) Investment Company Act. None of XXX, the
Partnership, any of the Stockholders, TCC or TCLP is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
(bb) Truth and Correctness. No representation or warranty
by any of XXX, the Partnership, any of the Stockholders, TCC or TCLP herein,
nor any written statement or certificate or other instrument furnished to
Western or Western Sub by any of XXX, the Partnership, any of the Stockholders,
TCC or TCLP pursuant hereto or in connection with the transactions contemplated
hereby, including the Exhibits annexed hereto, contains any untrue statement of
a material fact or omits or will omit to state a material fact necessary to
make the statements contained herein or therein, in light of the circumstances
under which such statements are made, not misleading.
(cc) TCC, TCLP and the Stockholders hereby agree that on
and after the date that the Partnership Interest and TCC's partnership interest
in the Partnership (including the 1%
Execution - 40 -
41
general partnership interest) are transferred to XXX, each of the
representations and warranties set forth in Section 5.01 shall, to the extent
applicable, and each of the covenants and agreements of the Partnership set
forth in Article 4 hereof shall, apply to XXX to the same extent and with the
same effect as such representations, warranties, covenants and agreements
applied or related to the Partnership.
5.02 Western's and Western Sub's Representations and Warranties.
(a) Due Incorporation. Each of Western and Western Sub
is a corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has all requisite corporate
power and authority to enter into this Agreement and to perform its obligations
hereunder.
(b) Authority. This Agreement and all transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of each of Western and Western Sub and this
Agreement constitutes a legal, valid and binding obligation of each of them
enforceable in accordance with its terms except as such enforceability may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting
or relating to enforcement of creditors' rights generally. Neither the
execution, delivery or performance of this Agreement nor the consummation of
the transactions contemplated hereby by Western or Western Sub will, with or
without the giving of notice or the passage of time, or both, conflict with,
result in a default or loss of rights (or give rise to any right of
termination, cancellation or acceleration) under, or result in the creation of
any Lien, pursuant to (i) any provision of the certificate of incorporation or
by-laws of Western or Western Sub; (ii) any material note, bond, indenture,
mortgage, deed of trust, contract, agreement, lease or other instrument or
obligation to which Western or Western Sub is a party or by which either of
them or their respective property is bound or affected; or (iii) any law,
order, judgment, ordinance, rule, regulation or decree to which Western or
Western Sub is a party or by which either of them or their respective property
is bound or affected. Except as described on Exhibit 5.02(b) annexed hereto,
no permit, consent, approval, authorization, qualification or registration of,
or declaration to or filing with any governmental or regulatory authority or
agency or third party is required to be obtained or made by Western or Western
Sub in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby in order to (A) render
this Agreement or the transactions contemplated hereby valid and effective and
(B) enable Western and Western Sub to consummate the Merger and purchase the
Business.
(c) Legal Matters. There is no claim, legal action,
counterclaim, suit, arbitration, governmental investigation or other legal,
administrative or tax proceeding, nor any order, decree or judgment, in
progress or pending, or to the knowledge of Western or Western Sub threatened,
against or relating to Western's or Western's Sub's right to perform their
respective obligations under this Agreement, nor does Western or Western Sub
know or have reason to be aware of any basis for the same. There is
outstanding no order, writ, injunction, judgment or decree of any court,
governmental agency or arbitration tribunal which would individually or in the
aggregate have a material adverse effect on Western's or Western Sub's
obligations hereunder or the transactions
Execution - 41 -
42
contemplated by this Agreement other than orders or decrees involving the
wireless telephone industry in general.
(d) Class A Common Stock. Western represents that each
of the shares of Class A Common Stock will, upon the consummation of the
transactions contemplated hereby at the Effective Date, be duly authorized,
duly issued, fully paid and non-assessable, and free and clear of any Liens,
other than any Liens imposed as a result of any action or consent of the
Stockholders or any restrictions on transferability resulting from Federal or
state securities laws.
(e) Truth and Correctness. No representation or warranty
by Western or Western Sub, or any written statement or certificate or other
instrument furnished to the Stockholders by Western pursuant hereto or in
connection with the transactions contemplated hereby, contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements contained herein or therein, in
light of the circumstances under which such statements are made, not
misleading.
(f) Reports. Western has previously furnished to the
Stockholders true and complete copies of its Annual Report on Form 10-K for the
fiscal year ended December 31, 1996, as filed with the SEC. Such Annual Report
(including all exhibits and schedules thereto and any documents incorporated by
reference therein) did not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
5.03 No Brokers. Each of Western and Western Sub represents and
warrants to the Stockholders that no agent, broker, investment banker, Person
or firm is or will be entitled to any broker's or finder's fee or any other
commission or similar fee directly or indirectly in connection with the
transactions contemplated by this Agreement based in any way on any
arrangements, agreements or understandings made by or on behalf of Western or
Western Sub, and Western and Western Sub, jointly and severally, hereby agree
to indemnify the Stockholders and agree to hold harmless the Stockholders
against and in respect of any claims for brokerage and other commissions
relating to such transactions based in any way on any arrangements, agreements
or understandings made by or on behalf of Western or Western Sub. Each of XXX,
the Partnership, each of the Stockholders, TCC and TCLP represent and warrant,
jointly and severally, to Western and Western Sub that, except for Columbia
Capital Corporation, no agent, broker, investment banker, Person or firm is or
will be entitled to any broker's or finder's fee or any other commission or
similar fee directly or indirectly in connection with the transactions
contemplated by this Agreement based in any way on any arrangements, agreements
or understandings made by or on behalf of any of XXX, the Partnership, any of
the Stockholders, TCC or TCLP and each of TCC, each of the Stockholders and
TCLP hereby agree, jointly and severally, to indemnify Western, Western Sub and
XXX and agree, jointly and severally, to hold harmless Western, Western Sub and
XXX against and in respect of any claims for brokerage and other commissions
relating to such transactions based in any way on any arrangements, agreements
or understandings made by or on behalf of any of XXX, the Partnership, any of
the Stockholders, TCC or TCLP, including those with Columbia Capital
Corporation.
Execution - 42 -
43
ARTICLE 6
CONDITIONS TO OBLIGATIONS
6.01 Conditions to Western's and Western Sub's Obligation. The
obligation of Western and Western Sub to perform, fulfill or carry out their
respective agreements, undertakings and obligations herein made or expressed to
be performed, fulfilled or carried out on the Effective Date is and shall be
subject to fulfillment of or compliance with, on or prior to the Effective
Date, the following conditions precedent, any of which may be waived by Western
and Western Sub, in their sole discretion, in whole or in part:
(a) Each of the representations and warranties of each of
XXX, the Partnership, each of the Stockholders, TCC and TCLP contained in this
Agreement shall be deemed to have been made again at and as of the time of the
Effective Date and shall then be true in all material respects except for
changes contemplated by this Agreement. Each of XXX, the Partnership, each of
the Stockholders, TCC and TCLP shall have performed and complied in all
material respects, with all agreements, covenants and conditions required by
this Agreement to be performed or complied with by each of them prior to or at
the Effective Date. Western shall have been furnished with a certificate of
each of XXX, the Partnership, each of the Stockholders, TCC and TCLP signed by
its Chairman, President, Vice Chairman or general partner, as the case may be,
dated the Effective Date, certifying to the fulfillment of the foregoing
conditions by such Person and to the truth and correctness in all material
respects, except for changes contemplated by this Agreement, as of the
Effective Date, of the representations and warranties of such Person contained
herein.
