AGREEMENT AND PLAN OF MERGER
dated as of
March 6, 1998
between
PRICELLULAR CORPORATION
and
AMERICAN CELLULAR CORPORATION
TABLE OF CONTENTS(1)
------------------------------
PAGE
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ARTICLE 1
THE MERGER
SECTION 1.01. The Merger......................................................1
SECTION 1.02. Conversion of Shares ...........................................2
SECTION 1.03. Surrender and Payment...........................................3
SECTION 1.04. Dissenting Shares...............................................4
SECTION 1.05. Stock Options...................................................5
ARTICLE 2
THE SURVIVING CORPORATION
SECTION 2.01. Certificate of Incorporation....................................5
SECTION 2.02. Bylaws..........................................................5
SECTION 2.03. Directors and Officers..........................................5
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Corporate Existence and Power...................................5
SECTION 3.02. Corporate Authorization.........................................6
SECTION 3.03. Governmental Authorization......................................6
SECTION 3.04. Non-contravention...............................................7
SECTION 3.05. Capitalization..................................................8
SECTION 3.06. Subsidiaries....................................................9
SECTION 3.07. SEC Filings....................................................10
SECTION 3.08. Financial Statements...........................................10
SECTION 3.09. Disclosure Documents ..........................................11
SECTION 3.10. Absence of Certain Changes.....................................11
SECTION 3.11. No Undisclosed Material Liabilities............................13
SECTION 3.12. Litigation.....................................................14
SECTION 3.13. Taxes..........................................................14
SECTION 3.14. ERISA and Labor Matters........................................15
SECTION 3.15. Finders' Fees..................................................17
SECTION 3.16. FCC Matters and Governmental Matters...........................18
SECTION 3.17. Licenses and Permits; Compliance with Laws.....................20
SECTION 3.18. Contracts......................................................20
SECTION 3.19. Properties; Assets.............................................21
SECTION 3.20. Environmental Matters..........................................21
SECTION 3.21. Related Party Transactions.....................................22
SECTION 3.22. Opinion of Financial Advisor...................................23
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
SECTION 4.01. Corporate Existence and Power..................................23
SECTION 4.02. Corporate Authorization........................................23
SECTION 4.03. Governmental Authorization.....................................23
SECTION 4.04. Non-contravention..............................................24
SECTION 4.05. Disclosure Documents ..........................................24
SECTION 4.06. Finders' Fees..................................................24
SECTION 4.07. Financing......................................................24
SECTION 4.08. Qualification of Buyer.........................................25
SECTION 4.09. Capitalization.................................................26
ARTICLE 5
COVENANTS OF THE COMPANY
SECTION 5.01. Conduct of the Company.........................................26
SECTION 5.02. Stockholder Meeting; Proxy Material............................27
SECTION 5.03. Access to Information..........................................28
SECTION 5.04. Other Offers...................................................28
SECTION 5.05. Notices of Certain Events......................................29
SECTION 5.06. Solvency Advice................................................29
ARTICLE 6
COVENANTS OF BUYER
SECTION 6.01. Confidentiality................................................30
SECTION 6.02. Voting of Shares...............................................30
SECTION 6.03. Indemnification; Directors' and Officers'
Insurance....................................................30
SECTION 6.04. Name Change....................................................32
SECTION 6.05. High Yield Financing ..........................................32
SECTION 6.06. Equity Financing...............................................32
ARTICLE 7
COVENANTS OF BUYER AND THE COMPANY
SECTION 7.01. Best Efforts...................................................33
SECTION 7.02. Certain Filings................................................34
SECTION 7.03. Public Announcements...........................................34
SECTION 7.04. Further Assurances.............................................34
SECTION 7.05. FCC Application................................................35
SECTION 7.06. HSR Act Matters................................................35
SECTION 7.07. Warrants; Convertible Notes....................................36
ARTICLE 8
CONDITIONS TO THE MERGER
SECTION 8.01. Conditions to the Obligations of Each Party....................36
SECTION 8.02. Conditions to the Obligations of Buyer.........................37
SECTION 8.03. Conditions to the Obligations of the Company...................38
ARTICLE 9
TERMINATION
SECTION 9.01. Termination....................................................39
SECTION 9.02. Effect of Termination..........................................40
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Notices.......................................................41
SECTION 10.02. Survival of Representations and Warranties
and Agreements..............................................42
SECTION 10.03. Amendments; No Waivers........................................42
SECTION 10.04. Expenses......................................................42
SECTION 10.05. Successors and Assigns........................................43
SECTION 10.06. Governing Law.................................................44
SECTION 10.07. Counterparts; Effectiveness...................................44
SECTION 10.08. Entire Agreement; No Third-party
Beneficiaries...............................................44
SECTION 10.09. Extension; Waiver.............................................44
SECTION 10.10. Headings......................................................44
SECTION 10.11. Severability..................................................44
SECTION 10.12. WAIVER OF JURY TRIAL..........................................45
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(1) The Table of Contents is not a part of this Agreement.
INDEX OF DEFINED TERMS
Term Section
---- -------
Acquisition Proposal.................................................5.04
Balance Sheet........................................................3.08
Balance Sheet Date...................................................3.08
Benefit Arrangements.................................................3.14(d)
Buyer................................................................Preamble
Buyer Material Adverse Effect........................................4.01
Claim................................................................6.03
Class A Shares.......................................................?
Class B Shares.......................................................?
Closing..............................................................1.02(b)
Closing Date.........................................................1.02(b)
Code.................................................................3.13
Communications Act...................................................3.03
Company..............................................................Preamble
Company Disclosure Documents.........................................3.09(a)
Company Proxy Statement..............................................3.09(a)
Company Returns......................................................3.13
Company SEC Reports..................................................3.07(a)
Company Securities...................................................3.05(e)
Company Stockholder Meeting..........................................5.02
Company 10-K.........................................................3.06(a)
Confidentiality Agreement............................................5.03
Contracts............................................................3.18
Convertible Discount Notes...........................................3.05(d)
Delaware Law.........................................................1.01(a)
Draft 1997 Form 10-K.................................................3.06(a)
Effective Time.......................................................1.01(c)
Employee Funds ......................................................5.01(a)(ii)
Employee Plans.......................................................3.14(a)
Environmental Law....................................................3.20
ERISA................................................................3.14(a)
Exchange Act.........................................................3.03
Exchange Agent.......................................................1.03(a)
FAA..................................................................3.16(a)
FCC..................................................................1.01(a)
FCC Application......................................................7.05(a)
FCC Licenses.........................................................3.16(a)
FCC Transfer Approvals...............................................8.01(e)
Final Order..........................................................8.01(e)
Financing Condition..................................................8.02(d)
HSR Act..............................................................3.03(b)
Indemnified Parties..................................................6.03(b)
Lien.................................................................3.04(d)
Material Adverse Effect..............................................3.01
Merger...............................................................1.01(a)
Merger Consideration.................................................1.02(c)
Multiemployer Plans..................................................3.14(b)(i)
Permits..............................................................3.17
Person...............................................................1.03(d)
Related Parties......................................................3.21(a)
SEC..................................................................3.07(a)
SEC Reports..........................................................3.07(a)
Securities Act.......................................................3.07(b)
Series A Preferred Stock.............................................1.02(c)
Shares...............................................................1.02(c)
Statutes.............................................................3.16(e)
Subsidiary...........................................................3.01
Subsidiary Securities................................................3.06(b)(ii)
Surviving Corporation................................................1.01(a)
Taxes................................................................3.13
Trigger Event........................................................10.04(b)
Trustee..............................................................7.07
Voting Agreement.....................................................Preamble
Warrant Agreement....................................................3.05(c)
Warrants.............................................................3.05(c)
Wireless.............................................................3.07(a)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of March 6, 1998 between
PRICELLULAR CORPORATION, a Delaware corporation (the "Company"), and AMERICAN
CELLULAR CORPORATION, a Delaware corporation ("Buyer").
WHEREAS, the respective Boards of Directors of the Company and Buyer
have approved, and deem it advisable and in the best interests of their
respective stockholders that Buyer merge with and into the Company, pursuant to
and subject to the terms and conditions set forth herein; and
WHEREAS, as a condition to Buyer entering into this Agreement and
incurring the obligations set forth herein, concurrently with the execution and
delivery of this Agreement, Buyer is entering into a voting agreement (the
"Voting Agreement") with certain holders of securities of the Company pursuant
to which, among other things, such holders have agreed to vote all shares of
capital stock of the Company owned by such holders in favor of this Agreement,
the Merger provided for herein and the transactions contemplated by this
Agreement;
NOW, THEREFORE, in consideration of the promises and the respective
representations, warranties, covenants, and agreements set forth herein and in
the voting agreements, the parties hereto agree as follows:
ARTICLE 1
THE MERGER
SECTION 1.01. The Merger. (a) Upon the terms and subject to the
conditions set forth in this Agreement (including approval of the Federal
Communications Commission (the "FCC")), at the Effective Time, Buyer shall be
merged (the "Merger") with and into the Company in accordance with the General
Corporation Law of the State of Delaware (the "Delaware Law") whereupon the
separate existence of Buyer shall cease, and the Company shall be the surviving
corporation (the "Surviving Corporation").
(b) Upon the terms and subject to the conditions of this
Agreement, the closing of the Merger (the "Closing") shall take place at 10:00
a.m. on a date to be specified by the parties (the "Closing Date"), which shall
be no later than the second business day after satisfaction of the conditions
set forth in Article 8, at the offices of Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, unless another time, date or place is agreed to in writing by the parties
hereto.
(c) Upon the Closing, the Company and Buyer will file a
certificate of merger with the Secretary of State of the State of Delaware and
make all other filings or recordings required by Delaware Law in connection with
the Merger. The Merger shall become effective at such time as the certificate of
merger is duly filed with the Secretary of State of the State of Delaware or at
such later time as is specified in the certificate of merger (the "Effective
Time").
(d) From and after the Effective Time, the Surviving Corporation
shall possess all the rights, privileges, powers and franchises and be subject
to all of the restrictions, disabilities and duties of the Company and Buyer,
all as provided under Delaware Law.
SECTION 1.02. Conversion of Shares. At the Effective Time:
(a) all shares of capital stock of the Company held by the Company
as treasury stock or owned by Buyer or any subsidiary of Buyer immediately prior
to the Effective Time shall be canceled, and no payment shall be made with
respect thereto;
(b) each share of common stock and preferred stock of Buyer
outstanding immediately prior to the Effective Time shall be converted into and
become one share of common stock and preferred stock, respectively, of the
Surviving Corporation with the same rights, powers and privileges as the shares
so converted and shall constitute the only outstanding shares of capital stock
of the Surviving Corporation; and
(c) except as otherwise provided in Section 1.02(a) or as provided
in Section 1.04 with respect to Shares (as defined below) as to which appraisal
rights have been exercised, (i) each share of (x) Class A Common Stock, par
value $0.01 per share, of the Company ("Class A Shares") issued and outstanding
immediately prior to the Effective Time and (y) Class B Common Stock, par value
$0.01 per share, of the Company (the "Class B Shares") issued and outstanding
immediately prior to the Effective Time, shall in each case be converted into
the right to receive $14.00 in cash, without interest (the "Merger
Consideration") and (ii) each share of Series A Cumulative Convertible Preferred
Stock, par value $0.01 per share (the "Series A Preferred Stock" and, together
with the Class A Shares and the Class B Shares, the "Shares"), of the Company
issued and outstanding immediately prior to the Effective Time shall be
converted into the right to receive the product of the Merger Consideration and
the number of Class A Shares into which each such share of Series A Preferred
Stock is convertible at such time in connection with a change of control.
