[Execution Version]
AGREEMENT AND PLAN OF MERGER
Among
BELLSOUTH CORPORATION,
AT&T INC.
and
ABC CONSOLIDATION CORP.
Dated as of March 4, 2006
TABLE OF CONTENTS
PAGE
ARTICLE I
THE MERGER; CLOSING; EFFECTIVE TIME
1.1 The Merger..........................................................1
1.2 Closing.............................................................2
1.3 Effective Time......................................................2
ARTICLE II
ARTICLES OF INCORPORATION AND BY-LAWS OF THE SURVIVING CORPORATION
2.1 The Articles of Incorporation.......................................2
2.2 The By-Laws.........................................................2
ARTICLE III
OFFICERS AND DIRECTORS
3.1 Directors of Surviving Corporation..................................2
3.2 Officers of Surviving Corporation...................................2
3.3 Parent Board of Directors/Company Executive Officers................3
ARTICLE IV
EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES
4.1 Effect on Capital Stock.............................................3
4.2 Exchange of Certificates for Shares.................................4
4.3 Adjustments to Prevent Dilution.....................................7
4.4 Company Stock Based Plans...........................................7
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of the Company.......................9
5.2 Representations and Warranties of Parent and Merger Sub............24
ARTICLE VI
COVENANTS
6.1 Interim Operations.................................................35
6.2 Acquisition Proposals..............................................42
6.3 Information Supplied...............................................47
6.4 Shareholders/Stockholders Meetings.................................47
6.5 Filings; Other Actions; Notification...............................48
6.6 Access; Consultation...............................................50
6.7 Affiliates.........................................................51
6.8 Stock Exchange Listing and De-listing..............................51
6.9 Publicity..........................................................51
6.10 Employee Benefits..................................................51
6.11 Expenses...........................................................53
6.12 Indemnification; Directors' and Officers' Insurance................53
6.13 Regulatory Compliance..............................................55
6.14 Takeover Statute; Rights Agreement.................................55
6.15 Dividends..........................................................55
6.16 Control of the Company's or Parent's Operations....................56
6.17 Section 16(b)......................................................56
6.18 Tax-Free Qualification.............................................56
6.19 Tax Representation Letters.........................................56
6.20 Cingular Headquarters..............................................57
6.21 Direct Investment Plan.............................................57
ARTICLE VII
CONDITIONS
7.1 Conditions to Each Party's Obligation to Effect the Merger.........57
7.2 Conditions to Obligations of Parent and Merger Sub.................58
7.3 Conditions to Obligation of the Company............................59
7.4 Invoking Certain Conditions........................................60
ARTICLE VIII
TERMINATION
8.1 Termination by Mutual Consent......................................61
8.2 Termination by Either Parent or the Company........................61
8.3 Termination by the Company.........................................61
8.4 Termination by Parent..............................................62
8.5 Effect of Termination and Abandonment..............................62
ARTICLE IX
MISCELLANEOUS AND GENERAL
9.1 Survival...........................................................65
9.2 Modification or Amendment..........................................65
9.3 Waiver of Conditions...............................................65
9.4 Counterparts.......................................................66
9.5 GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL......................66
9.6 Notices............................................................67
9.7 Entire Agreement...................................................68
9.8 No Third Party Beneficiaries.......................................68
9.9 Obligations of Parent and of the Company...........................68
9.10 Severability.......................................................68
9.11 Interpretation.....................................................68
9.12 Captions...........................................................69
9.13 Specific Performance...............................................69
9.14 Assignment.........................................................69
Exhibit A Form of Amended and Restated Charter of Surviving Corporation
Exhibit B Form of Affiliate Agreement
Index of Defined Terms
----------------------
Defined Term Section
------------ -------
Acquiring Person 8.5(b)
Acquisition Proposal 6.2(b)
Affected Employees 6.10(a)
Agreement Preamble
Bankruptcy and Equity Exception 5.1(c)
By-Laws 2.2
Certificate 4.1(a)
Certificate of Merger 1.3
Charter 2.1
Cingular 5.1(a)(i)
Closing 1.2
Closing Date 1.2
Code Recitals
Common Stock Unit 5.1(b)(i)
Communications Act 5.1(d)(i)
Company Preamble
Company Awards 4.4(b)
Company Compensation and Benefit Plans 5.1(h)(i)
Company Current Properties 5.1(l)(ii)
Company Direct Investment Plan 5.1(b)(i)
Company Disclosure Letter 5.1
Company Employees 5.1(h)(i)
Company ERISA Affiliate 5.1(h)(iii)
Company Former Properties 5.1(l)(iii)
Company Material Adverse Effect 5.1(a)(ii)
Company Non U.S. Compensation and Benefit Plans 5.1(h)(i)
Company Option 4.4(a)
Company Preferred Shares 5.1(b)(i)
Company Recommendation 5.1(c)
Company Recommendation Change 6.2(c)(ii)
Company Region 5.1(a)
Company Reports 5.1(e)(i)
Company Requisite Vote 5.1(c)
Company Share 4.1(a)
Company Shares 4.1(a)
Company Stock Plans 4.4(a)
Company Shareholders Meeting 6.4(a)
Company Superior Proposal Action 6.2(c)(ii)
Company U.S. Compensation and Benefit Plans 5.1(h)(ii)
Computer Software 5.1(p)(1)
Confidentiality Agreement 6.2(a)
Contracts 5.1(d)(ii)
Covered Proposal 8.5(b)
Current Premium 6.12(c)
D&O Insurance 6.12(c)
EC Merger Regulation 5.1(d)(i)
Effective Time 1.3
Environmental Law 5.1(l)
ERISA 5.1(h)(i)
ERISA Plans 5.1(h)(ii)
Exchange Act 5.1(d)(i)
Exchange Agent 4.2(a)
Exchange Fund 4.2(a)
Exchange Ratio 4.1(a)
Excluded Company Shares 4.1(a)
FCC 5.1(d)(i)
FCC Rules 6.13(a)
Final Order 7.2(e)
GAAP 5.1(e)(iii)
GBCC 1.1
Governmental Consents 7.1(c)
Governmental Entity 5.1(d)(i)
Hazardous Substance 5.1(l)
HSR Act 5.1(b)(ii)
Indemnified Parties 6.12(a)
Information Technology 5.1(p)(2)
Intellectual Property 5.1(p)(3)
IRS 5.1(h)(i)
Laws 5.1(i)
Licenses 5.1(i)
Lien 5.1(b)(ii)
Merger Recitals
Merger Consideration 4.1(a)
Merger Sub Preamble
Multiemployer Plan 5.1(h)(ii)
New Plans 6.10(b)
Order 7.1(d)
Parent Preamble
Parent Acquiring Person 8.5(c)
Parent Covered Proposal 8.5(c)
Parent Recommendation Change 6.2(d)
Parent Common Stock 4.1(a)
Parent Common Stock Unit 5.2(b)(i)
Parent Compensation and Benefit Plan 5.2(h)(i)
Parent Current Properties 5.2(k)
Parent Disclosure Letter 5.2
Parent Employees 5.2(h)(i)
Parent ERISA Affiliate 5.2(h)(iii)
Parent Former Properties 5.2(k)
Parent Material Adverse Effect 5.2(a)
Parent Non U.S. Compensation and Benefit Plans 5.2(h)(i)
Parent Option 5.2(b)(i)
Parent Preferred Stock 5.2(b)(i)
Parent Recommendation 5.2(c)
Parent Regions 5.2(a)
Parent Reports 5.2(e)(i)
Parent Requisite Vote 5.2(c)
Parent Stockholders Meeting 6.4(a)
Parent Superior Proposal Action 6.2(d)
Parent U.S. Compensation and Benefit Plans 5.2(h)(ii)
Pension Plan 5.1(h)(ii)
Person 4.2(b)
Prior Plan 6.10(b)
Prospectus/Proxy Statement 6.3(a)
PUC 5.1(d)(i)
Receiving Party 6.2(g)
Regulatory Material Adverse Effect 6.5(b)
Representatives 6.2(a)
Required Governmental Consents 7.1(c)
Rights Agreement 5.1(b)(i)
S-4 Registration Statement 6.3(a)
Xxxxxxxx-Xxxxx 5.1(e)(i)
SEC 4.4(c)
Securities Act 4.4(c)
Significant Subsidiary 5.1(b)(ii)
Subsidiary 5.1(a)(i)
Successor Plan 6.10(b)
Superior Proposal 6.2(b)
Surviving Corporation 1.1
Takeover Statute 5.1(k)
T 5.2(e)(i)
T Reports 5.2(e)(i)
Tax 5.1(n)
Tax Return 5.1(n)
Taxes 5.1(n)
Termination Date 8.2
Termination Fee 8.5(b)
Uncertificated Company Share 4.1(a)
Utilities Laws 5.1(d)(i)
XX.xxx 5.1(a)(i)
EXHIBIT B
AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER (hereinafter called this
"Agreement"), dated as of March 4, 2006 among BellSouth Corporation, a
Georgia corporation (the "Company"), AT&T Inc., a Delaware corporation
("Parent"), and ABC Consolidation Corp., a Georgia corporation and a
wholly-owned Subsidiary of Parent ("Merger Sub").
RECITALS
WHEREAS, the Board of Directors of Parent has approved, and
the Boards of Directors of the Company and Merger Sub have adopted, this
Agreement providing for the merger of Merger Sub with and into the Company
(the "Merger");
WHEREAS, the Board of Directors of Parent has resolved to
submit to the stockholders of Parent for their approval the issuance of
shares of Parent Common Stock (as defined below) in the Merger and the
Board of Directors of the Company has resolved to submit this Agreement to
the shareholders of the Company for their approval;
WHEREAS, it is intended that, for federal income tax
purposes, the Merger shall qualify as a reorganization under the provisions
of Section 368(a) of the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder (the "Code"), and that this
Agreement will be, and hereby is, adopted as a plan of reorganization; and
WHEREAS, the Company, Parent and Merger Sub desire to make
certain representations, warranties, covenants and agreements in connection
with this Agreement.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
ARTICLE I
THE MERGER; CLOSING; EFFECTIVE TIME
1.1. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, at the Effective Time, Merger Sub
shall be merged with and into the Company and the separate corporate
existence of Merger Sub shall thereupon cease. The Company shall be the
surviving corporation in the Merger (sometimes hereinafter referred to as
the "Surviving Corporation"), and the Company shall continue its separate
corporate existence under the laws of the state of Georgia, and all its
rights, privileges, immunities, powers and franchises shall continue
unaffected by the Merger, except as set forth in Article III hereof. The
Merger shall have the effects specified in the Georgia Business Corporation
Code, as amended (the "GBCC").
1.2. Closing. The closing of the Merger (the "Closing")
shall take place (i) at the offices of Xxxxxxxx & Xxxxxxxx LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 8:00 a.m. local time on the first
business day after the date on which the last to be satisfied or waived of
the conditions set forth in Article VII shall be satisfied or waived in
accordance with this Agreement (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the satisfaction
or waiver of those conditions), or (ii) at such other place and time and/or
on such other date as the Company and Parent may otherwise agree in writing
(the date on which the Closing occurs, the "Closing Date").