(b) There shall not then be pending by any third party
any suit or proceeding to restrain or invalidate, in whole or in part, this
Agreement or the transactions herein contemplated.
(c) Western shall have been furnished with an opinion of
Xxxxxxx & Xxxxxx, counsel for XXX, the Partnership, each of the Stockholders,
TCC and TCLP, dated the Effective Date, substantially in the form of Exhibit
6.01(c) annexed hereto.
(d) Western shall have been furnished with an opinion of
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, FCC counsel for XXX, the Partnership,
each of the Stockholders, TCC and TCLP dated the Effective Date, substantially
in the form of Exhibit 6.01(d) annexed hereto.
(e) The waiting periods, if applicable, of the HSR Act
shall have expired or been terminated.
(f) All consents, approvals and actions of third parties
including all approvals from Federal, state and local authorities (including
the FCC and all public service commissions and public utility commissions or
comparable bodies exercising jurisdiction over the Partnership or XXX) as may
be required for the consummation of the Merger and the transactions
contemplated hereby, as of the Effective Date, shall have been obtained or made
pursuant to a Final Order, which consents and approvals shall not contain any
conditions or restrictions which, in the case of FCC approvals, are not
customary in transactions of this nature, and which in the case of third party
consents and approvals, materially adversely affect the Partnership or XXX or
their respective
Execution - 43 -
44
businesses or financial condition, or the value of the Businesses or the assets
used in the Businesses, or the consummation of the transactions contemplated
hereby. "Final Order" means an action or decision as to which: (i) no request
for a stay is pending, no stay is in effect, and any deadline for filing such
request that may be designated by statute or regulation has passed; (ii) no
petition for rehearing or reconsideration or application for review is pending
and the time for filing any such petition or application has passed; (iii) the
FCC or public utility commission, public service commission (or comparable
bodies exercising jurisdiction over the Partnership, XXX or the Businesses)
does not have the action or decision under reconsideration on its own motion
and the time for initiating such reconsideration has passed; and (iv) no appeal
is pending or in effect and any deadline for filing any such appeal that may be
designated by statute or rule has passed. Notwithstanding anything to the
contrary herein contained, it shall not be a condition to Western's and Western
Sub's obligations under this Agreement for the Partnership to obtain each
individual required consent (other than any consents of the FCC, any public
utility or public service commission (or comparable bodies exercising
jurisdiction over the Partnership, XXX or the Businesses)) so long as the
failure to obtain any such individual consent would not individually or
together with all such other failures to obtain consents have a material
adverse effect on the Businesses, the assets used in the Businesses or their
ownership or operation by the Surviving Corporation or Western or the
consummation of the transactions contemplated hereby.
(g) Each of the Stockholders shall have delivered to the
Surviving Corporation stock certificates representing the XXX Shares and stock
powers, duly endorsed with signatures guaranteed relating thereto.
(h) Each of XXX, the Partnership, each of the
Stockholders, TCC and TCLP shall deliver to Western (i) if such Person is a
corporation (A) copies of its certificate of incorporation certified by the
Secretary of State of the jurisdiction of its incorporation, (B) copies of its
by-laws certified by its secretary, and (C) certificates of good standing of
recent date from the jurisdiction of its incorporation and all jurisdictions in
which it is qualified to do business; (ii) if such Person is a partnership, (A)
a copy of its partnership agreement certified by its general partner (other
than portions thereof which disclose the relative economic interests of the
partners thereof) and (B) certificates of good standing from the jurisdiction
of its organization and all jurisdictions in which it is qualified to do
business; and (iii) a lien and judgment search in the offices of the
Secretaries of State of the states of Colorado, Kansas, Minnesota, New Mexico,
Oklahoma, Texas and Utah and in the office of the county clerk of the
appropriate counties therein, dated not earlier than fifteen (15) Business Days
prior to the Effective Date, the results of which are consistent with the
representations of XXX, the Partnership, each of the Stockholders, TCC and TCLP
contained herein.
(i) Each of the Stockholders, TCC and TCLP shall have
delivered to Western releases from such Person's officers, directors,
stockholders and partners and from each of the Stockholders, TCC, MCP, MCI and
TCLP, themselves, releasing all rights and claims, if any, they may have with
respect to XXX, the Partnership, the Businesses and the assets used in the
Businesses.
Execution - 44 -
45
(j) Each of the Stockholders, TCC, MCP, MCI and TCLP, for
itself and its partners, Affiliates, officers, directors and stockholders shall
have delivered to Western documentation (including a general release) in form
reasonably satisfactory to Western evidencing the release and discharge of any
and all claims which it or its Affiliates, partners, officers, directors and
stockholders may have against XXX, the Partnership, the Businesses or the
assets used in the Businesses.
(k) Each of XXX, the Partnership, each of the
Stockholders, TCC and TCLP shall have delivered to Western a certified copy of
the resolution or resolutions duly adopted by its board of directors (and
stockholders if required) or general partner (and the consents of its partners
if required pursuant to its partnership agreement or other governing documents
or under the RULPA) authorizing the execution, delivery and performance of this
Agreement, including the Merger.
(l) The Stockholders and XXX shall have delivered to
Western all minute books, stock certificate books, stock transfer ledgers and
the corporate seal of XXX.
(m) The Stockholders shall have delivered to Western
resignations of all officers and directors of XXX.
(n) No statute, rule or regulation shall have been
enacted by any state or Federal government or governmental agency in the United
States which would render the consummation of this Agreement unlawful.
(o) Each of the Stockholders, TCC and TCLP shall have
delivered to Western an affidavit certifying as to such Person's non-foreign
status in accordance with Section 1445(b)(2) of the Code.
(p) The transactions contemplated by the Purchase
Agreement, of even date herewith, among Buyer, Triad Texas L.P., Triad Utah
L.P., Triad Oklahoma L.P., TCC and Triad Cellular L.P. (the "Purchase
Agreement") shall have been consummated, or shall be consummated concurrently
herewith, in accordance with the terms of such agreement.