SECTION 1.03. Surrender and Payment. (a) Prior to the Effective
Time, Buyer shall appoint an agent (the "Exchange Agent") for the purpose of
exchanging certificates representing Shares for the Merger Consideration. Buyer
will make available to the Exchange Agent, as needed, the Merger Consideration
to be paid in respect of the Shares. For purposes of determining the Merger
Consideration to be made available, Buyer shall assume that no holder of Shares
will perfect his right to appraisal of his Shares. Promptly after the Effective
Time, Buyer will send, or will cause the Exchange Agent to send, to each holder
of Shares at the Effective Time a letter of transmittal for use in such exchange
(which shall specify that the delivery shall be effected, and risk of loss and
title shall pass, only upon proper delivery of the certificates representing
Shares to the Exchange Agent).
(b) Each holder of Shares that have been converted into a right to
receive the Merger Consideration, upon surrender to the Exchange Agent of a
certificate or certificates representing such Shares, together with a properly
completed letter of transmittal covering such Shares, will be entitled to
receive the Merger Consideration payable in respect of such Shares. Until so
surrendered, each such certificate shall, after the Effective Time, represent
for all purposes, only the right to receive such Merger Consideration.
(c) The Merger Consideration shall be paid to each holder of
Shares free and clear of any withholding under Section 1445 of the Code, (i)
with respect to any Class B Share and any share of Series A Preferred Stock,
provided that Buyer receives (x) a certification from such holder of non-foreign
status as described in Treasury Regulation Section 1.1445-2(b) or (y) other
documentation reasonably satisfactory to Buyer establishing an exemption from
such withholding, in either such case at or prior to the Closing Date and (ii)
with respect to any Class A Share.
(d) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the Shares represented by the
certificate or certificates surrendered in exchange therefor, it shall be a
condition to such payment that the certificate or certificates 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 tax has been paid or is not payable. For purposes of
this Agreement, "Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or any agency or
instrumentality thereof.
(e) After the Effective Time, there shall be no further
registration of transfers of Shares. If, after the Effective Time, certificates
representing Shares are presented to the Surviving Corporation, they shall be
canceled and exchanged for the consideration provided for, and in accordance
with the procedures set forth, in this Article 1.
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.03(a) that remains unclaimed by the holders
of Shares six months after the Effective Time shall be returned to Buyer, upon
demand, and any such holder who has not exchanged his Shares for the Merger
Consideration in accordance with this Section prior to that time shall
thereafter look only to Buyer for payment of the Merger Consideration in respect
of his Shares. Notwithstanding the foregoing, Buyer shall not be liable to any
holder of Shares for any amount paid to a public official pursuant to applicable
abandoned property laws. Any amounts remaining unclaimed by holders of Shares
two years after the Effective Time (or such earlier date immediately prior to
such time as such amounts would otherwise escheat to or become property of any
governmental entity) shall, to the extent permitted by applicable law, become
the property of Buyer free and clear of any claims or interest of any Person
previously entitled thereto.
(g) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.03(a) to pay for Shares for which appraisal
rights have been perfected shall be returned to Buyer, upon demand.
SECTION 1.04. Dissenting Shares. Notwithstanding Section 1.02,
Shares 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 Delaware Law shall not
be converted into a right to receive the Merger Consideration, unless such
holder fails to perfect or withdraws or otherwise loses his right to appraisal.
If after the Effective Time such holder fails to perfect or withdraws or loses
his right to appraisal, such Shares shall be treated as if they had been
converted as of the Effective Time into a right to receive the Merger
Consideration. The Company shall give Buyer prompt notice of any demands
received by the Company for appraisal of Shares, 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, make any
payment with respect to, or settle or offer to settle, any such demands.
SECTION 1.05. Stock Options. At or immediately prior to the
Effective Time, each outstanding employee stock option to purchase Class A
Shares granted under the Company's 1994 Stock Option Plan, as amended (the "1994
Plan") , shall be canceled, and each holder of any such option, whether or not
then vested or exercisable, shall be paid by the Company promptly after the
Effective Time for each such option an amount determined by multiplying (i) the
excess, if any, of $14.00 per Class A Share over the applicable exercise price
of such option by (ii) the number of Class A Shares such holder could have
purchased (assuming full vesting of all options) had such holder exercised such
option in full immediately prior to the Effective Time. Any such payment shall
be subject to all applicable federal, state and local tax withholding
requirements.
ARTICLE 2
THE SURVIVING CORPORATION
SECTION 2.01. Certificate of Incorporation. The certificate of
incorporation of Buyer in effect at the Effective Time shall be the certificate
of incorporation of the Surviving Corporation until amended in accordance with
applicable law, except that the name of the Surviving Corporation shall be
changed to "American Cellular Corporation".
SECTION 2.02. Bylaws. The bylaws of Buyer in effect at the Effective
Time shall be the bylaws of the Surviving Corporation until amended in
accordance with applicable law.
SECTION 2.03. Directors and Officers. From and after the Effective
Time, until successors are duly elected or appointed and qualified in accordance
with applicable law, the directors and officers of Buyer at the Effective Time
shall be the directors and officers of the Surviving Corporation.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Buyer that:
SECTION 3.01. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all corporate powers required to carry on
its business as now conducted. The Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where the
failure to be so qualified would not, or would not reasonably be expected to,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), business, assets or results of operations of
the Company and its Subsidiaries (as defined below) taken as a whole (a
"Material Adverse Effect"). The Company has heretofore delivered to Buyer true
and complete copies of the Company's certificate of incorporation and bylaws as
currently in effect. For purposes of this Agreement, a "Subsidiary" of any
Person means any other Person of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are directly or indirectly owned or
controlled by such Person, and unless otherwise specified, "Subsidiary" means a
Subsidiary of the Company.
SECTION 3.02. Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby are within the Company's corporate
powers and, except for any required approvals by the Company's stockholders in
connection with the consummation of the Merger, have been duly authorized by all
necessary corporate action. This Agreement constitutes a valid and binding
agreement of the Company, enforceable against it in accordance with its terms
except as may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws affecting creditors' rights generally
and by equitable principles of general applicability. The Board of Directors of
the Company has approved the Merger, this Agreement and the transactions
contemplated hereby and such approval is sufficient to render the provisions of
Section 203 of Delaware Law inapplicable to the Merger, this Agreement and the
transactions contemplated hereby. The approval of the holders of a majority of
the votes of the outstanding Shares is the only vote of the holders of any class
of the Company's capital stock necessary to approve the Merger, this Agreement
and the transactions contemplated hereby.
SECTION 3.03. Governmental Authorization. The execution, delivery
and performance by the Company of this Agreement and the consummation by the
Company of the Merger and the other transactions contemplated hereby require no
consent, waiver, approval, authorization or permit by or from, or action by or
in respect of, or filing with, any governmental body, agency, official or
authority other than (a) the filing of a certificate of merger in accordance
with Delaware Law; (b) compliance with any applicable requirements of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX Xxx"); (c)
compliance with any applicable requirements of the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder (the
"Exchange Act"); (d) compliance with any applicable requirements of the
Communications Act of 1934, as amended, together with the rules, regulations and
published decisions of the FCC (collectively, the "Communications Act"); (e)
compliance with the applicable requirements of state and local public utility
commissions or similar entities; and (f) any action, filing, consent, waiver,
approval, authorization or permit that would not in the aggregate prevent or
delay consummation of the Merger in any material respect, or otherwise prevent
the Company from performing its obligations under this Agreement in any material
respect, or would not, or would not reasonably be expected to, in the aggregate
have a Material Adverse Effect.
SECTION 3.04. Non-contravention. Except as described in Schedule
3.04 and assuming compliance with the matters referred to in Section 3.03, the
execution, delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby do not and
will not (a) assuming receipt of the approval of stockholders referred to in
Section 3.02, contravene or conflict with the certificate of incorporation or
bylaws of the Company, (b) contravene or conflict with or constitute a violation
of any provision of any law, regulation, judgment, injunction, order or decree
binding upon or applicable to the Company or any Subsidiary, (c) result in a
breach or violation of or constitute a default under (or an event which with the
giving of notice or the lapse of time or both would constitute a default under)
or give rise to a right of termination, amendment, cancellation or acceleration
of any right or obligation of the Company or any Subsidiary or to a loss of any
benefit to which the Company or any Subsidiary is entitled or require any
consent, approval or authorization under any provision of any material
agreement, contract or other instrument binding upon the Company or any
Subsidiary or any of their respective assets (including any license, franchise,
permit or other similar authorization held by the Company or any Subsidiary) or
(d) result in the creation or imposition of any Lien on any asset of the Company
or any Subsidiary, except for such contraventions, conflicts or violations
referred to in clause (b) and breaches, violations, defaults, rights of
termination, cancellation or acceleration, losses, Liens or other occurrences
referred to in clauses (c) and (d) that in the aggregate would not, or would not
reasonably be expected to, have a Material Adverse Effect or prevent or delay
the consummation of the Merger in any material respect or otherwise prevent the
Company from performing its obligations under this Agreement in any material
respect. For purposes of this Agreement, "Lien" means, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or encumbrance of
any kind in respect of such asset. The execution and delivery of this Agreement
and the Voting Agreement does not constitute a "Change of Control" under the
terms of that certain Certificate of Designation of Series A Cumulative
Convertible Preferred Stock of the Company executed by the Company on December
15, 1995.
SECTION 3.05. Capitalization. (a) The authorized capital stock of
the Company consists of the following, as of March 3, 1998: (i) 100,000,000
Class A Shares, of which 21,824,566 are issued and outstanding, (ii) 50,000,000
Class B Shares, of which 13,134,275 are issued and outstanding, and (iii)
10,000,000 shares of preferred stock, of which 96,000 shares of Series A
Preferred Stock are issued and outstanding.
(b) As of March 3, 1998, there were outstanding under the 1994
Plan employee stock options to purchase an aggregate of 1,476,981 Class A Shares
(of which options to purchase an aggregate of 836,956 Class A Shares were
exercisable).
(c) As of the date of this Agreement, there were outstanding
warrants (the "Warrants") to purchase 1,819,584 Class B Shares pursuant to the
terms and conditions of the Warrant Agreement (the "Warrant Agreement") amended
and restated as of December 21, 1995 between Price Communications Corporation
and the Company.
(d) As of the date of this Agreement, there was outstanding
$60,000,000 aggregate principal amount of 10 3/4% Senior Subordinated
Convertible Discount Notes due 2004 (the "Convertible Discount Notes") pursuant
to the terms and conditions of the Indenture dated as of August 21, 1995 between
the Company and The Bank of Montreal Trust Company, as Trustee. As of December
31, 1997, the Accreted Value of the Convertible Discount Notes was $45,622,650.
(e) All outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and nonassessable.
Except as set forth in this Section and except for changes since March 3, 1998,
resulting from the exercise of employee stock options outstanding on such date,
there are outstanding (i) no shares of capital stock or other voting securities
of the Company, (ii) no securities of the Company convertible into or
exchangeable for shares of capital stock or voting securities of the Company and
(iii) no options or other rights to acquire from the Company, and no obligation
of the Company to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of the
Company (the items in clauses (a), (b), (c) and (d) of this Section 3.05 being
referred to collectively as the "Company Securities"). Except pursuant to the
terms of the Company Securities, there are no outstanding obligations of the
Company or any Subsidiary to repurchase, redeem or otherwise acquire any Company
Securities.
(f) Upon consummation of the Merger, neither any outstanding
Convertible Discount Notes, Warrants, Series A Preferred Stock nor any other
outstanding securities of the Company shall be convertible into or exchangeable
for any equity security of the Surviving Corporation.
