AGREEMENT AND PLAN OF MERGER
DATED AS OF OCTOBER 5, 1999
AMONG
ACC ACQUISITION LLC,
A DELAWARE LIMITED LIABILITY COMPANY
ACC ACQUISITION CO.,
A DELAWARE CORPORATION
AND
AMERICAN CELLULAR CORPORATION,
A DELAWARE CORPORATION
TABLE OF CONTENTS
PAGE
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ARTICLE I.THE MERGER..............................................................................................1
1.1 THE MERGER................................................................................................1
1.2 CLOSING...................................................................................................2
1.3 EFFECTIVE TIME............................................................................................2
1.4 EFFECTS OF THE MERGER.....................................................................................2
1.5 CERTIFICATE OF INCORPORATION..............................................................................2
1.6 BYLAWS....................................................................................................2
1.7 DIRECTORS AND OFFICERS....................................................................................2
1.8 EFFECT ON CAPITAL STOCK...................................................................................3
1.9 SURRENDER AND PAYMENT; DISSENTING SHARES..................................................................4
ARTICLE II.REPRESENTATIONS AND WARRANTIES.........................................................................7
2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............................................................7
2.2 REPRESENTATIONS AND WARRANTIES OF BUYER..................................................................19
2.3 REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGER SUB...................................................22
ARTICLE III.COVENANTS RELATING TO CONDUCT OF BUSINESS............................................................22
3.1 COVENANTS OF THE COMPANY.................................................................................22
3.2 COVENANTS OF BUYER AND MERGER SUB........................................................................25
3.3 ADVICE OF CHANGES........................................................................................26
3.4 CONTROL OF OTHER PARTY'S BUSINESS........................................................................26
ARTICLE IV.ADDITIONAL AGREEMENTS.................................................................................26
4.1 COMPANY STOCKHOLDERS MEETING.............................................................................26
4.2 ACCESS TO INFORMATION....................................................................................27
4.3 COOPERATION; FILINGS AND APPROVALS.......................................................................27
4.4 NO SHOPPING..............................................................................................29
4.5 EMPLOYEE BENEFITS........................................................................................30
4.6 FEES AND EXPENSES........................................................................................30
4.7 INDEMNIFICATION; DIRECTORS'AND OFFICERS'INSURANCE........................................................31
4.8 PUBLIC ANNOUNCEMENTS.....................................................................................32
4.9 FCC APPLICATION..........................................................................................32
4.10 FINANCING................................................................................................33
4.11 TERMINATION OF EQUITY DOCUMENTS..........................................................................34
4.12 FURTHER ASSURANCES.......................................................................................34
ARTICLE V.CONDITIONS PRECEDENT...................................................................................34
5.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER...............................................34
5.2 CONDITIONS TO THE OBLIGATIONS OF BUYER AND MERGER SUB TO EFFECT THE MERGER...............................35
5.3 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY TO EFFECT THE MERGER........................................37
ARTICLE VI.TERMINATION AND AMENDMENT.............................................................................37
6.1 TERMINATION..............................................................................................37
6.2 EFFECT OF TERMINATION....................................................................................39
6.3 AMENDMENT................................................................................................40
6.4 EXTENSION; WAIVER........................................................................................40
ARTICLE VII.GENERAL PROVISIONS...................................................................................41
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7.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS; NO OTHER REPRESENTATIONS AND WARRANTIES......41
7.2 NOTICES..................................................................................................41
7.3 INTERPRETATION...........................................................................................43
7.4 COUNTERPARTS.............................................................................................43
7.5 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES...........................................................43
7.6 GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL........................................................44
7.7 SEVERABILITY.............................................................................................44
7.8 ASSIGNMENT...............................................................................................45
7.9 ENFORCEMENT..............................................................................................45
7.10 DEFINITIONS..............................................................................................45
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GLOSSARY OF DEFINED TERMS
LOCATION OF
DEFINITION DEFINED TERM
Acquisition Proposal....................................................................................Section 4.4
Action...............................................................................................Section 5.2(e)
Agreement..................................................................................................Preamble
Bank................................................................................................Section 4.10(a)
Bank Commitment Letter ...........................................................................Section 2.2(g)(i)
Bank Credit Facility................................................................................Section 4.10(a)
Bank Financing Failure .................................................................................Section 6.2
Board of Directors..................................................................................Section 7.10(a)
Business Day........................................................................................Section 7.10(b)
Buyer......................................................................................................Preamble
Buyer Disclosure Schedule...............................................................................Section 2.2
Buyer SEC Reports....................................................................................Section 2.2(c)
Certificate of Merger...................................................................................Section 1.3
CMRS............................................................................................Section 2.1(e)(iii)
Class A Common Stock.................................................................................Section 1.8(c)
Class B Common Stock.................................................................................Section 1.8(d)
Closing.................................................................................................Section 1.2
Closing Date............................................................................................Section 1.2
Code.................................................................................................Section 1.9(h)
Commitment Letter...................................................................................Section 4.10(a)
Common Stock Purchase Price..........................................................................Section 1.8(c)
Communications Act..............................................................................Section 2.1(c)(iii)
Company....................................................................................................Preamble
Company 10-K......................................................................................Section 2.1(d)(i)
Company Benefit Plans.............................................................................Section 2.1(k)(i)
Company Board..............................................................................................Recitals
Company Common Stock.................................................................................Section 1.8(d)
Company Disclosure Schedule.............................................................................Section 2.1
Company Permits......................................................................................Section 2.1(f)
Company SEC Reports...............................................................................Section 2.1(d)(i)
Company Stockholders Meeting.........................................................................Section 4.1(a)
Company Voting Debt.............................................................................Section 2.1(b)(iii)
Confidentiality Agreement ..............................................................................Section 4.2
Definitive Financing Agreements.....................................................................Section 4.10(b)
Delaware Secretary of State.............................................................................Section 1.3
DGCL.......................................................................................................Recitals
Direct Preferred Stock Purchase......................................................................Section 1.8(e)
Dissenting Shares ...................................................................................Section 1.9(i)
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Effective Time..........................................................................................Section 1.3
ERISA.............................................................................................Section 2.1(k)(i)
Exchange Act......................................................................................Section 2.1(d)(i)
Exchange Agent.......................................................................................Section 1.9(a)
Executive Agreements.............................................................................Section 2.1(b)(iv)
Expenses................................................................................................Section 4.6
Extension Conditions.................................................................................Section 6.1(b)
FAA...............................................................................................Section 2.1(f)(i)
FCC.....................................................................................................Section 1.1
FCC Application......................................................................................Section 4.9(a)
FCC Licenses......................................................................................Section 2.1(e)(i)
FCC Transfer Approvals...............................................................................Section 5.1(d)
Final Order..........................................................................................Section 5.2(c)
Financing...........................................................................................Section 4.10(a)
GAAP.............................................................................................Section 2.1(d)(ii)
Governmental Entity.............................................................................Section 2.1(c)(iii)
Grant Agreements ....................................................................................Section 1.8(d)
HSR Act.........................................................................................Section 2.1(c)(iii)
Indemnified Party....................................................................................Section 4.7(a)
Intellectual Property ..............................................................................Section 7.10(c)
Investment Agreement.............................................................................Section 2.1(c)(ii)
Laredo Joint Venture ................................................................................Section 2.1(r)
Liens............................................................................................Section 2.1(b)(ii)
Liquidated Damages Amount ..............................................................................Section 6.2
Majority Holders...........................................................................................Recitals
Material Adverse Effect.............................................................................Section 7.10(d)
Material Contracts...................................................................................Section 2.1(j)
Merger.....................................................................................................Recitals
Merger Consideration.................................................................................Section 1.8(e)
Merger Sub.................................................................................................Preamble
Xxxxxxx Xxxxx........................................................................................Section 2.1(n)
Organizational Documents............................................................................Section 7.10(e)
Outside Date.........................................................................................Section 6.1(b)
Outstanding Indebtedness..........................................................................Section 2.1(b)(v)
Payment Fund ........................................................................................Section 1.9(a)
Pending Acquisitions.................................................................................Section 2.1(r)
Pending Dispositions.................................................................................Section 2.1(r)
Pending Transaction Documents........................................................................Section 2.1(r)
Person..............................................................................................Section 7.10(f)
Preferred Stock Liquidation Preference...............................................................Section 1.8(e)
Proxy Statement......................................................................................Section 4.1(b)
Real Property........................................................................................Section 2.1(s)
Repurchase Option ...................................................................................Section 1.8(d)
Required Company Vote................................................................................Section 2.1(m)
Required Regulatory Approvals........................................................................Section 5.1(c)
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SEC...............................................................................................Section 2.1(d)(i)
Securities Act....................................................................................Section 2.1(d)(i)
Senior Notes........................................................................................Section 4.10(a)
Series A Preferred Stock.............................................................................Section 1.8(e)
Stay Bonuses....................................................................................Section 2.1(b)(vii)
Subsidiary..........................................................................................Section 7.10(g)
Superior Proposal....................................................................................Section 4.4(b)
Surviving Corporation...................................................................................Section 1.1
Surviving Corporation Common Stock...................................................................Section 1.8(a)
Tax.................................................................................................Section 7.10(h)
Taxable.............................................................................................Section 7.10(h)
Taxes...............................................................................................Section 7.10(h)
Tax Return..........................................................................................Section 7.10(h)
Terminating Buyer Breach.............................................................................Section 6.1(f)
Terminating Company Breach...........................................................................Section 6.1(e)
Transaction Fees and Expenses...................................................................Section 2.1(b)(vii)
Unrestricted Equity Agreement ...................................................................Section 2.2(g)(ii)
Violation........................................................................................Section 2.1(c)(ii)
Voting Agreement ..........................................................................................Recitals
WARN ................................................................................................Section 3.3(f)
Written Consent of Shareholders......................................................................Section 2.1(m)
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THIS AGREEMENT AND PLAN OF MERGER, dated as of October 5, 1999
(this "AGREEMENT"), is among ACC Acquisition LLC, a Delaware limited liability
company ("BUYER"), ACC Acquisition Co., a Delaware corporation and a wholly
owned subsidiary of Buyer ("MERGER SUB"), and American Cellular Corporation, a
Delaware corporation (the "COMPANY").
WHEREAS, the Board of Managers of Buyer, the Board of
Directors of Merger Sub and the Board of Directors of the Company (the "COMPANY
BOARD") have each approved the acquisition of the Company by Buyer upon the
terms and subject to the conditions of this Agreement pursuant to which, among
other things, Merger Sub will merge with and into the Company (the "MERGER") in
accordance with the General Corporation Law of the State of Delaware (the
"DGCL"), and have each unanimously declared this Agreement and the transactions
contemplated hereby, including the Merger, to be advisable and in the best
interests of the members of Buyer and the stockholders of each of Merger Sub and
the Company;
WHEREAS, Buyer, Merger Sub and the Company desire to make
certain representations, warranties, covenants and agreements in connection with
the Merger and also to prescribe various conditions to the Merger as set forth
in this Agreement; and
WHEREAS, concurrently with the execution of this Agreement and
as an inducement to Buyer and Merger Sub to enter into this Agreement, certain
stockholders of the Company owning a majority of the Company's Class A Common
Stock ("MAJORITY HOLDERS") have entered into a Stockholder Voting Agreement,
dated as of the date hereof, with Buyer and Merger Sub (the "VOTING AGREEMENT")
pursuant to which, among other things, the Majority Holders have agreed to vote
their shares of the Company's Class A Common Stock in favor of this Agreement,
the Merger and the other transactions contemplated by this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I.
THE MERGER
1.1 THE MERGER. Upon the terms and subject to the conditions
set forth in this Agreement (including the approval of the Federal
Communications Commission (the "FCC")), at the Effective Time (defined
below), Merger Sub shall be merged with and into the Company in accordance
with the DGCL. Following the Merger, the separate corporate existence of
Merger Sub shall cease, and the Company shall continue as the surviving
corporation and as a wholly owned subsidiary of Buyer (the "SURVIVING
CORPORATION").
1.2 CLOSING. The closing of the Merger (the "CLOSING") shall
take place as soon as practicable but not later than the second business day,
after satisfaction or waiver (as permitted by this Agreement and applicable
law) of the conditions (excluding conditions that, by their terms, cannot be
satisfied until the Closing Date) set forth in Article V (the "CLOSING
DATE"), unless another time or date is agreed to in writing by the parties
hereto. The Closing shall be held at the offices of Xxxxxx & Xxxxxxx, 000
Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000-0000, unless another place
is agreed to in writing by the parties hereto.
1.3 EFFECTIVE TIME. Upon the Closing, the parties shall file
with the Secretary of State of the State of Delaware (the "DELAWARE SECRETARY
OF STATE") a certificate of merger (the "CERTIFICATE OF MERGER"), in form and
substance satisfactory to the Company and Buyer executed in accordance with
the relevant provisions of the DGCL and shall make all other filings,
recordings or publications required under the DGCL in connection with the
Merger. The Merger shall become effective at such time as the Certificate of
Merger is duly filed with the Delaware Secretary of State, or at such other
time as the parties may agree and specify in the Certificate of Merger (the
time the Merger becomes effective being herein referred to as the "EFFECTIVE
TIME").
1.4 EFFECTS OF THE MERGER. At and after the Effective Time, the
Merger will have the effects set forth in Section 259 of the DGCL. Without
limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the rights, privileges, powers and franchises of the
Company and Merger Sub shall be vested in the Surviving Corporation, and the
Surviving Corporation shall become subject to all of the restrictions,
disabilities and duties of the Company and Merger Sub.
1.5 CERTIFICATE OF INCORPORATION. At the Effective Time and
without any further action on the part of the Company or Merger Sub, the
certificate of incorporation of the Company shall be amended in its entirety
to read as the certificate of incorporation of Merger Sub reads as in effect
immediately prior to the Effective Time and, as so amended, shall be the
certificate of incorporation of the Surviving Corporation until thereafter
amended as provided therein or by applicable law, provided that provisions
therein relating to the indemnification and exculpation of officers and
directors shall be no less favorable than those set forth in the Company's
certificate of incorporation as in effect immediately prior to the Effective
Time.
1.6 BYLAWS. The bylaws of Merger Sub in effect immediately
prior to the Effective Time shall be the bylaws of the Surviving Corporation
until thereafter amended as provided therein or by applicable law, provided
that provisions therein relating to the indemnification and exculpation of
officers and directors shall be no less favorable than those set forth in the
Company's bylaws as in effect immediately prior to the Effective Time.
1.7 DIRECTORS AND OFFICERS. The directors of Merger Sub
immediately prior to the Effective Time shall be the directors of the
Surviving Corporation from and after the Effective Time, until the earlier of
their resignation or removal or otherwise ceasing to be a director or until
their respective successors are duly elected and qualified, as the case may
be. The officers of Merger Sub immediately prior to the Effective Time shall
be the officers of the Surviving Corporation from and after the Effective
Time, until the earlier of their resignation or removal or
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otherwise ceasing to be an officer or until their respective successors are
duly elected and qualified, as the case may be.
1.8 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue
of the Merger and without any action on the part of Buyer, Merger Sub, the
Company or the holder of any shares of capital stock of Buyer, Merger Sub or
the Company:
(a) CONVERSION OF CAPITAL STOCK OF MERGER SUB. Each share
of capital stock of Merger Sub outstanding immediately prior to the Effective
Time shall be converted into and become one fully paid and nonassessable
share of common stock, par value $.01 per share, of the Surviving Corporation
("SURVIVING CORPORATION COMMON STOCK"). Each certificate that, prior to the
Effective Time, represented one or more shares of capital stock of Merger Sub
shall thereafter represent that number of shares of Surviving Corporation
Common Stock into which the shares of capital stock of Merger Sub shall have
been converted pursuant to this Section 1.8(a). Each record holder of a
certificate that, prior to the Effective Time, represented one or more shares
of capital stock of Merger Sub shall receive, upon surrender of such
certificate, a new certificate or certificates evidencing and representing
the number of shares of Surviving Corporation Common Stock to which such
record holder shall be entitled pursuant to this Section 1.8(a).
(b) CANCELLATION OF TREASURY STOCK AND BUYER-OWNED STOCK.
Each share of capital stock of the Company that is held by the Company in its
treasury or that is owned by Buyer or any Subsidiary of Buyer immediately
prior to the Effective Time shall automatically be retired and shall cease to
exist, and no Merger Consideration shall be delivered in exchange therefor.