6.02 Conditions to TIM's, the Partnership's, the Stockholders', TCC's
and TCLP's Obligation. The obligation of XXX, the Partnership, the
Stockholders, TCC and TCLP to perform, fulfill or carry out their agreements,
undertakings and obligations herein made or expressed to be performed,
fulfilled or carried out on the Effective Date is and shall be subject to
fulfillment of or compliance with, on or prior to the Effective Date, the
following conditions precedent, any of which may be waived by XXX, the
Partnership, the Stockholders, TCC and TCLP in their sole discretion, in whole
or in part:
(a) Each of Western's and Western Sub's representations
and warranties contained in this Agreement shall be deemed to have been made
again at and as of the time of the Effective Date and shall then be true in all
material respects, except for changes contemplated by this Agreement. Western
and Western Sub shall have performed and complied in all material respects with
all agreements, covenants and conditions required by this Agreement to be
performed
Execution - 45 -
46
or complied with by Western and Western Sub prior to or at the Effective Date.
The Stockholders shall have been furnished with a certificate of Western's and
Western Sub's Chief Executive Officer, Vice Chairman or Senior Vice President,
dated the Effective Date, certifying to the fulfillment of the foregoing
conditions by Western and Western Sub and to the truth and correctness in all
material respects, except for changes contemplated by this Agreement, as of the
Effective Date, of the representations and warranties of Western and Western
Sub contained herein.
(b) There shall not then be pending by any third party
any suit or proceeding to restrain or invalidate this Agreement or the
transactions contemplated hereby; provided, however, if Western desires to
consummate the transactions contemplated hereby notwithstanding any such suit
or proceeding and agrees to indemnify and hold harmless each of, the
Stockholders, TCC and TCLP from any damages, losses, liabilities and expenses
(including reasonable attorneys' fees and expenses) incurred by such Person as
a result of such suit or proceeding, then XXX, the Partnership, the
Stockholders, TCC and TCLP shall nevertheless be obligated to consummate the
transactions contemplated hereby.
(c) Western shall have delivered to the Stockholders on
the Effective Date the Merger Consideration.
(d) All consents, approvals and actions of third parties,
including all approvals from Federal, state and local authorities (including
the FCC and all public service commission and public utilities commission or
comparable bodies exercising jurisdiction over the Partnership or XXX) as may
be required for the consummation of the Merger and the transactions
contemplated hereby shall have been obtained; provided, however, that such
consents, approvals and actions need not be Final Orders.
(e) The Stockholders shall have been furnished with an
opinion of Xxxxx Xxxx Xxxxx Constant & Xxxxxxxx, counsel for Western, dated the
Effective Date, substantially in the form of Exhibit 6.02(e) annexed hereto.
(f) The Stockholders shall have been furnished with a
certified copy of the resolution or resolutions duly adopted by the board of
directors of Western and Western Sub authorizing the execution, delivery and
performance of this Agreement.
(g) No statute, rule or regulation shall have been
enacted by any state or Federal government or governmental agency in the United
States which would render the consummation of this Agreement unlawful.
(h) The waiting periods, if applicable, of the HSR Act
shall have expired or been terminated.
(i) The transactions contemplated by the Purchase
Agreement shall have been consummated, or shall be consummated concurrently
herewith, in accordance with the terms of such agreement.
Execution - 46 -
47
ARTICLE 7
SURVIVAL; INDEMNITY
7.01 Survival of Representations and Warranties. Notwithstanding any
investigation or review made at any time by or on behalf of any party hereto,
all representations and warranties contained in this Agreement or in the
Exhibits annexed hereto or in any of the agreements, certificates or
instruments delivered in connection herewith (other than the representations
and warranties contained in Sections 5.01(b) and 5.01(l) (the "Title
Representations"), Section 5.01(k) and the first two sentences of Section
5.01(d) and the first sentence of Section 5.02(b) (the "Authorization
Representations"), Section 5.01(z) (the "Securities Representations") Section
5.01(q) (the "Tax Representations"), Sections 5.01(n) and 5.01(r) (the
"Employee Representations") and Section 5.01(j) (the "Environmental
Representations")) shall survive the Effective Date for a period of one year
and one hundred and eighty days after the Effective Date (the "Indemnification
Period") and shall thereupon expire together with any right to indemnification
(except with respect to any claim for breach of any such representation or
warranty for which written notice shall have been given prior to the
termination of the Indemnification Period to the party which made such
representation or warranty). The Environmental Representations shall survive
the Closing for a period of three (3) years after the Effective Date and the
Title Representations, the Authorization Representations, the Securities
Representations, the Tax Representations, the Employee Representations and the
liabilities and obligations of the Stockholders, TCC and TCLP under Sections
4.01(y) and 7.03 hereof and under Article 8 hereof shall survive the Merger
until the expiration of any applicable statutes of limitation (such three (3)
year period being the Indemnification Period with respect to the Environmental
Representations and such statutes of limitations period being the
Indemnification Period with respect to the Title Representations, the
Authorizations Representations, the Securities Representations, the Tax
Representations and the Employee Representations and the liabilities and
obligations of the Stockholders under Sections 4.01(y) and 7.03 hereof and
under Article 8 hereof).
7.02 Stockholders', TCC's and TCLP's Indemnity.
(a) During the Indemnification Period (or thereafter
solely with respect to any claim for indemnification for which notice has been
given prior to the expiration of the Indemnification Period), in addition to
any other indemnification provided for under this Agreement, each of the
Stockholders, TCC and TCLP shall jointly and severally indemnify and hold
harmless Western and its Affiliates (including the Surviving Corporation) from
and against any and all demands, claims, losses, liabilities, actions or causes
of action, assessments, actual damages (but excluding consequential damages),
fines, Taxes (including excise and penalty taxes), penalties, costs and
expenses (including interest, expenses of investigation, reasonable fees and
disbursements of counsel, accountants and other experts (whether such
reasonable fees and disbursements of counsel, accountants and other experts
relate to claims, actions or causes of action asserted by Western or its
Affiliates (including the Surviving Corporation) against any of the
Stockholders, TCC or TCLP or asserted by third parties)) (collectively
"Losses") incurred or suffered by Western and its Affiliates (including the
Surviving Corporation) and their respective
Execution - 47 -
48
officers, directors, employees, stockholders, agents and representatives
arising out of, resulting from, or relating to:
(i) any breach of any of the representations or
warranties made by any of XXX, the Partnership, any of the Stockholders, TCC or
TCLP in this Agreement or in any agreement, certificate, Exhibit or other
instrument delivered by any of XXX, the Partnership, any of the Stockholders,
TCC or TCLP pursuant to this Agreement;
(ii) any failure by any of XXX, the Partnership,
any of the Stockholders, TCC or TCLP to perform any of its covenants or
agreements contained in this Agreement or in any agreement, certificate,
Exhibit or other instrument delivered by any of XXX, the Partnership, any of
the Stockholders, TCC or TCLP pursuant to this Agreement; or
(iii) any liabilities arising out of, resulting
from or relating to the liabilities of any of XXX, the Partnership, any of the
Stockholders, TCC or TCLP or any other member of any affiliated group or
"controlled group," within the meaning of Section 414(b), (c), (m) and (o) of
the Code, of which any of XXX, the Partnership, any of the Stockholders, TCC or
TCLP was a member on or prior to the Effective Date which liability exists by
reason of such Person's having been a member of such affiliated or controlled
group, including liabilities relating to (A) the funding, operation,
maintenance, administration, amendment or termination of, or the withdrawal or
partial withdrawal from, any employee plan relating to any period on or prior
to the Effective Date and including, but not limited to, losses arising under
Title IV of ERISA, Section 302 of ERISA, Section 412 or 4971 of the Code, (B)
compliance with COBRA under Section 4980B of the Code, and (C) environmental
matters with respect to any operations of, or properties owned, occupied or
operated or formerly owned, leased or operated by, any of XXX, the Partnership,
any of the Stockholders, TCC or TCLP or any other member of an affiliated group
or "controlled group" of which any of XXX, the Partnership, any of the
Stockholders, TCC or TCLP was a member prior to the Effective Date.