(g) Upon consummation of the Merger, the Company shall have no
obligations due under any contracts entered into by the Company on or prior to
the Closing Date with regard to the voting, transfer or registration under the
Securities Act of any equity securities of the Company or that grant any
preemptive rights with respect to its equity securities (other than any such
contracts executed with Buyer).
SECTION 3.06. Subsidiaries. (a) Each Subsidiary is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, has all corporate powers required to carry on its
business as now conducted and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the character of
the property owned or leased by it or the nature of its activities makes such
qualification necessary, except for such qualifications the failure of which to
obtain would not, or would not reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect. All Subsidiaries and their respective
jurisdictions of incorporation are identified in the draft copy dated February
19, 1998 of the Company's annual report on Form 10-K for the fiscal year ended
December 31, 1997 (the "Draft 1997 Form 10-K") or in Schedule 3.06(a).
(b) Except as set forth in Schedule 3.06(b), all of the
outstanding capital stock of, or other ownership interests in, each Subsidiary
of the Company, is owned by the Company, directly or indirectly, free and clear
of any Lien and free of any other limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or other ownership interests). There are no outstanding (i) securities of
the Company or any Subsidiary convertible into or exchangeable for shares of
capital stock or other voting securities or ownership interests in any
Subsidiary and (ii) options or other rights to acquire from the Company or any
Subsidiary, and no other obligation of the Company or any Subsidiary to issue,
any capital stock, voting securities or other ownership interests in, or any
securities convertible into or exchangeable for any capital stock, voting
securities or ownership interests in, any Subsidiary (the items in clauses
3.06(b)(i) and 3.06(b)(ii) being referred to collectively as the "Subsidiary
Securities"). There are no outstanding obligations of the Company or any
Subsidiary to repurchase, redeem or otherwise acquire any outstanding Subsidiary
Securities.
SECTION 3.07. SEC Filings. (a) The Company and PriCellular Wireless
Corporation ("Wireless") have each filed with the Securities and Exchange
Commission (the "SEC") (i) annual reports on Form 10-K for its fiscal years
ended December 31, 1995 and 1996, (ii) quarterly reports on Form 10-Q for its
fiscal quarters ended March 31, 1997, June 30, 1997 and September 30, 1997,
(iii) proxy or information statements relating to meetings of, or actions taken
without a meeting by, the stockholders of the Company held since December 31,
1996 and (iv) all other reports, statements, schedules and registration
statements required to be filed with the SEC since December 31, 1996. The
Company has delivered to Buyer the Draft 1997 Form 10-K. The Company's annual
report on Form 10-K
for such reporting period shall not differ in any material respect from the
Draft 1997 Form 10-K. The Draft 1997 Form 10-K and the documents described in
clauses (i)-(iv) above are collectively referred to herein as the "SEC Reports."
(b) Other than Wireless, no Subsidiary is required to file any
report, form or document with the SEC pursuant under the Exchange Act or the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "Securities Act").
(c) As of their respective filing dates, none of the SEC Reports
(or with respect to the Draft 1997 Form 10-K, the date of such draft) contained
any untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(d) Each such registration statement, as amended or supplemented,
if applicable, filed pursuant to the Securities Act as of the date such
statement or amendment became effective did not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
(e) The SEC Reports when filed complied (and the Draft 1997 Form
10- K complies) in all material respects with applicable requirements of the
Securities Act and the Exchange Act.
SECTION 3.08. Financial Statements. The audited consolidated
financial statements and unaudited consolidated interim financial statements of
the Company and Wireless, respectively included in the SEC Reports filed prior
to the date hereof and in the Draft 1997 Form 10-K fairly present, in conformity
with generally accepted accounting principles applied on a consistent basis
(except as may be indicated in the notes thereto or in the case of unaudited
interim financial statements as permitted by Form 10-Q of the SEC ), the
consolidated financial position of the Company and Wireless, as the case may be,
and their respective consolidated subsidiaries as of the dates thereof and their
consolidated statements of operations, stockholders' equity and cash flows for
the periods then ended (subject to normal year-end adjustments in the case of
any unaudited interim financial statements which would not be material in amount
or effect). For purposes of this Agreement, "Balance Sheet" means the
consolidated balance sheet of the Company as of December 31, 1997 set forth in
the Draft 1997 Form 10-K and "Balance Sheet Date" means December 31, 1997.
SECTION 3.09. Disclosure Documents. (a) Each document required to be
filed by the Company with the SEC in connection with the transactions
contemplated by this Agreement (the "Company Disclosure Documents"), including,
without limitation, the proxy or information statement of the Company (the
"Company Proxy Statement"), if any, to be filed with the SEC in connection with
the Merger, and any amendments or supplements thereto will, when filed, comply
as to form in all material respects with the applicable requirements of the
Exchange Act.
(b) At the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to stockholders of the Company and at the
time such stockholders vote on adoption of this Agreement, the Company Proxy
Statement, as supplemented or amended, if applicable, will not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. At the time of the filing of any
Company Disclosure Document other than the Company Proxy Statement and at the
time of any distribution thereof, such Company Disclosure Document will not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The representations
and warranties contained in this Section 3.09(b) will not apply to statements or
omissions included in the Company Disclosure Documents based upon information
furnished to the Company in writing by Buyer specifically for use therein.
SECTION 3.10. Absence of Certain Changes. Except as disclosed in the
Company SEC Reports filed prior to the date of this Agreement or as set forth in
Schedule 3.10, since the Balance Sheet Date, the Company and its Subsidiaries
have conducted their business in the ordinary course consistent with past
practice and there has not been:
(a) any event, occurrence or development of a state of
circumstances or facts which, individually or in the aggregate, has
had, or reasonably would be expected to have, a Material Adverse
Effect;
(b) any declaration, setting aside or payment of any dividend or
other distribution with respect to any Shares, or any repurchase,
redemption or other acquisition, or issuance, award, grant or sale
by the Company or any Subsidiary of any outstanding shares of
capital stock or other securities of, or other ownership interests
in, the Company or any Subsidiary (excluding repurchases,
redemptions or acquisitions or issuances, awards, grants or sales
required to be made pursuant to the terms of any outstanding Company
Securities);
(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 its capital stock, or any issuance of any other
securities in respect of, or in lieu of, shares of its capital
stock;
(d) any incurrence, assumption or guarantee by the Company or any
Subsidiary of any indebtedness for borrowed money other than in the
ordinary course of business and in amounts and on terms consistent
with past practices and not in an amount in excess of $5,000,000 in
the aggregate;
(e) any creation or assumption by the Company or any Subsidiary of
any Lien on any material asset other than in the ordinary course of
business consistent with past practices;
(f) any making of any loan, advance or capital contributions to or
investment in any Person other than loans, advances or capital
contributions to or investments in wholly-owned Subsidiaries made in
the ordinary course of business consistent with past practices;
(g) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of the
Company or any Subsidiary which, individually or in the aggregate,
has had, or would reasonably be expected to have, a Material Adverse
Effect;
(h) any transaction or commitment made, or any contract or
agreement entered into, by the Company or any Subsidiary relating to
its assets or business (including the acquisition or disposition of
any assets) or any relinquishment by the Company or any Subsidiary
of any contract or other right, in either case, material to the
Company and its Subsidiaries taken as a whole, other than
transactions and commitments (i) in the ordinary course of business
consistent with past practice, and in the case of asset acquisitions
in an amount not in excess of $5,000,000 in the aggregate, and in
the case of asset dispositions in an amount not in excess of
$5,000,000 in the aggregate and (ii) those contemplated by this
Agreement;
(i) 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 concurrent change in generally
accepted accounting principles;
(j) except as contemplated by Section 5.01(b), any (i) grant of
any severance or termination pay to any director, officer or
employee of the Company or any Subsidiary, (ii) entering into of any
employment, deferred compensation or other similar agreement (or any
amendment to any such existing agreement) with any director, officer
or employee of the Company or any Subsidiary, (iii) increase in
benefits payable under any existing severance or termination pay
policies or employment agreements or (iv) other than in the ordinary
course of business consistent with past practice, increase in
compensation, bonus or other benefits payable to directors, officers
or employees of the Company or any Subsidiary;
(k) any labor dispute, other than routine individual grievances,
or any activity or proceeding by a labor union or representative
thereof to organize any employees of the Company or any Subsidiary,
which employees were not subject to a collective bargaining
agreement at the Balance Sheet Date, or any lockouts, strikes,
slowdowns, work stoppages or threats thereof by or with respect to
such employees;
(l) any material revaluation of any assets by the Company or any
Subsidiary; or
(m) any material transaction with a Related Party (other than
compensation for services rendered in the ordinary course of
business).
SECTION 3.11. No Undisclosed Material Liabilities. There are no
material liabilities of the Company or any Subsidiary of any kind, whether
accrued, contingent, absolute, determined, determinable or otherwise, and there
is no existing condition, situation or set of circumstances which could
reasonably be expected to result in such a liability, other than:
(a) liabilities disclosed or provided for in the Schedules hereto,
the Balance Sheet, the Company SEC Reports filed prior to the date
hereof or the Draft 1997 Form 10-K;
(b) liabilities incurred in the ordinary course of business
consistent with past practice since the Balance Sheet Date, which in
the aggregate would not, or would not reasonably be expected to,
have a Material Adverse Effect; and
(c) liabilities under this Agreement or incurred in connection
with the transactions contemplated hereby.
SECTION 3.12. Litigation. Except as set forth in the Company SEC
Reports filed prior to the date hereof, the Draft 1997 Form 10-K or in Schedule
3.12, there is no action, suit, investigation or proceeding pending against, or
to the knowledge of the Company threatened against or affecting, the Company or
any Subsidiary or any of their respective properties before any court or
arbitrator or any governmental body, agency or official which, if determined or
resolved adversely to the Company or any Subsidiary in accordance with the
plaintiff's demands, would reasonably be expected to have a Material Adverse
Effect.
SECTION 3.13. Taxes. Except as set forth in the Company Balance
Sheet (including the notes thereto) and except as would not, or would not
reasonably be expected to, individually or in the aggregate, have a Material
Adverse Effect, (i) all Tax returns, statements, reports and forms (including
estimated Tax or information returns)(collectively, the "Company Returns")
required to be filed with any taxing authority by, or with respect to, the
Company and its Subsidiaries have been filed in accordance with all applicable
laws; (ii) the Company and its Subsidiaries have timely paid or made provision
for payment of all Taxes shown as due and payable on the Company Returns that
have been so filed, and, as of the time of filing, the Company Returns correctly
reflected the facts regarding income, business, assets, operations, activities
and the status of the Company and its Subsidiaries (other than Taxes which are
being contested in good faith and for which adequate reserves are reflected on
the Company Balance Sheet); (iii) the Company and its Subsidiaries have made
provision for all Taxes payable by the Company and its Subsidiaries for which no
Company Return has yet been filed; (iv) the charges, accruals and reserves for
Taxes with respect to the Company and its Subsidiaries reflected on the Company
Balance Sheet are adequate under United States generally accepted accounting
principles to cover the Tax liabilities accruing through the date thereof; and
(v) there is no action, suit, proceeding, audit or claim now proposed or pending
against or with respect to the Company or any of its Subsidiaries in respect of
any Tax where there is a reasonable possibility of an adverse determination.