1.3. Effective Time. At the Closing, the Company and Merger
Sub will cause a Certificate of Merger (the "Certificate of Merger") to be
completed, executed, acknowledged and filed with the Secretary of State of
the State of Georgia as provided in Sections 14-2-1105(b) and Section
14-2-1105.1 of the GBCC. The Merger shall become effective at the time when
the Certificate of Merger has been duly filed with the Secretary of State
of Georgia or such other time as shall be agreed upon by the parties hereto
in writing and set forth in the Certificate of Merger in accordance with
the GBCC (the "Effective Time").
ARTICLE II
ARTICLES OF INCORPORATION AND BY-LAWS
OF THE SURVIVING CORPORATION
2.1. The Articles of Incorporation. At the Effective Time,
the articles of incorporation of the Surviving Corporation (the "Charter")
shall be amended in its entirety to read as set forth in Exhibit A hereto,
until thereafter amended as provided therein or by applicable Law.
2.2. The By-Laws. The by-laws of Merger Sub in effect at the
Effective Time shall be the by-laws of the Surviving Corporation (the
"By-Laws"), until thereafter amended as provided therein or by applicable
Law.
ARTICLE III
OFFICERS AND DIRECTORS
3.1. Directors of Surviving Corporation. The directors of
Merger Sub at the Effective Time shall, from and after the Effective Time,
be the directors of the Surviving Corporation until their successors have
been duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Charter and the By-Laws.
3.2. Officers of Surviving Corporation. The officers of the
Company at the Effective Time shall, from and after the Effective Time, be
the officers of the Surviving Corporation until their successors have been
duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Charter and the By-Laws.
3.3. Parent Board of Directors/Company Executive Officers.
(a) The Board of Directors of Parent shall take all actions necessary under
the certificate of incorporation and bylaws of Parent to appoint three
members of the Board of Directors of the Company selected by mutual
agreement of Parent and the Company as directors of Parent as of the
Effective Time, to serve as directors of Parent until their successors
shall have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the certificate of
incorporation and bylaws of Parent and applicable Law.
(b) Parent shall offer to each "Executive Officer" of the
Company (as listed in the Company's Form 10-K for the period ended December
31, 2005) (other than the Chief Executive Officer of the Company), the
opportunity to become a senior officer of Parent or a Subsidiary of Parent
immediately after the Effective Time on the basis described in Section
3.3(b) of the Company Disclosure Letter.
ARTICLE IV
EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES
4.1. Effect on Capital Stock. At the Effective Time, as a
result of the Merger and without any action on the part of the holder of
any capital stock of the Company:
(a) Merger Consideration. Each share of Common Stock, par
value $1.00 per share, of the Company (each, a "Company Share", and
together, the "Company Shares") issued and outstanding immediately prior to
the Effective Time (other than Company Shares that are owned by Parent or
by the Company or any direct or indirect wholly-owned Subsidiary of the
Company and in each case not held on behalf of third parties (collectively,
"Excluded Company Shares")) shall be converted into and become exchangeable
for 1.325 (the "Exchange Ratio") common shares, par value $1.00 per share,
of Parent ("Parent Common Stock") (the shares of Parent Common Stock into
which each Company Share is to be converted, the "Merger Consideration").
At the Effective Time, all Company Shares shall no longer be outstanding,
shall be cancelled and retired and shall cease to exist, and (A) each
certificate (a "Certificate") formerly representing any of such Company
Shares (other than Excluded Company Shares) and (B) each uncertificated
Company Share (an "Uncertificated Company Share") registered to a holder on
the stock transfer books of the Company (other than Excluded Company
Shares), shall thereafter represent only the right to the Merger
Consideration and the right, if any, to receive pursuant to Section 4.2(e)
cash in lieu of fractional shares into which such Company Shares have been
converted pursuant to this Section 4.1(a) and any distribution or dividend
pursuant to Section 4.2(c), in each case without interest.
(b) Cancellation of Shares. Each Excluded Company Share
shall, by virtue of the Merger and without any action on the part of the
holder thereof, no longer be outstanding, shall be cancelled and retired
without payment of any consideration therefor and shall cease to exist.
(c) Merger Sub. At the Effective Time, each share of Common
Stock, par value $1.00 per share, of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into one share
of Common Stock of the Surviving Corporation.
4.2 Exchange of Certificates for Shares.
-----------------------------------
(a) Exchange Agent. As of the Closing, Parent shall deposit,
or shall cause to be deposited, with an exchange agent selected by Parent
(the "Exchange Agent"), for the benefit of the holders of Company Shares
(other than Excluded Company Shares), certificates representing the shares
of Parent Common Stock to be exchanged for Company Shares (other than
Excluded Company Shares) in respect of the aggregate Merger Consideration
to be issued in the Merger and any dividends or other distributions with
respect to the Parent Common Stock to be paid or to be issued pursuant to
Section 4.2(c) or 4.2(e) in exchange for Company Shares (other than
Excluded Company Shares) (such cash and certificates for shares of Parent
Common Stock, together with the amount of any cash payable pursuant to
Section 4.2(e) in lieu of fractional shares and dividends or other
distributions payable with respect thereto pursuant to Section 4.2(c),
being hereinafter referred to as the "Exchange Fund"). With respect to the
amount of cash to be deposited as of the Closing to satisfy its obligations
under Section 4.2(e), Parent shall only be required to make a reasonable
estimate of the amount of such cash that will be necessary.
(b) Exchange Procedures. Parent shall cause transmittal
materials reasonably agreed upon by Parent and the Company prior to the
Closing to be mailed as soon as reasonably practicable after the Effective
Time by the Exchange Agent to each holder of record as of the Effective
Time of Company Shares (other than Excluded Company Shares) represented by
Certificates. Such transmittal materials shall advise the holders of such
Company Shares of the effectiveness of the Merger and the procedure for
surrendering the Certificates to the Exchange Agent. Upon the surrender of
a Certificate (or affidavit of loss in lieu thereof in accordance with
Section 4.2(g)) to the Exchange Agent in accordance with the terms of the
transmittal materials, the holder of the Certificate shall be entitled to
receive in exchange, and in respect of, such Certificate (i) a certificate
representing that number of whole shares of Parent Common Stock that such
holder is entitled to receive pursuant to this Article IV, (ii) a check in
the amount (after giving effect to any required tax withholdings) of (A)
any cash payable pursuant to Section 4.2(e) in lieu of fractional shares
plus (B) any unpaid dividends or other distributions with respect to the
Parent Common Stock that such holder has the right to receive pursuant to
Section 4.2(c), and, in each case, the Certificate so surrendered shall
forthwith be cancelled. No interest will be paid or accrued on any amount
payable upon due surrender of the Certificates. In the event of a transfer
of ownership of Company Shares that is not registered in the transfer
records of the Company, a certificate representing the proper number of
shares of Parent Common Stock, together with a check for any cash to be
paid upon due surrender of the Certificate and any other dividends or
distributions in respect thereof, may be issued and/or paid to such a
transferee if the Certificate formerly representing such Company Shares is
presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and to evidence that any applicable stock
transfer Taxes have been paid. If any certificate for shares of Parent
Common Stock is to be issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it shall be a
condition of such exchange that the Person requesting such exchange shall
pay any transfer or other Taxes required by reason of the issuance of
certificates representing shares of Parent Common Stock in a name other
than that of the registered holder of the Certificate surrendered, or shall
establish to the satisfaction of Parent or the Exchange Agent that such Tax
has been paid or is not applicable.
For the purposes of this Agreement, the term "Person" shall
mean any individual, corporation (including not-for-profit), general or
limited partnership, limited liability company, joint venture, estate,
trust, association, organization, Governmental Entity or other entity of
any kind or nature.
(c) Distributions with Respect to Unexchanged Shares; Voting.
---------------------------------------------------------
(i) Whenever a dividend or other distribution is declared by
Parent in respect of Parent Common Stock, the record date for which is at
or after the Effective Time, that declaration shall include dividends or
other distributions in respect of all shares of Parent Common Stock
issuable pursuant to this Agreement. No dividends or other distributions in
respect of such Parent Common Stock shall be paid to any holder of any
unsurrendered Certificate until such Certificate is surrendered for
exchange in accordance with this Article IV. Subject to the effect of
applicable Laws, following surrender of any such Certificate, there shall
be issued and/or paid to the holder of the certificates representing whole
shares of Parent Common Stock issued in exchange therefor, without
interest, (A) at the time of such surrender, the dividends or other
distributions with a record date after the Effective Time and a payment
date on or prior to the date of issuance of such whole shares of Parent
Common Stock and not previously paid with respect to such shares and (B) at
the appropriate payment date, the dividends or other distributions payable
with respect to such whole shares of Parent Common Stock with a record date
after the Effective Time but with a payment date subsequent to surrender.
(ii) Registered holders of unsurrendered Certificates shall
be entitled to vote after the Effective Time at any meeting of Parent's
stockholders with a record date at or after the Effective Time the number
of whole shares of Parent Common Stock represented by such Certificates, as
the case may be, regardless of whether such holders have surrendered their
Certificates or delivered duly executed transmittal materials.
(d) Transfers. After the Effective Time, there shall be no
transfers on the stock transfer books of the Company of the Company Shares
that were outstanding immediately prior to the Effective Time.
(e) Fractional Shares. Notwithstanding any other provision
of this Agreement, no fractional shares of Parent Common Stock will be
issued and any holder of Company Shares entitled to receive a fractional
share of Parent Common Stock but for this Section 4.2(e) shall be entitled
to receive an amount in cash (without interest) determined by multiplying
such fraction (rounded to the nearest one-hundredth of a share) by the
average of the closing price of a share of Parent Common Stock, as reported
in the Wall Street Journal, New York City edition, for the five trading
days ending on the trading day immediately prior to the Effective Time.
(f) Termination of Exchange Period; Unclaimed Stock. Any
portion of the Exchange Fund (including the proceeds of any investments
thereof and any shares of Parent Common Stock) that remains unclaimed by
the shareholders of the Company 180 days after the Effective Time shall be
delivered, at Parent's option, to Parent. Any shareholders of the Company
who have not theretofore complied with this Article IV shall thereafter
look only to Parent for delivery of any shares of Parent Common Stock and
payment of any cash, dividends and other distributions in respect thereof
payable or deliverable pursuant to Section 4.1, Section 4.2(c) and Section
4.2(e) upon due surrender of their Certificates (or affidavits of loss in
lieu thereof), in each case, without any interest thereon. Notwithstanding
the foregoing, none of Parent, the Surviving Corporation, the Exchange
Agent or any other Person shall be liable to any former holder of Company
Shares for any amount properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar Laws.
(g) Lost, Stolen or Destroyed Certificates. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the Person claiming such Certificate to be
lost, stolen or destroyed and the posting by such Person of a bond in the
form customarily required by Parent as indemnity against any claim that may
be made against it with respect to such Certificate, Parent will issue the
shares of Parent Common Stock, and the Exchange Agent will issue any cash,
dividends and other distributions in respect thereof issuable and/or
payable in exchange for such lost, stolen or destroyed Certificate pursuant
to this Agreement.