(b) Notwithstanding anything to the contrary contained in
Section 7.02(a), the Stockholders, TCC and TCLP shall not be required to pay or
reimburse Western or its Affiliates (including the Surviving Corporation), for
Losses pursuant to any of Stockholders', TCC's and TCLP's joint and several
indemnification obligations pursuant to Section 7.02 which (when aggregated
with any Losses paid to Western, or Western's Affiliates, by any of the
Stockholders, TCC, TCLP or their respective Affiliates pursuant to Article 7 of
(i) the Purchase Agreement, (ii) the Agreement, of even date herewith, between
Western and TCC with respect to the acquisition by Western of rights to certain
D and E Block PCS licenses, and (iii) the Agreement, of even date herewith,
between Western and TCLP with respect to the acquisition by Western of the
Texas 1 RSA; the Agreements referred to in clauses (i), (ii) and (iii) above
being referred to as the "Concurrent Agreements") are in excess of One Hundred
Million ($100,000,000) Dollars.
(c) Notwithstanding anything to the contrary contained in
this Section 7.02, neither Western nor its Affiliates shall be entitled to seek
indemnification under Section 7.02(a) for any Losses unless the aggregate
amount of Western's or its Affiliates' Losses in respect of all such matters,
when aggregated with the aggregate amount of Western's or its Affiliates'
Losses (as such
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terms are defined in the Concurrent Agreements) arising under the Concurrent
Agreements (as more particularly set forth in Article 7 of the Concurrent
Agreements), exceeds $375,000 in which event Western and its Affiliates shall
be entitled to seek indemnification under this Section 7.02 for the amount of
such Losses in excess of $375,000; provided, however, that the limitations set
forth in this Section 7.02(c) shall not be taken into account in determining
the amount of the Estimated Capital Adjustment Amount and the Capital
Adjustment Amount determined in accordance with the procedure set forth in
Section 3.05(b) (which determination shall be made without any exclusions
whatsoever by reason of the foregoing); provided further, however, that the
foregoing limitation with respect to Western's or its Affiliates' right to
indemnification shall not be applicable to Losses arising from or relating to
(and Western and its Affiliates shall be entitled to indemnification for all
such Losses commencing with the first dollar of such Losses) (i) any breach of
the Title Representations, the Authorization Representations, the Tax
Representations, the Securities Representations, the Employee Representations
and the liabilities and obligations of any of the Stockholders, TCC and TCLP
under Sections 4.01(y) and 7.03 hereof and under Article 8 hereof; (ii) any
Losses arising by reason of or relating to any inaccuracy or omission relating
to current assets or current liabilities included on the Effective Date Balance
Sheets, which affected in any way the determination of Working Capital,
Reimbursable Capital Expenditures and Reimbursable Indebtedness Amount pursuant
to Section 3.05 hereof and which were known to, or should have been reasonably
foreseeable by, any of the Stockholders, TCC or TCLP at the time of preparation
of the Effective Date Balance Sheets; or (iii) any Losses arising by reason of
or relating to any litigation listed on Exhibit 5.01(f) annexed hereto.
(d) As collateral security for the Stockholders', TCC's
and TCLP's indemnification obligations under this Agreement, and such Person's
Affiliates indemnification obligations under the Concurrent Agreements, the
Stockholders or their Affiliates shall deliver, or cause to be delivered, to a
national bank to be mutually agreed to (the "Escrow Agent") to be held in
escrow pursuant to the terms of an Escrow Agreement, in substantially the form
of Exhibit 7.02(d) annexed hereto (the "Escrow Agreement"), to be entered into
on the Effective Date, at Stockholder's option, either Six Million ($6,000,000)
Dollars in cash or Four Hundred Eighty Thousand (480,000) shares of Class A
Common Stock issued upon consummation of the Merger (such cash or shares being
referred to herein as the "Escrow Fund"). The Escrow Fund shall be held by the
Escrow Agent pursuant to the Escrow Agreement for a period of one (1) year and
one hundred eighty (180) days after the Effective Date; provided, however, that
on the first anniversary of the Effective Date, the Escrow Fund shall be
reduced to an amount equal to the lesser of the balance of the Escrow Fund on
such first anniversary or 75% (if the Escrow Fund is originally funded with
shares of Class A Common Stock, as measured by Shares) of the original Escrow
Fund (except to the extent any claims in excess of such reduced amount have
been asserted prior to such first anniversary). The Escrow Agreement shall set
forth the procedures for Western or its Affiliates (including the Surviving
Corporation) to make any claims against the Escrow Fund, the circumstances
under which such Escrow Fund shall be distributed either to Western or its
Affiliates (including the Surviving Corporation) or to Stockholders and
procedures for the Stockholders to substitute cash in lieu of stock. Nothing
contained in this Section 7.02(d) or in the Escrow Agreement shall limit in any
way any Stockholder's, TCC's and TCLP's indemnification obligations under this
Agreement, or the indemnification obligations of any Stockholder, TCC and TCLP
or their Affiliates, as applicable, under the Concurrent Agreements; it being
understood that,
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if the Escrow Fund is not sufficient to satisfy such indemnification
obligations, then Stockholders, TCC and TCLP and their Affiliates, as
applicable, shall (subject to Section 7.02(b) hereof) remain liable for such
indemnification obligations as set forth in this Agreement or in the Concurrent
Agreements.