(c) CONVERSION OF CLASS A COMMON STOCK. Subject to Section
1.9(i), each share of Class A Common Stock, par value $.01 per share, of the
Company (the "CLASS A COMMON STOCK") (other than shares of Class A Common
Stock to be canceled in accordance with Section 1.8(b), but including shares
of Class B Common Stock converted to Class A Common Stock in accordance with
Section 1.8(d)) issued and outstanding immediately prior to the Effective
Time shall be converted into the right to receive an amount equal to
$3,244.24 per share in cash as adjusted pursuant to the last sentence of this
Section 1.8(c), plus interest thereon for the period commencing on January 1,
2000 through and including the Closing Date at a rate of eight percent (8%)
per annum (compounded daily calculated on the basis of a 365-day year for the
actual number of days elapsed) (the "COMMON STOCK PURCHASE PRICE"). As of the
Effective Time, all such shares of Class A Common Stock shall no longer be
outstanding and shall automatically be retired and shall cease to exist, and
each holder of a certificate representing any such shares of Class A Common
Stock shall cease to have any rights with respect thereto, except the right
to receive, upon the surrender of such certificates, the Common Stock
Purchase Price. If any shares of Company Common Stock are repurchased
pursuant to stock repurchase rights, the Common Stock Purchase Price shall be
the amount determined pursuant to the following formula: (A) $873,956,081
minus the amount paid to repurchase shares of Company Common Stock, plus
interest on such difference for the period commencing on January 1, 2000
through and including the Closing Date at a rate of eight percent (8%) per
annum (compounded daily
3
calculated on the basis of a 365-day year for the actual number of days
elapsed), divided by (B) the number of shares of Company Common Stock
outstanding after such repurchase.
(d) CONVERSION OF CLASS B COMMON STOCK. Subject to the
terms of the Executive Agreements or the subscription agreement with respect
thereto, as they may be amended from time to time, identified in Section
2.1(b)(iv)(3), (4) and (5) of the Company Disclosure Schedule (collectively,
the "GRANT AGREEMENTS"), each share of Class B Common Stock, par value $.01
per share, of the Company (the "CLASS B COMMON STOCK" and, together with the
Class A Common Stock, the "COMPANY COMMON STOCK") (other than shares of Class
B Common Stock to be canceled in accordance with Section 1.8(b)) issued and
outstanding immediately prior to the Effective Time, whether or not then
vested or subject to a repurchase option in favor of the Company (a
"REPURCHASE OPTION"), shall become fully vested and the Repurchase Option, if
any, with respect thereto shall lapse and each such share shall automatically
be converted, without any action on the part of any holder thereof, into one
share of Class A Common Stock pursuant to and in accordance with the terms of
the Grant Agreements, and shall thereupon be subject to conversion into the
right to receive the Common Stock Purchase Price in accordance with the
provisions of Section 1.8(c), less any applicable withholding.
(e) TREATMENT OF SERIES A PREFERRED STOCK. Each share of
Series A Preferred Stock, par value $.01 per share, of the Company (the
"SERIES A PREFERRED STOCK") (other than shares of Series A Preferred Stock to
be canceled in accordance with Section 1.8(b)) issued and outstanding
immediately prior to the Effective Time shall be converted into the right to
receive $100 per share in cash plus an additional amount in cash equal to and
representing all accrued or accumulated but unpaid dividends thereon to and
including the Effective Time (the "PREFERRED STOCK LIQUIDATION PREFERENCE"
and, together with the Common Stock Purchase Price, the "MERGER
CONSIDERATION"). As of the Effective Time, all such shares of Series A
Preferred Stock shall no longer be outstanding and shall automatically be
retired and shall cease to exist, and each holder of a certificate
representing any such shares of Series A Preferred Stock shall cease to have
any rights with respect thereto, except the right to receive upon the
surrender of such certificates, the Preferred Stock Liquidation Preference.
Notwithstanding the foregoing, at the election of Buyer given on or before
October 30, 1999, the Company shall use commercially reasonable efforts
(which shall not require the Company to make any payment) to cause the
holders of Series A Preferred Stock to sell their shares of Series A
Preferred Stock directly to Buyer or its designee simultaneously with the
Closing at the Preferred Stock Liquidation Preference (the "DIRECT PREFERRED
STOCK PURCHASE"). The agreement with respect to the Direct Preferred Stock
Purchase shall provide representations and warranties only as to title,
authority to sell such shares and absence of liens thereon and shall also
provide that such sale be without recourse (other than with respect to such
representations and warranties given), and that all representations and
warranties shall be several and not joint.
1.9 SURRENDER AND PAYMENT; DISSENTING SHARES
(a) EXCHANGE AGENT. Prior to the Effective Time, Buyer
shall designate a bank or trust company reasonably acceptable to the Company
to act as agent (the "EXCHANGE
4
AGENT") for the holders of shares of Company Common Stock and Series A
Preferred Stock in connection with the exchange of certificates representing
shares of Company Common Stock or Series A Preferred Stock in the Merger for
the payment of the Merger Consideration to which holders of shares of Company
Common Stock and Series A Preferred Stock shall become entitled pursuant to
Section 1.8. Prior to the Effective Time, Buyer or Merger Sub shall deposit
with the Exchange Agent cash in an aggregate amount equal to the sum of (i)
the product of (A) the number of shares of Company Common Stock issued and
outstanding (other than shares to be canceled pursuant to Section 1.8(b) and
Dissenting Shares) immediately prior to the Effective Time (assuming for
purposes of this clause (A) the conversion of all shares of Class B Common
Stock to shares of Class A Common Stock in accordance with Section 1.8(d)),
multiplied by (B) the Common Stock Purchase Price, PLUS (ii) the product of
(A) the number of shares of Series A Preferred Stock issued and outstanding
(and not to be canceled pursuant to Section 1.8(b)) immediately prior to the
Effective Time, multiplied by (B) the Preferred Stock Liquidation Preference.
The deposit made by Buyer or Merger Sub pursuant to the preceding sentence is
hereinafter referred to as the "PAYMENT FUND." The Exchange Agent shall cause
the Payment Fund to be held for the benefit of the holders of Company Common
Stock and Series A Preferred Stock and to be promptly applied to the payment
of the Merger Consideration to such holders. The Payment Fund shall not be
used for any purpose that is not provided for herein.
(b) EXCHANGE PROCEDURES. As soon as reasonably practicable
after the Effective Time, Buyer shall, or shall cause the Exchange Agent to,
provide to each holder of record of a certificate or certificates or other
instrument or instruments which immediately prior to the Effective Time
represented issued and outstanding shares of Company Common Stock or Series A
Preferred Stock, (i) a letter of transmittal (which shall be upon customary
terms and shall specify that delivery shall be effected, and risk of loss and
title to the certificate shall pass, only upon proper delivery of such
certificate to the Exchange Agent) and (ii) instructions for use in effecting
the surrender of certificates in exchange for the Merger Consideration. Upon
surrender of a certificate for cancellation to the Exchange Agent in
accordance with this Section 1.9(b), together with such letter of
transmittal, duly executed in accordance with the instructions thereto, and
such other documents as may reasonably be required by the Exchange Agent, the
Exchange Agent shall pay the surrendering holder the Merger Consideration to
which such holder may be entitled pursuant to Section 1.8 and the certificate
so surrendered shall forthwith be canceled. If any portion of such payment is
to be made to a Person other than the registered holder of the shares of
Company Common Stock or Series A Preferred Stock, as the case may be,
represented by the certificate surrendered in exchange therefor, it shall be
a condition to such payment that the certificate so surrendered shall be
properly endorsed or otherwise be in proper form for transfer and that the
Person requesting such payment shall pay to the Exchange Agent any transfer
or other Taxes required as a result of such payment to a Person other than
the registered holder of such shares or establish to the satisfaction of the
Exchange Agent that such Taxes have been paid or that none are payable. Until
surrendered as contemplated by this Section 1.9(b), (i) each certificate
representing shares of Company Common Stock (other than certificates
representing Dissenting Shares or shares retired pursuant to Section 1.8(b))
shall be deemed at any time after the Effective Time to represent only the
right to receive the Common Stock Purchase Price upon such surrender, and
(ii) each certificate representing shares of Series A Preferred Stock (other
than shares retired pursuant to Section 1.8(b)) shall be deemed at any
5
time after the Effective Time to represent only the right to receive the
Preferred Stock Liquidation Preference upon such surrender.
(c) NO FURTHER OWNERSHIP RIGHTS. All Merger Consideration
paid upon the surrender for exchange of certificates representing shares of
Company Common Stock or Series A Preferred Stock, as the case may be, in
accordance with the terms of this Article I shall be deemed to have been paid
in full satisfaction of all rights pertaining to such shares of Company
Common Stock or Series A Preferred Stock theretofore represented by such
certificates. As of and after the Effective Time, there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of shares of Company Common Stock or Series A Preferred Stock.
If, after the Effective Time, certificates are presented to the Surviving
Corporation or the Exchange Agent for any reason, they shall be canceled and
exchanged as provided in this Article I.
(d) TERMINATION OF PAYMENT FUND; UNCLAIMED FUNDS. Any
portion of the Payment Fund made available to the Exchange Agent pursuant to
Section 1.9(a) that remains unclaimed by holders of shares of Company Common
Stock or Series A Preferred Stock for twelve (12) months after the Effective
Time shall be delivered to the Surviving Corporation, upon demand, and any
holders of Certificates who have not theretofore complied with this Article I
shall thereafter look only to the Surviving Corporation for the payment of
the Merger Consideration to which such Person is entitled pursuant to Section
1.8 and only as general creditors thereof for payment of their claim for the
Merger Consideration.
(e) NO LIABILITY. None of Buyer, Merger Sub, the Company or
the Exchange Agent shall be liable to any Person in respect of any payments
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
(f) INVESTMENT OF FUNDS. The Payment Fund shall be invested
by the Exchange Agent in obligations of, or guaranteed by, the United States
of America, in commercial paper obligations rated A-1 or P-1 or better by
Xxxxx'x Investor Services, Inc. or Standard & Poor's Ratings Services,
respectively, in each case with maturities not exceeding seven (7) days. All
interest and earnings thereon shall inure to the benefit of the Surviving
Corporation.
(g) LOST CERTIFICATES. In the event that any certificate
representing shares of Company Common Stock or Series A Preferred Stock shall
have been lost, stolen or destroyed before the Company has notice that the
certificate has been acquired by a protected purchaser (as such term is
defined in Section 8-303 of the Delaware Uniform Commercial Code), upon the
making of an affidavit of that fact by the Person claiming such certificate
to be lost, stolen or destroyed and, if required by Buyer, the execution of
an agreement by such Person indemnifying Buyer against any claim that may be
made against it with respect to such certificate or any payment with respect
thereto indemnifying the Surviving Corporation against any loss or expense
related thereto, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed certificate the payment of the Merger Consideration to
which such Person is entitled pursuant to Section 1.8.
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(h) WITHHOLDING RIGHTS. The Exchange Agent shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of Company Common Stock or
Series A Preferred Stock such amounts as are required to be deducted and
withheld with respect to the making of such payment under the terms of the
Internal Revenue Code of 1986, as amended (the "CODE"), or any provision of
state, local or foreign tax law. To the extent that amounts are so withheld,
such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the shares of Company Common Stock or
Series A Preferred Stock, as the case may be, in respect of which such
deduction and withholding was made by such party.
(i) DISSENTING SHARES. Notwithstanding anything in this
Agreement to the contrary, shares of Company Common Stock outstanding
immediately prior to the Effective Time and held by a holder who has not
voted in favor of the Merger or consented thereto in writing and who has
demanded appraisal for such shares in accordance with Section 262 of the DGCL
(the "DISSENTING SHARES") shall not be converted into the right to receive
the Common Stock Purchase Price, unless such holder fails to perfect or
withdraws or otherwise loses its right to appraisal. If after the Effective
Time such holder fails to perfect or withdraws or loses its right to
appraisal, such Dissenting Shares shall be treated as if they had been
converted as of the Effective Time into a right to receive the Common Stock
Purchase Price to which such holder is entitled. The Company shall give Buyer
prompt notice of any demands received by the Company for appraisal of shares
of Company Common Stock and Buyer shall have the right to participate in all
negotiations and proceedings with respect to such demands. The Company shall
not, except with the prior written consent of Buyer which consent shall not
be unreasonably withheld or delayed, make any payment with respect to, or
settle or offer to settle, any such demands.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as
specifically set forth or cross referenced in the corresponding section of
the disclosure schedule delivered by the Company to Buyer at or prior to the
execution of this Agreement (the "COMPANY DISCLOSURE SCHEDULE"), the Company
represents and warrants to Buyer and Merger Sub as follows:
(a) ORGANIZATION, STANDING AND POWER. Except as set forth in
Section 2.1(a) of the Company Disclosure Schedule, each of the Company and
its Subsidiaries has been duly organized and is validly existing and in good
standing under the laws of its jurisdiction of organization and has requisite
power and authority to carry on its business as presently conducted. Each of
the Company and its Subsidiaries is duly qualified and in good standing or
otherwise authorized to do business in each jurisdiction in which the nature
of its business or the ownership or leasing of its properties makes such
qualification necessary, except where the failure to so qualify would not
individually or in the aggregate have a Material Adverse Effect on the
Company. Copies of the Organizational Documents of the Company and each
Subsidiary of the Company have been previously furnished to Buyer and are
true, complete and correct copies of such documents as in effect on the date
of this Agreement.
7
(b) CAPITAL STRUCTURE
(i) As of the date of this Agreement, the
authorized capital stock of the Company consists of (A) 475,000 shares
of Class A Common Stock, of which 254,671.75 shares are outstanding,
(B) 25,000 shares of Class B Common Stock, of which 15,315.25 shares
are outstanding (including 600 shares held by the Company in its
treasury), and (C) 5,000,000 shares of preferred stock, par value $.01
per share, of which 3,250,000 shares of Series A Preferred Stock are
outstanding. All issued and outstanding shares of capital stock of the
Company are duly authorized, validly issued, fully paid and
nonassessable, and at the Closing no class of capital stock will be
entitled to preemptive rights. As of the date of this Agreement, there
are no outstanding options, warrants or other rights to acquire capital
stock from the Company, except with respect to the issuance of Class A
Common Stock in connection with the conversion and vesting of shares of
Class B Common Stock outstanding as of the date hereof.
(ii) Except as set forth in Section 2.1(b)(ii) of
the Company Disclosure Schedule, all of the issued and outstanding
capital stock (or other ownership interests) of each of the Company's
Subsidiaries is owned, directly or indirectly, by the Company or one of
its wholly-owned Subsidiaries and are duly authorized, validly issued,
fully paid and nonassessable and are owned by the Company or one of its
wholly-owned Subsidiaries free and clear of any liens, claims,
encumbrances, mortgages, security interests, rights of first refusal,
rights of first offer, puts, calls, obligations to buy or sell assets
or equity interests, restrictions or any other claims of any third
party ("LIENS").
(iii) As of the date of this Agreement, no bonds,
debentures, notes or other indebtedness of the Company or any of its
Subsidiaries which are issued or outstanding provide to the holder of
such debt the right to vote prior to default on any matters on which
stockholders may vote ("COMPANY VOTING DEBT").
(iv) Except as otherwise set forth in this
Section 2.1(b), as of the date of this Agreement, there are no
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Company or its
Subsidiaries is a party or by which any of them is bound obligating the
Company or any of its Subsidiaries to issue, deliver or sell, or cause
to be issued, delivered or sold, additional shares of capital stock or
other voting securities of the Company or any such Subsidiary or
obligating the Company or such Subsidiary to issue, grant, extend or
enter into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. As of the date of this
Agreement, except pursuant to the terms of the Series A Preferred Stock
as set forth in the Company's Organizational Documents and rights under
those certain Executive Agreements, each dated June 22, 1998 (together
the "EXECUTIVE AGREEMENTS"), between the Company and Xxxx Xxxxx and
Xxxxx XxXxxxxx, respectively, there are no outstanding obligations of
the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock of the Company or such
Subsidiary.
8
(v) As of the date of this Agreement, the only
outstanding indebtedness for borrowed money of the Company and its
Subsidiaries is (a) indebtedness under the Bank Credit Facility in an
amount not exceeding $915.0 million, (b) indebtedness under the Senior
Notes in principal amount not exceeding $285.0 million (plus interest
thereon) and (c) other indebtedness for borrowed money (including
capital leases and for the deferred purchase price for goods and
services and excluding accounts payable) not exceeding $10.0 million
in the aggregate (all such indebtedness referred to in clauses (a) -
(c) being referred to as the "OUTSTANDING INDEBTEDNESS").