Except as set forth on Schedule 3.13, (a) no extension of a statute of
limitations relating to material Taxes is in effect with respect to the Company
or its Subsidiaries; (b) neither the Company nor any of its Subsidiaries has
ever been a member of an affiliated group of corporations within the meaning of
Section 1504 of the Internal Revenue Code of 1986, as amended (the "Code"),
other than an affiliated group of corporations of which the Company was the
common parent; and (c) there are no material Tax sharing agreements or similar
arrangements (including Tax indemnity arrangements) with respect to or involving
the Company or any of its Subsidiaries. For purposes of this Section 3.13,
"Taxes" means any and all taxes, charges, fees, levies or other assessments,
including income, gross receipts, excise, real or personal property, sales,
withholding, social security, retirement, unemployment, occupation, use,
service, license, net worth, payroll, franchise, and transfer and recording,
imposed by the Internal Revenue Service or any taxing authority (whether
domestic or foreign, including any federal, state, U.S. possession, county,
local or foreign government or any subdivision or taxing agency thereof),
whether computed on a separate, consolidated, unitary, combined or any other
basis, including interest, fines, penalties or additions to tax attributable to
or imposed on or with respect to any such taxes, charges, fees, levies or other
assessments.
SECTION 3.14. ERISA and Labor Matters. (a) The Company has provided
Buyer with a list identifying each "employee benefit plan", as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), which (i) is or was during the six year period ending on the date
hereof subject to any provision of ERISA, (ii) is or was during the six year
period ending on the date hereof maintained, administered or contributed to by
the Company or any affiliate (as defined below) of the Company and (iii) covers
or has covered during such six year period any employee or former employee of
the Company or any Subsidiary. Copies of such plans (and, if applicable, related
trust agreements) and all amendments thereto and written interpretations thereof
have been made available to Buyer together with (A) the most recent annual
report (Form 5500 including, if applicable, Schedule B thereto) prepared in
connection with any such plan and (B) the most recent actuarial valuation
report, if any, prepared in connection with any such plan. Such plans are
referred to collectively herein as the "Employee Plans". For purposes of this
Section, "affiliate" of any Person means any other Person which, together with
such Person, would be treated as a single employer under Section 414 of the
Code.
(b) No Employee Plan (i) constitutes a "multiemployer plan", as
defined in Section 3(37) of ERISA (a "Multiemployer Plan"), (ii) is maintained
in connection with any trust described in Section 501(c)(9) of the Code or (iii)
is subject to Title IV of ERISA or the minimum funding standards of Section 412
of the Code. Nothing done or omitted to be done and no transaction or holding of
any asset under or in connection with any Employee Plan has or will make the
Company or any Subsidiary, any officer or director of the Company or any
Subsidiary subject to any material liability under Title I of ERISA or liable
for any material tax pursuant to Section 4975 of the Code.
(c) Each Employee Plan that is intended to be qualified under
Section 401(a) of the Code has been determined by the Internal Revenue Service
to be so qualified and, to the knowledge of the Company, there has been no event
since the date os such determination which would adversely affect such
qualification; each trust created under any such Plan has been determined by the
Internal Revenue Service to be exempt from tax under Section 501(a) of the Code
and, to the knowledge of the Company, there has been no event since the date of
such exemption which would adversely affect such exemption. The Company has
furnished to the Buyer copies of the most recent Internal Revenue Service
determination letter with respect to each such Employee Plan. Each Employee Plan
has been maintained in substantial compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations,
including but not limited to ERISA and the Code, which are applicable to such
Employee Plan.
(d) The Company has provided Buyer with a list of each employment,
severance or other similar contract, arrangement or policy and each plan or
arrangement (written or oral) providing for insurance coverage (including any
self-insured arrangements), workers' compensation, disability benefits,
supplemental unemployment benefits, vacation benefits, retirement benefits or
for deferred compensation, profit-sharing, bonuses, stock options, stock
appreciation or other forms of incentive compensation or post-retirement
insurance, compensation or benefits which (i) is not an Employee Plan, (ii) is
entered into, maintained or contributed to, as the case may be, by the Company
or any of its affiliates and (iii) covers any employee or former employee of the
Company or any Subsidiary. Such contracts, plans and arrangements as are
described above, copies or descriptions of all of which have been furnished
previously to Buyer are referred to collectively herein as the "Benefit
Arrangements", and which together with the Employee Plans are referred to
collectively herein as the "Benefit Plans". Each Benefit Arrangement has been
maintained in substantial compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations that are
applicable to such Benefit Arrangement.
(e) Except as set forth in Schedule 3.14, neither the Company nor
any Subsidiary has any current or projected liability in respect of
post-employment or post-retirement health or medical or life insurance benefits
for retired, former or current employees of the Company or any Subsidiary,
except as required to avoid excise tax under Section 4980B of the Code.
(f) Except as disclosed in writing to Buyer prior to the date
hereof, there has been no amendment to, written interpretation or announcement
(whether or not written) by the Company or any of its affiliates relating to, or
change in employee participation or coverage under, any Employee Plan or Benefit
Arrangement which would increase materially the expense of maintaining such
Employee Plan or Benefit Arrangement above the level of the expense incurred in
respect thereof for the fiscal year ended on the Balance Sheet Date.
(g) Neither the Company nor any Subsidiary is a party to or
subject to any union contract or any employment contract or arrangement
providing for annual future compensation of more than $100,000 with any officer,
consultant, director or employee.
(h) Neither the Company nor any Subsidiary is a party to any
collective bargaining agreement or other contract or agreement with any labor
organization or other representative of any of the employees of the Company or
any Subsidiary. The Company and each Subsidiary is in compliance in all material
respects with applicable laws relating to the employment or the workplace,
including, without limitation, provisions relating to wages, hours, collective
bargaining, safety and health, work authorization, equal employment opportunity,
immigration and the withholding of income taxes, unemployment compensation,
worker's compensation, employee privacy and right to know and social security
contributions.
(i) Except as disclosed on Schedule 3.14 or as contemplated by
Sections 1.05 and 5.01(b) of this Agreement, neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
will (i) result in any material payment (including, without limitation,
severance, or unemployment compensation) becoming due to any director or
employee of the Company or any Subsidiary; (ii) result in the acceleration of
vesting under any Employee Plan or Benefit Arrangement; or (iii) materially
increase any benefits otherwise payable under any Employee Plan, and any such
payment or increase in benefits is fully deductible under the Code, including
but not limited to Sections 162, 280G and 404. Deductibility of future
compensation payments to employees of the Company and each Subsidiary are not
subject to the limitations of Code Section 280G as a result of prior corporate
transactions involving the Company or any Subsidiary or the transactions
contemplated hereby.
(j) As of the date hereof, except as disclosed on Schedule 3.14,
(i) the Company and each Subsidiary have performed all material obligations
required to be performed by them under any Benefit Plan and (ii) there are no
actions, suits, arbitrations or claims (other than routine claims for benefits)
pending or threatened with respect to any Benefit Plan.
SECTION 3.15. Finders' Fees. Except for (i) Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation, (ii) SBC Warburg Dillon Read and (iii) Gleacher
NatWest (the fees and expenses of which have been disclosed to Buyer), there is
no investment banker, broker, finder or other intermediary which has been
retained by or is authorized to act on behalf of, the Company or any Subsidiary,
who might be entitled to any fee or commission from Buyer or any of its
affiliates upon consummation of the transactions contemplated by this Agreement.
SECTION 3.16. FCC Matters and Governmental Matters. (a) The Company
and its Subsidiaries hold all licenses, permits and other authorizations issued
by the FCC to the Company and its Subsidiaries for the operation of their
respective businesses that are set forth in Schedule 3.16(a) (the "FCC
Licenses"). The FCC Licenses constitute all of the licenses, permits and
authorizations from the FCC that are required for the operations and businesses
of the Company and its Subsidiaries as they are now operated, except that in the
case of certain microwave operations, the FCC has authorized such operations but
has not issued a written microwave authorization, and in the case of certain
cell sites, the Company is awaiting issuance of a license pursuant to a Form 489
notification. Schedule 3.16(a) also identifies all microwave operations that are
authorized but for which the FCC has not issued a written authorization. Without
limiting the foregoing, the Company and its Subsidiaries have received all
necessary authorizations from the Federal Aviation Administration ("FAA") for
all existing towers that are part of the cellular or microwave systems operated
by the Company and its Subsidiaries and for any facilities the construction of
which have been approved by the FCC or of which applications or notifications
have been filed for such approval.
(b) Schedule 3.16(b) sets forth each application and notification
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 and its
Subsidiaries have provided a copy to Buyer of each of the FCC Licenses and the
applications and notifications listed in Schedule 3.16(b), except where the FCC
has not issued a written microwave authorization.
(c) The FCC Licenses are valid and in full force and effect,
unimpaired by any condition or restriction or any act or omission by the Company
or any of its Subsidiaries which would reasonably be expected to have a Material
Adverse Effect. Except as set forth in Schedule 3.16(c), there are no
modifications, amendments, applications, revocations, or other proceedings, or
complaints pending or, to the knowledge of the Company, threatened, with respect
to the FCC Licenses (other than proceedings that apply to the cellular industry
generally). Except as set forth in Schedule 3.16(c), all fees due and payable to
the FCC have been paid and no event has occurred which, with or without the
giving of notice or lapse of time or both, would constitute grounds for
revocation or modification of the FCC Licenses. For all of the FCC Licenses that
are cellular licenses in which the five-year fill-in period expired prior to the
date of this Agreement, the Company timely filed appropriate applications or
notifications with the FCC such that none of the original authorized area became
" unserved area," as defined in 47 C.F.R. Part 22 , except where such unserved
areas have subsequently been added to the Company's Cellular Geographic Service
Area pursuant to Phase 2 applications and Form 489 notifications or as
identified on Schedule 3.16(c). Schedule 3.16(c) identifies all of the FCC
Licenses that are cellular licenses for which the five-year fill-in period has
not yet passed as of the date of this Agreement. The Company does not conduct
any microwave operations on frequencies that are subject to relocation under the
FCC's rules, except as identified on Schedule 3.16(c), which also identifies
which of such operations are classified as "primary" and which as "secondary"
under the FCC's rules.
(d) Except where a lack of compliance would not, or would not
reasonably be expected to, have a Material Adverse Effect, (i) all reports
required by the Communications Act or required to be filed with the FCC by the
Company and its Subsidiaries have been filed and are accurate and complete in
all material respects and (ii) all reports required to be filed by the Company
and its Subsidiaries with all other governmental or administrative authorities,
federal, state and local, have been filed and are accurate and complete in all
material respects.
(e) Except where a lack of compliance would not, or would not
reasonably be expected to, have a Material Adverse Effect, the Company and its
Subsidiaries are in compliance with, and their cellular systems have been
operated in compliance with, the Communications Act and the rules, regulations,
policies and orders of the relevant state public utilities commissions and the
FAA, including, without limitation, the FCC's time and coverage requirements of
47 C.F.R. xx.xx. 22.142, 22.911, 22.912 and 22.946 (the "Statutes"). Except as
set forth in Schedule 3.16(e), the Company and its Subsidiaries have not
received any written notice to the effect, or otherwise been advised in writing,
that they are not in compliance with any Statutes and do not have any reason to
anticipate that any presently existing circumstances are reasonably likely to
result in violations of any Statutes.
(f) Without limiting the generality of the foregoing, 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.
(g) Neither the Company nor any of its Subsidiaries has engaged in
any course of conduct that could reasonably be expected to impair the ability of
Buyer or its subsidiaries to be the holder of the FCC Licenses or is aware of
any reason why the FCC Licenses might not be renewed in the ordinary course, why
any of the FCC Licenses might be revoked, or why any pending applications or
notifications might not be approved.