7.03 Tax Indemnification.
(a) During the Indemnification Period (or thereafter
solely with respect to any claim for indemnification for which notice has been
given prior to the expiration of the Indemnification Period, each of the
Stockholders, TCC and TCLP hereby agrees, jointly and severally, to indemnify
and hold harmless Western and its Affiliates from and against (i) all liability
for Taxes of XXX, the Partnership, the Stockholders, TCC and TCLP (including
any liability for Taxes by reason of such Person's or the Partnership being
included in a Federal or state consolidated, combined or unitary return)
attributable to a taxable period ending before or on the Effective Date
(including any Tax liabilities resulting from the transactions contemplated by
this Agreement), and the portion of any taxable period that includes (but does
not end on) such day (in the case of a taxable period that includes (but does
not end on) the Effective Date, the portion of the Tax for which the
Stockholders, TCC or TCLP shall be liable shall be calculated by multiplying
the Tax for the entire period by a fraction, the numerator of which shall be
the number of days during such period prior to the Effective Date and the
denominator of which shall be the total number of days during such period) and,
in the case of any liability arising under Treasury Regulation Section
1.1502-6(a) (or any corresponding provision of state or local law),
attributable to any taxable period beginning before the Effective Date, and
amounts payable after the Effective Date with respect to liability for Taxes
arising before the Effective Date pursuant to any written or unwritten
agreement entered into before the Effective Date for the allocation or payment
of or with respect to Tax liabilities or benefits ("Tax Sharing Arrangements";
such amounts being included in the definition of "Taxes" for purposes of this
Section 7.03), to the extent such Taxes, in the aggregate, exceed the reserve
therefor on the Effective Date Balance Sheets and (ii) any liability for
out-of-pocket fees, costs and expenses (including reasonable attorney's fees)
arising out of or incident to any Tax indemnified hereunder. If any amount for
which each of the Stockholders, TCC or TCLP is to indemnify Western and its
Affiliates (including the Surviving Corporation) pursuant to the immediately
preceding sentence is, subject to the Stockholders', TCC's or TCLP's rights
under Section 7.03(b), determined to be payable (whether as a payment of
estimated tax or otherwise) after the Effective Date, the Stockholders, TCC and
TCLP shall pay or cause to be paid to Western such amount no later than the
later of (A) five (5) Business Days after Western gives notice to the
Stockholders of both the amount due and the date such amount is due and payable
(the "Due Date") and (B) three (3) Business Days before the Due Date. Amounts
described in clause (ii) shall be reimbursed as incurred. Any payment required
to be made hereunder and not made at the time specified in the preceding two
sentences shall bear interest at the prime rate of The Toronto-Dominion Bank as
in effect from time to time or such higher rate actually payable by the
indemnified party on the delayed payment of the Taxes being indemnified,
calculated from the date such payment was required to be made hereunder to the
date such payment is actually received by the indemnified party. "Taxes" shall
mean all taxes of any kind, including those on, or measured by or referred to
as income, gross receipts, sales, use, ad valorem, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property or
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51
windfall profits taxes, customs duties or similar fees, assessments or charges
of any kind whatsoever, together with any interest and any penalties, additions
to tax or additional amounts imposed by any taxing authority, domestic or
foreign.
(b) If any claim or demand is asserted by any taxing
authority in writing with respect to a Tax indemnified hereunder, Western shall
notify the Stockholders of such claim or demand within fifteen (15) days of
receipt thereof; provided, however, that failure to give such notification
shall not affect the indemnified party's entitlement to indemnification
hereunder except to the extent the indemnifying party shall have been actually
prejudiced as a result of such failure. The indemnifying party shall have the
right to control the defense, compromise or settlement thereof; provided,
however, that the indemnifying party shall not be permitted to take any action
with respect to an issue that could adversely affect the Tax liability of the
indemnified party (with respect to liabilities not indemnified hereunder)
unless the indemnified party consents to such action. Without limiting the
indemnifying party's rights under the preceding sentence, the indemnified party
shall be permitted to participate in the defense of any such claim or demand,
at its own expense. The indemnified party shall cooperate fully in such
defense as and to the extent reasonably requested by the indemnifying party.
Such cooperation shall include the retention and (upon the indemnifying party's
request) the provision to the indemnifying party of records and information
which are reasonably relevant to such claims or demand and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder.
(c) If any liability for Taxes with respect to which
Western or its Affiliates is entitled to indemnification hereunder results from
the disallowance of any claimed deduction or credit, or from the shifting of
any item of income from one taxable period to another taxable period, the
amount of indemnification to which Western or its Affiliates is entitled shall
be computed after taking into account any resulting tax benefit accruing to
Western or its Affiliates by reason of such disallowed claim or shift of any
item of income.
7.04 Western's Indemnity.
(a) During the Indemnification Period (or thereafter
solely with respect to any claim for indemnification for which notice has been
given prior to expiration of the Indemnification Period), in addition to any
other indemnification provided for under this Agreement, from and after the
Effective Date, Western shall indemnify and hold harmless the Stockholders and
their respective Affiliates from and against any and all Losses (as defined in
Section 7.02, except that reasonable fees and disbursements of counsel,
accountants and other experts shall be included whether they relate to claims,
actions or causes of action asserted by the Stockholders, TCC or TCLP against
Western or asserted by third parties) incurred or suffered by the Stockholders
and their Affiliates and their respective officers, directors, partners,
employees, agents and representatives arising out of, resulting from, or
relating to:
(i) any breach of any of the representations or
warranties made by Western in this Agreement or in any agreement, certificate
or other instrument delivered by Western pursuant to this Agreement; and
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(ii) any failure by Western to perform any of its
covenants or agreements contained in this Agreement or in any agreement,
certificate or other instrument delivered by Western pursuant to this
Agreement.
(b) Notwithstanding anything to the contrary contained in
this Section 7.04, none of the Stockholders, TCC, TCLP or their Affiliates
shall be entitled to seek indemnification under this Section 7.04 for any
Losses unless the aggregate amount of the Stockholders', TCC's TCLP's and their
Affiliates' Losses in respect of all such matters, when aggregated with the
aggregate amount of the Stockholders', TCC's and TCLP's or their Affiliates'
Losses (as such terms are defined in the Concurrent Agreements) arising under
the Concurrent Agreements ( as more particularly set forth in Article 7 of the
Concurrent Agreements), exceeds $375,000 in which event the Stockholders and
their Affiliates shall be entitled to seek indemnification under this Section
7.04 for the amount of such Losses in excess of $375,000; provided, however,
that the limitations set forth in this Section 7.04(b) shall not be taken into
account in determining the amount of the Estimated Capital Adjustment Amount or
the Capital Adjustment Amount determined in accordance with the procedure set
forth in Section 3.05 (which determination shall be made without any exclusions
whatsoever by reason of the foregoing); provided further, however, that the
foregoing limitation with respect to the Stockholders', TCC's and TCLP's right
to indemnification shall not be applicable to Losses arising from or relating
to (and the Stockholders shall be entitled to indemnification for all such
Losses commencing with the first dollar of such Losses) any breach of the
representation and warranty set forth in the first sentence of Section 5.02(b)
hereof.