(vi) As of the date of this Agreement, the
aggregate Preferred Stock Liquidation Preference does not exceed $379.0
million.
(vii) The aggregate amounts payable (a) for "stay
bonuses" to be offered as a result of the transactions contemplated by
this Agreement (the "STAY BONUSES"), (b) fees and expenses including
investment banking, legal and accounting fees and expenses for the
transactions contemplated hereby payable on behalf of the Company and
(c) by the Company to the employees, officers, directors and
consultants of the Company and its Subsidiaries and other Persons
pursuant to any employment agreement, consulting agreement, investment
agreement, the Executive Agreements, benefit plan, stock option
agreement or any other plan, contract or arrangement pursuant to or as
a result of a change in control of the Company (excluding (x) amounts
payable under Article I of this Agreement at the Effective Time to any
such persons in their capacity as shareholders of the Company and (y)
amounts which are not paid or payable by the Company or any Subsidiary
of the Company but are deemed 280G payments under the Code), will not
exceed a total of $18.5 million (collectively, the "TRANSACTION FEES
AND EXPENSES").
(viii) Immediately upon (and from and after) the
Closing, there will be no agreements or arrangements pursuant to which
(a) the Company or any Subsidiary is or could be required to register
shares of its capital stock or other securities under the Securities
Act or (b) the Company is a party and which restricts the voting or
disposition of any capital stock of the Company.
(c) AUTHORITY; NO CONFLICTS. Except as set forth in Section
2.1(c) of the Company Disclosure Schedule:
(i) The Company has all requisite corporate
power and authority to enter into this Agreement and, subject to the
adoption of this Agreement and approval of the Merger by the majority
vote of the stockholders of the Company, to consummate the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part
of the Company, subject in the case of the consummation of the Merger
to the adoption of this Agreement by the requisite vote of the
stockholders of the Company. This Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding
9
agreement of the Company, enforceable against it in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws relating to or
affecting creditors generally and by general equity principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(ii) The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby do not and will not, conflict
with, or result in any breach or violation of, or constitute a default
(with or without notice or lapse of time, or both) under, or give rise
to a right of consent, termination, amendment, cancellation or
acceleration of any obligation or the loss of a material benefit under,
the creation of a Lien on any asset or the triggering of any change of
control provision (any such conflict, violation, default, right of
consent, termination, amendment, cancellation or acceleration, loss,
creation or triggering, a "VIOLATION") pursuant to (A) any provision of
the Organizational Documents of the Company or any of its Subsidiaries
or any partnership agreement, stockholders agreement, limited liability
company agreement, organizational document or similar agreement or
arrangement to which the Company or any such Subsidiary is a party
which governs or defines the relationship by and among the Company and
its Subsidiaries, on the one hand, and other direct or indirect equity
owners of any direct or indirect Subsidiary of the Company, on the
other, including any such agreement or arrangement providing for a
Lien (each an "INVESTMENT AGREEMENT") (assuming receipt of the
approval of the Company's stockholders referred to in Section
2.1(c)(i)), or (B) any loan or credit agreement, note, mortgage, bond,
indenture, lease, benefit plan or other agreement, obligation,
instrument, permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to the
Company, the Company's Subsidiaries or their respective properties or
assets, except, with respect to either clause (A) or (B), as would not
have or be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company or Buyer and
subject to obtaining or making the consents, approvals, orders,
authorizations, registrations, declarations and filings referred to in
Section 2.1(c)(iii) or otherwise contemplated in this Agreement.
(iii) No consent, approval, order or authorization
of, or registration, declaration or filing with, any supranational,
national, state, municipal or local government, any instrumentality,
subdivision, court, administrative agency or commission or other
authority thereof, or any quasi-governmental or private body exercising
any regulatory, taxing, or other governmental or quasi-governmental
authority (a "GOVERNMENTAL ENTITY"), is required by or with respect to
the Company or any of its Subsidiaries in connection with the
execution, delivery and performance by the Company of this Agreement
or the consummation by the Company of the transactions contemplated
hereby, except for (A) those required under or in relation to the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR ACT"), or any antitrust or other competition laws of other
jurisdictions; (B) compliance with any applicable requirements of the
Communications Act of 1934, as amended, and the rules and regulations
promulgated thereunder (collectively, the "COMMUNICATIONS ACT") and
the
10
decisions of the FCC, and any applicable requirements of any public
service or utility commissions or similar entities; (C) the filing and
recordation of appropriate merger or other documents pursuant to and in
accordance with the DGCL; and (D) such consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of
which to make or obtain could not be reasonably expected to have a
Material Adverse Effect on the Company or would not materially impair
or delay the ability of the Company to consummate the transactions
contemplated hereby.
(d) CERTAIN REPORTS AND FINANCIAL STATEMENTS; NO UNDISCLOSED
LIABILITIES.
(i) The Company has filed with the Securities
and Exchange Commission (the "SEC") (A) the Company's Annual Report on
Form 10-K for the period from February 26, 1998 (date of formation) to
December 31, 1998 (the "COMPANY 10-K"), (B) the Company's Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 1999, (C)
the Company's Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 1999, and (D) all registration statements, forms and
except where the omissions to file would not individually or in the
aggregate have a Material Adverse Effect on the Company, all other
material documents required by the Securities Act or the Exchange Act
to be filed by the Company with the SEC since December 31, 1998 (the
documents identified in clauses (A), (B), (C) and (D), including all
exhibits thereto, are collectively referred to herein as the "COMPANY
SEC REPORTS"). No Subsidiary of the Company is required to separately
file any form, report or other document with the SEC. None of the
Company SEC Reports, as of their respective dates (and, if amended or
supplemented by a filing prior to the date of this Agreement or as of
the Closing Date, then on the date of such filing), contained any
untrue statement of a material fact or omitted to state any material
fact necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The Company
SEC Reports, as of their respective dates (and as of the date of any
amendment thereto, as applicable), complied as to form in all material
respects with the applicable requirements of the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder
(the "SECURITIES ACT") and the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (the
"EXCHANGE ACT"), as the case may be.
(ii) Except as set forth in Section 2.1(d) of the
Company Disclosure Schedule, each of the financial statements
(including the related notes) included in the Company SEC Reports
presents fairly, in all material respects, the consolidated financial
position and consolidated results of operations and cash flows of the
Company and its Subsidiaries as of the respective dates or for the
respective periods set forth therein, all in conformity with U.S.
generally accepted accounting principles ("GAAP") consistently applied
during the periods involved except as otherwise indicated in the notes
thereto or, in the case of unaudited interim financial statements, as
permitted by Form 10-Q, and subject further, in the case of the
unaudited interim financial statements, to normal year-end adjustments
that have not been and are not expected to be material in amount.
11
(iii) None of the information supplied or to be
supplied by the Company for inclusion or incorporation by reference in
the Proxy Statement will, either at the date such Proxy Statement is
first mailed to the Company's shareholders or at the time of the
Company Stockholder Meeting, including by reason of amendment, contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are
made, not misleading, and the Proxy Statement will comply as to form
in all material respects with the requirements of the Exchange Act,
except that in each case no representation is made by the Company with
respect to statements made or incorporated by reference therein based
upon information supplied in writing by Merger Sub or Buyer
specifically for inclusion therein.
(e) FCC MATTERS
(i) The Company or its Subsidiaries hold all
licenses, permits and other authorizations issued by the FCC to the
Company or its Subsidiaries set forth in Section 2.1(e)(i) of the
Company Disclosure Schedule (the "FCC LICENSES"), except where the
failure to so hold such FCC Licenses individually or in the aggregate
has not had and would not reasonably be expected to have a Material
Adverse Effect on the Company. The FCC Licenses constitute all of the
licenses, permits, franchises, consents and authorizations from the
FCC that are necessary or appropriate for the operations and businesses
of the Company and its Subsidiaries as they are now operated, except
where the failure to have all such licenses, permits, franchises,
consents and authorizations has not had and would not reasonably be
expected to have a Material Adverse Effect on the Company.
(ii) Except where the failure to so list such
applications or provide such information would be reasonably expected
to have a Material Adverse Effect on Buyer, Section 2.1(e)(ii) of the
Company Disclosure Schedule sets forth each application that the
Company and its Subsidiaries have pending before the FCC and sets
forth the expiration date for each of the cellular FCC Licenses. The
Company has provided a copy, except where the FCC has not issued a
written microwave authorization, to Buyer of each of the FCC Licenses
and the applications listed in Section 2.1(e)(ii) of the Company
Disclosure Schedule.
(iii) The FCC Licenses are valid and in full force
and effect, unimpaired by any condition or restriction or any act or
omission by the Company or any of its Subsidiaries which individually
or in the aggregate has had or would reasonably be expected to have a
Material Adverse Effect on the Company. There are no modifications,
amendments, applications, revocations or other proceedings, or
complaints, pending or, to the knowledge of the Company, threatened,
with respect to the FCC Licenses (other than proceedings that apply to
the cellular or commercial mobile radio service ("CMRS") industry
generally) which individually or in the aggregate has had or would
reasonably be expected to have a Material Adverse Effect on the Company
or Buyer, and, except as set forth in Section 2.1(e) of the Company
Disclosure Schedule, all fees due and payable to
12
the FCC have been paid and no event has occurred which, with or without
the giving of notice or lapse of time or both, would constitute grounds
for revocation of FCC Licenses which individually or in the aggregate
has had or would reasonably be expected to have a Material Adverse
Effect on the Company or Buyer.
(iv) Except where a lack of compliance would not
individually or in the aggregate be reasonably expected to have a
Material Adverse Effect, since June 25, 1998 all reports required by
the Communications Act or required to be filed with the FCC or any
other Governmental Entity by the Company or its Subsidiaries have been
filed and are accurate and complete in all material respects.
(v) Except where a lack of compliance would not
individually or in the aggregate be reasonably expected to have a
Material Adverse Effect, the Company and its Subsidiaries have operated
their cellular systems in compliance with the Communications Act and
the rules, regulations, policies and orders of the relevant state
public utilities commissions and the Federal Aviation Administration.
The Company and its Subsidiaries have not received any written notice
(or otherwise been advised in writing) to the effect that they are in
violation of any of such statutes, rules, regulations, policies or
orders.
(vi) Without limiting the generality of the
foregoing, except where any action would individually or in the
aggregate not reasonably be expected to have a Material Adverse Effect
on the Company or Buyer, no adverse finding has been made, no consent
decree entered, no adverse action has been approved or taken by the
FCC or any court or other administrative body, and to the knowledge of
the Company, no admission of liability has been made with respect to
the Company or any of its Subsidiaries or any of the Company's
stockholders or any management employee of the Company or its
Subsidiaries concerning any civil or criminal suit, action or
proceeding brought under the provision of any federal, state,
territorial or local law relating to any of the following: any felony;
unlawful restraint of trade or monopoly; unlawful combination, contract
or agreement in restraint of trade; the use of unfair methods of
competition; fraud; unfair labor practice; or discrimination.
Notwithstanding the foregoing, to the actual knowledge of Messrs. Fujii
and XxXxxxxx and Xx. Xxxxxxx X. Xxxxxx, none of the Company or any
management employee is the subject of any criminal suit or any action
or proceeding involving a felony or fraud.
(f) COMPLIANCE WITH APPLICABLE LAWS; REGULATORY MATTERS. The
Company and its Subsidiaries hold all permits, licenses, certificates,
franchises, registrations, consents, variances, exemptions, orders and
approvals of all Governmental Entities (other than the FCC Licenses) (the
"COMPANY PERMITS") necessary for the conduct by the Company and its
Subsidiaries of their respective operations as now being conducted, except
for those as to which the failure to so hold such Company Permits
individually or in the aggregate would not be reasonably expected to have a
Material Adverse Effect on the Company. Except as set forth in Section 2.1(f)
of the Company Disclosure Schedule, the Company and its Subsidiaries are in
compliance with the terms of the Company Permits, except where the failure so
to comply
13
individually or in the aggregate would not be reasonably expected to have a
Material Adverse Effect on the Company. Except as set forth in Section 2.1(f)
of the Company Disclosure Schedule, the businesses of the Company and its
Subsidiaries are not being and have not been conducted in violation of any
law, ordinance, regulation, judgment, decree, injunction, rule or order of
any Governmental Entity, except for violations which individually or in the
aggregate would not be reasonably expected to have a Material Adverse Effect
on the Company. Except as set forth in Section 2.1(f) of the Company
Disclosure Schedule, as of the date of this Agreement, no investigation by
any Governmental Entity with respect to the Company or any Subsidiary is
pending or, to the knowledge of the Company, threatened, other than
investigations which individually or in the aggregate would not be reasonably
expected to have a Material Adverse Effect on the Company.
(g) LITIGATION. Except as set forth in Section 2.1(g) of the
Company Disclosure Schedule, there is no litigation, arbitration, claim,
suit, action, investigation or proceeding pending or, to the knowledge of the
Company, threatened, against or affecting the Company or any Subsidiary
which, if determined or resolved adversely to the Company or such Subsidiary
in accordance with the plaintiff's demands, would individually or in the
aggregate be reasonably expected to have a Material Adverse Effect on the
Company, nor is there any judgment, award, decree, injunction, rule or order
of any Governmental Entity or arbitrator outstanding against the Company or
any Subsidiary which would be reasonably be expected to have a Material
Adverse Effect on the Company.
(h) TAXES. Except as set forth on Section 2.1(h) of the Company
Disclosure Schedule (i) the Company and its Subsidiaries have duly and timely
filed (taking into account any extension of time within which to file) all
Tax Returns required to be filed by any of them and all such filed Tax
Returns are complete and accurate in all material respects, except where such
failure to timely file such Tax Returns would not have a Material Adverse
Effect on the Company; (ii) the Company and its Subsidiaries have paid all
Taxes required to be paid prior to the date of this Agreement that are shown
as due on such filed Tax Returns or that the Company or any Subsidiary is
obligated to withhold from amounts owing to any employee, creditor or third
party, except with respect to matters contested in good faith and for such
amounts that would not have a Material Adverse Effect on the Company; (iii)
as of the date of this Agreement, there are no pending or, to the knowledge
of the Company, threatened in writing audits, examinations, investigations or
other proceedings in respect of Taxes or Tax matters relating to the Company
or any Subsidiary which, if determined adversely to the Company or such
Subsidiary, would have a Material Adverse Effect on the Company; (iv) there
are no deficiencies or claims for any Taxes that have been proposed, asserted
or assessed against the Company or any Subsidiary which, if such deficiencies
or claims were finally resolved against the Company or such Subsidiary, would
have a Material Adverse Effect on the Company; (v) there are no Liens for
Taxes upon the assets of the Company or any Subsidiary, other than Liens for
current Taxes not yet due and payable, and Liens for Taxes that are being
contested in good faith by appropriate proceedings and for which adequate
reserves have been made on the balance sheet of the Company at June 30, 1999;
(vi) neither the Company nor any Subsidiary has made an election under
Section 341(f) of the Code and (vii) except as would not have a Material
Adverse Effect on the Company, none of the Company or any Subsidiary is a
party to any agreement or
14
arrangement that could reasonably be expected to result, individually or in
the aggregate, in the actual or deemed payment by the Company or a Subsidiary
of any "excess parachute payments" within the meaning of Section 280G of the
Code or for which a deduction would be disallowed under Section 162(m) of the
Code.