(h) Uncertificated Company Shares. Parent shall cause the
Exchange Agent to (i) issue in registered form, as of the Effective Time,
to each holder of Uncertificated Company Shares that number of whole shares
of Parent Common Stock that such holder is entitled to receive in respect
of each such Uncertificated Company Share pursuant to this Article IV and
(ii) mail to each such holder materials (to be reasonably agreed by Parent
and the Company prior to the Effective Time) advising such holder of the
effectiveness of the Merger and the conversion of their Company Shares into
Merger Consideration pursuant to the Merger and a check in the amount
(after giving effect to any required tax withholdings) for any cash payable
pursuant to Section 4.2(e) in lieu of fractional shares in respect of each
such Uncertificated Company Share, in each case without any action by such
holders.
4.3 Adjustments to Prevent Dilution. In the event that prior
to the Effective Time there is a change in the number of Company Shares or
shares of Parent Common Stock or securities convertible or exchangeable
into or exercisable for Company Shares or shares of Parent Common Stock
issued and outstanding as a result of a distribution, reclassification,
stock split (including a reverse split), stock dividend or distribution,
recapitalization, merger, subdivision, issuer tender or exchange offer, or
other similar transaction, the Merger Consideration shall be equitably
adjusted to eliminate the effects of such event on the Merger
Consideration.
4.4 Company Stock Based Plans.
-------------------------
(a) At the Effective Time, each outstanding option to
purchase Company Shares (a "Company Option") under the Company Compensation
and Benefit Plans identified in Section 5.1(b) of the Company Disclosure
Letter as being the only Company Compensation and Benefit Plans pursuant to
which Company Shares may be issued or benefits measured by the value of
Company Shares may be obtained (the "Company Stock Plans"), whether vested
or unvested, shall be converted into an option to acquire a number of
shares of Parent Common Stock equal to the product (rounded up to the
nearest whole number) of (x) the number of Company Shares subject to the
Company Option immediately prior to the Effective Time and (y) the Exchange
Ratio, at an exercise price per share (rounded down to the nearest whole
cent) equal to (A) the exercise price per Company Share of such Company
Option immediately prior to the Effective Time divided by (B) the Exchange
Ratio; provided, however, that the exercise price and the number of shares
of Parent Common Stock purchasable pursuant to the Company Options shall be
determined in a manner consistent with the requirements of Section 409A of
the Code; provided, further, that in the case of any Company Option to
which Section 422 of the Code applies, the exercise price and the number of
shares of Parent Common Stock purchasable pursuant to such option shall be
determined in accordance with the foregoing, subject to such adjustments as
are necessary in order to satisfy the requirements of Section 424(a) of the
Code. Except as specifically provided above, following the Effective Time,
each Company Option shall continue to be governed by the same terms and
conditions as were applicable under such Company Option immediately prior
to the Effective Time. At or prior to the Effective Time, the Company shall
adopt appropriate amendments to the Company Stock Plans, if necessary, and
the Board of Directors of the Company shall adopt appropriate resolutions,
if necessary, to effectuate the provisions of this Section 4.4(a). Parent
shall take all actions as are necessary for the assumption of the Company
Stock Plans pursuant to this Section 4.4, including the issuance (subject
to Section 4.4(c)) and listing of Parent Common Stock as necessary to
effect the transactions contemplated by this Section 4.4.
(b) At the Effective Time, each right of any kind,
contingent or accrued, to acquire or receive Company Shares or benefits
measured by the value of Company Shares, and each award of any kind
consisting of Company Shares that may be held, awarded, outstanding,
payable or reserved for issuance under the Company Stock Plans, other than
Company Options and outstanding performance shares (the "Company Awards"),
shall be deemed to be converted into the right to acquire or receive
benefits measured by the value of (as the case may be) the number of shares
of Parent Common Stock equal to the product of (x) the number of Company
Shares subject to such Company Award immediately prior to the Effective
Time and (y) the Exchange Ratio, and each such right shall otherwise be
subject to the terms and conditions applicable to such right under the
relevant Company Stock Plan. At or prior to the Effective Time, the Company
shall adopt appropriate amendments to the Company Stock Plans, if
necessary, and the Board of Directors of the Company shall adopt
appropriate resolutions, if necessary, to effectuate the provisions of this
Section 4.4(b).
(c) If registration of any interests in the Company Stock
Plans or the shares of Parent Common Stock issuable thereunder is required
under the Securities Act of 1933, as amended (the "Securities Act"), Parent
shall file with the Securities and Exchange Commission (the "SEC"), by the
business day following the Effective Time, a registration statement on Form
S-8 (or any successor form), with respect to such interests or Parent
Common Stock, and shall use its commercially reasonable best efforts to
maintain the effectiveness of such registration statement (and to maintain
the current status of the prospectus or prospectuses contained therein and
comply with any applicable state securities or "blue sky" laws) for so long
as the relevant Company Stock Plans remain in effect and such registration
of interests therein or the shares of Parent Common Stock issuable
thereunder (and compliance with any such state laws) continues to be
required. As soon as reasonably practicable after the registration of such
interests or shares, as applicable, Parent shall deliver to the holders of
Company Options and Company Awards by any permissible method appropriate
notices setting forth such holders' rights pursuant to the respective
Company Stock Plans and agreements evidencing the grants of such Company
Options and Company Awards, and stating that such Company Options and
Company Awards and agreements have been assumed by Parent in accordance
with the applicable terms.
(d) Without limiting the applicability of the preceding
paragraph, the Company shall take all necessary action to ensure that the
Surviving Corporation will not be bound at the Effective Time by any
options, or other rights, awards or arrangements under the Company Stock
Plans that would entitle any Person after the Effective Time to
beneficially own any Company Shares or to receive any payments in respect
thereof, and at or prior to the Effective Time, the Company shall adopt
appropriate amendments to all Company Stock Plans conferring any rights to
Company Shares or other capital stock of the Company, if necessary, and the
Board of Directors of the Company shall adopt appropriate resolutions, if
applicable, to effectuate the provisions of this Section 4.5(d).
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of the Company. Except as
set forth in the disclosure letter delivered to Parent by the Company at
the time of entering into this Agreement (the "Company Disclosure Letter"),
or, to the extent the qualifying nature of such disclosure with respect to
a specific representation and warranty is reasonably apparent therefrom, as
set forth in the Company Reports filed with the SEC on or after January 1,
2005 and prior to the date of this Agreement (excluding all disclosures in
any "Risk Factors" Section) (it being understood that the exclusion with
respect to the "Risk Factors" section in the prior parenthetical shall not
be deemed a qualification of the matters expressly set out in the Company
Disclosure Letter or the exceptions in the definition of "Company Material
Adverse Effect"), the Company hereby represents and warrants to Parent and
Merger Sub as of the date of this Agreement and as of the Closing that:
(a) Organization, Good Standing and Qualification. Each of
the Company and its Subsidiaries is a legal entity duly organized, validly
existing and in good standing under the Laws of its respective jurisdiction
of organization and has all requisite corporate or similar power and
authority to own, lease and operate its properties and assets and to carry
on its business as presently conducted and is qualified to do business and
is in good standing as a foreign legal entity in each jurisdiction where
the ownership, leasing or operation of its assets or properties or conduct
of its business requires such qualification, except where the failure to be
so organized, qualified or in good standing, or to have such power or
authority, would not, individually or in the aggregate, reasonably be
likely to have a Company Material Adverse Effect. Prior to the date of this
Agreement, the Company has made available to Parent a complete and correct
copy of the Company's articles of incorporation and by-laws, each as in
effect and as amended through the date of this Agreement.
As used in this Agreement, (i) the term "Subsidiary" means,
with respect to any Person, any other Person of which at least a majority
of the securities or ownership interests having by their terms ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions is directly or indirectly owned or controlled
by such Person and/or one or more of its respective Subsidiaries, and shall
be deemed not to include Cingular Wireless Corporation or Cingular Wireless
LLC (together "Cingular") or XxxxxxXxxxx.xxx LLC ("XX.xxx") or any of their
respective Subsidiaries, except where expressly specified; (ii) the term
"Company Material Adverse Effect" means (x) an effect that would prevent or
materially delay or impair the ability of the Company to consummate the
Merger or (y) a material adverse effect on the financial condition,
properties, assets, liabilities, business or results of operations of the
Company and its Subsidiaries, including its interest in Cingular, XX.xxx
and their respective Subsidiaries, taken as a whole, excluding any such
effect resulting from or arising in connection with changes or conditions
(A) generally affecting (I) the United States economy or financial or
securities markets, (II) political conditions in the United States or (III)
the United States telecommunications industry or any generally recognized
business segment of such industry, (B) generally affecting the
telecommunications industry (or any generally recognized business segment
of such industry) in the Company Region, taken as a whole, (C) resulting
from any hurricane, earthquake, or other natural disasters in the Company
Region, (D) resulting from the execution, announcement or performance of
this Agreement, or (E) resulting from or arising in connection with the
financial condition, properties, assets, liabilities, business or results
of operations of Cingular, XX.xxx or any of their respective Subsidiaries;
and (iii) the "Company Region" means the states of Alabama, Florida,
Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina
and Tennessee.
(b) Capital Structure. (i) The authorized capital stock of
the Company consists of 8.65 billion Company Shares, of which 1,801,734,512
Company Shares were issued and outstanding as of March 1, 2006, and 100
million shares of First Preferred Stock, par value $1.00 per share (the
"Company Preferred Shares"), none of which were outstanding as of the date
of this Agreement. All of the outstanding Company Shares have been duly
authorized and validly issued and are fully paid and nonassessable. The
Company has no Company Shares or Company Preferred Shares reserved for
issuance, except that (A) as of the date of this Agreement, there are an
aggregate of 30 million Company Preferred Shares, designated "Series B
First Preferred Stock", reserved for issuance pursuant to the Rights
Agreement, dated as of November 22, 1999, between the Company and
ChaseMellon Shareholder Services, L.L.C., as Rights Agent, as amended by
Amendment No. 1 thereto, dated as of March 2, 2005 (the "Rights Agreement")
and (B) as of March 1, 2006, there were an aggregate of 166,891,548 Company
Shares reserved for issuance pursuant to the Company Stock Plans. Section
5.1(b) of the Company Disclosure Letter contains a correct and complete
list as of March 1, 2006 of (x) the number of outstanding Company Options,
the exercise price of all Company Options and number of Company Shares
issuable at such exercise price and (y) the number of outstanding rights,
including those issued under the Company Stock Plans, to receive, or rights
the value of which is determined by reference to, Company Shares, the date
of grant and number of Company Shares subject thereto (including without
limitation restricted stock, restricted stock units and performance shares)
(each a "Common Stock Unit"). From March 1, 2006 to the date of this
Agreement, the Company has not issued any Company Shares except pursuant to
the exercise of Company Options and the settlement of Common Stock Units
outstanding on March 1, 2006 in accordance with their terms and pursuant to
the Company's Direct Investment Plan, dated November 16, 2004 (the "Company
Direct Investment Plan"), and since March 1, 2006, the Company has not
issued any Company Options or Common Stock Units. All outstanding grants of
Company Options and Common Stock Units were made under the Company Stock
Plans. Except as set forth in this Section 5.1(b) and the right to purchase
Company Shares pursuant to the Company Direct Investment Plan, as of the
date of this Agreement, there are no preemptive or other outstanding
rights, options, warrants, conversion rights, stock appreciation rights,
redemption rights, repurchase rights, agreements, arrangements, calls,
commitments or rights of any kind that obligate the Company or any of its
Subsidiaries to issue or sell any shares of capital stock or other equity
securities of the Company or any securities or obligations convertible or
exchangeable into or exercisable for, or giving any Person a right to
subscribe for or acquire from the Company or any of its Subsidiaries, any
other securities of the Company and no securities or obligations of the
Company or any of its Subsidiaries evidencing such rights are authorized,
issued or outstanding. Except (x) as set forth in this Section 5.1(b) or
(y) pursuant to the Company Direct Investment Plan, as of the date of this
Agreement, the Company does not have outstanding any bonds, debentures,
notes or other obligations the holders of which have the right to vote (or
convertible into or exercisable for securities having the right to vote)
with the shareholders of the Company on any matter.