7.05 Procedure.
(a) In the event that any party hereto shall sustain or
incur any Losses in respect of which indemnification may be sought by such
party pursuant to this Article 7, the party seeking such indemnification (the
"Indemnitee") shall assert a claim for indemnification by giving prompt (in the
event of claims arising by reason of the commencement of litigation against an
Indemnitee by third parties, in no event later than ten (10) days after service
of process, which process expressly indicates a claim for which Indemnitor (as
hereinafter defined) may be liable) written notice thereof (the "Notice"),
which shall describe in reasonable detail the facts and circumstances upon
which the asserted claim for indemnification is based, to the party providing
indemnification (the "Indemnitor") and shall thereafter keep the Indemnitor
reasonably informed with respect thereto; provided that failure of the
Indemnitee to give the Indemnitor prompt notice as provided herein shall not
relieve the Indemnitor of any of its obligations hereunder, except to the
extent that the Indemnitor is materially prejudiced by such failure. In case
any third party claim, action or proceeding (a "Claim") is brought against any
Indemnitee, the Indemnitor shall have the right to assume, conduct and control
the defense, compromise or settlement thereof, by written notice to the
Indemnitee of its intention to do so within thirty (30) days after receipt of
the Notice, with counsel reasonably satisfactory to the Indemnitee, at the
Indemnitor's own expense, and thereupon to prosecute in the name and on behalf
of the Indemnitee any available cross-claims, counter-claims or third-party
claims arising with respect to the Claim. If the Indemnitor shall assume the
defense of such Claim, it shall not settle such Claim unless such settlement
includes as an unconditional term thereof the giving by the claimant or the
plaintiff of a release of the Indemnitee, reasonably
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satisfactory to the Indemnitee, from all liability with respect to such Claim.
As long as the Indemnitor is contesting any such Claim in good faith and on a
timely basis, the Indemnitee shall not pay or settle any such Claim.
Notwithstanding the assumption by the Indemnitor of the defense of any Claim as
provided in this Section 7.05 and without limiting the Indemnitor's right to
assume, conduct and control the defense, compromise or settlement thereof, the
Indemnitee shall be permitted to join in the defense of such Claim and to
employ counsel at its own expense.
(b) If the Indemnitor shall fail to notify the Indemnitee
of its desire to assume the defense of any such Claim within the prescribed
30-day period set forth in Section 7.05(a), or shall notify the Indemnitee that
it will not assume the defense of any such Claim, then the Indemnitee may
assume the defense of any such Claim, in which event it may do so in such
manner as it may deem appropriate, and the Indemnitor shall be bound by any
determinations made in any litigation with respect to such Claim or any
settlement thereof effected by the Indemnitee, provided that any such
determinations or settlement shall not affect the right of the Indemnitor to
dispute the Indemnitee's claim for indemnification. The failure of the
Indemnitor to assume the defense of any Claim shall not be deemed a concession
by Indemnitor that it is required to indemnify the Indemnitee for the subject
matter of such Claim.
(c) Amounts payable by the Indemnitor to the Indemnitee
in respect of any Losses for which any party is entitled to indemnification
hereunder shall be payable by the Indemnitor as incurred by the Indemnitee.
Any payments by any Indemnitor in indemnification hereunder shall be treated as
adjustments to the Merger Consideration.
(d) The provisions of this Section 7.05 shall be subject
to the provisions of Section 7.03(b).
7.06 Indemnification Payments in Cash. All payments by the
Stockholders, TCC or TCLP to Western in respect of any indemnification
obligation to Western or its Affiliates (including the Surviving Corporation)
shall be made by such Person in cash, or at the Stockholders' option, if the
Escrow Fund contains shares of Class A Common Stock, by the delivery to Western
or its Affiliates (including the Surviving Corporation) of shares of its Class
A Common Stock from the Escrow Fund (valuing such shares so delivered at the
average closing price on NASDAQ of such shares for the six (6) Business Days
immediately preceding the date of the delivery of such shares).
7.07 Investigations; Waivers. The survival periods and rights to
indemnification provided for in this Article 7 shall remain in effect
notwithstanding any investigation at any time by or on behalf of any party
hereto or any waiver by any party hereto of any condition to such party's
obligations to consummate the transactions contemplated hereby.
7.08 Indemnity Sole Remedy. In the absence of fraud or of a suit
seeking specific performance as contemplated by this Agreement, the remedies
provided to XXX, the Partnership, the Stockholders, TCC and TCLP and to Western
by the foregoing provisions of this Article 7 shall after the Effective Date be
in lieu of any other remedies to which the respective party is entitled at law
or in equity for any breach or noncompliance by a party with the provisions of
this Agreement.
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ARTICLE 8
EMPLOYEE BENEFIT PLANS
8.01 Employees.
(a) On or before thirty (30) days prior to the Effective
Date, Western will provide written notice to the Stockholders setting forth the
identity of the Employees the Surviving Corporation desires to employ after the
Effective Date. Each of XXX, the Partnership, each of the Stockholders, TCC
and TCLP agrees to use all reasonable efforts to assist the Surviving
Corporation in employing such Employees and, in this regard, to terminate such
Employees on or prior to the Effective Date.
(b) Upon reasonable notice, the Partnership and XXX
shall, and each of XXX, each of the Stockholders, TCC and TCLP shall cause the
Partnership and XXX to, provide Western with access to the Employees during
normal business hours throughout the period on and before the Effective Date in
accordance with the procedure established in Section 4.01(b). Such access
shall be for the purpose of interviewing the Employees and providing transition
training for those Employees continuing in employment after the Effective Date.
(c) Western and XXX, the Partnership, the Stockholders,
TCC and TCLP shall consult regarding communications with the Employees whom the
Surviving Corporation does not intend to retain after the Effective Date so as
to minimize any adverse impact on the Businesses. Upon the reasonable request
of Western, the Partnership and XXX shall, and each of XXX, each of the
Stockholders, TCC and TCLP shall cause the Partnership and XXX to, use all
commercially reasonable efforts to minimize such impact, including enforcing
the Partnership's rights under any confidential or non-compete agreement with
such Employees (other than the non-compete agreements of Xxxxx X. Xxxxx or
Xxxxx X. Xxxxxxx).
(d) Nothing contained in this Agreement shall confer upon
any Employee any right with respect to continued employment with the Surviving
Corporation. No provision of this Agreement shall create any third-party
rights in any Employee, or beneficiary or dependent thereof, with respect to
the compensation, terms and conditions of employment and benefits that may be
provided to such Employee by Western or its Affiliates (including the Surviving
Corporation) after the Effective Date.
8.02 Employee Benefit Plans.
(a) All medical, dental, vision, travel accident,
accidental death and dismemberment, and life insurance expenses incurred by
Employees and their dependents on or before the Effective Date, pursuant to
Employee Plans, irrespective of the time at which claims are presented, are the
responsibility of the Stockholders, TCC and TCLP and shall be paid directly by
the Stockholders, TCC and TCLP or their medical, dental or life insurance
carrier to such Employees and dependents.
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(b) The Stockholders, TCC and TCLP shall be responsible
for any medical, dental or life insurance coverage due to any Employees and
their dependents who retired on or before the Effective Date.
(c) Each of Stockholders, TCC and TCLP, jointly and
severally, agree to fulfill their obligations under continuation coverage rules
of COBRA with respect to a "qualifying event," within the meaning of Section
4980B(f) of the Code or Section 603 of ERISA, occurring on or before the
Effective Date with respect to any Employees and their dependents.