(i) ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30, 1999
through the date of this Agreement, the Company and its Subsidiaries have
conducted their respective businesses in the ordinary course and have not
incurred any material liability, except in the ordinary course of their
respective businesses and except as set forth in Section 2.1(i) of the
Company Disclosure Schedule, and there has not been (A) any change in the
business, assets financial condition or results of operations of the Company
or its Subsidiaries that individually or in the aggregate has had or would be
reasonably likely to have a Material Adverse Effect on the Company; (B) any
declaration, setting aside or payment of any dividend or other distribution
with respect to any capital stock of the Company, or any issuance, award,
grant, sale, repurchase, redemption or other acquisition by the Company or
any Subsidiary of any outstanding shares of capital stock or other securities
of, or ownership interests in, the Company or any Subsidiary (other than
repurchases of 200 shares of Company Common Stock from employees leaving the
Company); (C) any amendment of any material term of any outstanding security
of the Company or any Subsidiary, or any reorganization, recapitalization,
split, consolidation or reclassification with respect to any capital stock of
the Company or any Subsidiary; (D) any material change in any method of
accounting or accounting practice by the Company or any Subsidiary, except
for any such change required by reason of a change in GAAP; or (E) other than
in the ordinary course of business, any (x) entry by the Company or its
Subsidiaries into any employment agreement, severance agreement or
termination agreement with any officer of the Company, (y) except for regular
increases in the ordinary course of business consistent with past practices,
increase in benefits payable under existing employment, severance or
termination agreements or pay policies (with the exception of the Stay
Bonuses), or (z) except for regular increases in the ordinary course of
business consistent with past practices, increase in compensation, bonus or
other benefits payable to the executive officers of the Company or any
Subsidiary.
(j) CERTAIN AGREEMENTS. All contracts listed as exhibits to the
Company SEC Reports under the rules and regulations of the SEC relating to
the business of the Company and its Subsidiaries and any contract involving
the receipt or payment of more than $250,000 per year on an annualized basis
(the "MATERIAL CONTRACTS") have been or, if entered into after the date of
the Agreement, will be promptly provided to Buyer and are valid and in full
force and effect except to the extent they have previously expired or been
terminated in accordance with their terms, and neither the Company nor any of
its Subsidiaries has violated any provision of any Material Contract to which
it is a party, or committed or failed to perform any act thereunder which,
with or without notice, lapse of time, or both, would constitute a default
under the provisions of, any such Material Contract, except for defaults
which individually or in the aggregate have not had and would not be
reasonably expected to have a Material Adverse Effect on the Company. To the
knowledge of the Company, no counterparty to any such Material Contract has
violated any provision of, or committed or failed to perform any act which,
with or without notice, lapse of time, or both, would constitute a default or
other breach under the provisions of, such Material Contract, except for
defaults or breaches which individually or in the
15
aggregate have not had and would not be reasonably expected to have a
Material Adverse Effect on the Company. Except for contour extension
agreements or agreements of similar import entered into in the ordinary
course of business, neither the Company nor any Subsidiary has entered into
or will enter into any agreement or arrangement limiting or otherwise
restricting the Company or any of its Subsidiaries from engaging in or
competing in any line of business or in any geographic area which materially
impacts or will materially impact any of the following lines of business of
the Company, Xxxxxx Communications Corporation or AT&T Corp.:
telecommunications (including, without limitation, local, long distance,
internet and wireless), cable and video entertainment, data access,
communications consulting and systems integration and network management.
(k) EMPLOYEE BENEFIT PLANS; LABOR MATTERS
(i) The Company has made available to Buyer a
true and complete copy of each employee benefit plan as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and each other material employee benefit plan,
program, arrangement and contract (including any bonus, deferred
compensation, stock bonus, profit sharing, stock purchase, restricted
stock, stock option, stock appreciation rights, post-retirement
benefits or other forms of incentive compensation or benefits,
consulting, employment, termination, change in control and severance
plan, program, arrangement and contract), to which the Company or any
Subsidiary is a party or which is maintained or contributed to by the
Company or any Subsidiary (the "COMPANY BENEFIT PLANS"). Section
2.1(k) of the Company Disclosure Schedule contains a list of all
Company Benefit Plans.
(ii) Each of the Company Benefit Plans that is an
"employee pension benefit plan" within the meaning of Section 3(2) of
ERISA and that is intended to be qualified under Section 401(a) of the
Code has received a favorable determination letter from the United
States Internal Revenue Service which determination letter includes any
new or modified provisions required by Section 401(a) of the Code for
which the remedial amendment period under Section 401(b) of the Code
has expired as of the Closing Date, and which determination letter
includes the determination that the corresponding trust created under
any such Company Benefit Plan is exempt from tax under Section 501(a)
of the Code and the Company is not aware of any circumstances which
would reasonably be expected to result in the revocation of any such
favorable determination letter that would have a Material Adverse
Effect on the Company.
(iii) None of the Company Benefit Plans is subject
to (i) Title IV of ERISA or (ii) the minimum funding requirements of
Title I of ERISA or Section 412 of the Code. None of the Company
Benefit Plans is a "multiemployer plan" as defined in Section 3(37) of
ERISA and neither the Company nor any Subsidiary has ever contributed
to or had an obligation to contribute to any multiemployer plan.
(iv) There are no investigations by any
governmental authority, termination proceedings or other claims (except
claims for benefits payable in the normal
16
operation of the Company Benefit Plans), suits or proceedings pending
of which the Company has written notice or, to the knowledge of the
Company, threatened or anticipated, against or involving any Company
Benefit Plan or asserting any rights or claims to benefits under any
Company Benefit Plan that could give rise to any material liability on
the part of Company or any Subsidiary.
(v) With respect to the Company Benefit Plans,
no event has occurred and, to the knowledge of the Company, there
exists no condition or set of circumstances, in connection with
which the Company or any Subsidiary could be subject to any liability
under the terms of such Company Benefit Plans, ERISA, the Code or any
other applicable law which would have a Material Adverse Effect on the
Company.
(vi) Neither of the Company nor any Subsidiary is
a party to any collective bargaining or other labor union contracts and
no collective bargaining agreement is being negotiated by the Company
or any Subsidiary. There is no pending labor dispute, strike or work
stoppage against the Company or any Subsidiary which may interfere with
the respective business activities of the Company or any Subsidiary,
except where such dispute, strike or work stoppage would not have a
Material Adverse Effect on the Company. There is no pending charge or
complaint against the Company or any Subsidiary by the National Labor
Relations Board or any comparable state agency, except where such
unfair labor practice, charge or complaint would not have a Material
Adverse Effect on the Company.
(l) INTELLECTUAL PROPERTY. Except as set forth in Section
2.1(l) of the Company Disclosure Schedule, the Company and its Subsidiaries
own or have the right to use, the Intellectual Property used in their
respective businesses, except where the failure to own or have the right to
use such Intellectual Property, individually or in the aggregate, does not
have and would not reasonably be expected to have a Material Adverse Effect
on the Company. Except as would not have a Material Adverse Effect on the
Company, to the knowledge of the Company (i) no claims are pending or
threatened that the Company or any Subsidiary is infringing on or otherwise
violating the rights of any person with regard to any Intellectual Property
and (ii) no person is infringing on or otherwise violating any right of the
Company or any Subsidiary with respect to any Intellectual Property owned by
and/or licensed to the Company or any Subsidiary.
(m) VOTE REQUIRED. The affirmative vote of the holders of a
majority of the outstanding shares of Class A Common Stock (the "REQUIRED
COMPANY VOTE") is the only vote of the holders of any class or series of
capital stock of the Company necessary to approve and adopt this Agreement,
the Merger and the transactions contemplated hereby and such vote may be
validly taken pursuant to a written consent in lieu of a shareholders meeting
executed by the holders of a majority of the outstanding Class A Common Stock
(a "WRITTEN CONSENT OF SHAREHOLDERS").
(n) BROKERS OR FINDERS. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in connection
with any of the transactions contemplated by this Agreement
17
based upon arrangements made by or on behalf of the Company, except Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("XXXXXXX XXXXX"), whose fees and
expenses will be paid by the Company in accordance with the Company's letter
agreement with such firm dated July 14, 1999 and shall not exceed the amount
set forth in such letter. A true and complete copy of such agreement has been
delivered to Buyer prior to the date hereof. Upon payment of such fees and
expenses, there shall be no additional financial or other obligations of the
Surviving Corporation to Xxxxxxx Xxxxx under such letter agreement.
(o) TAKEOVER STATUTE. The Company has taken all the necessary
steps to prevent the application of any state takeover statute (including the
provisions of Section 203 of the DGCL or similar statute or regulation of the
State of Delaware or the states in which the Company is conducting business)
to this Agreement or any of the transactions contemplated herein, including
the Merger.
(p) OPINION OF FINANCIAL ADVISOR. The Company has received the
opinion of Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, dated the date
of this Agreement, to the effect that, as of such date, the Common Stock
Purchase Price is fair, from a financial point of view, to the holders of
Company Common Stock.
(q) ASSETS. All tangible assets of the Company and its
Subsidiaries are in good operating condition and sufficient for their
respective use thereof, normal wear and tear excepted, except where such
failure to be in good operating condition could not reasonably be expected to
result in a Material Adverse Effect on the Company. The Company and its
Subsidiaries own or have the right to use all assets necessary for the
conduct of their business and operations and reflected on the balance sheet
included in the most recent Form 10-Q filed by the Company with the SEC,
except where the lack of such ownership or usage rights would not be
expected, individually or in the aggregate, to have a Material Adverse Effect
on the Company.
(r) ACQUISITIONS AND DISPOSITIONS. Except with respect to the
sale of the Company's interest in the Texas/Illinois Cellular Limited
Partnership (the "LAREDO JOINT VENTURE"), Section 2.1(r) of the Company
Disclosure Schedule describes the material terms (including the buyer,
purchase price, assets or equity interests to be sold, escrow provisions and
any other material terms) of each proposed or pending disposition of assets
or equity interests owned by the Company or any Subsidiary (the "PENDING
DISPOSITIONS") involving in the aggregate a sales price in excess of $25.0
million. Section 2.1(r) of the Company Disclosure Schedule describes the
material terms (including the seller, purchase price, assets or equity
interests to be acquired, escrow provisions and any other material terms) of
each proposed or pending acquisition of assets or equity interests by the
Company or any Subsidiary (the "PENDING ACQUISITIONS") involving in the
aggregate a sales price in excess of $25.0 million. The Company has delivered
to Buyer true and complete copies of the executed contracts, agreements and
other documents relating to each Pending Acquisition and Pending Disposition
or, where definitive documentation has not been executed as of the date of
this Agreement, the most current drafts thereof (such contracts, agreements,
drafts and other documents referred to as the "PENDING TRANSACTION
DOCUMENTS").
18
(s) REAL PROPERTY - OWNED. Except as set forth in Section
2.1(s) of the Company Disclosure Schedule, the Company or a Subsidiary has
good and marketable or insurable title to all of the real property ("REAL
PROPERTY") reflected as owned on the consolidated balance sheet of the
Company at June 30, 1999 free and clear of all Liens, except for Liens that
would not materially interfere with the continued use of the property as it
is currently being used. Section 2.1(s) of the Company Disclosure Schedule
correctly identifies each parcel of Real Property owned by the Company and
its Subsidiaries except where the failure to so identify a parcel of Real
Property would not result in or would not be reasonably likely to result in a
Material Adverse Effect on the Buyer.
(t) REAL AND PERSONAL PROPERTY - LEASED. Except as set forth in
Section 2.1(s) of the Company Disclosure Schedule, set forth on Section
2.1(t)(A) (in the case of real property) and Section 2.1(t)(B) (in the case
of personal property) of the Company Disclosure Schedule are true and
accurate listings of all real and personal property leases to which the
Company or a Subsidiary is a party (other than personal property leases with
individual annual payment of less than $100,000) setting forth (i) the name
of the lessor and lessee, (ii) the property subject to the lease and the use
thereof (cell site, retail, office, etc.), (iii) the expiration date of the
lease, (iv) the annual rent and (v) with respect to the real property leases,
a description of the property leased. Except as set forth on Section
2.1(t)(A) (in the case of leased real property) and Section 2.1(t)(B) (in
case of leased personal property) of the Company Disclosure Schedule, (i) all
of the leases set forth on such Schedules are in full force and effect and
are valid, binding and enforceable in accordance with their respective terms,
(ii) all accrued currently payable rents and other payments required by such
leases have been paid, (iii) each of the Company and its Subsidiaries and, to
their knowledge, each other party thereto have complied with all respective
covenants and provisions of such leases, (iv) neither the Company or a
Subsidiary nor, to their knowledge, any other party is in default in any
respect under any such leases, (v) no party has asserted any defense, set
off, or counter claim thereunder, and (vi) no waiver, indulgence or
postponement of any obligations thereunder has been granted by any party. The
representations in this Section 2.1(t) read without giving effect to the
parenthetical immediately before subclause (i) in the first sentence will not
be breaches of this Agreement unless in the aggregate they are inaccurate so
as to result in or be reasonably likely to result in a Material Adverse
Effect on the Company or Buyer. Notwithstanding any provision of this
Agreement or any item set forth in Section 2.1(t) of the Company Disclosure
Schedule, the parties acknowledge that the Company has no obligation to
identify or disclose the existence of any "change in control" or similar
provision in any agreement with respect to the leased real or personal
property set forth on Sections 2.1(t)(A) and 2.1(t)(B) of the Company
Disclosure Schedule.
2.2 REPRESENTATIONS AND WARRANTIES OF BUYER. Except as
specifically set forth or cross-referenced in the corresponding section of
the disclosure schedule delivered by Buyer to the Company at or prior to the
execution of this Agreement (the "BUYER DISCLOSURE SCHEDULE"), Buyer
represents and warrants to the Company as follows:
(a) ORGANIZATION, STANDING AND POWER. Buyer has been duly
organized as a limited liability company and is validly existing and in good
standing under the laws of its jurisdiction of organization and has requisite
limited liability company power and authority to
19
carry on its business as presently conducted. Buyer is duly qualified and in
good standing or otherwise authorized to do business in each jurisdiction in
which the nature of its business or the ownership or leasing of its
properties makes such qualification necessary, except where the failure so to
qualify would not have a Material Adverse Effect on Buyer. Copies of the
Organizational Documents as in effect on the date of this Agreement of Buyer
have been previously furnished or made available to the Company and are true,
complete and correct copies of such documents as in effect on the date of
this Agreement.
(b) AUTHORITY; NO CONFLICTS
(i) Buyer has all requisite limited liability
company power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary limited liability company action on the part of Buyer. This
Agreement has been duly executed and delivered by Buyer and constitutes
a valid and binding agreement of Buyer, enforceable against it in
accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors generally, or by general equity
principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(ii) The execution, delivery and performance of
this Agreement by Buyer and the consummation by Buyer of the
transactions contemplated hereby do not and will not, conflict with or
result in any breach of or other Violation pursuant to (A) any
provision of the Organizational Documents of Buyer or any of its
Subsidiaries, or (B) except as would not have a Material Adverse Effect
on Buyer and subject to obtaining or making the consents, approvals,
orders, authorizations, registrations, declarations and filings
referred to in Section 2.2(b)(iii) below, any loan or credit agreement,
note, mortgage, bond, indenture, lease, benefit plan or other
agreement, obligation, instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Buyer, any of its Subsidiaries or their
respective properties or assets.
(iii) No consent, approval, order or authorization
of, or registration, declaration or filing with, any Governmental
Entity is required by or with respect to Buyer or any of its
Subsidiaries in connection with the execution, delivery and performance
by Buyer of this Agreement or the consummation by Buyer of the
transactions contemplated hereby, except for (A) the consents,
approvals, orders, authorizations, registrations, declarations and
filings required under or in relation to Section 2.1(c)(iii)(A), (B)
and (C), and (B) such consents, approvals, orders, authorizations,
registrations, declarations and filings the failure of which to make or
obtain would not have a Material Adverse Effect on Buyer or would not
materially impair or delay the ability of Buyer to consummate the
transactions contemplated hereby.
20
(c) NO VOTE REQUIRED. No vote of the members of Buyer is
necessary to approve this Agreement or any of the transactions contemplated
hereby other than those which have already been obtained.
(d) BROKERS OR FINDERS. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in connection
with any of the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Buyer or Merger Sub, except fees payable
by Buyer to Xxxxxx Brothers Inc. and Toronto Dominion Securities Inc.
(e) OWNERSHIP OF COMPANY CAPITAL STOCK. As of the date of this
Agreement, neither Buyer nor any of its Subsidiaries or, to its knowledge,
any of its affiliates or associates (as such terms are defined under the
Exchange Act) (i) beneficially owns, directly or indirectly or (ii) is party
to any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of, in case of either clause (i) or (ii), shares
of capital stock of the Company.