(ii) As of the date of this Agreement, each of the
outstanding shares of capital stock or other securities of each of the
Company's Subsidiaries that constitute a "Significant Subsidiary" (as
defined in Rule 1.02(w) of Regulation S-X promulgated pursuant to the
Exchange Act), which term shall not be deemed to include Cingular, XX.xxx
or any of their respective Subsidiaries, has been duly authorized and
validly issued and is fully paid and nonassessable and owned by the Company
or by a direct or indirect wholly-owned Subsidiary of the Company, free and
clear of any lien, charge, pledge, security interest, claim or other
encumbrance (each, a "Lien"), except for such Liens as would not,
individually or in the aggregate, reasonably be likely to have a Company
Material Adverse Effect. As of the date of this Agreement, there are no
preemptive or other outstanding rights, options, warrants, conversion
rights, stock appreciation rights, redemption rights, repurchase rights,
agreements, arrangements, calls, commitments or rights of any kind that
obligate the Company or any of its Subsidiaries to issue or sell any shares
of capital stock or other equity securities of any of the Company's
Subsidiaries (including Cingular) or any securities or obligations
convertible or exchangeable into or exercisable for, or giving any Person a
right to subscribe for or acquire from the Company or any of its
Subsidiaries, any equity securities of any of the Company's Subsidiaries
(including Cingular), and no securities or obligations of the Company or
any of its Subsidiaries evidencing such rights are authorized, issued or
outstanding. Section 5.1(b) of the Company Disclosure Letter contains, to
the knowledge of the executive officers of the Company, a true and complete
list as of the date of this Agreement of each Person in which the Company
owns, directly or indirectly, (other than through Cingular, XX.xxx and
their respective Subsidiaries) any voting interest that may require a
filing by Parent or any affiliate of Parent under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act") other than
voting interests that are owned, directly or indirectly, by the Company or
any of its Subsidiaries the acquisition of which will be exempt from the
filing requirements under the HSR Act or was exempt at the time of the
Company's direct or indirect acquisition of such interests pursuant to 16
C.F.R. ss.802.9. To the knowledge of the Company's executive officers, as
of the date of this Agreement, no Person or group beneficially owns 5% or
more of the Company's voting securities, with the terms "group" and
"beneficially owns" having the meanings ascribed to them under Rule 13d-3
and Rule 13d-5 under the Exchange Act.
(c) Corporate Authority; Approval and Fairness. The Company
has all requisite corporate power and authority and has taken all corporate
action necessary in order to execute, deliver and perform its obligations
under this Agreement and to consummate, subject only to approval of this
Agreement by the holders of a majority of the outstanding Company Shares
(the "Company Requisite Vote"), the Merger. This Agreement has been duly
executed and delivered by the Company and is a valid and binding agreement
of the Company enforceable against the Company in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar Laws of general applicability
relating to or affecting creditors' rights and to general equity principles
(the "Bankruptcy and Equity Exception"). The Board of Directors of the
Company (A) has unanimously adopted this Agreement and approved the Merger
and the other transactions contemplated hereby and resolved to recommend
the approval of this Agreement by the holders of Company Common Shares by
the Company Requisite Vote (the "Company Recommendation"), (B) has received
the opinions of its financial advisors, Citigroup Global Markets Inc. and
Xxxxxxx, Sachs & Co. each, dated as of the date of this Agreement, to the
effect that, as of the date of this Agreement, the Exchange Ratio is fair,
from a financial point of view, to the holders of Company Shares and (C)
directed that this Agreement be submitted to the holders of Company Shares
for their approval.
(d) Governmental Filings; No Violations. (i) Other than the
necessary notices, reports, filings, consents, registrations, approvals,
permits or authorizations (A) pursuant to Section 1.3, (B) required under
the HSR Act, European Union Council Regulation (EC) No. 139/2000 of January
20, 2004 (the "EC Merger Regulation") (if applicable), the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and the Securities
Act, (C) to comply with state securities or "blue-sky" laws, (D) with or to
the Federal Communications Commission ("FCC") pursuant to the
Communications Act of 1934, as amended (the "Communications Act"), and (E)
with or to the local, state and foreign public utility commissions or
similar local or state regulatory bodies (each, a "PUC") and the local and
state Governmental Entities pursuant to applicable local, state or foreign
Laws regulating the telecommunications business ("Utilities Laws") and (F)
foreign regulatory bodies pursuant to applicable foreign laws regulating
actions having the purpose or effect of monopolization or restraint of
trade, no filings, notices and/or reports are required to be made by the
Company with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by the Company from, any
governmental or regulatory authority, court, agency, commission, body or
other legislative, executive or judicial governmental entity ("Governmental
Entity"), in connection with the execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
Merger and the other transactions contemplated hereby, except those that
the failure to make or obtain would not, individually or in the aggregate,
reasonably be likely to have a Company Material Adverse Effect.
(ii) The execution, delivery and performance of this
Agreement by the Company do not, and the consummation by the Company of the
Merger and the other transactions contemplated hereby will not, constitute
or result in (A) a breach or violation of, a termination (or right of
termination) or a default under the Company's articles of incorporation or
by-laws, (B) a breach or violation of, a termination (or right of
termination) or a default under the articles of incorporation, by-laws or
the comparable governing instruments of any of the Company's Significant
Subsidiaries, (C) a breach or violation of, or a default or termination (or
right of termination) under, the acceleration of any obligations or the
creation of an obligation, Lien or pledge, security interest or other
encumbrance on its assets or the assets of any of its Subsidiaries (with or
without notice, lapse of time or both) pursuant to, any agreement, lease,
license granted by a Person other than a Governmental Entity, contract,
note, mortgage, indenture, or other contractual obligation ("Contracts")
binding upon the Company or any of its Subsidiaries or, assuming the
filings, notices and/or approvals referred to in Section 5.1(d)(i) are made
or obtained, any Law or governmental or non-governmental permit or license
to which the Company or any of its Subsidiaries is subject or (D) any
change in the rights or obligations of any party under any of its
Contracts, except, in the case of clauses (C) and (D), for any breach,
violation, termination, default, acceleration, creation or change that
would not, individually or in the aggregate, reasonably be likely to have a
Company Material Adverse Effect. The Company Disclosure Letter sets forth a
correct and complete list of Contracts of the Company and its Subsidiaries
pursuant to which consents or waivers are or may be required prior to
consummation of the transactions contemplated by this Agreement other than
those where the failure to obtain such consents or waivers would not,
individually or in the aggregate, reasonably be likely to have a Company
Material Adverse Effect.
(e) Reports; Financial Statements. (i) The Company has filed
and furnished all forms, statements, reports and documents required to be
filed or furnished by it with or to the SEC pursuant to applicable
securities statutes, regulations, policies and rules since December 31,
2004 (collectively, such forms, statements, reports and documents filed
with or furnished to the SEC since December 31, 2004, or those filed with
or furnished to the SEC subsequent to the date of this Agreement, and as
amended, the "Company Reports"). Each of the Company Reports, at the time
of its filing or being furnished complied, or if not yet filed or
furnished, will comply, as to form, in all material respects with the
applicable requirements of the Securities Act, the Exchange Act and the
Xxxxxxxx-Xxxxx Act of 2002, as amended ("Xxxxxxxx-Xxxxx"), and any rules
and regulations promulgated thereunder applicable to the Company Reports.
As of their respective dates (and, if amended, as of the date of such
amendment) the Company Reports did not, and any of the Company Reports
filed with or furnished to the SEC subsequent to the date of this Agreement
will not, contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were
made, not misleading.
(ii) The Company maintains disclosure controls and
procedures as required by Rule 13a-15 under the Exchange Act. Such
disclosure controls and procedures are designed to ensure that information
required to be disclosed by the Company in the reports it files or submits
under the Exchange Act is recorded, processed, summarized and reported
within the time frames specified by the SEC's rules and forms. The Company
maintains internal control over financial reporting as required by Rule
13a-15 under the Exchange Act. Such internal control over financial
reporting were designed, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles and includes policies and procedures that (i) pertain
to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the
Company, (ii) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company, and (iii)
provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company's assets that
could have a material effect on its financial statements. The Company has
disclosed, based on the most recent evaluation of its chief executive
officer and its chief financial officer prior to the date of this
Agreement, to the Company's auditors and the audit committee of the
Company's board of directors (A) any significant deficiencies in the design
or operation of its internal controls over financial reporting that are
reasonably likely to adversely affect the Company's ability to record,
process, summarize and report financial information and has identified for
the Company's auditors and audit committee of the Company's board of
directors any material weaknesses in internal control over financial
reporting and (B) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company's
internal control over financial reporting. The Company has made available
to Parent prior to the date of this Agreement a summary of any such
disclosure made by management to the Company's auditors and audit committee
since December 31, 2004. Since December 31, 2004 and prior to the date of
this Agreement, no material complaints from any source regarding
accounting, internal accounting controls or auditing matters, and no
material concerns from Company Employees regarding questionable accounting
or auditing matters, have been received by the Company. The Company has
made available to Parent prior to the date of this Agreement a summary of
all material complaints or concerns relating to other matters made since
December 31, 2004 and through the date of this Agreement through the
Company's whistleblower hot-line or equivalent system for receipt of
employee concerns regarding possible violations of Law by the Company or
any of its Subsidiaries or any of their respective employees in respect of
such employee's employment with the Company or its Subsidiaries. No
attorney representing the Company or any of its Subsidiaries, whether or
not employed by the Company or any of its Subsidiaries, has reported
evidence of a violation of securities laws, breach of fiduciary duty or
similar violation by the Company or any of its officers, directors,
employees or agents to the Company's chief legal officer, audit committee
(or other committee designated for the purpose) of the board of directors
or the board of directors pursuant to the rules adopted pursuant to Section
307 of Xxxxxxxx-Xxxxx or any Company policy contemplating such reporting,
including in instances not required by those rules.