(d) All short-term, long-term and extended disability
benefits payable to Employees and their dependents who became disabled on or
before the Effective Date are the responsibility of the Stockholders, TCC and
TCLP and shall be paid directly by such Persons or their insurance carriers to
such Employees and their dependents.
(e) If any Employees are terminated from employment as a
result of the transactions contemplated by this Agreement or otherwise, any
obligations arising out of such termination of employment, including severance,
accrued vacation pay, COBRA obligations, notices or compensation required under
the Worker Adjustment and Retraining Notification ("WARN") Act, employment
discrimination complaints, unfair labor practice charges, grievance under any
collective bargaining agreement, breach of contract claims, and wrongful
termination and related tort claims shall be the sole responsibility of the
Stockholders, TCC and TCLP.
(f) All benefits payable to Employees as salary, bonus or
other compensation or benefits or under Employee Plans accrued through the
Effective Date shall be paid and administered by and be the responsibility of
the Stockholders, TCC and TCLP, and neither Western nor any of its Affiliates
shall have any liability therefor.
(g) Each of the Stockholders, TCC and TCLP hereby jointly
and severally agree, until expiration of all applicable statutes of
limitations, to indemnify, hold harmless and defend Western and its Affiliates
(including the Surviving Corporation) from and against any and all claims,
damages, liabilities and expenses including reasonable attorney's fees and
disbursements of counsel, incurred by Western or any of its Affiliates
(including the Surviving Corporation) arising from or in connection with any
failure of the Stockholders, TCC or TCLP or their Affiliates to discharge their
responsibilities under paragraphs (a) - (f) of this Section 8.02.
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ARTICLE 9
MISCELLANEOUS
9.01 Expenses. Each party shall bear its own expenses incident to
the negotiation, preparation, authorization and consummation of this Agreement
and the transactions contemplated hereby, including all fees and expenses of
its counsel and accountants, whether or not such transactions are consummated;
provided, however, if Western and its Affiliates shall be required under
applicable law to pay more than one filing fee under the HSR Act with respect
to the transactions contemplated hereby and by Concurrent Agreements, then TCLP
shall pay on behalf of Western the filing fee under the HSR Act required in
connection with the transaction contemplated by this Agreement.
9.02 Equitable Remedies. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with the specific terms of the provisions or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity. Each party agrees
that it will not assert, as a defense against a claim for specific performance,
that the party seeking specific performance has an adequate remedy at law.
9.03 Notices. All notices, claims and other communications hereunder
shall be in writing and shall be made by hand delivery, registered or certified
mail (postage prepaid, return receipt requested), facsimile, or overnight air
courier guaranteeing next day delivery (a) if to Western or Western Sub (or to
XXX or the Partnership after the Effective Date), to it at Western Wireless
Corporation, 0000 XX Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxx X. Xxxxxx, Esq. (Fax No. 000-000-0000), with a copy (which shall not
constitute notice) to Xxxxx Xxxx Xxxxx Constant & Xxxxxxxx, 00 Xxxxxxxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxxxx, Esq. (Fax No.
000-000-0000) or (b) if to any Stockholder, TCC or TCLP (or to XXX or the
Partnership prior to the Effective Date, to it at 0000 Xxxx Xxxx Xxxx, Xxxxx
Xxxx, Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxx (Fax No. 000-000-0000), with a
copy (which shall not constitute notice) to Xxxxxxx & Xxxxxx, 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx, Esq. (Fax
No. 000-000-0000), or at such other address as any party may from time to time
furnish to the other parties by a notice given in accordance with the
provisions of this Section 9.03. All such notices and communications shall be
deemed to have been duly given at the time delivered by hand, if personally
delivered; five (5) Business Days after being deposited in the mail, first
class postage prepaid, return receipt requested, if mailed; when receipt
confirmed, if sent by facsimile; and the next Business Day after timely
delivery to the courier, if sent by an overnight air courier service
guaranteeing next day delivery.
9.04 Entire Agreement. This Agreement, together with the Exhibits
annexed hereto, contains the entire understanding among the parties hereto
concerning the subject matter hereof and may not be changed, modified, altered
or terminated except by an agreement in writing executed by the parties hereto.
Any waiver by any party of any of its rights under this Agreement or of any
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breach of this Agreement shall not constitute a waiver of any other rights or
of any other or future breach.
9.05 Remedies Cumulative. Except as otherwise provided herein, each
and all of the rights and remedies in this Agreement provided, and each and all
of the rights and remedies allowed at law and in equity in like case, shall be
cumulative, and the exercise of one right or remedy shall not be exclusive of
the right to exercise or resort to any and all other rights or remedies
provided in this Agreement or at law or in equity.
9.06 Governing Law. This Agreement shall be construed in accordance
with and subject to the laws and decisions of the State of Washington
applicable to contracts made and to be performed entirely therein.
9.07 Counterparts. This Agreement may be executed in several
counterparts hereof, and by the different parties hereto on separate
counterparts hereof, each of which shall be an original; but such counterparts
shall together constitute one and the same instrument.
9.08 Waivers. No provision in this Agreement shall be deemed waived
by course of conduct, including the Merger, unless such waiver is in writing
signed by the parties and stating specifically that it was intended to modify
this Agreement.
9.09 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and to their respective
successors and assigns. None of XXX, the Partnership, any of the Stockholders,
TCC or TCLP shall have the right to assign this Agreement or any of its rights
or obligations hereunder to any Person.
9.10 Further Assurances. Western shall, at the request of the
Stockholders, TCC and TCLP, and each of the Stockholders, TCC and TCLP shall,
at the request of Western, from time to time, execute and deliver such other
assignments, transfers, conveyances and other instruments and documents and do
and perform such other acts and things as may be reasonably necessary or
desirable for effecting complete consummation of this Agreement and the
transactions herein contemplated.
9.11 Disclosures.
(a) Each of Western and each of XXX, the Partnership,
each of the Stockholders, TCC and TCLP acknowledges and confirms in connection
with the negotiation of this Agreement and the execution hereof, during the
period from the date hereof through the Effective Date, the parties hereto will
have furnished to one another certain materials, information, data and other
documentation ("Disclosures") concerning their business, financial condition
and operations which are proprietary and confidential. Each party acknowledges
the party disclosing such Disclosures considers them secret and confidential
and asserts a proprietary interest therein. Accordingly, each of Western and
each of XXX, the Partnership, each of the Stockholders, TCC and TCLP covenants
and agrees that it shall maintain all Disclosures made by another party in
strict confidence and shall not use such Disclosures for its own benefit or
disclose them to third parties, except to its agents, representatives, bankers,
investment bankers, counsel and employees involved in evaluating the
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transactions contemplated by this Agreement, its partners (and the partners or
other security holders thereof) or as otherwise required by law (including the
requirement of Western to disclose such terms under any Federal or state
securities laws); provided, however, that in no event shall any of XXX, the
Partnership, any of the Stockholders, TCC or TCLP be permitted to disclose the
dollar amount or number of shares of Class A Common Stock into which the XXX
Shares are to be converted in accordance with Section 3.02 or any information
concerning the calculation of such amount to any other Person (including its
employees) unless and until such time as such information otherwise becomes
public.