(f) FCC QUALIFICATION. Buyer and Merger Sub are and at the
Effective Time will be legally, technically and otherwise qualified under the
Communications Act and all rules, regulations and policies of the FCC to
acquire, own or control and operate the assets and business of the Company
and its Subsidiaries. There are no facts or proceedings known or with
reasonable due diligence should be known to Buyer which would disqualify
Buyer or Merger Sub under the Communications Act or otherwise from acquiring
or operating any of the assets and business of the Company and its
Subsidiaries or would cause the FCC not to approve the FCC Application. Buyer
has no knowledge of any fact or circumstance relating to Buyer, Merger Sub or
any other affiliate of Buyer that would (i) cause the filing of any objection
to the FCC Application or (ii) lead to a delay in the processing by the FCC
of the FCC Application. As of the date hereof, no waiver of any FCC rule or
policy is necessary to be obtained for the approval of the FCC Application,
and no processing pursuant to any exception or rule of general applicability
will be requested or required in connection with the consummation of the
transactions contemplated by this Agreement.
(g) FINANCING
(i) Buyer's members have received a commitment
letter dated October 4, 1999 (the "BANK COMMITMENT LETTER") from Bank
of America, N.A. and Banc of America Securities LLC pursuant to which
such parties have agreed to provide, subject to the terms and
conditions set forth therein, $1.75 billion of financing to Buyer for
the purpose of funding a portion of Buyer's financing for the
acquisition of the Company. A true copy of the Bank Commitment Letter
has been delivered to the Company, is in effect on the date hereof, has
not been amended or modified and there is no breach or default by Buyer
or Merger Sub existing, or which with notice or the passage of time may
exist, thereunder as of the date hereof.
(ii) AT&T Wireless Services, Inc., AT&T Wireless
Services JV Co., a Delaware corporation, and Buyer have entered into an
Unrestricted Equity
21
Agreement dated as of the date hereof (the "UNRESTRICTED EQUITY
AGREEMENT") of which the Company is a third-party beneficiary thereof.
A true copy of the Unrestricted Equity Agreement has been delivered to
the Company, is in full force and effect and has not been amended or
modified.
2.3 REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGER SUB.
Buyer and Merger Sub represent and warrant to the Company as follows:
(a) ORGANIZATION, STANDING AND POWER. Merger Sub is a wholly
owned Subsidiary of Buyer and is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware. Copies
of the Organizational Documents of Merger Sub have been previously furnished
or made available to the Company and are true, complete and correct copies of
such documents.
(b) AUTHORITY; NO CONFLICTS
(i) Merger Sub has all requisite corporate power
and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and
performance by Merger Sub of this Agreement and the consummation by
Merger Sub of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Merger Sub.
This Agreement has been duly executed and delivered by Merger Sub and
constitutes a valid and binding agreement of Merger Sub, enforceable
against it in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to or affecting creditors generally, or
by general equity principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(ii) The execution, delivery and performance by
Merger Sub of this Agreement and the consummation by Merger Sub of the
transactions contemplated hereby do not and will not contravene or
conflict with the Organizational Documents of Merger Sub.
(c) NO BUSINESS ACTIVITIES. Merger Sub is not a party to any
material agreements (other than this Agreement and any agreement contemplated
hereby) and, since the date of its incorporation, has not conducted any
activities other than in connection with or as contemplated by this Agreement
and the arranging of the Financing. Merger Sub has no Subsidiaries.
ARTICLE III.
COVENANTS RELATING TO CONDUCT OF BUSINESS
3.1 COVENANTS OF THE COMPANY. During the period from the date of this
Agreement and continuing until the Effective Time (except as expressly
permitted by this Agreement or identified in the Company Disclosure Schedule
or to the extent that Buyer shall otherwise consent in writing, which consent
shall not be unreasonably withheld or delayed with respect to
22
Section 3.1(d), (e), (j) or (k)) the provisions set forth in paragraphs (a)
to (l) of this Section 3.1 shall apply. For purposes of this Section 3.1,
wherever any action on the part of the Company or its Subsidiaries requires
the consent of Buyer, Buyer shall be deemed to have consented in writing if
Xx. Xxxxxxx Xxxxxx or another designee of Buyer of which the Company has
prior written notice has received a written request (delivered to Xx. Xxxxxx
by a nationally recognized overnight mail or courier service with signature
required upon receipt with a copy to Xxxxxxx & Xxxxxx, LLP and Xxxxxxxx
Xxxxxx & Xxxxxx LLP at the addresses and to the attention of the persons set
forth in Section 7.2) to consent to an action to be taken by the Company and
7 business days have lapsed since the date of such written request and Xx.
Xxxxxx or such other designee has not responded in writing to such request.
(a) ORDINARY COURSE. The Company shall, and shall cause its
Subsidiaries to, carry on their respective businesses in the usual, regular
and ordinary course in all material respects, and shall use reasonable
commercial efforts to preserve intact their present business organizations,
maintain their rights and franchises, and preserve their relationships with
customers, suppliers and others having business dealings with them. Without
limiting the generality of the foregoing, except as otherwise specifically
permitted by this Agreement, the Company and its Subsidiaries shall operate
their respective businesses substantially in accordance with the budget for
advertising, promotion and capital expenditures previously delivered to Buyer
and as set forth in Section 3.1(a) of the Company Disclosure Schedule.
(b) DIVIDENDS; CHANGES IN SHARE CAPITAL. The Company shall not,
and shall not propose to, (i) declare or pay any dividends on or make other
distributions in respect of any of its capital stock, (ii) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for, shares of its capital stock, or (iii) repurchase, redeem or otherwise
acquire any shares of its capital stock or any securities convertible into or
exercisable or exchangeable for any shares of its capital stock except (A) as
permitted under Xxxx Xxxxx'x and Xxxxx XxXxxxxx'x Executive Agreements and as
may be required under existing management compensation agreements identified
in Section 3.1(b) of the Company Disclosure Schedule, (B) with respect to
Series A Preferred Stock, as may be required under the Company's
Organizational Documents, or (C) with respect to the exchange of shares of
Class B Common Stock on a one for one basis for shares of Class A Common
Stock (which shares are included in the Company's outstanding common stock
represented in Section 2.1(b)).
(c) ISSUANCE OF SECURITIES. The Company shall not, and shall
cause its Subsidiaries not to, issue, deliver or sell, or authorize or
propose the issuance, delivery or sale of, any shares of its capital stock of
any class, any Company Voting Debt or any securities convertible into or
exercisable for, or any rights, warrants or options to acquire, any such
shares or Company Voting Debt, or enter into any agreement with respect to
any of the foregoing, other than the issuance of Class A Common Stock in
exchange for Class B Common Stock (which shares are included in the Company's
outstanding common stock represented in Section 2.1(b)) on a one for one
basis, in accordance with the terms, including the vesting schedule, set
forth in the instruments governing the grant thereof of the Class B Common
Stock.
23
(d) ORGANIZATIONAL DOCUMENTS. Except to the extent required to
comply with their respective obligations hereunder or required by law, the
Company and its Subsidiaries shall not amend or propose to amend their
respective Organizational Documents.
(e) INDEBTEDNESS. The Company shall not, and shall not permit any
Subsidiary to, (i) incur or permit to exist any indebtedness for borrowed
money or guarantee any such indebtedness or issue or sell any debt securities
or warrants or rights to acquire any debt securities of the Company or any
Subsidiary or guarantee any debt securities of other Persons (other than
indebtedness of the Company or its Subsidiaries to the Company or its
Subsidiaries), except (A) under the Bank Credit Facility, (B) the Senior
Notes and (C) other indebtedness not exceeding $10.0 million in the
aggregate, (ii) make any loans, advances or capital contributions to, or
investments in, any other Person, other than by the Company or its
Subsidiaries to or in the Company or its Subsidiaries or (iii) pay, discharge
or satisfy any claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than in the case of
clauses (ii) and (iii) above, loans, advances, capital contributions,
investments, payments, discharges or satisfactions incurred or committed to
in the ordinary course of business consistent with past practice.
(f) EMPLOYEE COMPENSATION; BENEFIT PLANS. The Company shall not,
and shall not permit its Subsidiaries to, (i) increase the compensation
payable or to become payable to any of its officers, (ii) except as
contemplated by Section 3.1(l) or as noted in Section 2.1(b)(iv)(3), (4) and
(5) of the Company Disclosure Schedule, adopt or amend (except as may be
required or prudent under law) any Company Benefit Plans, or take any action
with respect to the grant of any severance or termination pay, or stay bonus
or other incentive arrangement (other than pursuant to Company Benefit Plans
and policies in effect on the date of this Agreement, the Stay Bonuses and
other items identified in Section 2.1(k) of the Company Disclosure Schedule),
except any such increases or grants to non-executive officers made in the
ordinary course of business reasonably consistent with past practices or as
provided in Section 4.5 or (iii) effectuate a "plant closing" or "mass
layoff" as those terms are defined in the Worker Adjustment and Retraining
Notification Act of 1988 ("WARN"), affecting in whole or in part any site of
employment, facility, operating unit or employee of the Company or any
Subsidiary other than in compliance with the provisions thereof.
(g) OTHER ACTIONS. The Company shall not, and shall not permit
its Subsidiaries to, take any action that would result in (i) any of the
representations or warranties of the Company set forth in this Agreement that
are qualified as to materiality becoming untrue or inaccurate, (ii) any of
such representations and warranties that are not so qualified becoming untrue
or inaccurate in any material respect or (iii) except as otherwise permitted
by Section 4.1(a) or 4.4, any of the conditions to the Merger set forth in
Article V not being satisfied.
(h) ACCOUNTING METHODS; INCOME TAX ELECTIONS. Except as disclosed
in the Company SEC Reports filed prior to the date of this Agreement, as set
forth in Section 2.1(d) of the Company Disclosure Schedule, or as required by
a Governmental Entity, the Company shall not change its methods of accounting
in effect at December 31, 1998, except as required by
24
changes in GAAP as concurred in by the Company's independent auditors. The
Company shall not (i) change its fiscal year, (ii) make any Tax election
which would have a Material Adverse Effect on the Company or (iii) settle or
compromise any material Federal, State, local or foreign Tax liability.
(i) COOPERATION WITH RESPECT TO HSR AND FCC FILINGS. The Company
shall cooperate with Buyer (including if necessary in Buyer's reasonable
judgment or in the opinion of Buyer's HSR and FCC counsel, modification of
Buyer's existing HSR and FCC filings) to modify or amend any HSR and FCC
filings with respect to the Pending Acquisitions and Pending Dispositions.
(j) ACQUISITIONS AND DISPOSITIONS. Except with respect to the
Laredo Joint Venture, none of the Company or its Subsidiaries shall enter
into any agreement or commitment to merge or consolidate with any Person or
acquire or dispose of any assets (including asset swaps) or equity interests
(i) having a value in excess of (A) $25.0 million in the case of all such
dispositions taken collectively or (B) $25.0 million in the case of all such
mergers, consolidations and acquisitions taken collectively or (ii) if in the
judgment of FCC counsel approved by both parties in their written opinion it
would have a Material Adverse Effect on the FCC's approval of the transfer of
the FCC Licenses to Buyer or Buyer's ability to operate the business of the
Company and its Subsidiaries substantially as now conducted or have a
Material Adverse Effect on the FCC's approval process.
(k) SETTLEMENT OF CLAIMS AND LITIGATION. The Company shall not,
and shall cause its Subsidiaries not to, compromise or settle any claim by or
against the Company or any Subsidiary, or any litigation, arbitration or
other proceeding in which the Company or a Subsidiary is the claiming or
defending party, except in the ordinary course of business consistent with
past practice and which, in the aggregate, do no involve the payment or
receipt of payments (or other consideration) in excess of $5.0 million.
(l) 401(k) PLAN. The Company shall complete self-correction of
its 401(k) plan for those operational compliance matters identified on
Section 2.1(d) of the Company Disclosure Schedule prior to Closing but
failure to complete such self-correction shall not constitute a breach unless
the reasonably estimated payments and costs to complete compliance would
exceed $1 million.
3.2 COVENANTS OF BUYER AND MERGER SUB. During the period from the
date of this Agreement and continuing until the Effective Time (except as
expressly contemplated or permitted by this Agreement or to the extent that
the Company shall otherwise consent in writing):
(a) ORDINARY COURSE. Buyer shall carry on its business in the
usual, regular and ordinary course in all material respects, and shall not,
and shall not permit any of its Subsidiaries to, take any action that would
result in (i) any of the representations or warranties of the Buyer or Merger
Sub set forth in this Agreement that are qualified as to materiality becoming
untrue or inaccurate, (ii) any of such representations and warranties that
are not so qualified becoming untrue or inaccurate in any material respect,
(iii) any of the conditions to the Merger
25
set forth in Article V not being satisfied, or (iv) other than as
contemplated in Section 4.10, any amendment to the Bank Commitment Letter,
unless such amendment would not adversely affect the Company or the
consummation of the transactions contemplated hereby. In addition, Buyer
shall not incur any debt or obligations other than its obligations hereunder
or which are related to, or intended to facilitate the financing or
consummation of the transactions contemplated by, this Agreement.
(b) OBLIGATIONS OF MERGER SUB. Buyer hereby agrees to cause
Merger Sub to comply with and perform its obligations under this Agreement
and to cause Merger Sub to consummate the Merger as contemplated and on the
terms and conditions set forth herein. Whenever this Agreement requires
Merger Sub to take any action, such requirement shall be deemed to include an
undertaking of Buyer to cause Merger Sub to take such action.
3.3 ADVICE OF CHANGES. Each party shall: (i) confer on a regular and
frequent basis with the other; (ii) promptly notify the other orally and in
writing of any representation or warranty made by it contained in this
Agreement that is qualified as to materiality becoming untrue or inaccurate
or any such representation or warranty that is not so qualified becoming
untrue or inaccurate in any material respect and (iii) promptly notify the
other orally or in writing of the failure by such party (A) to comply with or
satisfy in any respect any covenant, condition or agreement required to be
complied with or satisfied by it under this Agreement that is qualified as to
materiality or (B) to comply with or satisfy in any material respect any
covenant, condition or agreement required to be complied with or satisfied by
it under this Agreement that is not so qualified as to materiality; PROVIDED,
HOWEVER, that, in any case, no such notification shall affect the
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
3.4 CONTROL OF OTHER PARTY'S BUSINESS. Nothing contained in this
Agreement shall give the Company, on the one hand or Buyer or Merger Sub, on
the other hand, the right, directly or indirectly, to control or direct the
other party's operations or business prior to the Effective Time. Prior to
the Effective Time, each of the Company and Buyer shall exercise, consistent
with the terms and conditions of this Agreement, complete control and
supervision over its respective operations and business.
ARTICLE IV.
ADDITIONAL AGREEMENTS
4.1 COMPANY STOCKHOLDERS MEETING
(a) If required by law or requested by the Company's Board of
Directors, the Company shall cause a meeting of its stockholders (the
"COMPANY STOCKHOLDERS MEETING") to be duly called and held as soon as
reasonably practicable for the purpose of obtaining the Required Company
Vote, and the Company shall, through the Company Board, recommend to its
stockholders that they vote in favor of the approval of the Merger and the
adoption of this Agreement and Buyer shall vote or cause to be voted all the
shares of Company Common Stock owned of record by Buyer, Merger Sub or any of
Buyer's other Subsidiaries in favor of the approval of the Merger and
adoption of this Agreement. After the date hereof, Buyer shall not
26
purchase, offer to purchase, or enter into any contract, agreement or
understanding regarding the purchase of shares of Company Common Stock,
except pursuant to the terms of the Merger and the Voting Agreement.
(b) If required by law or requested by the Company's Board of
Directors, the Company shall prepare a proxy or information statement for
distribution to its stockholders for purposes of the Company Stockholders
Meeting (the "PROXY STATEMENT"). If applicable, the Company shall use
reasonable efforts to cause the Proxy Statement and all other proxy materials
for the Company Stockholders Meeting to be mailed to the Company's
stockholders as promptly as practicable.