(iii) Each of the consolidated balance sheets included in or
incorporated by reference into the Company Reports (including the related
notes and schedules) fairly presents the consolidated financial position of
the Company and its consolidated Subsidiaries, as of its date, and each of
the consolidated statements of operations, cash flows and of changes in
shareholders' equity included in or incorporated by reference into the
Company Reports (including any related notes and schedules) fairly presents
the results of operations, retained earnings and changes in financial
position, as the case may be, of the Company and its consolidated
Subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to notes and normal year-end audit adjustments that
will not be material in amount or effect), in each case in accordance with
U.S. generally accepted accounting principles ("GAAP") consistently applied
during the periods involved, except as may be noted therein.
(f) Absence of Certain Changes. Since December 31, 2005
there has not been any event, occurrence, discovery or development which
has had or would, individually or in the aggregate, reasonably be likely to
have a Company Material Adverse Effect. Since December 31, 2005, and
through the date of this Agreement: (i) the Company and its Subsidiaries
have conducted their respective businesses only in, and have not engaged in
any material transaction other than in accordance with, the ordinary and
usual course of such businesses; (ii) except for normal quarterly cash
dividends in an amount equal to $0.29 per Company Share, the Company and
its non-wholly-owned Subsidiaries have not declared, set aside or paid any
dividend or distribution payable in cash, stock or property in respect of
any capital stock; (iii) the Company and its Subsidiaries have not incurred
any material indebtedness for borrowed money or guaranteed such
indebtedness of another Person, or issued or sold any debt securities or
warrants or other rights to acquire any debt security of the Company or any
of its Subsidiaries other than issuing commercial paper in the ordinary
course of business; (iv) the Company and its Subsidiaries have not
transferred, leased, licensed, sold, mortgaged, pledged, placed a Lien upon
or otherwise disposed of any of the Company's or its Subsidiaries' property
or assets (including capital stock of any of the Company's Subsidiaries)
outside of the ordinary course of business consistent with past practice
with a fair market value in excess of $10 million; (v) the Company and its
Subsidiaries have not acquired any business, whether by merger,
consolidation, purchase of property or assets or otherwise; (vi) there has
not been (A) any material increase in the compensation payable or to become
payable to the Company's officers or (B) any establishment, adoption, entry
into or amendment of any collective bargaining, bonus, profit sharing,
thrift, compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any
director, officer or employee, except to the extent required by Law; and
(vii) the Company and its Subsidiaries have not made any change with
respect to accounting policies, except as required by changes in GAAP or by
Law.
(g) Litigation and Liabilities. There are no (i) civil,
criminal or administrative actions, suits, claims, hearings, investigations
or proceedings pending or, to the knowledge of the Company's executive
officers, threatened against the Company or any of its Subsidiaries, except
for those that would not, individually or in the aggregate, reasonably be
likely to have a Company Material Adverse Effect or (ii) obligations or
liabilities, whether or not accrued, contingent or otherwise and whether or
not required to be disclosed, or any other facts or circumstances that are
reasonably likely to result in any obligations or liabilities of the
Company or any of its Subsidiaries, except for (A) liabilities or
obligations to the extent (x) reflected on the consolidated balance sheets
of the Company or (y) readily apparent in the notes thereto, in each case
included in the Company's annual report on Form 10-K for the year ended
December 31, 2005, (B) liabilities or obligations incurred in the ordinary
course of business since December 31, 2005, none of which has had or would,
individually or in the aggregate, reasonably be likely to have a Company
Material Adverse Effect, (C) payment or performance obligations under
Contracts required in accordance with their terms, or performance
obligations, to the extent required under applicable Law; or (D) those
liabilities or obligations that would not, individually or in the
aggregate, reasonably be likely to have a Company Material Adverse Effect.
(h) Employee Benefits.
-----------------
(i) Section 5.1(h)(i) of the Company Disclosure Letter sets
forth a list of each benefit and compensation plan, contract, policy or
arrangement maintained, sponsored or contributed to by the Company or any
of its Subsidiaries covering current or former employees of the Company and
its Subsidiaries ("Company Employees") and current or former directors of
the Company, including, but not limited to, "employee benefit plans" within
the meaning of Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), and incentive and bonus, deferred
compensation, stock purchase, restricted stock, stock option, stock
appreciation rights or stock based compensation plans (the "Company
Compensation and Benefit Plans"), except that such Section of the Company
Disclosure Letter does not set forth (A) those plans that did not require
(x) the payment to any individual covered thereby of more than $500,000
during the year ending December 31, 2005 or (y) the payment to all
individuals covered thereby of more than $2,500,000 during the year ending
December 31, 2005 in the aggregate (unless (i) more than 50 employees are
eligible to participate in the plan, program, contract, policy or
arrangement or (ii) the plan, program, contract, policy or arrangement
contains a change-in-control or similar provision or (iii) the plan,
program, contract, policy or arrangement covers Persons required to file
beneficial ownership statements pursuant to Section 16 of the Exchange Act)
and (B) Company Compensation and Benefit Plans maintained outside of the
United States primarily for the benefit of Company Employees working
outside of the United States (such plans covered by clause (B) hereinafter
being referred to as the "Company Non U.S. Compensation and Benefit
Plans"). Each Company Compensation and Benefit Plan which has received a
favorable or unfavorable determination letter from the Internal Revenue
Service ("IRS") has been separately identified. True and complete copies of
each Company Compensation and Benefit Plan listed in Section 5.1(h)(i) of
the Company Disclosure Letter, including, but not limited to, any trust
agreement or insurance contract forming a part of any Company Compensation
and Benefit Plan, and all amendments thereto, have been provided or made
available to Parent.
(ii) Each Company Compensation and Benefit Plan, other than
"multiemployer plans" within the meaning of Section 3(37) of ERISA (each, a
"Multiemployer Plan") and the Company Non U.S. Compensation and Benefit
Plans (collectively, the "Company U.S. Compensation and Benefit Plans"), is
in compliance with, to the extent applicable, ERISA, the Code, and other
applicable Laws, in each case except for such failures as would not,
individually or in the aggregate, reasonably be likely to have a Company
Material Adverse Effect. Each Company U.S. Compensation and Benefit Plan
which is subject to ERISA (an "ERISA Plan") that is an "employee pension
benefit plan" within the meaning of Section 3(2) of ERISA (a "Pension
Plan") and that is intended to be qualified under Section 401(a) of the
Code has received a favorable determination letter from the IRS covering
all tax Law changes prior to the Economic Growth and Tax Relief
Reconciliation Act of 2001 or has applied to the IRS for such favorable
determination letter within the applicable remedial amendment period under
Section 401(b) of the Code, and the Company is not aware of any
circumstances likely to result in a loss of the qualification of such plan
under Section 401(a) of the Code. As of the date of this Agreement, there
is no pending or, to the knowledge of the Company's executive officers,
threatened litigation relating to the Company U.S. Compensation and Benefit
Plans, except as would not, individually or in the aggregate, reasonably be
likely to have a Company Material Adverse Effect. Any voluntary employees'
beneficiary association within the meaning of Section 501(c)(9) of the Code
which provides benefits under a Company Compensation and Benefit Plan has
received an opinion letter from the IRS recognizing its exempt status under
Section 501(c)(9) of the Code, has timely filed notice under Section 505(c)
of the Code, and the Company is not aware of circumstances likely to result
in the loss of such exempt status under Section 501(c)(9) of the Code,
except as would not, individually or in the aggregate, reasonably be likely
to result in a Company Material Adverse Effect. Neither the Company nor any
of its Subsidiaries has engaged in a transaction with respect to any ERISA
Plan that would subject the Company or any of its Subsidiaries to a tax or
penalty imposed by either Section 4975 of the Code or Section 502(i) of
ERISA except as would not, individually or in the aggregate, reasonably be
likely to have a Company Material Adverse Effect. Neither the Company nor
any of its Subsidiaries has incurred or reasonably expects to incur a tax
or penalty imposed by Section 4980F of the Code or Section 502 of ERISA,
except as would not, individually or in the aggregate, reasonably be likely
to have a Company Material Adverse Effect.
(iii) No liability under Subtitle C or D of Title IV of
ERISA has been or is expected to be incurred by the Company or any of its
Subsidiaries with respect to any ongoing, frozen or terminated
"single-employer plan", within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any of them, or the single-employer
plan of any entity which is considered one employer with the Company under
Section 4001 of ERISA or Section 414 of the Code (a "Company ERISA
Affiliate"), except as would not, individually or in the aggregate,
reasonably be likely to have a Company Material Adverse Effect. The Company
and its Subsidiaries have not incurred and do not expect to incur any
withdrawal liability with respect to a Multiemployer Plan under Subtitle E
of Title IV of ERISA (regardless of whether based on contributions of a
Company ERISA Affiliate), except as would not, individually or in the
aggregate, reasonably be likely to have a Company Material Adverse Effect.
No notice of a "reportable event", within the meaning of Section 4043 of
ERISA, for which the 30-day reporting requirement has not been waived or
extended, other than pursuant to Pension Benefit Guaranty Corporation Reg.
Section 4043.66, has been required to be filed for any Company Pension
Plans or by any Company ERISA Affiliates within the 12-month period ending
on the date of this Agreement.
(iv) All contributions required to be made under each
Company U.S. Compensation and Benefit Plan have been timely made and all
obligations in respect of each Company Compensation and Benefit Plan have
been properly accrued and reflected on the most recent consolidated balance
sheet filed or incorporated by reference in the Company Reports prior to
the date of this Agreement to the extent required by GAAP except, in the
case of each of the foregoing, as would not individually or in the
aggregate, reasonably be likely to have a Company Material Adverse Effect.
Neither any Company Pension Plan nor any single-employer plan of any
Company ERISA Affiliate has an "accumulated funding deficiency" (whether or
not waived) within the meaning of Section 412 of the Code or Section 302 of
ERISA and no Company ERISA Affiliate has an outstanding funding waiver.
Neither the Company nor any of its Subsidiaries has provided, or is
required to provide, security to any Pension Plans or to any
single-employer plan of any Company ERISA Affiliate pursuant to Section
401(a)(29) of the Code.
(v) Under each Company Pension Plan which is a
single-employer plan, as of the last day of the most recent plan year ended
prior to the date of this Agreement, the actuarially determined present
value of all "benefit liabilities", within the meaning of Section
4001(a)(16) of ERISA (as determined on the basis of the actuarial
assumptions contained in the Company Pension Plan's most recent actuarial
valuation), did not exceed the then current value of the assets of such
Company Pension Plan, and there has been no material adverse change in the
financial condition of such Company Pension Plan since the last day of the
most recent plan year.
(vi) Neither the Company nor its Subsidiaries have any
obligations for retiree health or life benefits under any ERISA Plan or
collective bargaining agreement, except as required by Section 4980B of the
Code or Section 601 of ERISA.