SECTION 3.17. Licenses and Permits; Compliance with Laws. The
Company and its Subsidiaries hold all governmental permits, licenses,
authorizations, consents and approvals (none of which has been modified or
rescinded and all of which are in full force and effect) (collectively, the
"Permits") necessary for the Company and its Subsidiaries to own, lease, and
operate their respective properties and to carry their respective businesses as
now being conducted, except for Permits the failure of which to obtain would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The businesses of the Company and its Subsidiaries are not being
conducted in violation of any applicable law, statute, ordinance, regulation,
judgment, Permits, order, decree, concession, grant or other authorization of
any governmental entity, except for violations that would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 3.18. Contracts. (a) Except as set forth in Schedule 3.18,
included or incorporated by reference in the SEC Reports filed prior to the date
hereof and the Draft 1997 Form 10-K are all contracts and documents required to
be filed as exhibits thereto (collectively, together with all contracts and
documents that would be required to be so filed but for the exception with
respect to filing contracts made in the ordinary course of business, the
"Contracts").
(b) Except as set forth in Schedule 3.18, each of the Contracts is
valid, in full force and effect, binding upon the Company, and, to the Company's
knowledge, the other parties thereto and enforceable in accordance with their
respective terms, subject to bankruptcy, insolvency, reorganization, moratorium
or similar laws now or hereafter in effect affecting creditors' rights
generally. Neither the Company nor any Subsidiary is in default under any
Contract, nor, to the Company's knowledge, does any condition exist that, with
notice or lapse of time or both, would constitute such default, excluding in any
case such defaults that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect.
(c) The Company does not have any material contractual arrangements
relating to its joint venture with Southwestern Xxxx in respect of the Laredo,
Texas MSA that is not a Contract.
SECTION 3.19. Properties; Assets. (a) Except for such exceptions
that do not, or would not reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect, the Company or one of its
Subsidiaries (i) has good and marketable title to all the properties and assets
reflected in the consolidated balance sheet of the Company dated as of December
31, 1997 as being owned by the Company or any Subsidiary (except properties sold
or otherwise disposed of since the date thereof in the ordinary course of
business), or acquired after the date thereof, free and clear of all Liens,
except (x) statutory liens securing payments not yet due and (y) such
imperfections or irregularities of title, claims, liens, charges, security
interests or encumbrances as do not materially affect the use of the properties
or assets subject thereto or affected thereby or otherwise materially impair
business operations at such properties and (ii) is the lessee of all leasehold
estates and is in possession of the properties purported to be leased
thereunder, and to the knowledge of the Company, each such lease is valid
without default thereunder by the lessee or lessor.
(b) Except for such exceptions that do not, or would not
reasonably be expected to, individually or in the aggregate, have a Material
Adverse Effect, the assets and properties of the Company and its Subsidiaries,
taken as a whole, are in good operating condition and repair (ordinary wear and
tear excepted), and constitute all of the assets and properties which are
required for the businesses and operations of the Company and its Subsidiaries
as presently conducted.
SECTION 3.20. Environmental Matters. Neither the Company nor any
Subsidiary is in violation of any applicable Environmental Law, and no condition
or event has occurred with respect to the Company or any Subsidiary, with the
giving of notice, lapse of time, or both, would constitute a violation of any
such Environmental Law, excluding in any event such violations, conditions and
events that, individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect, and neither the Company nor any Subsidiary,
nor to the Company's knowledge any other Person has ever generated,
manufactured, refined, transported, treated, stored, handled, disposed,
transferred, produced or processed any Contaminant in any reportable quantity
at, or to the Company's knowledge in the vicinity of any real property that has
been or is currently owned or leased by the Company or any Subsidiary, other
than any such acts that individually or in the aggregate do not, or would not
reasonably be expected to, individually or in the aggregate, have a Material
Adverse Effect. To the Company's knowledge, no other Person has violated any
Environmental Law with respect to the business or assets of the Company or any
Subsidiary, excluding any violations that, individually or in the aggregate, do
not, or would not reasonably be expected to have a Material Adverse Effect. For
purposes of this Section, "Environmental Law" means any and all applicable
federal, state and local statutes, laws, judicial decisions, regulations,
ordinances, rules, judgments, orders, decrees, codes, injunctions, permits,
licenses, agreements and governmental restrictions relating to the environment,
the effect of the environment on human health or to emissions, discharges or
releases of pollutants, contaminants, petroleum or petroleum products, chemicals
or industrial, toxic, radioactive or hazardous substances or wastes into the
environment including without limitation ambient air, surface water,
groundwater, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic, radioactive or hazardous substances or wastes or the clean-up
or other remediation thereof; and "Contaminant" means any waste, pollutant,
hazardous or toxic substance or waste, petroleum, petroleum-based substance or
waste, special waste, or any constituent of any such substance or waste, in each
of the foregoing cases as defined in or pursuant to any Environmental Law.
SECTION 3.21. Related Party Transactions. (a) Except as set forth in
the Company SEC Reports or Schedule 3.21, no beneficial owner of 5% or more of
the Company's outstanding equity securities or officer or director of the
Company or any Person (other than the Company) in which any such Person owns any
beneficial interest (other than a publicly held corporation whose stock is
traded on a national securities exchange or in the over-the-counter market and
less than 1% of the stock of which is beneficially owned by all such Persons)
(collectively, "Related Parties") has any interest in: (i) any contract,
arrangement or understanding with, or relating to, the business or operations
of, the Company or any Subsidiary, (ii) any loan, arrangement, understanding,
agreement or contract for or relating to indebtedness of the Company or any
Subsidiary, or any property (real, personal or mixed), tangible or intangible,
used in the business or operations of the Company or any Subsidiary; excluding
any such contract, arrangement, understanding or agreement constituting an
Employee Plan or Benefit Arrangement.
(b) Following the Effective Time, except for obligations set forth
herein, neither the Company nor any Subsidiary will have any obligations of any
kind to any Related Party except for (i) accrued salary for the pay period
commencing immediately prior to the Effective Time, (ii) the obligations set
forth in the Company SEC Reports and (iii) contracts entered into with AT&T in
the ordinary course of business.
SECTION 3.22. Opinion of Financial Advisor. The Directors of the
Company have received the opinions of SBC Warburg Dillon Read and Gleacher
NatWest to the effect that the Merger Consideration is fair from a financial
point of view to the stockholders of the Company (other than Buyer and its
affiliates).
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Company that:
SECTION 4.01. Corporate Existence and Power. Buyer is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted, except for such licenses, authorizations,
consents and approvals the failure of which to obtain would not, or would not
reasonably be expected to, individually or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), business, assets or
results of operations of Buyer (a "Buyer Material Adverse Effect"). Since the
date of its incorporation, Buyer has not engaged in any activities other than in
connection with or as contemplated by this Agreement or in connection with
arranging any financing required to consummate the transactions contemplated
hereby.
SECTION 4.02. Corporate Authorization. The execution, delivery and
performance by Buyer of this Agreement and the consummation by Buyer of the
transactions contemplated hereby are within the corporate powers of Buyer and
have been duly authorized by all necessary corporate action. This Agreement
constitutes a valid and binding agreement of Buyer, enforceable against it in
accordance with its terms except as may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws affecting
creditors' rights generally and by equitable principles of general
applicability.
SECTION 4.03. Governmental Authorization. The execution, delivery
and performance by Buyer of this Agreement and the consummation by Buyer of the
transactions contemplated by this Agreement require no action by or in respect
of, or filing with, any governmental body, agency, official or authority other
than (a) the filing of a certificate of merger in accordance with Delaware Law,
(b) compliance with any applicable requirements of the HSR Act, (c) compliance
with any applicable requirements of the Exchange Act and (d) compliance with any
applicable requirements of the Communications Act.
SECTION 4.04. Non-contravention. The execution, delivery and
performance by Buyer of this Agreement and the consummation by Buyer of the
transactions contemplated hereby do not and will not (a) contravene or conflict
with the certificate of incorporation or bylaws of Buyer, (b) assuming
compliance with the matters referred to in Section 4.03, contravene or conflict
with or constitute a violation of any provision of law, regulation, judgment,
order or decree binding upon Buyer or (c) result in a breach or violation of or
constitute a default under (or an event which with the giving of notices or the
lapse of time or both would constitute a default under) or give rise to any
right of termination, cancellation or acceleration of any right or obligation of
Buyer or to a loss of any benefit to which it is entitled or require any
consent, approval or authorization under any provision of any material
agreement, contract or other instrument binding upon Buyer or any of its assets,
except for such contraventions, conflicts or violations referred to in clause
(b) and breaches, violations, defaults, rights of termination, cancellation or
acceleration or losses referred to in clause (c) that in the aggregate would
not, or would not reasonably be expected to, have a Buyer Material Adverse
Effect or prevent or delay the consummation of the Merger in any material
respect or otherwise prevent Buyer from performing its obligations under this
Agreement in any material respect or prevent or delay the consummation of the
Merger in any material respect.
SECTION 4.05. Disclosure Documents. The information with respect to
Buyer that Buyer furnishes to the Company in writing specifically for use in any
Company Disclosure Document will not contain, any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading (i) in the case of the Company Proxy Statement at the time
the Company Proxy Statement or any amendment or supplement thereto is first
mailed to stockholders of the Company, at the time the stockholders vote on
adoption of this Agreement and at the Effective Time, and (ii) in the case of
any Company Disclosure Document other than the Company Proxy Statement, at the
time of the filing thereof and at the time of any distribution thereof.
SECTION 4.06. Finders' Fees. There is no investment banker, broker,
finder or other intermediary who might be entitled to any fee or commission from
the Company or any of its affiliates upon consummation of the transactions
contemplated by this Agreement.
SECTION 4.07. Financing. (a) Buyer has delivered to the Company
copies of (i) a stock purchase agreement (the "Stock Purchase Agreement") dated
March 5, 1998 by and among Buyer and the purchasers listed on Exhibit A thereto
pursuant to which each of the foregoing purchasers has committed, subject to the
terms and conditions set forth therein, to purchase securities of Buyer for an
aggregate amount equal to $350,000,000, (ii) a bridge loan commitment letter
dated March 6, 1998 from Xxxxxxx Xxxxx Capital Corporation ("MLCC") and
Toronto-Dominion (Texas), Inc. and TD Securities (USA) Inc. (collectively, "TD",
and together with MLCC, the "Initial Lenders") pursuant to which the Initial
Lenders have committed, subject to the terms and conditions set forth therein,
to provide an unsecured senior subordinated bridge loan in the aggregate
principal amount of $200,000,000 (the "Bridge Loan Commitment") and (iii) a
credit facilities commitment letter dated March 6, 1998 from the Initial Lenders
pursuant to which the Initial Lenders have committed, subject to the terms and
conditions set forth therein, to enter into one or more credit agreements
providing for loans to Buyer of up to $1,000,000,000 (the "Credit Facilities
Commitment"). The aforementioned Stock Purchase Agreement, the Bridge Loan
Commitment and the Credit Facilities Commitment shall be referred to as the
"Financing Agreements" and the financing to be provided thereunder shall be
referred to as the "Financing." As of the date hereof, neither the Stock
Purchase Agreement, the Bridge Loan Commitment nor the Credit Facilities
Commitment referred to above has been withdrawn and Buyer does not know of any
facts or circumstances that may reasonably be expected to result in any of the
conditions set forth in the Financing Agreements not being satisfied.
(b) Upon obtaining the Financing described in paragraph (a), Buyer
will have sufficient funds available to consummate the Merger as contemplated by
this Agreement.
(c) As of the date hereof, Buyer believes that the Financing will
not create any liability to the directors, officers or stockholders of the
Company under any federal or state fraudulent conveyance or transfer law. As of
the date hereof, Buyer further believes that immediately after consummation of
the transactions contemplated hereby, including, without limitation, the
Financing, the Surviving Corporation (i) will not become insolvent, (ii) will
not be left with unreasonably small capital, (iii) will not have incurred debts
beyond its ability to pay such debts as they mature, and (iv) the capital of the
Company will not become impaired.