4.2 ACCESS TO INFORMATION. From the date hereof until the earlier of
the Effective Time or the termination of this Agreement, upon reasonable
notice, the Company shall afford to the officers, employees, accountants,
counsel, financial advisors and other representatives of Buyer reasonable
access during normal business hours, to the Company's and its Subsidiaries'
properties, books, contracts, commitments and records located at its
corporate headquarters in Schaumburg, Illinois and its corporate-level
officers, management employees, accountants and representatives and, during
such period, the Company shall furnish promptly to Buyer, consistent with its
legal obligations (and subject to existing confidentiality and similar
non-disclosure obligations and the preservation of attorney client and work
product privileges), all information concerning its business, properties and
personnel as Buyer may reasonably request; PROVIDED, HOWEVER, the Company may
restrict any such access to the extent that (i) a Governmental Entity
expressly requires the Company or any of its Subsidiaries to restrict access
to any properties or information reasonably related to any such contract on
the basis of applicable laws and regulations, (ii) any law, treaty, rule or
regulation of any Governmental Entity applicable to the Company or any of its
Subsidiaries requires the Company or any of its Subsidiaries to restrict
access to any properties or information, or (iii) such access would
unreasonably disrupt or interfere with the operations or business of the
Company; and PROVIDED FURTHER that the Company shall use its reasonable
efforts to obtain the consent or release of the parties to confidentiality
and non-disclosure agreements which authorize the delivery of the
confidential or non-disclosable information to Buyer. Buyer acknowledges that
any such information received by Buyer or its representatives from or on
behalf of the Company pursuant to this Section 4.2 shall be deemed received
pursuant to, and shall be held in confidence by Buyer and its representatives
to the extent required by, and in accordance with, the provisions of that
certain letter agreement, dated August 3, 1999 (as amended, the
"CONFIDENTIALITY AGREEMENT"), between the Company and Buyer, which
Confidentiality Agreement shall, notwithstanding language in such
Confidentiality Agreement to the contrary, remain in full force and effect
and shall be incorporated herein by reference with the same effect as if
fully set forth herein; provided Buyer may use any such information for the
purposes referred to in Section 4.3(d).
4.3 COOPERATION; FILINGS AND APPROVALS
(a) Subject to the terms and conditions of this Agreement, each
of the Company, Buyer and Merger Sub shall cooperate with each other and
shall use (and shall cause their respective Subsidiaries to use) its
commercially reasonable best efforts to take or cause to
27
be taken all actions, and do or cause to be done all things, necessary,
proper or advisable on their part under this Agreement and applicable laws to
consummate and make effective the Merger and the other transactions
contemplated by this Agreement as soon as practicable, including, without
limitation, (i) preparing and filing as promptly as practicable all
documentation to effect all necessary applications, notices, petitions,
filings, tax ruling requests and other documents and to obtain as promptly as
practicable all consents, waivers, licenses, orders, registrations,
approvals, permits, tax rulings and authorizations necessary or advisable to
be obtained from any third party and/or any Governmental Entity in order to
consummate the Merger or any of the other transactions contemplated by this
Agreement (including the consent of the FCC), and (ii) taking all steps as
may be necessary to obtain all such consents, waivers, licenses,
registrations, permits, authorizations, tax rulings, orders and approvals;
provided that the Company shall not be required to incur any significant
expense or liability or agree to any significant modification to any
contractual arrangement or Company Permit to obtain any of the foregoing.
(b) The Company and its Subsidiaries and Buyer shall file all
reports required to be filed by each of them with any Governmental Entity
between the date of this Agreement and the Effective Time and shall (to the
extent permitted by law or regulation or any applicable confidentiality
agreement) deliver to the other party copies of all such reports promptly
after the same are filed. Subject to applicable laws relating to the exchange
of information, each of the Company and Buyer shall have the right to review
in advance, and to the extent practicable each will consult with the other,
with respect to all the information relating to the other party and each of
their respective Subsidiaries, which appears in any filings, announcements or
publications made with, or written materials submitted to, any Governmental
Entity in connection with the transactions contemplated by this Agreement. In
exercising the foregoing right, each of the parties hereto agrees to act
reasonably and as promptly as practicable. Notwithstanding the foregoing, the
Company will not be obligated to deliver any tax returns on a regular basis
pursuant to this Section 4.3(b) unless reasonably requested by Buyer.
(c) Each of the Company and Buyer agrees to make all necessary
filings in connection with the Required Regulatory Approvals as promptly as
practicable after the date of this Agreement, and to use its reasonable best
efforts to furnish or cause to be furnished, as promptly as practicable, all
information and documents required with respect to such Required Regulatory
Approvals and shall otherwise cooperate with the applicable Governmental
Entity in order to obtain any Required Regulatory Approvals in as expeditious
a manner as possible. Each party agrees that, to the extent practicable, it
will consult with the other party with respect to the obtaining of all
permits, consents, approvals and authorizations of all third Persons
(including lessors) and Governmental Entities necessary or advisable to
consummate the transactions contemplated by this Agreement and Seller agrees
to cooperate with Buyer and Buyer's representatives seeking to comply with
any material leases or other material agreements which would be violated as a
result of the consummation of the transactions contemplated hereby and each
party will keep the other party apprised of the status of matters relating to
completion of the transactions contemplated hereby. Without limiting the
generality of the foregoing, Buyer and Merger Sub agree to take all actions
necessary to comply with the HSR Act so as to consummate the Merger as
promptly as practicable, including, without limitation, (i) filing, no later
than
28
twenty (20) business days following the date hereof, with the Federal Trade
Commission and the United States Department of Justice all documents required
to be filed pursuant to the HSR Act, and (ii) causing the expiration of the
notice and waiting periods under the HSR Act with respect to the transactions
contemplated by this Agreement as promptly as possible after the date of this
Agreement. Each of the Company and Buyer shall take all commercially
reasonable action necessary to resolve such objections, if any, as may be
asserted by any Governmental Entity with respect to this Agreement and the
transactions contemplated hereby in connection with the Required Regulatory
Approvals. If any administrative or judicial suit, action or proceeding is
instituted (or threatened to be instituted) by a Person or Governmental
Entity challenging this Agreement and the transactions contemplated hereby as
violative of applicable antitrust or competition laws, each of the Company
and Buyer shall cooperate and shall contest and resist, except insofar as the
Company and Buyer shall otherwise agree, any such suit, action or proceeding,
including any suit, action or proceeding that seeks a temporary restraining
order or preliminary injunction that would prohibit, prevent or restrict
consummation of the Merger or any other transaction contemplated by this
Agreement.
(d) The Company and Buyer each shall, upon request by the other,
furnish the other with all information concerning itself, its Subsidiaries,
directors, officers and stockholders and such other matters as may reasonably
be necessary or advisable in connection with the Proxy Statement, the
Financing or alternative financing for the transactions contemplated by this
Agreement (including a public debt and/or equity financing by Buyer and/or
its affiliates) or any other statement, filing, tax ruling request, notice or
application made by or on behalf of the Company, Buyer or any of their
respective Subsidiaries to any third party and/or any Governmental Entity in
connection with the transactions contemplated by this Agreement. Without
limiting the generality of the foregoing, the Company shall, and shall use
commercially reasonably efforts, to cause its accountants and other
representatives, to cooperate with Buyer and its Affiliates in connection
with the Financing (or any alternative financing for the Merger proposed by
Buyer), including (i) authorization to include the Company's financial
statements and other relevant information in any filing with the SEC or other
Governmental Entity and obtaining comfort letters customary in public
financing, (ii) incurring borrowings under its existing credit facilities
contemporaneously with the Closing, but not in excess of the maximum amount
permitted under such facilities, and (iii) cause Ernst & Young LLP to prepare
the Company's year-end audit in the ordinary course.
4.4 NO SHOPPING. Unless and until this Agreement shall have been
terminated by either party pursuant to Article VI, the Company shall not, and
shall not authorize any of its officers, directors, agents, representatives
or advisors to, directly or indirectly, solicit, initiate, negotiate with or
knowingly encourage any Person (other than Buyer, Merger Sub or their
respective designees) to make or submit an offer, indication of interest or
proposal to acquire all or a majority of the Company's consolidated business
or more than a total of 9.9% of any class of the Company's capital stock,
whether by merger, consolidation or other business combination, purchase of
assets, tender or exchange offer or otherwise (other than the transactions
contemplated by this Agreement) (each of the foregoing, an "ACQUISITION
PROPOSAL") or provide any Person any non-public information concerning the
Company or its Subsidiaries which the Company has reason to believe will be
used in connection with an Acquisition Proposal.
29
4.5 EMPLOYEE BENEFITS
(a) For a period of 12 months immediately following the Closing
Date, the Surviving Corporation shall (i) provide aggregate compensation
(including base salary, bonus opportunities (other than the Stay Bonus
provision and one-time payments made as a result of a change in control in
connection with the transactions contemplated by this Agreement) and
benefits) to each employee (other than Messrs. Fujii and XxXxxxxx) of the
Company and its Subsidiaries as of the Closing Date for so long as such
employee is employed by the Surviving Corporation which is no less favorable
than that provided to each such employee prior to the Closing Date, and (ii)
maintain in effect employee benefit plans and arrangements (including
severance, change of control and termination benefits) which provide benefits
for such employees which in the aggregate have a value which is at least
comparable to the benefits provided by the Company Benefit Plans.
(b) For purposes of determining eligibility to participate,
waiting periods, vesting and accrual or entitlement to benefits where length
of service is relevant under any employee benefit plan or arrangement of
Buyer, the Surviving Corporation or any of their respective Subsidiaries, if
employees of the Company or any of its Subsidiaries are eligible to
participate therein, employees of the Company and its Subsidiaries as of the
Effective Time shall receive service credit for service with the Company and
its Subsidiaries to the same extent such service credit was granted under the
Company Benefit Plans, subject to offsets for previously accrued benefits and
no duplication of benefits. If employees of the Company or any of its
Subsidiaries are eligible to participate in any medical, dental or health
plan maintained or established by the Surviving Corporation (other than the
plan or plans which such employees participated in immediately prior to the
Effective Time), such plan or plans shall not include pre-existing condition
exclusions, except to the extent such exclusions were applicable under the
plans in which such employees participated immediately prior to the Effective
Time, and shall provide credit for any deductibles and co-payments applied or
made with respect to each such employee in the calendar year of the change in
plan.
(c) Buyer shall cause the Surviving Corporation to assume and
honor in accordance with their terms all written employment, severance and
termination plans, policies and agreements (including change in control
provisions) of employees of the Company and its Subsidiaries as in effect on
the date of this Agreement and the Stay Bonus program, each of which plans,
policies, agreements and programs are listed in Section 4.5 of the Company
Disclosure Schedule and are subject to Section 4.5(a). The Company agrees to
consult with Buyer regarding the aggregate amount and allocation of such
aggregate amount payable under the Stay Bonus program.
4.6 FEES AND EXPENSES. Whether or not the transactions contemplated
hereby are consummated, all Expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such Expenses, except if the Merger is consummated, the Surviving
Corporation shall pay, or cause to be paid, any and all property or transfer
taxes imposed on the Company or its Subsidiaries and any real property
transfer tax imposed on any holder of shares of capital stock of the Company
resulting from the Merger. As
30
used in this Agreement, "EXPENSES" includes all out-of-pocket expenses
(including, without limitation, all fees and expenses of counsel,
accountants, investment bankers, experts and consultants to a party hereto
and its affiliates) incurred by a party or on its behalf in connection with
or related to the authorization, preparation, negotiation, execution and
performance of this Agreement and the transactions contemplated hereby,
including the Financing.
4.7 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE
(a) Buyer and the Surviving Corporation shall cause to be
maintained in effect for a period of six (6) years after the Effective Time
the current provisions regarding indemnification of current or former
officers and directors (each an "INDEMNIFIED PARTY") contained in the
Organizational Documents of the Company or its Subsidiaries and in any
agreements between an Indemnified Party and the Company or its Subsidiaries
(which provisions, unless required by applicable law, shall not be amended,
repealed or otherwise modified for such six-year period in any manner that
would adversely affect the rights thereunder of any Indemnified Party),
provided that in the event any claim or claims are asserted or made within
such six-year period, all rights to indemnification in respect of any claim
or claims shall continue until final disposition of any and all such claims,
and
(b) either (i) Buyer and the Surviving Corporation shall cause to
be maintained in effect for a period of six (6) years after the Effective
Time the current policies of directors' and officers' liability insurance and
fiduciary liability insurance maintained by the Company provided that Buyer
or the Surviving Corporation may substitute therefor policies of at least the
same coverage and amounts containing terms and conditions which are, in the
aggregate, no less advantageous to the insured and provided further that such
substitution shall not result in any gaps or lapses in coverage with respect
to matters occurring on or prior to the Effective Time; and provided further,
that the annual premium therefor is not in excess of two hundred percent
(200%) of the last annual premium paid by the Company prior to the date
hereof (or if such premium is in excess of such amount, such policies of
directors' and officers' liability insurance and fiduciary liability
insurance providing for as much coverage as can be obtained for such amount)
with respect to claims arising from facts or events that occurred on or
before the Effective Time or (ii) at the Company's election and so long as
the Company advises Buyer of such election not less than 60 days prior to
Closing Buyer shall purchase a tail policy to be in effect until the sixth
anniversary of Closing for directors' and officers' liability insurance and
fiduciary liability insurance at a one time premium cost not to exceed
$100,000. This covenant is intended to be for the benefit of, and shall be
enforceable by, each of the Indemnified Parties and their respective heirs
and legal representatives. For a period of six (6) years after the Effective
Time (provided that in the event any claim or claims are asserted or made
within such six-year period, all rights to indemnification in respect of any
claim or claims shall continue until final disposition of any and all such
claims), Buyer shall indemnify the Indemnified Parties to the same extent as
such Indemnified are entitled to indemnification under the Organizational
Documents pursuant to Section 4.7(a). Without limitation of the foregoing, in
the event after the Effective Time any such Indemnified Party is or becomes
involved in any action, proceeding or investigation in connection with any
matter occurring prior to or on the Effective Time, including the
transactions contemplated hereby, and a conflict of interest exists which
would prohibit
31
counsel for the Company or counsel for one or more other Persons from
representing such Indemnified Party, then the Surviving Corporation will pay
as incurred such Indemnified Party's reasonable fees and expenses of counsel
selected by the Surviving Corporation (including the cost of any
investigation and preparation and the cost of any appeal) incurred in
connection therewith. This covenant shall survive the closing of the
transactions contemplated hereby and is intended to be for the benefit of,
and shall be enforceable by, each of the Indemnified Parties and their
respective heirs and legal representatives. Buyer hereby guarantees the
compliance by the Surviving Corporation with the provisions of, and the
performance of the obligations of the Surviving Corporation under, this
Section 4.7.
4.8 PUBLIC ANNOUNCEMENTS. So long as this Agreement is in effect, the
Company and Buyer shall use all reasonable efforts to develop a joint
communications plan and each party shall use all reasonable efforts (i) to
ensure that all press releases and other public statements with respect to
the transactions contemplated hereby shall be consistent with such joint
communications plan and (ii) unless otherwise required by applicable law or
by obligations pursuant to any listing agreement with or rules of any
securities exchange, to consult with each other before issuing any press
release or otherwise making any public statement with respect to this
Agreement or the transactions contemplated hereby.
4.9 FCC APPLICATION
(a) As promptly as practicable after the execution and delivery
of this Agreement, Buyer, Merger Sub and the Company shall prepare all
appropriate applications for FCC consent, and such other documents as may be
required, with respect to the transfer of control of the Company to Buyer
(collectively, the "FCC APPLICATION"). Not later than the twentieth Business
Day following the date of this Agreement, Buyer and Merger Sub shall deliver
to the Company their respective completed portions of the FCC Application,
and not later than the thirtieth Business Day following the date of this
Agreement, the Company shall file or cause to be filed the FCC Application.
The Company and Buyer shall prosecute the FCC Application in good faith and
with due diligence in order to obtain such FCC consent as expeditiously as
practicable. If the Closing shall not have occurred for any reason within the
initial effective period of the granting of approval by the FCC of the FCC
Application, and neither the Company nor Buyer shall have terminated this
Agreement pursuant to Section 6.1, the Company and Buyer shall jointly
request one or more extensions of the effective period of such grant. No
party hereto shall knowingly take or fail to take any action the intent or
reasonably anticipated consequence of which action or failure to act would be
to cause the FCC not to grant approval of the FCC Application or delay either
such approval or the consummation of the transfer of control of the Company
pursuant to this Agreement.
(b) The Company shall pay any fees that may be payable in
connection with the filing or granting of approval of the FCC Application.
Buyer and the Company shall each oppose any objection or petition against the
FCC Application, and shall oppose any request for reconsideration or judicial
review of the granting of the FCC Application. The Company shall pay any
costs incurred in connection with complying with the FCC notice and
advertisement
32
requirements in connection with the transfer of control of the Company
pursuant to this Agreement.