(b) No public announcement by any party hereto with
regard to the transactions contemplated hereby or the material terms hereof
(including the dollar amount or number of shares of Class A Common Stock into
which the XXX Shares are to be converted in accordance with Section 3.02) shall
be issued by any party without the mutual prior consent of the other parties,
except in the event the parties are unable to agree on a press release and
legal counsel for one party is of the opinion that such press release is
required by law and such party furnishes the other parties a written opinion of
outside legal counsel, or other counsel reasonably acceptable to the party
being furnished such opinion, to that effect, then such party may issue the
legally required press release.
(c) This Agreement shall not restrict any party hereto
from using information already known to it, to which it is entitled under
existing agreements, or information generally in the public domain or any
information coming into its possession after it becomes public knowledge unless
it became public knowledge through a breach of this Agreement.
9.12 Name. The Stockholders shall on or prior to the Effective Date
change the name of XXX for the purpose of deleting any reference in such name
to "Triad." Western agrees that, on and after the Effective Date, it shall not
have the right to use or make any reference to the name "Triad" with respect to
the Surviving Corporation; provided, however, that for a period of 90 days
after the Effective Date, Western shall have the right to continue to use all
existing supplies of forms, invoices, stationary, and other paper goods in the
conduct of the business of XXX and the Partnership. Western agrees to
indemnify the Stockholders for any claims arising by reason of Western's use of
such supplies.
9.13 Termination.
(a) This Agreement may be terminated and the transactions
contemplated hereby may be abandoned, without further obligation of any of
XXX, the Partnership, any of the Stockholders, TCC, TCLP or Western or Western
Sub, at any time prior to the Effective Date as follows:
(i) by mutual written consent duly authorized by
the general partners and board of directors, as applicable, of XXX, the
Partnership, the Stockholders, TCC, and TCLP and board of directors of Western
and Western Sub; or
(ii) by XXX, the Partnership, the Stockholders,
Execution - 58 -
59
TCC and TCLP or by Western or Western Sub, if the Effective Date shall not have
occurred on or before the first anniversary of the date hereof, or such later
date, if any, as XXX, the Partnership, the Stockholders, TCC, TCLP, Western and
Western Sub shall agree in writing; provided, that the party exercising such
right is not in default of its obligations under this Agreement in a manner
which results in the failure to satisfy the conditions to the transactions
contemplated hereby of the other parties; or
(iii) by XXX, the Partnership, the Stockholders,
TCC and TCLP or by Western or Western Sub if the consummation of the
transactions contemplated hereby shall be prohibited by a final, non-appealable
order, decree or injunction of a court of competent jurisdiction or of the FCC.
(b) In the event of a termination of this Agreement, no
party hereto shall have any liability or further obligation to any other party
to this Agreement except that nothing herein will relieve any party from
liability for any breach of this Agreement.
9.14 Amendment. The boards of directors of the Constituent
Corporations and the other parties hereto may amend this Agreement at any time
prior to the Effective Date, provided that an amendment made subsequent to the
adoption of this Agreement by the stockholders of either Constituent
Corporation shall not (i) alter or change the amount or kind of shares,
securities, cash, property or rights to be received in exchange for or on
conversion of all or any of the shares of any class or series thereof of either
Constituent Corporation, (ii) alter or change any term of the Certificate of
Incorporation of the Surviving Corporation to be effected by the Merger, or
(iii) alter or change any of the terms and conditions of this Agreement if such
alteration or change would adversely affect the holders of shares of any class
or series thereof of either Constituent Corporation.
9.15 Definitions; Etc. Unless the context otherwise requires, the
terms defined in any Section of this Agreement shall have the meanings therein
specified for all purposes of this Agreement, applicable to both the singular
and plural forms of any of the terms defined herein. When a reference is made
in this Agreement to a Section, such reference shall be to a Section of this
Agreement unless otherwise indicated. Whenever the words "include", "includes"
or "including" are used in this Agreement, they shall be deemed to be followed
by the words "without limitation". The use of a gender herein shall be deemed
to include the neuter, masculine and feminine genders wherever necessary or
appropriate. Whenever the word "herein" or "hereof" is used in this Agreement,
it shall be deemed to refer to the Agreement and not to a particular Section of
the Agreement unless expressly stated otherwise.
Execution - 59 -
60
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement and Plan of Merger as of the date first above written.
WESTERN WIRELESS CORPORATION
By: /s/ XXXX X. XXXXXXX
-----------------------------
Title: Chief Executive Officer
MINNESOTA CELLULAR CORPORATION
By: /s/ XXXXX X. XXXXX
-----------------------------
Title: Chief Executive Officer
TRIAD INVESTMENT MINNESOTA, INC.
By: /s/ XXXXX X. XXXXX
-----------------------------
Title: President
/s/ XXXXX X. XXXXX
--------------------------------
Xxxxx X. Xxxxx
/s/ XXXXX X. XXXXXXX
--------------------------------
Xxxxx X. Xxxxxxx
/s/ XXXXX X. XXXXXX
--------------------------------
Xxxxx X. Xxxxxx
TRIAD CELLULAR CORPORATION
By: /s/ XXXXX X. XXXXX
-----------------------------
Title: President
61
TRIAD CELLULAR L.P.
By: Triad Cellular Corporation,
its general partner
By: /s/ XXXXX X. XXXXX
----------------------------------
Title: President
TRIAD MINNESOTA, L.P.
By: Triad Cellular L.P., a
general partner
By: Triad Cellular Corporation,
its general partner
By: /s/ XXXXX X. XXXXX
----------------------------------
Title: President
By: Triad Cellular Corporation,
a general partner
By: /s/ XXXXX X. XXXXX
----------------------------------
Title: President
The undersigned hold options to acquire, in the aggregate, more than 50% of the
issued and outstanding voting capital stock of XXX and intend, subject to
obtaining all requisite regulatory approvals, to exercise such options
following the date hereof and on or prior to the Effective Date. In connection
therewith, each of the undersigned hereby acknowledge the foregoing Agreement
and Plan of Merger and agree to comply with, and be bound by, the provisions
thereof applicable to a "Stockholder" thereunder in the event the undersigned
exercise its options as aforesaid and to otherwise be bound by the terms hereof
to the extent expressly stated herein.
MEDIA/COMMUNICATIONS PARTNERS II
LIMITED PARTNERSHIP
By: M/X X XX Limited Partnership,
its general partner
By: M/C II General Partner - J., Inc.,
a general partner
By: /s/ XXXXX X. XXXX
----------------------------------
Title: President
62
MEDIA/COMMUNICATIONS INVESTORS
LIMITED PARTNERSHIP
By: M/C Investors General Partner -
J, Inc, a general partner
By: /s/ XXXXX X. XXXX
----------------------------------
Title: President