SECTION 4.08. Qualification of Buyer. Buyer is 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 and operate the assets and business of the Company and its
Subsidiaries. There are no facts or proceedings which would reasonably be
expected to disqualify Buyer 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 (as
defined in Section 7.05(a)). Buyer has no knowledge of any fact or circumstance
relating to Buyer or any of its affiliates that would be reasonably be expected
to (a) cause the filing of any objection to the FCC Application or (b) lead to a
delay in the processing by the FCC of the FCC Application. No waiver of any FCC
rule or policy is necessary to be obtained for the approval of the FCC
Application, nor will processing pursuant to any exception or rule of general
applicability be requested or required in connection with the consummation of
the transaction herein.
SECTION 4.09. Capitalization. Within 20 days after the date hereof,
the shareholders of Buyer will have contributed $25,000,000 in equity capital to
Buyer. Buyer agrees that its paid in equity capital will not be less than such
amount until after the later of: (i) the tenth day after this Agreement is
terminated pursuant to Section 9.01 and (ii) the date on which any disputes
between the parties hereto arising out of or relating to this Agreement and the
transactions contemplated hereby have been resolved. Buyer agrees not to pay any
fees to any of its affiliates prior to the Effective Time.
ARTICLE 5
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 5.01. Conduct of the Company. (a) From the date hereof until
the Effective Time, except pursuant to existing obligations disclosed in the
Schedules to this Agreement or in the Company SEC Reports, or except as
contemplated by this Agreement, (A) the Company and its Subsidiaries shall
conduct their business in the ordinary course consistent with past practice and
shall use their best efforts to preserve intact their business organizations and
relationships with third parties, to maintain their rights and franchises, to
keep available the services of their present officers and employees and to
maintain and keep their properties and assets in as good repair and condition as
at present, ordinary wear and tear excepted and (B) without limiting the
generality of the foregoing, without the written consent of Buyer (which consent
will not be unreasonably withheld or delayed):
(i) the Company will not adopt or propose any change in its
certificate of incorporation or bylaws;
(ii) the Company will not, and will not permit any Subsidiary of
the Company to, merge or consolidate with any other Person or
acquire a material amount of assets or business of any other Person
or make any capital expenditures other than as contemplated by the
Company's 1998 Budget previously delivered to Buyer;
(iii) the Company will not, and will not permit any Subsidiary of
the Company to, sell, lease, license or otherwise dispose of any
assets or property except (x) pursuant to existing contracts or
commitments and (y) in the ordinary course consistent with past
practice;
(iv) the Company will not, and will not permit any Subsidiary of
the Company to (x) take or agree or commit to take any action that
would make any representation and warranty of the Company hereunder
inaccurate in any respect at, or as of any time prior to, the
Effective Time or (y) omit or agree or commit to omit to take any
action necessary to prevent any such representation or warranty from
being inaccurate in any respect at any such time; or
(v) the Company will not, and will not permit any Subsidiary of
the Company to, agree or commit to do any of the foregoing.
(b) Between the date hereof and the Effective Time, the Company
will allocate and make available four million dollars in cash ($4,000,000) (the
"Employee Funds") from its cash reserves for distribution to officers and
employees of the Company (excluding the President of the Company). The Employee
Funds will be distributed at the Effective Time to such officers and employees
of the Company (excluding the President of the Company) and in such amounts and
at such times as shall be determined in the sole discretion of the President of
the Company.
SECTION 5.02. Stockholder Meeting; Proxy Material. (a) The Company
shall cause a meeting of its stockholders (the "Company Stockholder Meeting") to
be duly called and held as soon as reasonably practicable for the purpose of
voting on the approval and adoption of this Agreement and the Merger. The
Directors of the Company shall, subject to their fiduciary duties as advised by
counsel, recommend approval and adoption of this Agreement and the Merger by the
Company's stockholders. In connection with such meeting, the Company will (i)
promptly prepare and file with the SEC, will use its best efforts to have
cleared by the SEC and will thereafter mail to its stockholders as promptly as
practicable the Company Proxy Statement and all other proxy materials for such
meeting, (ii) use its best efforts to obtain the necessary approvals by its
stockholders of this Agreement and the transactions contemplated hereby unless
otherwise required by applicable fiduciary duties of the directors of the
Company, as determined by such directors in good faith after consultation with
counsel and (iii) otherwise comply with all legal requirements applicable to
such meeting. Buyer shall have the right to review the Company Proxy Statement
and other proxy materials before filing with the SEC.
(b) Without limiting the generality of the foregoing, the Company
and Buyer shall each notify the other as promptly as practicable (i) upon
becoming aware of any event or circumstance which should be described in an
amendment of, or supplement to, the Company Proxy Statement and (ii) after the
receipt by it of any written or oral comments of the SEC on, or of any written
request by the SEC for amendments or supplements to, the Company Proxy
Statement, and shall promptly supply the other with copies of all correspondence
between it or any of its representatives and the SEC with respect to any of the
foregoing filings.
SECTION 5.03. Access to Information. (a) From the date hereof until
the Effective Time, the Company will (i) give Buyer, its counsel, financial
advisors, auditors and other authorized representatives reasonable access during
normal business hours to the offices, properties, books and records of the
Company and its Subsidiaries as such Persons may reasonably request, and furnish
such persons with such financial and operating data and other information as
such Persons may reasonably request and (ii) instruct the Company's employees,
counsel and financial advisors to cooperate with Buyer in its investigation of
the business of the Company and its Subsidiaries; provided that no investigation
pursuant to this Section shall affect any representation or warranty given by
the Company to Buyer hereunder. The foregoing information shall be held in
confidence to the extent required by, and in accordance with, the provisions of
the letter agreement dated December 5, 1997 between Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation and Spectrum Equity Investors (the "Confidentiality
Agreement").
(b) The Company will not waive or fail to enforce any provision of
any confidentiality or standstill or similar agreement to which it is a party
without the prior written consent of Buyer.
SECTION 5.04. Other Offers. (a) From the date hereof until the
termination hereof, the Company and its Subsidiaries and their respective
officers, directors, employees, representatives (including any investment
banker, attorney or accountant) and other agents will not, directly or
indirectly, (i) take any action to solicit, initiate or encourage any
Acquisition Proposal or (ii) subject to the fiduciary duties of the Board of
Directors under applicable law as advised by Xxxxx Xxxx & Xxxxxxxx, counsel to
the Company, engage in discussions or negotiations with, or disclose any
nonpublic information relating to the Company or any Subsidiary or afford access
to the properties, books or records of the Company or any Subsidiary to, any
Person that may be considering making, or has made, an Acquisition Proposal. The
Company will promptly notify Buyer after receipt of any Acquisition Proposal or
any indication that any Person is considering making an Acquisition Proposal or
any request for nonpublic information relating to the Company or any Subsidiary
or for access to the properties, books or records of the Company or any
Subsidiary by any Person that may be considering making, or has made, an
Acquisition Proposal, which notification shall include the identity of the
offeror and the terms and conditions of any Acquisition Proposal (but only to
the extent the Board of Directors of the Company may disclose such information
without breaching its fiduciary duties as advised by counsel and as determined
in good faith and without violating any of the conditions of such Acquisition
Proposal), and will keep Buyer fully informed (subject to such fiduciary duties)
on a current basis of the status and details of any such Acquisition Proposal,
indication or request.
(b) For purposes of this Agreement, "Acquisition Proposal" means
any offer or proposal for, or any indication of interest in, a merger or other
business combination involving the Company or any Subsidiary or the direct or
indirect acquisition of any equity interest in, or a substantial portion of the
assets of, the Company or any Subsidiary, other than the transactions
contemplated by this Agreement, or a tender offer or exchange offer for at least
20% of the outstanding Shares or any other extraordinary transaction the
consummation of which would or could reasonably be expected to impede, interfere
with, prevent or materially delay the Merger.
SECTION 5.05. Notices of Certain Events. The Company shall promptly
notify Buyer of:
(a) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against,
relating to or involving or otherwise affecting the Company or any
Subsidiary which, if pending on the date of this Agreement, would
have been required to have been disclosed pursuant to Section 3.12
or which relate to the consummation of the transactions contemplated
by this Agreement.
SECTION 5.06. Solvency Advice. The Company shall request Valuation
Research or Xxxxxxxx Xxxxx to deliver the advice contemplated by Section
8.03(d) as promptly as practicable.
ARTICLE 6
COVENANTS OF BUYER
Buyer agrees that:
SECTION 6.01. Confidentiality. Buyer acknowledges and agrees that
all information received from or on behalf of the Company or any of the
Company's Subsidiaries in connection with the Merger shall be deemed received
pursuant to the Confidentiality Agreement and Buyer shall, and shall cause
Buyer's affiliates and Representatives (each as defined therein), to comply with
the provisions of the Confidentiality Agreement with respect to such information
and the provisions of the Confidentiality Agreement are hereby incorporated
herein by reference with the same effect as if fully set forth herein.
SECTION 6.02. Voting of Shares. Buyer agrees to vote all Shares
beneficially owned by it in favor of adoption of this Agreement at the Company
Stockholder Meeting.
SECTION 6.03. Indemnification; Directors' and Officers' Insurance.
(a) The certificate of incorporation and bylaws of the Surviving Corporation
shall contain the provisions with respect to indemnification set forth in the
certificate of incorporation and bylaws of the Company on the date of this
Agreement, which provisions shall not be amended, repealed or otherwise modified
for a period of six years after the Effective Time in any manner that would
adversely affect the rights thereunder of persons who at any time prior to the
Effective Time were identified as prospective indemnified parties under the
certificate of incorporation or bylaws of the Company in respect of actions or
omissions occurring at or prior to the Effective Time (including, without
limitation, the transactions contemplated by this Agreement), unless such
modification is required by applicable law.
(b) From and after the Effective Time, the Surviving Corporation
shall indemnify, defend and hold harmless the present and former officers,
directors and employees of the Company and the Subsidiaries (collectively, the
"Indemnified Parties") against all losses, expenses (including reasonable fees
and expenses of counsel), claims, damages, liabilities or amounts that are paid
in settlement of, with the approval of Buyer and the Surviving Corporation
(which approval shall not be unreasonably withheld), or otherwise in connection
with, any claim, action, suit, proceeding or investigation (a "Claim"), based in
whole or in part on, or arising in whole or in part out of, any actions or
omissions occurring at or prior to the Effective Time (including, without
limitation, the transactions and financing contemplated by this Agreement), in
each case to the fullest extent permitted under Delaware Law (and shall pay
expenses in advance of the final disposition of any such action or proceeding to
each Indemnified Party to the fullest extent permitted under Delaware Law, upon
receipt from the Indemnified Party to whom expenses are advanced of the
undertaking to repay such advances contemplated by Section 145(e) of Delaware
Law).
(c) Without limiting the foregoing, in the event any Claim is
brought against any Indemnified Party (whether arising before or after the
Effective Time) after the Effective Time, (i) the Indemnified Parties may retain
its regularly engaged independent legal counsel as of the date of this
Agreement, or other independent legal counsel satisfactory to them and
reasonably acceptable to Buyer, (ii) the Surviving Corporation shall pay all
reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received and (iii) the Surviving Corporation
will use its reasonable efforts to assist in the vigorous defense of any such
matter, provided that the Surviving Corporation shall not be liable for any
settlement of any Claim effected without its written consent, which consent
shall not be unreasonably withheld. Any Indemnified Party wishing to claim
indemnification under this Section 6.03, promptly upon learning of any such
Claim, shall notify the Surviving Corporation (although the failure so to notify
the Surviving Corporation shall not relieve the Surviving Corporation from any
liability which the Surviving Corporation may have under this Section 6.03,
except to the extent such failure materially prejudices the Surviving
Corporation), and shall deliver to the Surviving Corporation the undertaking
contemplated by Section 145(e) of Delaware Law. The Indemnified Parties as a
group may retain one law firm (in addition to local counsel) to represent them
with respect to each such matter unless there is, under applicable standards of
professional conduct (as reasonably determined by counsel to such Indemnified
Parties) a conflict on any significant issue between the position of any two or
more of such Indemnified Parties, in which event, an additional counsel as may
be required may be retained by such Indemnified Parties.