4.10 FINANCING
(a) Buyer has delivered to the Company a true and complete copy
of the Bank Commitment Letter, which when combined with the equity to be
contributed to Buyer by its members will be sufficient to allow Buyer (i) to
pay in full all payments to be made in connection with the Merger (including
the purchase of the Series A Preferred Stock) and the other transactions
contemplated hereby, (ii) to refinance and retire all outstanding
indebtedness of the Company at the Effective Time under (A) the Credit
Agreement, dated June 25, 1998, among American Cellular Wireless LLC, as
borrower, certain guarantors, arrangers and agents signatory thereto, the
lenders party thereto and Toronto Dominion (Texas), Inc., as administrative
agent for the lenders (as amended, supplemented or modified from time to
time, the "BANK CREDIT FACILITY"), and (B) the 10 1/2% Senior Notes due 2008
issued by the Company pursuant to the Indenture, dated as of May 13, 1998,
between the Company and Chase Manhattan Bank and Trust Company, National
Association, as trustee (the "SENIOR NOTES"), and (iii) to satisfy all
Transaction Fees and Expenses and all other costs arising in connection
therewith. The financing to be provided under the Bank Commitment Letter (or
such other financing as Buyer may arrange with a bank or institutional lender
having capital and surplus in excess of $3.0 billion and a Thomson Bank Watch
Rating of "B" or better (any such bank or institutional lender is referred to
herein as the "BANK") that is on terms and conditions that are no less
favorable to Buyer than those contained in the Bank Commitment Letter) is
referred to in this Agreement as the "FINANCING."
(b) Buyer agrees to use its commercially reasonable efforts to
promptly negotiate and obtain definitive agreements with respect to the
Financing upon the terms provided in the Bank Commitment Letter (or such
replacement commitment letter that has substantially similar terms as the
Bank Commitment Letter and is in any event no less favorable to Buyer than
those set forth in the Bank Commitment Letter) (the "DEFINITIVE FINANCING
AGREEMENTS") and if such Definitive Financing Agreements are entered into, to
consummate the Financing upon satisfaction of (i) the conditions set forth in
Article V and (ii) the conditions precedent to any extension of credit under
the Definitive Financing Agreements (other than those conditions which are
within Buyer's control which conditions Buyer shall cause to be satisfied).
Buyer shall use reasonable commercial efforts to satisfy all requirements of
the Bank Commitment Letter (or such replacement commitment letter that has
substantially similar terms as the Bank Commitment Letter and is in any event
no less favorable to Buyer than those set forth in the Bank Commitment
Letter) and of the Definitive Financing Agreements which are conditions
precedent to closing the transactions constituting the Financing and to
drawing the cash proceeds thereunder. The Company shall provide such
cooperation as is reasonably requested by the Buyer in order to satisfy those
conditions to closing the transactions constituting the Financing which are
applicable to the Company, provided that the Company shall not be obligated
to incur any Expense in order to comply with this obligation.
33
4.11 TERMINATION OF EQUITY DOCUMENTS. At or prior to the Effective
Time, the Company shall cause (i) the Stockholders Agreement, dated as of
March 5, 1998, by and among the Company and each of the stockholders of the
Company signatory thereto, as amended, supplemented or modified from time to
time, (ii) the Stock Purchase Agreement, dated as of March 5, 1998, by and
among the Company and each of the stockholders of the Company signatory
thereto, as amended, supplemented or modified from time to time, and (iii)
the Registration Rights Agreement, dated as of March 5, 1998, by and among
the Company and each of the stockholders of the Company signatory thereto, as
amended, supplemented or modified from time to time, each to be terminated
and of no further force and effect (except for provisions thereof which by
their terms survive any such termination and do not adversely impact Buyer or
the Surviving Corporation in a material manner).
4.12 FURTHER ASSURANCES. If at any time after the Effective Time any
further action is reasonably necessary to carry out the purposes of this
Agreement, the proper officers of the Company, Buyer and Merger Sub shall
take any such further action and shall be authorized to execute and deliver,
in the name and on behalf of the Company, Buyer or Merger Sub, as the case
may be, any deeds, bills of sale, assignments or assurances and to take any
other actions to vest, perfect or confirm of record or otherwise in the
Surviving Corporation any and all right, title and interest in, to and under
any of the rights, properties or assets of the Company acquired or to be
acquired by the Surviving Corporation as a result of or in connection with
the Merger.
ARTICLE V.
CONDITIONS PRECEDENT
5.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
obligations of the Company, Buyer and Merger Sub to effect the Merger are
subject to the satisfaction or waiver on or prior to the Effective Time of
the following conditions:
(a) HSR ACT. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or
shall have expired.
(b) NO INJUNCTIONS OR RESTRAINTS, ILLEGALITY. No temporary
restraining order, preliminary or permanent injunction or other order issued
by a court or other Governmental Entity of competent jurisdiction shall be in
effect and have the effect of making the Merger illegal or otherwise
restraining or prohibiting consummation of the Merger or any of the other
transactions contemplated by this Agreement; PROVIDED, HOWEVER, that the
provisions of this Section 5.1(b) shall not be available to any party whose
failure to fulfill its obligations pursuant to Section 4.3 shall have been
the cause of, or shall have resulted in, such order or injunction.
(c) REQUIRED REGULATORY APPROVALS. All consents, waivers,
authorizations, permits, orders and approvals of, and declarations and
filings with, and all expirations of waiting periods imposed by, any
Governmental Entity (other than the FCC) which, if not obtained in connection
with the execution, delivery and performance by the parties of this Agreement
and the consummation of the transactions contemplated hereby, would have a
Material Adverse Effect on the Company or the Surviving Corporation, or
materially impair the ability of the Company, Buyer or Merger Sub to
consummate the transactions contemplated hereby (collectively,
34
"REQUIRED REGULATORY APPROVALS"), shall have been obtained, waived, declared
or filed or have occurred, as the case may be, and all such Required
Regulatory Approvals shall be in full force and effect.
(d) FCC TRANSFER APPROVALS. Except as set forth in Section 5.2(c),
all consents, waivers, approvals and authorizations (the "FCC TRANSFER
APPROVALS") required to be obtained from, and all filings or notices required
to be made by Buyer and the Company prior to the consummation of the
transactions contemplated by this Agreement shall have been obtained from or
made with, the FCC.
5.2 CONDITIONS TO THE OBLIGATIONS OF BUYER AND MERGER SUB TO EFFECT THE
MERGER. In addition to the conditions set forth in Section 5.1, the
obligations of Buyer and Merger Sub to effect the Merger are further subject
to the satisfaction or waiver on or prior to the Effective Time of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company set forth in this Agreement shall be true and
correct as of the date of this Agreement and as of the Closing Date as though
made on and as of the Closing Date, except to the extent (i) any inaccuracies
in such representations and warranties, individually or in the aggregate,
would not have a Material Adverse Effect on the Company (provided that,
solely for purposes of this Section 5.2(a), any representation or warranty of
the Company that is qualified by materiality (or words of similar import) or
Material Adverse Effect shall be read as if such language were not present),
or (ii) such representations and warranties speak as of an earlier date.
Buyer shall have received a certificate executed on behalf of the Company by
its Chief Executive Officer or Chief Financial Officer to such effect.
(b) PERFORMANCE OF OBLIGATIONS AND COVENANTS. The Company shall have
performed or complied in all material respects with all of its obligations
and covenants required to be performed by the Company under this Agreement at
or prior to the Closing Date. Buyer shall have received a certificate
executed on behalf of the Company by its Chief Executive Officer or Chief
Financial Officer to such effect.
(c) FINAL ORDER. Each of the FCC Transfer Approvals shall have
become a Final Order. For purposes of this Agreement, "FINAL ORDER" shall
mean an action by the FCC: (i) that is not reversed, stayed, enjoined, set
aside, annulled or suspended within the deadline, if any, provided by
applicable statute or regulation, (ii) with respect to which no request for
stay, motion or petition for reconsideration or rehearing, application or
request for review, or notice of appeal or other judicial petition for review
that is filed within such period is pending, and (iii) as to which the
deadlines, if any, for filing any such request, motion, petition,
application, appeal or notice, and for the entry of orders staying,
reconsidering or reviewing on the FCC's own motion have expired.
Notwithstanding anything to the contrary contained in this Agreement, (A)
Buyer may, at its option by written notice to the Company, waive, on behalf
of all parties, the requirement that each of the FCC Transfer Approvals shall
have become a Final Order, and (B) in the case of the required FCC Transfer
Approvals regarding the transfer of the microwave and PCS licenses only,
Buyer shall, on behalf of all parties, deem either initial FCC approvals or
35
special temporary authority to transfer the microwave or PCS licenses, as the
case may be, to satisfy this condition and, in such case, upon receipt of
either the initial FCC approvals or such special temporary authority, each
party shall be obligated hereunder as though a Final Order with respect
thereto had been received.
(d) DELIVERIES. Buyer shall have received (i) payoff letters in
customary form with respect to the Bank Credit Facility and shall have
received a certificate from the Company's Chief Financial Officer with
respect to the amount of the Transaction Fees and Expenses and the amount of
Outstanding Indebtedness; (ii) resignations of all directors of the Company
effective as of the Effective Time; (iii) written statements contemplated by
Section 5.2(d) of the Company Disclosure Schedule from Messrs. Fujii and
XxXxxxxx; and (iv) agreements and instruments in form and substance
reasonably satisfactory to Buyer evidencing the termination of each of the
agreements and instruments as provided in Section 4.11 of this Agreement.
(e) NO LITIGATION. Except as set forth on Section 2.1(g) of the
Company Disclosure Schedule, there shall not be pending any suit, action,
investigation (of which the Company has received written notice that it is a
target) or proceeding by any Governmental Entity (an "ACTION") (i) seeking to
restrain or prohibit the consummation of the Merger or any of the other
transactions contemplated by this Agreement or seeking to obtain damages from
the Company or Buyer or any of their respective Subsidiaries, which, if
determined adversely to the Company, would be reasonably likely to have a
Material Adverse Effect on the Company; (ii) seeking to prohibit or limit the
ownership or operation by the Company or any of its Subsidiaries or Buyer of
any material portion of the business or assets of the Company and its
Subsidiaries; (iii) seeking to require the Company or any of its Subsidiaries
or Buyer to dispose of or hold separate any material portion of the business
or assets of the Company and its Subsidiaries as a result of the Merger or
any of the other transactions contemplated by this Agreement; (iv) seeking to
prohibit Buyer from effectively controlling in any material respect the
business or operations of the Company and its Subsidiaries, including the
exercise of any purported right under a Lien with respect to any Subsidiary,
or (v) seeking to impose limitations on the ability of Buyer or Merger Sub to
hold, or exercise full rights of ownership of, any shares of Company Common
Stock, including without limitation, the right to vote shares of Company
Common Stock on all matters properly presented to the shareholders of the
Company or which otherwise would have a Material Adverse Effect on the
Company.
(f) MATERIAL ADVERSE CHANGE. Since the date of this Agreement, there
shall not have been a Material Adverse Effect on the Company.
(g) DISSENTING SHARES. The holders of not more than 5% of all
outstanding Class A Common Stock shall have demanded (and not withdrawn)
appraisal for their shares in accordance with Section 262 of the DGCL.
(h) DEBT REPAYMENT. Messrs. Fujii and XxXxxxxx shall have repaid all
outstanding indebtedness owed by them to the Company and its Subsidiaries.
36
(i) SHAREHOLDER APPROVAL. The Written Consent of Shareholders
approving and adopting this Agreement and the transactions contemplated
hereby, including the Merger in accordance with the DGCL, shall be in full
force and effect as of the Closing Date.
5.3 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY TO EFFECT THE MERGER.
In addition to the conditions set forth in Section 5.1, the obligations of
the Company to effect the Merger are further subject to the satisfaction or
waiver on or prior to the Effective Time of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer and Merger Sub set forth in this Agreement shall be true
and correct as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date, except to the extent (i) any
inaccuracies in such representations and warranties, individually or in the
aggregate, would not have a Material Adverse Effect on Buyer or Merger Sub
(provided that, solely for purposes of this Section 5.2(a), any
representation or warranty of Buyer or Merger Sub that is qualified by
materiality (or words of similar import) or Material Adverse Effect shall be
read as if such language were not present), or (ii) such representations and
warranties speak as of an earlier date. The Company shall have received an
officer's certificate executed on behalf of Buyer and Merger Sub to such
effect.
(b) PERFORMANCE OF OBLIGATIONS AND COVENANTS. Buyer and Merger Sub
shall have performed or complied with in all material respects all of their
respective obligations and covenants required to be performed by them under
this Agreement at or prior to the Closing Date and the Company shall have
received an officer's certificate executed on behalf of Buyer and Merger Sub
to such effect.
ARTICLE VI.
TERMINATION AND AMENDMENT
6.1 TERMINATION. This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, by action taken or
authorized by the Board of Directors of the terminating party or parties,
whether before or after approval of this Agreement and the transactions
contemplated hereby by the stockholders of the Company:
(a) By mutual written consent of Buyer and the Company, by action of
their respective Boards of Directors;
(b) By either the Company or Buyer if the Merger shall not have been
consummated by the date which is six (6) months from the date of this
Agreement (the "OUTSIDE DATE"); PROVIDED, HOWEVER, that such Outside Date
shall be extended to the date which is twelve (12) months from the date of
this Agreement in the event all conditions to effect the Merger other than
those set forth in Sections 5.1(a), (b), (c) and (d) and 5.2(c) (the
"EXTENSION CONDITIONS") have been or are, in the reasonable judgment of
either Seller or Buyer, capable of being satisfied (or if the party for whose
benefit such condition runs is in such party's discretion, waived) at the
time of such extension and the Extension Conditions have been or are
reasonably capable of being satisfied on or prior to such extended date;
PROVIDED FURTHER that the right to terminate this
37
Agreement under this Section 6.1(b) shall not be available to any party whose
failure (or, if Buyer is the terminating party, the failure of Buyer or
Merger Sub) to fulfill any obligation under this Agreement has been the
primary cause of, or resulted in, the failure of the Merger to occur on or
before such Outside Date, as the same may be extended pursuant to this
Section 6.1(b) (except that, notwithstanding the provisions of this Section
6.1(b), if, at the Outside Date, all conditions precedent to Buyer's
obligation to consummate the Merger set forth in Article V have been
satisfied (or waived by Buyer) and the Merger has not closed solely as a
result of a Bank Financing Failure, Buyer shall have the right to terminate
this Agreement pursuant to this Section 6.1(b) upon payment to the Company of
the Liquidated Damages Amount);
(c) By either the Company or Buyer if there shall be any law or
regulation that makes consummation of the Merger illegal or otherwise
prohibited or if any Governmental Entity shall have issued an order, decree
or ruling or taken any other action (which order, decree, ruling or other
action the terminating party (including, if Buyer is the terminating party,
Merger Sub) shall have used its commercially reasonable efforts to resist,
resolve or lift, as applicable, subject to the provisions of Section 4.3)
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such order, decree, ruling or other
action shall have become final and nonappealable;
(d) By Buyer if the approval by the stockholders of the Company
required for the consummation of the Merger or the other transactions
contemplated hereby shall not have been obtained by reason of the failure to
obtain the required vote at the Company Stockholders Meeting or at any
adjournment thereof or pursuant to a written consent in lieu of a
shareholders meeting;
(e) By Buyer, upon a material breach of any covenant or agreement on
the part of the Company set forth in this Agreement, or if (i) any
representation or warranty of the Company that is qualified as to materiality
shall have become untrue or (ii) any representation or warranty of the
Company that is not so qualified shall have become untrue in any material
respect (a "TERMINATING COMPANY BREACH"); PROVIDED, HOWEVER, Buyer shall
promptly give the Company written notice specifying such breach and if such
Terminating Company Breach is capable of being cured by the Company prior to
the earlier of 30 days or the tenth day prior to the Outside Date through the
exercise of its reasonable commercial efforts, so long as the Company
continues to exercise its reasonable commercial efforts to cure such
Terminating Company Breach, Buyer may not terminate this Agreement under this
Section 6.1(e);
(f) By the Company, upon a material breach of any covenant or
agreement on the part of Buyer or Merger Sub set forth in this Agreement, or
if (i) any representation or warranty of Buyer or Merger Sub that is
qualified as to materiality shall have become untrue or (ii) any
representation or warranty of Buyer or Merger Sub that is not so qualified
shall have become untrue in any material respect ("TERMINATING BUYER
BREACH"); PROVIDED, HOWEVER, the Company shall promptly give Buyer written
notice specifying such breach and if such Terminating Buyer Breach is capable
of being cured by Buyer prior to the earlier of 30 days or the tenth day
prior to the Outside Date through the exercise of reasonable commercial
efforts, so long as Buyer and Merger Sub continue to exercise their
respective reasonable commercial
38
efforts to cure such Terminating Buyer Breach, the Company may not terminate
this Agreement under this Section 6.1(f);
(g) By Buyer upon any action by the parties to the Voting Agreement
or the Written Consent of Shareholders, the effect of which is that the
approval or consent of a majority of the Company's stockholders entitled to
vote on the Merger is no longer in effect.