(vii) There has been no amendment to, announcement by the
Company or any of its Subsidiaries relating to, or change in employee
participation or coverage under, any of the Company Compensation and
Benefit Plans that would increase materially the expense of maintaining
such plan above the level of the expense incurred therefor for the most
recent fiscal year, except as required by Law. Except as provided in this
Agreement or as may be required by Law or by any of the Company
Compensation and Benefit Plans listed on Section 5.1(h)(vii) of the Company
Disclosure Letter, none of the execution of this Agreement, shareholder
approval of this Agreement, receipt of approval or clearance from any one
or more Governmental Entities of the Merger or the other transactions
contemplated by this Agreement, or the consummation of the Merger and the
other transactions contemplated by this Agreement will (A) entitle any
employees of the Company or its Subsidiaries to severance pay or any
increase in severance pay upon any termination of employment after the date
of this Agreement; (B) accelerate the time of payment or vesting or result
in any payment or funding (through a grantor trust or otherwise) of
compensation or benefits under, increase the amount payable or result in
any other material obligation pursuant to, any Company U.S. Compensation
and Benefit Plan; or (C) limit or restrict the right of the Company, or,
after the consummation of the transactions contemplated by this Agreement,
Parent, to merge, amend or terminate any of the Company U.S. Compensation
and Benefit Plans.
(viii) All Company Non-U.S. Compensation and Benefit Plans
are listed in Section 5.1(h)(viii) of the Company Disclosure Letter and
comply with applicable local Law except as would not, individually or in
the aggregate, reasonably be likely to have a Company Material Adverse
Effect. The Company and its Subsidiaries have no unfunded liabilities with
respect to any such Company Non-U.S. Compensation and Benefit Plans that
are not set forth in the consolidated balance sheets included in or
incorporated by reference into the Company Reports filed prior to the date
of this Agreement, except as would not, individually or in the aggregate,
reasonably be likely to have a Company Material Adverse Effect. There is no
pending or, to the knowledge of the Company's executive officers,
threatened material litigation relating to the Company Non-U.S.
Compensation and Benefit Plans, except as would not, individually or in the
aggregate, reasonably be likely to have a Company Material Adverse Effect.
(i) Compliance with Laws. The businesses of each of the
Company and its Subsidiaries have not been conducted in violation of any
law, rule, statute, ordinance, regulation, judgment, determination, order,
decree, injunction, arbitration award, license, authorization, opinion,
agency requirement or permit of any Governmental Entity or common law
(collectively, "Laws"), except for violations that would not, individually
or in the aggregate, reasonably be likely to have a Company Material
Adverse Effect. No investigation or review by any Governmental Entity with
respect to the Company or any of its Subsidiaries is pending or, to the
knowledge of the Company's executive officers, threatened, nor has any
Governmental Entity indicated an intention to conduct the same, except for
those the outcome of which would not, individually or in the aggregate,
reasonably be likely to have a Company Material Adverse Effect. The
executive officers of the Company have not received any notice or
communication of any material noncompliance with any such Laws that has not
been cured as of the date of this Agreement, except for such changes and
noncompliance that would not, individually or in the aggregate, reasonably
be likely to have a Company Material Adverse Effect. Each of the Company
and its Subsidiaries has obtained and is in substantial compliance with all
permits, licenses, certifications, approvals, registrations, consents,
authorizations, franchises, variances, exemptions and orders issued or
granted by a Governmental Entity (collectively, "Licenses") necessary to
conduct its business as presently conducted, except for those the absence
of which or failure to be in compliance with, would not, individually or in
the aggregate, reasonably be likely to have a Company Material Adverse
Effect.
(j) Certain Contracts. Section 5.1(j) of the Company
Disclosure Letter sets forth a list as of the date of this Agreement of
each Contract (other than material Contracts with Parent, Cingular, XX.xxx
and/or their respective Subsidiaries) to which either the Company or any of
its Subsidiaries is a party or bound which, to the knowledge of the
executive officers of the Company (i) provides that any of them will not
compete in any material respect with any other Person, (ii) purports to
limit in any material respect either the type of business in which the
Company or its Subsidiaries, including Cingular (or, after the Effective
Time, Parent or its Subsidiaries), may engage or the manner or locations in
which any of them may so engage in any business or would reasonably be
likely to require the disposition of any material assets or line of
business of the Company or its Subsidiaries, including Cingular or, Parent
or its Subsidiaries after the Effective Time, (iii) requires them to deal
exclusively in any material respect with any Person or group of related
Persons or (iv) provides for a material indemnification obligation by the
Company or any of its Subsidiaries. A true and complete copy of each such
Contract has been made available to Parent prior to the date of this
Agreement.
(k) Takeover Statutes. The Board of Directors of the Company
has taken all appropriate and necessary actions such that Parts 2 and 3 of
Article 11 of the GBCC shall not apply to the Merger or the other
transactions contemplated hereby. No other "fair price", "moratorium",
"control share acquisition" or other similar anti-takeover statute or
regulation (each, a "Takeover Statute") as in effect on the date of this
Agreement is applicable to the Company, the Company Shares, the Merger or
the other transactions contemplated by this Agreement. No anti-takeover
provision contained in the Company's articles of incorporation, including
Article Tenth thereof, or its by-laws is, or at the Effective Time will be,
applicable to the Merger or the other transactions contemplated hereby.
(l) Environmental Matters. Except for such matters that
would not, individually or in the aggregate, reasonably be likely to have a
Company Material Adverse Effect: (i) each of the Company and its
Subsidiaries has complied, and is in compliance, with all applicable
Environmental Laws; (ii) the properties currently owned, leased or operated
by the Company or any of its Subsidiaries (including soils, groundwater,
surface water, buildings or other structures) ("Company Current
Properties") are not contaminated with any Hazardous Substances; (iii) the
properties formerly owned or operated by the Company or any of its
Subsidiaries ("Company Former Properties") were not contaminated with
Hazardous Substances during the period of ownership or operation by the
Company or any of its Subsidiaries; (iv) neither the Company nor any of its
Subsidiaries is subject to liability for the transportation, disposal or
arranging for the transportation or disposal of any Hazardous Substance at
any third party property; (v) there have been no releases or threatened
releases of any Hazardous Substance (x) at any Company Current Property or,
to the knowledge of the Company's executive officers, Company Former
Properties or (y) caused by the Company or any of its Subsidiaries at any
third party property; (vi) neither the Company nor any of its Subsidiaries
has received any notice, demand, letter, claim or request for information
alleging that the Company or any of its Subsidiaries may be in violation of
or liable under any Environmental Law (including any claims relating to
electromagnetic fields or microwave transmissions); (vii) neither the
Company nor any of its Subsidiaries is subject to any orders, decrees or
injunctions with any Governmental Entity or is subject to any indemnity or
other agreement with any third party relating to liability under any
Environmental Law; and (viii) to the knowledge of the Company's executive
officers, there are no circumstances or conditions involving the Company or
any of its Subsidiaries that could reasonably be likely to result in any
claims, liability, investigations, costs or restrictions on the Company or
any of its Subsidiaries or on the ownership, use, or transfer of Company
Current Property or Company Former Property, in each case, pursuant to any
Environmental Law.
As used herein, the term "Environmental Law" means any Law
relating to: (A) the protection, investigation or restoration of the
environment, health, safety, or natural resources, (B) the handling, use,
presence, disposal, release or threatened release of any Hazardous
Substance or (C) noise, odor, wetlands, pollution, contamination or any
injury or threat of injury to persons or property in connection with any
Hazardous Substance.
As used herein, the term "Hazardous Substance" means any
substance that is: listed, classified or regulated pursuant to any
Environmental Law, including any petroleum product or by-product,
asbestos-containing material, lead-containing paint or plumbing,
polychlorinated biphenyls, radioactive materials or radon.
(m) Tax Matters. As of the date of this Agreement, neither
the Company nor any of its affiliates has taken or agreed to take any
action, nor do the executive officers of the Company have any knowledge of
any fact or circumstance, that would prevent the Merger and the other
transactions contemplated by this Agreement from qualifying as a
"reorganization" within the meaning of Section 368(a) of the Code.
(n) Taxes. Except as would not, individually or in the
aggregate, reasonably be likely to have a Company Material Adverse Effect,
the Company and each of its Subsidiaries (i) have duly and timely filed
(taking into account any extension of time within which to file) all Tax
Returns (as defined below) required to be filed by any of them on or prior
to the date of this Agreement and all such filed Tax Returns are complete
and accurate in all material respects; (ii) have paid all Taxes (as defined
below) that are required to be paid or that the Company or any of its
Subsidiaries are obligated to withhold from amounts owing to any employee,
creditor or third party, except with respect to matters contested in good
faith or for which adequate reserves have been established; and (iii) have
not waived any statute of limitations with respect to Taxes or agreed to
any extension of time with respect to a Tax assessment or deficiency.
Except as would not, individually or in the aggregate, reasonably be likely
to have a Company Material Adverse Effect, as of the date of this Agreement
there are no audits, examinations, investigations or other proceedings in
respect of Taxes or Tax matters, in each case, pending or, to the knowledge
of the executive officers or Controller of the Company, threatened. Except
as would not, individually or in the aggregate, reasonably be likely to
have a Company Material Adverse Effect, neither the Company nor any member
of its "affiliated group" (within the meaning of Section 1504 of the Code)
has any item of income or gain, arising from an intercompany transaction
within the meaning of Treasury Regulation ss.1.1502-13 that has not yet
been taken into account pursuant to Treasury Regulation ss.1.1502-13.
Neither the Company nor any of its Subsidiaries has any liability for Taxes
of any Person (other than the Company and its Subsidiaries) under Treasury
Regulation ss.1.1502-6 (or any comparable provision of state, local or
foreign Law) except as would not, individually or in the aggregate,
reasonably be likely to have a Company Material Adverse Effect. Neither the
Company nor any of its Subsidiaries is a party to any Tax sharing agreement
(with any Person other than the Company and/or any of its wholly-owned
Subsidiaries), except as would not, individually or in the aggregate,
reasonably be likely to have a Company Material Adverse Effect. Neither the
Company nor any of its Subsidiaries has constituted either a "distributing
corporation" or a "controlled corporation" within the meaning of Section
355(a)(1)(A) of the Code in any distribution intended to qualify for
tax-free treatment under Section 355 of the Code occurring during the last
30 months. No payments to be made to any of the officers and employees of
the Company or its Subsidiaries will, as a result of consummation of the
Merger, be subject to the deduction limitations under Section 280G of the
Code.
As used in this Agreement, (i) the term "Tax" (including,
with correlative meaning, the term "Taxes") includes all federal, state,
local and foreign income, profits, franchise, gross receipts,
environmental, customs duty, capital stock, severance, stamp, payroll,
sales, employment, unemployment, disability, use, property, withholding,
excise, production, value added, occupancy and other taxes, duties or
assessments of any nature whatsoever, together with all interest, penalties
and additions imposed with respect to such amounts and any interest in
respect of such penalties and additions, and (ii) the term "Tax Return"
includes all returns and reports (including elections, declarations,
disclosures, schedules, estimates and information returns) required to be
supplied to a Tax authority relating to Taxes.