(d) Buyer shall cause to be maintained in effect for not less than
six years after the Effective Time the current policies of directors' and
officers' liability insurance and fiduciary liability insurance maintained by
the Company with respect to matters occurring prior to the Effective Time,
provided that (i) Buyer may substitute therefor policies with reputable and
financially sound carriers having at least the same coverage and amounts thereof
and containing terms and conditions which are no less advantageous to the
Indemnified Parties and (ii) Buyer shall not be required to pay an annual
premium for such insurance in excess of three hundred percent of the last annual
premium paid prior to the date of this Agreement, but in such case shall
purchase as much coverage as possible for such amount.
(e) This Section 6.03 is intended to be for the benefit of, and
shall be enforceable by, the Indemnified Parties referred to herein, their heirs
and personal representatives and shall be binding on Buyer and the Surviving
Corporation and their respective successors and assigns.
SECTION 6.04. Name Change. On or about the Closing Date, Buyer
agrees to take such action as is necessary to cause the Surviving Corporation
and its Affiliates to change their respective names to names that do not
include, and are not identical or confusingly similar to, the name "Price" or
"PriCellular."
SECTION 6.05. High Yield Financing. As promptly as practicable
following the date hereof, Buyer shall use its commercially reasonable efforts
to raise gross cash proceeds of $200 million from an offering of its unsecured
senior subordinated debt securities (the "High Yield Financing") upon such terms
and conditions as may be specified by the Initial Lenders pursuant to the
Financing Agreements. Buyer agrees that it shall not amend (other than to extend
the termination date thereof), waive, discharge or terminate any material
provision of any of the Financing Agreements without the prior written consent
of the Company, which consent shall not be unreasonably withheld or delayed. In
the event that any portion of such Financing becomes unavailable, regardless of
the reason therefor, Buyer will use its commercially reasonable efforts to
obtain alternative financing on substantially comparable or more favorable terms
from other sources.
SECTION 6.06. Equity Financing. Promptly after entering into this
Agreement, Buyer shall deliver to each of the purchasers party to the Stock
Purchase Agreement, in accordance with the procedures set forth therein, the
"Initial Funding Notice" referred to therein, which notice shall not be
withdrawn. If Buyer shall not have received $25 million of equity capital within
20 days after the date hereof, upon the request of the Company, Buyer shall use
its commercially reasonable efforts to seek specific enforcement and such other
legal remedies as may be available to enforce the respective commitments of its
investors, as set forth in the Stock Purchase Agreement, to fund such $25
million.
ARTICLE 7
COVENANTS OF BUYER AND THE COMPANY
The parties hereto agree that:
SECTION 7.01. Best Efforts. (a) Subject to the terms and conditions
of this Agreement, each party will use its best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable to consummate the transactions contemplated by this Agreement as
promptly as practicable, including, without limitation, using its best efforts
to obtain all licenses, permits, consents, approvals, authorizations,
qualifications and orders required to be obtained (i) from any governmental
body, agency or official under applicable laws and regulations, and (ii)
pursuant to contracts to which the Company or Buyer is a party. From the date
hereof until the Closing Date, each party shall execute and file or join in the
execution and filing of any applications or other documents (in form reasonably
satisfactory to the other party) that may reasonably be necessary in order to
obtain the authorizations, approvals or consents of the FCC and each other
governmental body or third party that may be required or that each party may
reasonably request of the other in connection with the consummation of the
transactions contemplated by this Agreement. Each party agrees that it will give
the other party notice if it becomes aware of an occurrence or nonoccurrence
that would result in such party not being able to deliver the certificate
required by Section 8.02(a) or 8.03(a), as applicable.
(b) The Company agrees to provide such cooperation as is
reasonably requested by Buyer in connection with the arrangement of the debt
financing to be consummated in connection with this Agreement, including making
Company personnel available to participate in drafting sessions for offering
memoranda and due diligence sessions. The Company will also provide assistance
in connection with the preparation of customary closing documentation for such
debt financing, provided that the Company will have no obligation to provide
such cooperation to the extent it reasonably could result in a potential
personal liability to an officer, director or employee of the Company. Subject
to Section 10.04, any out of pocket expenses incurred by the Company in
connection with such assistance will be reimbursed by Buyer if the Closing does
not occur.
(c) The Company shall, and shall cause Wireless to, provide such
cooperation as is reasonably requested by Buyer in connection with Buyer's
consummation of the tender offers for the debt securities issued by Wireless or
the Company in connection with the arrangement of debt financing for the
transactions contemplated by this Agreement, including without limitation,
making Company and Wireless personnel available to participate in the
preparation of tender offer documents and ancillary documents, executing
supplemental indentures, providing assistance in connection with arranging for
the delivery of customary legal opinions and preparation of other customary
closing documentation, provided that the Company and Wireless will have no
obligation to make any payments in connection therewith; provided further that
the Company and Wireless will have no obligation to provide such cooperation to
the extent it reasonably could result in a potential liability to an officer,
director or employee of the Company or Wireless. Subject to Section 10.04, any
out of pocket expenses incurred by the Company or Wireless in connection with
such assistance will be reimbursed by Buyer if the Closing does not occur.
(d) Buyer agrees that upon satisfaction of (i) the conditions set
forth in Article 8 of this Agreement (other than the Financing Condition) and
(ii) the conditions precedent to any extension of credit under the financing
agreements relating to the Bridge Loan Commitment and the Credit Facilities
Commitment, other than those conditions which are within Buyer's control to
cause to be satisfied at such time, it shall promptly, but in no event later
than the second business day after satisfaction of the conditions referred to in
clause (i) and (ii) above, borrow such amounts under the Financing Agreements as
are required for Buyer to consummate the Merger and all transactions
contemplated by this Agreement.
SECTION 7.02. Certain Filings. The Company and Buyer shall cooperate
with one another (a) in connection with the preparation of the Company
Disclosure Documents, and (b) in determining whether any action by or in respect
of, or filing with, any governmental body, agency or official, or authority is
required, or any actions, consents, approvals or waivers are required to be
obtained from parties to any material contracts, in connection with the
consummation of the transactions contemplated by this Agreement and (c) in
seeking any such actions, consents, approvals or waivers or making any such
filings, furnishing information required in connection therewith or with the
Company Disclosure Documents and seeking timely to obtain any such actions,
consents, approvals or waivers.
SECTION 7.03. Public Announcements. Buyer and the Company will
consult with each other before issuing any press release or making any public
statement with respect to this Agreement and the transactions contemplated
hereby and, except as may be required by applicable law or any listing agreement
with any national securities exchange, will not issue any such press release or
make any such public statement prior to such consultation.
SECTION 7.04. Further Assurances. At and after the Effective Time,
the officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Buyer, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of the Company or Buyer, any other actions and things 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.
SECTION 7.05. FCC Application. (a) As promptly as practicable after
the execution and delivery of this Agreement, Buyer 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 fifth business
day following execution and delivery of this Agreement, the Company shall
deliver to Buyer its completed portion of the FCC Application. Not later than
the tenth business day following the execution and delivery of this Agreement,
Buyer shall file, or cause to be filed, the FCC Application. Buyer and the
Company shall prosecute the FCC Application in good faith and with due diligence
in order to obtain such FCC consent as expeditiously as practicable. If the
Closing shall not have occurred for any reason within the initial effective
period of the granting of approval by the FCC of the FCC Application, and
neither Buyer nor the Company shall have terminated this Agreement pursuant to
Section 9.01, Buyer and the Company shall jointly request one or more extensions
of the effective period of such grant. No party hereto shall knowingly take, or
fail to take, any action the intent or reasonably anticipated consequence of
which action or failure to act would be to cause the FCC not to grant approval
of the FCC Application or delay either such approval or the consummation of the
transfer of control of the Company.
(b) Buyer and the Company shall each pay one-half (1/2) of any FCC
fees that may be payable in connection with the filing or granting of approval
of the FCC Application. Buyer and the Company shall each oppose any request for
reconsideration or judicial review of the granting of approval of the FCC
Application.
SECTION 7.06. HSR Act Matters. Promptly after the date hereof, Buyer
and the Company (as may be required pursuant to the HSR Act) will complete all
documents required to be filed with the Federal Trade Commission and the United
States Department of Justice in order to comply with the HSR Act and, not later
than 15 days after the date hereof, together with the persons who are required
to join in such filings, shall file the same with the appropriate governmental
agencies. Buyer and the Company shall promptly furnish all materials thereafter
required by any of the governmental agencies having jurisdiction over such
filings, and shall take all reasonable actions and shall file and use best
efforts to have declared effective or approved all documents and notifications
with any such governmental agencies, as may be required under the HSR Act or
other Federal antitrust laws for the consummation of the Merger and the other
transaction contemplated hereby.
SECTION 7.07. Warrants; Convertible Notes. (a) Prior to the
Effective Time, the Company and Buyer will deliver to the holder of the Warrants
the written instrument required to be delivered pursuant to Section 1.3(c) of
the Warrant Agreement. After the Effective Time, at the request of the holder of
the Warrants, the Company will exchange the Warrants for an amount in cash equal
to the product of (i) the number of Class B Shares into which the Warrants to be
exchanged are exercisable and (ii) the difference between the Merger
Consideration and the Exercise Price on the day the holder of the Warrants
requests an exchange pursuant to this Section 7.07.
(b) Prior to the Effective Time, the Company and Buyer will
execute and deliver to the Bank of Montreal Trust Company (the "Trustee") the
supplemental indenture (and any necessary officer's certificates) relating to
the Convertible Discount Notes as required by Section 13.06 of that Indenture
dated as of August 21, 1995 between the Company and the Trustee. In addition,
prior to the Effective Time, the Company and Buyer will mail to each holder of
the Convertible Discount Notes a notice of the execution of such supplemental
indenture.
ARTICLE 8
CONDITIONS TO THE MERGER
SECTION 8.01. Conditions to the Obligations of Each Party. The
obligations of the Company and Buyer to consummate the Merger are subject to
the satisfaction of the following conditions:
(a) this Agreement and the transactions contemplated hereby shall
have been approved and adopted by the stockholders of the Company in
accordance with Delaware Law;
(b) any applicable waiting period under the HSR Act relating to
the Merger shall have expired;
(c) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the
consummation of the Merger or any other transactions pursuant to
this Agreement;
(d) all consents, waivers, approvals, authorizations or permits by
or from, and all actions by or in respect of or filings with any
governmental body, agency, official, or authority required to permit
the execution, delivery and performance of this Agreement, and the
consummation of the Merger and the other transactions contemplated
by this Agreement, including, without limitation, the FCC Transfer
Approvals referred to below, shall have been obtained; and
(e) except as set forth below, 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 consummation of the transactions
contemplated in this Agreement shall have been obtained from or made
with, the FCC, and each of the FCC Transfer Approvals shall have
become a Final Order.