The party desiring to terminate this Agreement pursuant to Section 6.1(b),
(c), (d), (e), (f) or (g) shall provide the other party notice of such
termination in accordance with Section 7.2.
6.2 EFFECT OF TERMINATION. In the event of termination of this Agreement
by either the Company or Buyer as provided in Section 6.1, this Agreement
shall forthwith become void and of no further force and effect and there
shall be no liability or obligation on the part of Buyer, Merger Sub or the
Company or their respective officers or directors except with respect to the
Company, Buyer and Merger Sub (i) as provided in the last sentence of Section
4.2, Section 4.6, this Section 6.2 and Article VII, and (ii) for damages
incurred by any party as a result of a breach by the other party of any of
its covenants, representations, warranties or other agreements set forth in
this Agreement, including damages incurred as a result of any termination
that results from such a breach, and in the case of a breach by Buyer or
Merger Sub, to the full extent of such damages up to but not exceeding $500
million. Notwithstanding the foregoing, in the event that the conditions
precedent to Buyer's obligations to consummate the Merger set forth in
Article V have been satisfied (or waived by Buyer) and the Merger fails to
occur by the date on which such conditions have been so satisfied (or waived
by Buyer) solely because either (i) Buyer has received written notice from
Bank of America N.A. and Banc of America Securities LLC that they will not
fund the financing contemplated by the Bank Commitment Letter (or, if Buyer
has substituted a Bank pursuant to Section 4.10(a), a similar written notice
from such Bank) for any reason other than (x) a breach by Buyer of its
obligations to the banks under the Bank Commitment Letter or the Definitive
Financing Agreements (or, if Buyer has substituted a Bank pursuant to Section
4.10(a), a breach by Buyer of its obligations to such Bank under any
commitment letter or other financing agreements with such Bank) or (y) the
failure of Buyer to satisfy a condition to the funding of such financing that
is within Buyer's control or (ii) Buyer and Bank of America N.A. and Banc of
America Securities LLC have been unable, despite good faith efforts, to
negotiate, execute and deliver the Definitive Financing Agreements (or, if
Buyer has substituted a Bank pursuant to Section 4.10(a), Buyer and Bank have
been unable, despite good faith efforts, to negotiate, execute and deliver
definitive financing agreements) (a "BANK FINANCING FAILURE"), then in the
event of termination of this Agreement by either party in accordance with the
terms hereof, Buyer shall pay the Company, as liquidated damages, the sum of
$100 million without the necessity of proof by the Company of actual damages
(the "LIQUIDATED DAMAGES AMOUNT"). The parties acknowledge that the
Liquidated Damages Amount is a fair and reasonable measure of the damages
that the Company and its stockholders would sustain as a result of the
failure of Buyer to consummate the Merger due to a Bank Financing Failure,
and that the amount of actual damages in the event of a Bank Financing
Failure would be impossible to ascertain. For the avoidance of doubt, the
parties hereby acknowledge that a Bank Financing Failure cannot occur if
there is a breach (after giving effect to any applicable cure period provided
in this Agreement) by Buyer of its obligations under this
39
Agreement, and in the event of such breach the Company shall be entitled to
pursue its remedies against Buyer to the full extent of such damages up to
but not exceeding $500 million as provided in Section 6.2(a)(ii); PROVIDED,
HOWEVER, the Company covenants and agrees that in the event a court of
competent jurisdiction renders a final nonappealable order that Buyer did not
breach its obligations under this Agreement and that a Bank Financing Failure
had occurred, then upon the payment of the Liquidated Damages Amount, neither
Buyer nor Merger Sub (nor any affiliate thereof) will have any further
liability to the Company, and the Company shall not pursue any other action
or claim against the Buyer or any of its affiliates, arising out of or
relating to this Agreement, the Unrestricted Equity Agreement or any other
related agreement or the transactions contemplated hereby and thereby.
Notwithstanding any other provision of this Agreement, no party hereto may be
liable for any punitive, consequential or special damages in any action based
on a breach by the other party of any of its covenants, representations,
warranties or other agreements set forth in this Agreement. For the avoidance
of doubt, in the event a Bank Financing Failure occurs prior to the
satisfaction (or waiver by Buyer) of all of the conditions precedent to
Buyer's obligations to consummate the Merger set forth in Article V, Buyer's
obligations to consummate the transactions contemplated by this Agreement in
accordance with the terms hereof shall remain in full force and effect;
PROVIDED, HOWEVER, the Liquidated Damages Amount shall not be payable prior
to the satisfaction (or waiver by Buyer) of all of the conditions precedent
to Buyer's obligations to consummate the Merger set forth in Article V.
Nothing in this Section 6.2 or any other section of this Agreement shall be
construed in any manner to condition Buyer's obligation to consummate the
transactions contemplated by this Agreement upon Buyer's obtaining the
Financing or any substitute financing.
6.3 AMENDMENT. This Agreement may be amended by all the parties hereto,
by action taken or authorized by their respective Boards of Directors, at any
time whether before or after approval of this Agreement and the transactions
contemplated hereby by the stockholders of the Company, but, after any such
approval, no amendment shall be made which by law requires further approval
by such stockholders without such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
6.4 EXTENSION; WAIVER. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall
be valid only if set forth in a written instrument signed on behalf of such
party. No delay on the part of any party hereto in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party hereto of any right, power or privilege
hereunder operate as a waiver of any other right, power or privilege
hereunder, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder. Unless otherwise
provided, the rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies which the parties hereto may
40
otherwise have at law or in equity. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of those rights.
ARTICLE VII.
GENERAL PROVISIONS
7.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS; NO OTHER
REPRESENTATIONS AND WARRANTIES. None of the representations, warranties,
covenants and other agreements in this Agreement or in any instrument
delivered pursuant to this Agreement, including any rights arising out of any
breach of such representations, warranties, covenants and other agreements,
shall survive the Effective Time, except for those covenants and agreements
contained herein and therein that by their terms apply or are to be performed
in whole or in part after the Effective Time and this Article VII. Each party
hereto agrees that, except for the representations and warranties contained
in this Agreement the Unrestricted Equity Agreement, none of the Company,
Buyer or Merger Sub makes any other representations or warranties, and each
hereby disclaims any other representations and warranties made by itself or
any of its officers, directors, employees, agents, financial and legal
advisors or other representatives, with respect to the execution and delivery
of this Agreement, the documents and the instruments referred to herein, or
the transactions contemplated hereby or thereby, notwithstanding the delivery
or disclosure to the other party or the other party's representatives of any
documentation or other information with respect to any one or more of the
foregoing.
7.2 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed duly given (a) on the date of delivery if
delivered personally, (b) on the first Business Day following the date of
dispatch if delivered by a nationally recognized next-day courier service,
(c) on the earlier of the date of receipt or the tenth Business Day following
the date of mailing if delivered by registered or certified mail, return
receipt requested, postage prepaid or (d) if sent by facsimile transmission,
when transmitted and receipt is confirmed by telephone. All notices hereunder
shall be delivered as set forth below, or pursuant to such other instructions
as may be designated in writing by the party to receive such notice:
(a) if to Buyer or Merger Sub, to:
ACC Acquisition LLC
c/o Dobson Communication Corporation
00000 X. Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, President
Fax No.: 000-000-0000
with copies to:
Xxxxxx Communications Corporation
00000 X. Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
41
Attention: Xxxxxxx Xxxxxx, President
Fax No.: 000-000-0000
and:
AT&T Wireless Services, Inc.
0000 000xx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx
Fax No.: 000-000-0000
Xxxxxxx and Xxxxxx, LLP
0000 XxxxXxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esquire
Fax No.: 000-000-0000
and:
Xxxxxxxx Xxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esquire
Fax No.: 000-000-0000
(b) if to Seller, to:
American Cellular Corporation
0000 X. Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 6017
Attention: Xxxx Xxxxx, Chief Executive Officer
with copies to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esquire
and:
American Cellular Corporation
0000 X Xxxxxx, X.X.
Xxxxx 000
00
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, General Counsel
Xxxxx Xxxxxx Xxxxxxxx LLP 0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxx
7.3 INTERPRETATION. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table
of contents, glossary of defined terms and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. 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 parties have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement
shall be construed as if drafted jointly by the parties and no presumption or
burden or proof shall arise favoring or disfavoring any party by virtue of
the authorship of any of the provisions of this Agreement. Any reference to
any federal, state, local or foreign statue or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise. It is understood and agreed that neither the
specifications of any dollar amount in this Agreement nor the inclusion of
any specific item in the Schedules or Exhibits is intended to imply that such
amounts or higher or lower amounts, or the items so included or other items,
are or are not material, and neither party shall use the fact of setting of
such amounts or the fact of the inclusion of such item in the Schedules or
Exhibits in any dispute or controversy between the parties as to whether any
obligation, item or matter is or is not material for purposes hereof.
7.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that
both parties need not sign the same counterpart.
7.5 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES
(a) This Agreement (including the Schedules and Exhibits hereto)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, other than the Confidentiality Agreement, which
Confidentiality Agreement shall survive the execution and delivery of this
Agreement.
(b) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right,
benefit or remedy of any nature whatsoever under or by
43
reason of this Agreement, other than Article I and Sections 4.7 and 6.2 (each
of which is intended to be for the benefit of the Persons covered thereby and
may be enforced by such Persons).
7.6 GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL
(a) This Agreement shall be governed and construed in accordance
with the laws of the State of Delaware, without regard to the laws that might
be applicable under conflicts of laws principles.
(b) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of any court in the State of Delaware, or Federal court of the
United States of America sitting in Delaware, and any appellate court of such
jurisdiction, in any action or proceeding arising out of or relating to this
Agreement or the agreements delivered in connection herewith or the
transactions contemplated hereby or thereby or for recognition or enforcement
of any judgment relating thereto, and each of the parties hereby irrevocably
and unconditionally (i) agrees not to commence any such action or proceeding
except in such courts, (ii) agrees that any claim in respect of any such
action or proceeding may be heard and determined in such Delaware state court
or, to the extent permitted by law, in such Federal court, (iii) waives, to
the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any such action or
proceeding in any such Delaware state or Federal court, and (iv) waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such Delaware state or
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 7.2. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
(c) Each party acknowledges and agrees that any controversy which
may arise under this agreement is likely to involve complicated and difficult
issues, and therefore it hereby irrevocably and unconditionally waives any
right it may have to a trial by jury in respect of any litigation directly or
indirectly arising out of or relating to this agreement and any of the
agreements delivered in connection herewith or the transactions contemplated
hereby or thereby. Each party certifies and acknowledges that (i) no
representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce either of such waivers, (ii) it understands and
has considered the implications of such waivers, (iii) it makes such waivers
voluntarily, and (iv) it has been induced to enter into this agreement by,
among other things, the mutual waivers and certifications in this section
7.6(c).
7.7 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy,
all other terms and provisions of this Agreement shall nevertheless remain in
full force and effect. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall
44
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible. Any provision of this Agreement
held invalid or unenforceable only in part, degree or certain jurisdictions
will remain in full force and effect to the extent not held invalid or
unenforceable. To the extent permitted by applicable law, each party waives
any provision of law which renders any provision of this Agreement invalid,
illegal or unenforceable in any respect.
7.8 ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto, in
whole or in part (whether by operation of law or otherwise), without the
prior written consent of the other parties, and any attempt to make any such
assignment without such consent shall be null and void. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of and be enforceable by the parties and their respective permitted
successors and assigns.
7.9 ENFORCEMENT. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed
in accordance with their specific terms. It is accordingly agreed that except
as otherwise provided in Section 6.2 the parties shall be entitled to
specific performance of the terms hereof, this being in addition to any other
remedy to which they are entitled at law or in equity.
7.10 DEFINITIONS. As used in this Agreement:
(a) "BOARD OF DIRECTORS" means the Board of Directors of any
specified Person and any properly serving and acting committees thereof.
(b) "BUSINESS DAY" means any day on which banks are not required or
authorized to close in the City of New York.
(c) "INTELLECTUAL PROPERTY" means patents, copyrights, trademarks
(registered and unregistered), service marks, brand names, trade names, and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing.
(d) "MATERIAL ADVERSE EFFECT" means, with respect to any Person, any
change, circumstance, event or effect that, individually or in the aggregate
with all other changes, circumstances and effects has had or is reasonably
likely to have a material adverse effect on the business, operations,
financial condition or results of operations of such Person and its
Subsidiaries taken as a whole. As used in this Agreement, the term "Material
Adverse Effect" (i) shall include, without limitation, any change,
circumstance, event or effect (A) with respect to Buyer, that is materially
adverse to Buyer's ability to pay the Merger Consideration or otherwise
perform its obligations under this Agreement or that would otherwise
materially impair the ability of Buyer to consummate the transactions
contemplated hereby, and (B) with respect to the Company, that would
materially impair the ability of the Company to consummate the transactions
contemplated hereby, and (ii) shall not include, with respect to the Company,
any change, circumstance, event or effect that relates to or results
primarily from changes in general
45
economic conditions, financial markets or conditions in the cellular or
wireless telephone or telecommunications industry or related industries.
(e) "ORGANIZATIONAL DOCUMENTS" means, with respect to any entity,
the certificate of incorporation, bylaws, partnership agreement, limited
liability company agreement or other governing documents of such entity.
(f) "PERSON" means an individual, corporation, partnership, limited
liability company, association, trust, unincorporated organization, entity or
group (as defined in the Exchange Act).
(g) "SUBSIDIARY" when used with respect to any Person means any
other corporation or other organization, whether incorporated or
unincorporated, (i) of which such Person or any other Subsidiary of such
Person is a general partner (excluding partnerships in which the general
partnership interests held by such Person or any direct or indirect
Subsidiary of such Person do not have a majority of the voting or economic
interests in such partnership), or (ii) of which such Person or any other
Subsidiary of such Person (or such Person and one or more of its
Subsidiaries) directly or indirectly owns or controls (by ownership; contract
or otherwise) securities or other interests having by their terms ordinary
voting power to elect a majority of the Board of Directors or others
performing similar functions with respect to such corporation or other
organization, or (iii) which is, or which in accordance with GAAP should be,
consolidated for purposes of the Company's financial reporting.
(h) "TAX" (including, with correlative meaning, the terms "TAXES"
and "TAXABLE") means all federal, state, local and foreign income, profits,
franchise, gross receipts, environmental, customs duty, capital stock,
severance, stamp, payroll, sales, employment, unemployment disability, use,
property, withholding, excise, production, value added, occupancy and other
taxes, duties or assessments of any nature whatsoever, together with all
interest, penalties, fines and additions to tax imposed with respect to such
amounts and any interest in respect of such penalties and additions to tax,
and "TAX RETURN" means all returns and reports (including elections, claims,
declarations, disclosures, schedules, estimates, computations and information
returns) required to be supplied to a Tax authority in any jurisdiction
relating to Taxes.
(i) "THE OTHER PARTY" means, with respect to the Company, Buyer and
means, with respect to Buyer, the Company.
[SIGNATURE PAGE FOLLOWS]
46
IN WITNESS WHEREOF, Buyer, Merger Sub and the Company have
caused this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
ACC ACQUISITION LLC,
a Delaware limited liability company
By: Xxxxxx XX Company, Member
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
----------------------------------
Title: President
----------------------------------
By: AT&T Wireless Services JV Co., Member
By: /s/ Xxx Xxxxx
----------------------------------
Name: Xxx Xxxxx
----------------------------------
Title: Vice President
----------------------------------
ACC ACQUISITION CO.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
----------------------------------
Title: President
----------------------------------
AMERICAN CELLULAR CORPORATION,
a Delaware corporation
By: /s/ Xxxx Xxxxx
----------------------------------
Name: Xxxx Xxxxx
----------------------------------
Title: CEO
----------------------------------
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