(o) Labor Matters. Section 5.1(o) of the Company Disclosure
Letter sets forth a list, as of the date of this Agreement, of each
material collective bargaining agreement or other similar Contract with a
labor union or labor organization to which the Company or any of its
Subsidiaries is a party. Except in each case as would not, individually or
in the aggregate, reasonably be likely to have a Company Material Adverse
Effect, (i) (except for proceedings involving individual employees arising
in the ordinary course of business) neither the Company or any of its
Subsidiaries is the subject of any proceeding asserting that the Company or
any of its Subsidiaries has committed an unfair labor practice or is
seeking to compel the Company to bargain with any labor union or labor
organization and (ii) there is no pending or, to the knowledge of the
Company's executive officers, threatened in writing, nor has there been for
the past five years, any labor strike, dispute, walkout, work stoppage,
slow-down or lockout involving the Company or any of its Subsidiaries.
(p) Intellectual Property. Each of the Company and its
Subsidiaries owns or has a valid right to use, or can acquire on reasonable
terms, all Intellectual Property and Information Technology necessary to
carry on its business as operated by it on the date of this Agreement,
except where the absence of such rights would not, individually or in the
aggregate, have a Company Material Adverse Effect. Neither the Company nor
any of its Subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property of third parties which would reasonably be likely, individually or
in the aggregate, to have a Company Material Adverse Effect.
As used herein,
(1) "Computer Software" means all computer software and databases
(including without limitation source code, object code and all related
documentation).
(2) "Information Technology" means the computers, Computer Software,
firmware, middleware, servers, workstations, routers, hubs, switches, data
communications lines, and all other information technology equipment and
elements, and associated documentation, in each case, which are necessary
for the operation of the business of the Company or any of its Subsidiaries
as conducted as of the date of this Agreement.
(3) "Intellectual Property" means, collectively, all United States and
foreign (A) trademarks, service marks, brand names, certification marks,
collective marks, d/b/a's, Internet domain names, logos, symbols, trade
dress, assumed names, fictitious names, trade names, and other indicia of
origin, all applications and registrations for the foregoing, and all
goodwill associated therewith and symbolized thereby, including all
renewals of same; (B) inventions and discoveries, whether patentable or
not, and all patents, registrations, invention disclosures and applications
therefor, including divisions, continuations, continuations-in-part and
renewal applications, and including renewals, extensions and reissues; (C)
trade secrets and confidential information and know-how, including
processes, schematics, business methods, formulae, drawings, prototypes,
models, designs, customer lists and supplier lists; (D) published and
unpublished works of authorship, whether copyrightable or not (including
without limitation databases and other compilations of information),
copyrights therein and thereto, and registrations and applications
therefor, and all renewals, extensions, restorations and reversions
thereof; (E) moral rights, rights of publicity and rights of privacy; and
(F) all other intellectual property or proprietary rights.
(q) Affiliate Transactions. As of the date of this
Agreement, there are no transactions, arrangements or Contracts between the
Company and its Subsidiaries, on the one hand, and its affiliates (other
than its wholly-owned Subsidiaries) or other Persons, on the other hand,
that would be required to be disclosed under Item 404 of Regulation S-K
under the Securities Act.
(r) Insurance. The Company and its Subsidiaries maintain
insurance coverage with reputable insurers in such amounts and covering
such risks as are in accordance with normal industry practice for companies
engaged in businesses similar to that of the Company or its Subsidiaries
(taking into account the cost and availability of such insurance).
(s) Rights Agreement. The Board of Directors of the Company
has approved Parent and its Affiliates (as defined in the Rights Agreement)
and Associates (as defined the Rights Agreement) as the Beneficial Owner
(as defined in the Rights Agreement) of all of the Voting Securities (as
defined in the Rights Agreement) and as the holder of all of the Voting
Power (as defined in the Rights Agreement) and such approval has not been
revoked, withdrawn or modified. Neither Parent nor Merger Sub shall be
deemed to be an Acquiring Person (as such term is defined in the Rights
Agreement) and the Distribution Date (as defined in the Rights Agreement)
shall not be deemed to occur and the Rights will not separate from the
Company Shares, as a result of entering into this Agreement or consummating
the Merger and/or the other transactions contemplated hereby.
(t) Brokers and Finders. Neither the Company nor any of the
Company's officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fees, commissions or
finders, fees in connection with the Merger or the other transactions
contemplated in this Agreement, except that the Company has employed
Xxxxxxx, Xxxxx & Co. and Citigroup Global Markets Inc. as the Company's
financial advisors, the arrangements with which have been disclosed to
Parent prior to the date of this Agreement.
(u) No Other Representations and Warranties. Except for the
representations and warranties of the Company contained in this Agreement,
the Company is not making and has not made, and no other Person is making
or has made on behalf of the Company, any express or implied representation
or warranty in connection with this Agreement or the transactions
contemplated hereby, and no Person is authorized to make any such
representations and warranties on behalf of the Company.
5.2 .Representations and Warranties of Parent and Merger
Sub. Except as set forth in the disclosure letter delivered to the Company
by Parent at the time of entering into this Agreement (the "Parent
Disclosure Letter"), or, to the extent the qualifying nature of such
disclosure with respect to a specific representation and warranty is
reasonably apparent therefrom, as set forth in the Parent Reports or the T
Reports filed with the SEC, on or after January 1, 2005 and prior to the
date of this Agreement, (excluding all disclosures in any "Risk Factors"
Section) (it being understood that the exclusion with respect to the "Risk
Factors" section in the prior parenthetical and in Section 7.3(d) shall not
be deemed a qualification of the matters expressly set out in the Parent
Disclosure Letter or the exceptions in the definition of "Parent Material
Adverse Effect"), Parent and Merger Sub hereby represent and warrant to the
Company as of the date of this Agreement and as of the Closing that:
(a) Organization, Good Standing and Qualification. Each of
Parent and its Subsidiaries is a legal entity duly organized, validly
existing and in good standing under the Laws of its respective jurisdiction
of organization and has all requisite corporate or similar power and
authority to own, lease and operate its properties and assets and to carry
on its business as presently conducted and is qualified to do business and
is in good standing as a foreign legal entity in each jurisdiction where
the ownership, leasing or operation of its assets or properties or conduct
of its business requires such qualification, except where the failure to be
so organized, qualified or in good standing, or to have such power or
authority, would not, individually or in the aggregate, reasonably be
likely to have a Parent Material Adverse Effect. Prior to the date of this
Agreement, Parent has made available to the Company a complete and correct
copy of the Parent's certificate of incorporation and by-laws, each as in
effect and as amended through the date of this Agreement.
As used in this Agreement "Parent Material Adverse Effect"
means (x) an effect that would prevent or materially delay or impair the
ability of Parent to consummate the Merger or (y) a material adverse effect
on the financial condition, properties, assets, liabilities, business or
results of operations of Parent and its Subsidiaries, including its
interest in Cingular, XX.xxx and any of their respective Subsidiaries,
taken as a whole, excluding any such effect resulting from or arising in
connection with changes or conditions (A) generally affecting (I) the
United States economy or financial or securities markets, (II) political
conditions in the United States or (III) the United States
telecommunications industry or any generally recognized business segment of
such industry, (B) generally affecting the telecommunications industry (or
any generally recognized business segment of such industry) in any of the
Parent Regions, each taken as a whole, (C) resulting from any hurricane,
earthquake or other natural disaster in any of the Parent Regions, (D)
resulting from the execution, announcement or performance of this
Agreement, or (E) resulting from or arising in connection with the
financial condition, properties, assets, liabilities, business or results
of operations of Cingular, XX.xxx or any of their respective Subsidiaries;
and (iii) the "Parent Regions" means each of the states of (A) California
and Nevada, (B), Illinois, Indiana, Michigan, Ohio, Wisconsin; (C) Kansas,
Missouri, Oklahoma, Arkansas and Texas and (D) Connecticut.
(b) Capital Structure. (i) The authorized capital stock of
Parent consists of 7,000,000,000 shares of Parent Common Stock, of which
3,884,566,072 shares of Parent Common Stock were issued and outstanding as
of February 28, 2006, and 1,000,000,000 shares of Preferred Stock, par
value $1.00 per share (the "Parent Preferred Stock"), of which 768,390.4
shares were outstanding as of the date of this Agreement. All of the
outstanding shares of Parent Common Stock and Parent Preferred Stock have
been duly authorized and validly issued and are fully paid and
nonassessable. Section 5.2(b) of the Parent Disclosure Letter contains a
correct and complete list as of February 28, 2006 of (x) the number of
outstanding options to purchase Parent Common Stock (each, a "Parent
Option") under the Parent Compensation and Benefit Plans, the exercise
price of all Parent Options and number of shares of Parent Common Stock
issuable at such exercise price and (y) the number of outstanding rights to
receive Parent Common Stock (including without limitation restricted stock
and restricted stock units), under the Parent Compensation and Benefit
Plans (each a "Parent Common Stock Unit"). From February 28, 2006 to the
date of this Agreement, Parent has not issued any Parent Common Stock
except pursuant to the exercise of Parent Options and the settlement of
Parent Common Stock Units outstanding on February 28, 2006 in accordance
with their terms and since February 28, 2006 Parent has not issued any
Parent Options or Parent Common Stock Units. Except as set forth in this
Section 5.2(b), as of the date of this Agreement, there are no preemptive
or other outstanding rights, options, warrants, conversion rights, stock
appreciation rights, redemption rights, repurchase rights, agreements,
arrangements, calls, commitments or rights of any kind that obligate Parent
or any of its Subsidiaries to issue or sell any shares of capital stock or
other equity securities of Parent or any securities or obligations
convertible or exchangeable into or exercisable for, or giving any Person a
right to subscribe for or acquire from Parent or any of its Subsidiaries,
any equity securities of Parent, and no securities or obligations of Parent
or any of its Subsidiaries evidencing such rights are authorized, issued or
outstanding. Except as set forth in this Section 5.2(b), as of the date of
this Agreement, Parent does not have outstanding any bonds, debentures,
notes or other obligations the holders of which have the right to vote (or
convertible into or exercisable for securities having the right to vote)
with the stockholders of Parent on any matter.