For purposes of this Agreement, "Final Order" shall mean an action by the FCC:
(i) that is not reversed, stayed, enjoined, set aside, annulled or suspended
within the deadline, if any, provided by applicable statute or regulation, (ii)
with respect to which no request for stay, motion or petition for
reconsideration or rehearing, application or request for review, or notice of
appeal or other judicial petition for review that is filed within such period is
pending and (iii) as to which the deadlines, if any, for filing any such
request, motion, petition, application, appeal or notice, and for the entry of
orders staying, reconsidering or reviewing on the FCC's own motion have expired.
Notwithstanding anything to the contrary contained herein or otherwise: (x)
Buyer may, at its option by written notice to the Company, waive on behalf of
all the parties the requirement that each of the FCC Transfer Approvals shall
have become a Final Order and (y) in the case of the required FCC Transfer
Approvals of the transfer of the microwave licenses only, Buyer shall, on behalf
of all the parties, deem either initial FCC approvals or special temporary
authority to transfer the microwave licenses to satisfy this condition and in
such case upon receipt of either the initial FCC approvals or special temporary
authority each party shall be obligated hereunder as though a Final Order had
been received.
SECTION 8.02. Conditions to the Obligations of Buyer. The
obligations of Buyer to consummate the Merger are subject to the satisfaction of
the following further conditions:
(a) the Company shall have performed in all material respects all
of its obligations hereunder required to be performed by it at or
prior to the Effective Time, the representations and warranties of
the Company contained in this Agreement and in any certificate or
other writing delivered by the Company pursuant hereto shall be true
in all material respects at and as of the Effective Time (provided
that any representation or warranty contained herein that is
qualified by a materiality standard shall not be further qualified
hereby) as if made at and as of such time (except that those
representations and warranties made as of a specified date shall be
true in all material respects as of such date) and Buyer shall have
received a certificate signed by an executive officer of the Company
to the foregoing effect;
(b) no court, arbitrator or governmental body, agency or official
shall have issued any order, and there shall not be any statute,
rule or regulation, restraining or prohibiting the consummation of
the Merger or the effective operation of the business of the Company
and its Subsidiaries after the Effective Time;
(c) Buyer shall have received all documents it may reasonably
request relating to the existence of the Company and its
Subsidiaries and the authority of the Company for this Agreement,
all in form and substance reasonably satisfactory to Buyer;
(d) Buyer shall have obtained the debt financing set forth in the
Financing Agreements on the terms set forth therein, unless the
failure to obtain such financing was the result of a willful failure
by Buyer to perform any covenant or condition contained therein or
the inaccuracy of any representation or warranty arising out of the
bad faith or willful misconduct of Buyer (the "Financing
Condition");
(e) Since the date of this Agreement, there shall not have
occurred any change, event, occurrence, development or circumstance
which, individually or in the aggregate, has had, or would
reasonably be expected to have, a Material Adverse Effect; and
(f) The AT&T consent and waiver agreement shall be in full force
and effect in accordance with its terms.
SECTION 8.03. Conditions to the Obligations of the Company. The
obligations of the Company to consummate the Merger are subject to the
satisfaction of the following further conditions:
(a) Buyer shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to
the Effective Time, the representations and warranties of Buyer
contained in this Agreement and any certificate or other writing
delivered by Buyer pursuant hereto shall be true in all material
respects at and as of the Effective Time as if made at and as of
such time (except that those representations and warranties made as
of a specified date shall be true in all material respects as of
such date) and the Company shall have received a certificate signed
by an executive officer of each of Buyer to the foregoing effect;
(b) the Company shall have received all documents it may
reasonably request relating to the existence of Buyer and the
authority of Buyer for this Agreement, all in form and substance
reasonably satisfactory to the Company;
(c) Buyer shall have entered into a consulting agreement with the
President of the Company in form and substance reasonably
satisfactory to the President and Buyer; and
(d) The Board of Directors of the Company shall have received
advice, reasonably satisfactory to the Board, from an independent
advisor confirming the belief of Buyer set forth in Section 4.07(c).
ARTICLE 9
TERMINATION
SECTION 9.01. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
any approval of this Agreement by the stockholders of the Company):
(a) by mutual written consent of the Company and Buyer;
(b) by either the Company or Buyer if the Merger has not been
consummated by the earliest to occur of (i) the termination of the
Bridge Loan Commitment or the Credit Agreement Commitment if the
High Yield Financing shall not have been consummated prior thereto,
(ii) if the High Yield Financing shall have been consummated, the
proceeds thereof ceasing to be held in escrow and (iii) March 6,
1999;
(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 judgment, injunction, order or decree
enjoining Buyer or the Company from consummating the Merger is
entered and such judgment, injunction, order or decree shall become
final and nonappealable;
(d) by the Company, upon payment to Buyer of the amounts referred
to in Section 10.04(b), if prior to or after the Company Stockholder
Meeting, the Directors of the Company, in good faith based upon the
advice of independent legal counsel, shall have withdrawn or
modified in a manner adverse to Buyer their approval or
recommendation of this Agreement, or shall have resolved to do so,
in order to permit the Company to execute a definitive agreement in
connection with an Acquisition Proposal, provided that the Company
has complied with its obligations in Section 5.04;
(e) by Buyer upon the occurrence of any Trigger Event;
(f) by the Company or Buyer if the approval of the stockholders of
the Company required for the consummation of the Merger shall not
have been obtained at a duly held meeting of shareholders to vote on
the Merger, or any adjournment thereof;
(g) by Buyer or the Company upon a material breach on the part of
the other of any covenant or agreement herein or if any
representation or warranty of the other party shall not be true in
any material respect (provided that any representation or warranty
that is qualified by a materiality standard shall not be further
qualified hereby) and, if such breach is capable of being cured,
shall not have been cured within 20 business days following receipt
by the breaching party of written notice of such breach from the
other party; or
(h) by the Company if equity capital in an amount equal to at
least $25 million shall not have been contributed to Buyer within 30
days after the date of this Agreement as contemplated by Section
4.09.
The party desiring to terminate this Agreement pursuant to this
Section 9.01 shall give written notice of such termination to the other party in
accordance with Section 10.01.
SECTION 9.02. Effect of Termination. If this Agreement is terminated
pursuant to Section 9.01, this Agreement shall become void and of no effect with
no liability on the part of any party hereto, except that the agreements
contained in Sections 6.01 and 10.04 shall survive the termination hereof, and
except that nothing herein shall relieve any party from liability for any breach
hereof.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including telecopy or
similar writing) and shall be given,
if to Buyer, to:
American Cellular Corporation
c/o Spectrum Equity Investors
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxx, Esq.
Xxxxxx & Xxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
if to the Company, to:
PriCellular Corporation
000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx, Esq.
Xxxx Xxxxxxxx, Esq.
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
or such other address or telecopy number as such party may hereafter specify for
the purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective (a) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section and the
appropriate telecopy confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section.
SECTION 10.02. Survival of Representations and Warranties and
Agreements. The representations and warranties and agreements contained herein
and in any certificate or other writing delivered pursuant hereto shall not
survive the Effective Time except for the agreements set forth in Article 1,
Sections 6.03, 7.04 and 7.07, which shall survive the Effective Time, and
Section 10.04, which shall survive the termination of this Agreement.
SECTION 10.03. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived prior to the Effective Time if, and only if,
such amendment or waiver is in writing and signed, in the case of an amendment,
by the Company and Buyer, or in the case of a waiver, by the party against whom
the waiver is to be effective; provided that after the adoption of this
Agreement by the stockholders of the Company, no such amendment or waiver shall,
without the further approval of such stockholders, alter or change (i) the
amount or kind of consideration to be received in exchange for any shares of
capital stock of the Company or (ii) any of the terms or conditions of this
Agreement if such alteration or change would adversely affect the holders of any
shares of capital stock of the Company.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 10.04. Expenses. (a) Except as otherwise provided in this
Section, all costs and expenses incurred in connection with this Agreement shall
be paid by the party incurring such cost or expense.
(b) In order to induce Buyer to enter into this Agreement, the
Company agrees to pay Buyer a fee in immediately available funds equal to
$29,000,000 (unless a Trigger Event occurs after May 15, 1998 and at such time
the Buyer shall not have either (i) consummated the High Yield Financing, the
proceeds of which shall continue to be held in escrow or (ii) obtained the
irrevocable waiver by the Initial Lenders of the conditions set forth in
Sections 3(c), Section 4 (paragraph 2) and in the attached term sheet under the
caption entitled "Conditions to Effectivness and to Interim Loan" the references
to the accuracy of representations and warranties of Target in the first
paragraph thereof and subparagraphs (l) and (r) of the Bridge Loan Commitment in
which case, $19,000,000) promptly, but in no event later than three business
days, after the termination of this Agreement as a result of the occurrence of
any of the events set forth below (a "Trigger Event"):
(i) the Company shall have entered into a definitive agreement
with respect to any Acquisition Proposal;
(ii) any Person or group (as defined in Section 13(d)(3) of the
Exchange Act) (other than Buyer or any of its affiliates or any
shareholders of the Company that have executed voting agreements
with Buyer) shall have become the beneficial owner (as defined in
Rule 13d-3 promulgated under the Exchange Act) of outstanding Shares
representing at least 50.1% of the total voting power of the Company
or shall have acquired, directly or indirectly, at least 50.1% of
the assets of the Company;
(iii) the Board of Directors of the Company shall have withdrawn or
materially modified its approval or recommendation of the Merger or
shall have resolved to do so;
(iv) the Board of Directors of the Company shall have recommended
an Acquisition Proposal to the stockholders of the Company; or
(v) the approval of the stockholders of the Company required for
the consummation of the Merger shall not have been obtained at a
duly held meeting of the stockholders to vote on the Merger, or any
adjournment thereof.
(c) If this Agreement is terminated by the Company pursuant to
Section 9.01(d) or (f) or by Buyer pursuant to Section 9.01(e), (f) or (g), the
Company agrees to reimburse Buyer (i) for all out-of-pocket expenses reasonably
incurred in connection with this Agreement of up to $8,000,000 plus (ii) if
Buyer shall have consummated the High Yield Financing for all out-of-pocket
expenses reasonably incurred in connection with the High Yield Financing,
including interest, underwriting discounts, debt tender payments and fees,
expenses and other costs of consummating and unwinding the High Yield Financing
of up to $27,000,000.
SECTION 10.05. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto.
SECTION 10.06. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Delaware.
SECTION 10.07. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
SECTION 10.08. Entire Agreement; No Third-party Beneficiaries. This
Agreement and the other agreements referred to herein or executed
contemporaneously herewith constitute the entire agreement, and supersede all
prior agreements and understandings, both written and oral, between the parties
with respect to the subject matter of this Agreement. This Agreement, other than
as provided in Section 6.03, is not intended to confer upon any Person other
than the parties any rights or remedies.
SECTION 10.09. Extension; Waiver. At any time prior to the Effective
Time, any party hereto may with respect to any other party hereto (a) extend the
time for the performance of any of the obligations or other acts, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto, or (c) subject to Section 10.03, waive
compliance with any of the agreements or conditions (other than Section
8.01(a)). No failure or delay on the part of any party hereto in the exercise of
any rights hereunder shall impair such right or be construed to be a waiver of,
or acquiescence in, any breach of any representation, warranty or agreement
herein, nor shall any single or partial exercise of any such right preclude
other or further exercise thereof or of any other right. All rights and remedies
existing under this Agreement are cumulative to, and not exclusive of, any
rights or remedies otherwise available.
SECTION 10.10. Headings. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 10.11. Severability. In the event that any one or more of
the provisions contained in this Agreement or in any other instrument referred
to herein, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement or any other such
instrument.
SECTION 10.12. WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND BUYER
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
PRICELLULAR CORPORATION
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: President, Chief Executive
Officer
AMERICAN CELLULAR
CORPORATION
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chairman, Chief Executive
Officer