(ii) As of the date of this Agreement, each of the
outstanding shares of capital stock or other securities of each of Parent's
Subsidiaries that constitute a Significant Subsidiary, which term shall not
be deemed to include Cingular, XX.xxx or any of their respective
Subsidiaries, has been duly authorized and validly issued and is fully paid
and nonassessable and owned by Parent or by a direct or indirect
wholly-owned Subsidiary of Parent, free and clear of any Lien, except for
such Liens as would not, individually or in the aggregate, reasonably be
likely to have a Parent Material Adverse Effect. As of the date of this
Agreement, there are no preemptive or other outstanding rights, options,
warrants, conversion rights, stock appreciation rights, redemption rights,
repurchase rights, agreements, arrangements, calls, commitments or rights
of any kind that obligate Parent or any of its Subsidiaries to issue or
sell any shares of capital stock or other equity securities of any of
Parent's Subsidiaries (including Cingular) or any securities or obligations
convertible or exchangeable into or exercisable for, or giving any Person a
right to subscribe for or acquire from Parent or any of its Subsidiaries
any equity securities of any of Parent's Subsidiaries (including Cingular),
and no securities or obligations of Parent or any of its Subsidiaries
evidencing such rights are authorized, issued or outstanding. To the
knowledge of Parent's executive officers, as of the date of this Agreement,
no Person or group beneficially owns 5% or more of Parent's outstanding
voting securities, with the terms "group" and "beneficially owns" having
the meanings ascribed to them under Rule 13d-3 and Rule 13d-5 under the
Exchange Act.
(iii) The authorized capital stock of Merger Sub consists of
1,000 shares of Common Stock, par value $1.00 per share, all of which are
validly issued and outstanding. All of the issued and outstanding capital
stock of Merger Sub is, and at the Effective Time will be, owned, directly
or indirectly, by Parent, and there are (i) no other shares of capital
stock or other voting securities of Merger Sub, (ii) no securities of
Merger Sub convertible into or exchangeable for shares of capital stock or
other voting securities of Merger Sub and (iii) no options or other rights
to acquire from Merger Sub, and no obligations of Merger Sub to issue, any
capital stock, other voting securities or securities convertible into or
exchangeable for capital stock or other voting securities of Merger Sub.
Merger Sub has not conducted any business prior to the date of this
Agreement and has no, and prior to the Effective Time will have no, assets,
liabilities or obligations of any nature other than those incident to its
formation and pursuant to this Agreement and the Merger and the other
transactions contemplated by this Agreement.
(c) Corporate Authority; Approval and Fairness. Parent and
Merger Sub each have all requisite corporate power and authority and each
has taken all corporate action necessary in order to execute, deliver and
perform its obligations under this Agreement and to consummate, subject
only to the approval by the stockholders of Parent by a majority of votes
cast on the proposal to issue the shares of Parent Common Stock required to
be issued in the Merger; provided that the total vote cast represents over
50% of all of the outstanding shares of Parent Common Stock (the "Parent
Requisite Vote"). This Agreement has been duly executed and delivered by
Parent and Merger Sub and is a valid and binding agreement of Parent and
Merger Sub, enforceable against each of Parent and Merger Sub in accordance
with its terms, subject to the Bankruptcy and Equity Exception. The shares
of Parent Common Stock, when issued pursuant to this Agreement, will be
validly issued, fully paid and nonassessable, and no stockholder of Parent
will have any preemptive right of subscription or purchase in respect
thereof. The Board of Directors of Parent has (A) unanimously approved this
Agreement and the other transactions contemplated hereby and resolved to
recommend that the holders of Parent Common Stock vote in favor of the
issuance of Parent Common Stock required to be issued in the Merger
pursuant to this Agreement (the "Parent Recommendation"), (B) received the
opinions of its financial advisors, Xxxxxx Brothers Inc. and Evercore
Financial Advisors LLC, Inc., dated as of the date of this Agreement, to
the effect that the Exchange Ratio is fair from a financial point of view
to Parent and (C) directed that the proposal to issue shares of Parent
Common Stock required to be issued in the Merger be submitted to the
holders of Parent Common Stock for their approval.
(d) Governmental Filings; No Violations. (i) Other than the
necessary notices, reports, filings, consents, registrations, approvals,
permits or authorizations (A) pursuant to Section 1.3, (B) required under
the HSR Act, the EC Merger Regulation (if applicable), the Exchange Act and
the Securities Act, (C) to comply with state securities or "blue-sky" laws,
(D) with or to the FCC pursuant to the Communications Act, (E) with or to
the local, state and foreign PUCs and local, state and foreign Governmental
Entities pursuant to applicable local, state or foreign Utilities Laws and
(F) if any, of the foreign regulatory bodies pursuant to applicable foreign
laws regulating actions having the purpose or effect of monopolization or
restraint of trade, no filings, notices and/or reports are required to be
made by Parent or Merger Sub with, nor are any consents, registrations,
approvals, permits or authorizations required to be obtained by Parent or
Merger Sub from, any Governmental Entity, in connection with the execution,
delivery and performance of this Agreement by Parent and Merger Sub and the
consummation by Parent and Merger Sub of the Merger and the other
transactions contemplated hereby, except those that the failure to make or
obtain would not, individually or in the aggregate, reasonably be likely to
have a Parent Material Adverse Effect.
(ii) The execution, delivery and performance of this
Agreement by Parent and Merger Sub do not, and the consummation by Parent
and Merger Sub of the Merger and the other transactions contemplated hereby
will not, constitute or result in (A) a breach or violation of, a
termination (or right of termination) or a default under Parent's
certificate of incorporation or by-laws, (B) a breach or violation of, a
termination (or right of termination) or a default under, the certificate
of incorporation, by-laws or the comparable governing instruments of any of
Parent's Significant Subsidiaries, (C) a breach or violation of, or a
default or termination (or right of termination) under, the acceleration of
any obligations or the creation of an obligation, Lien or pledge, security
interest or other encumbrance on Parent's assets or the assets of any of
its Subsidiaries (with or without notice, lapse of time or both) pursuant
to, any Contract binding upon Parent or any of its Subsidiaries or,
assuming the filings, notices and/or approvals referred to in Section
5.2(d)(i) are made or obtained, any Law or governmental or non-governmental
permit or license to which Parent or any of its Subsidiaries is subject or
(D) any change in the rights or obligations of any party under any of its
Contracts, except, in the case of clauses (C) and (D), for any breach,
violation, termination, default, acceleration, creation or change that
would not, individually or in the aggregate, reasonably be likely to have a
Parent Material Adverse Effect. The Parent Disclosure Letter sets forth a
correct and complete list of Contracts of Parent and its Subsidiaries
pursuant to which consents or waivers are or may be required prior to
consummation of the transactions contemplated by this Agreement other than
those where the failure to obtain such consents or waivers would not,
individually or in the aggregate, reasonably be likely to have a Parent
Material Adverse Effect.
(e) Reports; Financial Statements. (i) Each of Parent and,
to the knowledge of the executive officers of Parent, AT&T Corporation, a
New York corporation ("T"), has filed and furnished all forms, statements,
reports and documents required to be filed or furnished by it with or to
the SEC pursuant to applicable securities statutes, regulations, policies
and rules since December 31, 2004 (collectively, such forms, statements,
reports and documents filed with or furnished to the SEC since December 31,
2004, or those filed with or furnished to the SEC subsequent to the date of
this Agreement, and as amended, the "Parent Reports" and the "T Reports",
respectively). Each of the Parent Reports and, to the knowledge of the
executive officers of Parent, the T Reports at the time of its filing or
being furnished complied, or if not yet filed or furnished in the case of
Parent Reports, will comply, as to form, in all material respects with the
applicable requirements of the Securities Act, the Exchange Act and
Xxxxxxxx-Xxxxx, and any rules and regulations promulgated thereunder
applicable to the Parent Reports and the T Reports, as the case may be. As
of their respective dates (and, if amended, as of the date of such
amendment) the Parent Reports and, to the knowledge of the executive
officers of Parent, the T Reports did not, and any of the Parent Reports
filed with or furnished to the SEC subsequent to the date of this Agreement
will not, contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were
made, not misleading.
(ii) Parent maintains, and, to the knowledge of the
executive officers of Parent, prior to its acquisition by Parent, T
maintained, disclosure controls and procedures as required by Rule 13a-15
under the Exchange Act. Such disclosure controls and procedures are or
were, as applicable, designed to ensure that information required to be
disclosed by Parent and T, as applicable, in the reports it files or filed,
as applicable, or submits or submitted, as applicable, under the Exchange
Act is or were, as applicable, recorded, processed, summarized and reported
within the time frames specified by the SEC's rules and forms. Parent
maintains, and, to the knowledge of the executive officers of Parent, prior
to its acquisition by Parent, T maintained, internal control over financial
reporting as required by Rule 13a-15 under the Exchange Act. Such internal
control over financial reporting are or were, as applicable, in the case of
Parent, in the case of T, to the knowledge of the executive officers of
Parent, designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles and includes policies and procedures that (i) pertain to the
maintenance of records that in reasonable detail accurately and fairly
reflect or reflected, as applicable, the transactions and dispositions of
the assets of Parent or T, as applicable, (ii) provide or provided, as
applicable, reasonable assurance that transactions are or were, as
applicable, recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and
that receipts and expenditures of Parent or T, as applicable, are being
made or were made, as applicable, only in accordance with authorizations of
management and directors of the Parent or T, as applicable, and (iii)
provide or provided, as applicable, reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or
disposition of the assets of Parent or T, as applicable, that could have a
material effect on its financial statements. Parent has disclosed, based on
the most recent evaluation of its chief executive officer and its chief
financial officer prior to the date of this Agreement, to Parent's auditors
and the audit committee of Parent's board of directors (A) any significant
deficiencies in the design or operation of its internal controls over
financial reporting that are or were, as applicable, reasonably likely to
adversely affect Parent's ability to record, process, summarize and report
financial information and has identified for Parent's auditors and audit
committee of Parent's board of directors any material weaknesses in its
internal control over financial reporting and (B) any fraud, whether or not
material, that involves management or other employees who have a
significant role in Parent's internal control over financial reporting.
Parent has made available to the Company prior to the date of this
Agreement a summary of any such disclosure made by management of Parent to
Parent's auditors and audit committee since December 31, 2004. Since
December 31, 2004 and prior to the date of this Agreement, no material
complaints from any source regarding accounting, internal accounting
controls or auditing matters, and no material concerns from Parent
employees (including former employees of T and its Subsidiaries) regarding
questionable accounting or auditing matters, have been received by Parent
or, to the knowledge of the executive officers of Parent, T. Parent has
made available to the Company prior to the date of this Agreement a summary
of all material complaints or concerns relating to other matters made since
December 31, 2004 and through the date of this Agreement through Parent's
and, to the knowledge of the executive officers of Parent, T's
whistleblower hot-lines or equivalent systems for receipt of employee
concerns regarding possible violations of Law by Parent, T or any of their
Subsidiaries or any of their respective employees. No attorney representing
Parent, T or any of their respective Subsidiaries, whether or not employed
by Parent, T or any of their Subsidiaries, has, in the case of T to the
knowledge of the executive officers of Parent, reported evidence of a
violation of securities laws, breach of fiduciary duty or similar violation
by Parent or T or any of their respective officers, directors, employees or
agents to Parent's or T's chief legal officer, audit committee (or other
committee designated for the purpose) of the board of directors or the
board of directors pursuant to the rules adopted pursuant to Section 307 of
Xxxxxxxx-Xxxxx or any Parent or T policy contemplating such reporting,
including in instances not required by those rules.
(iii) Each of the consolidated balance sheets included in or
incorporated by reference into the Parent Reports and the T Reports
(including the related notes and schedules) fairly presents the
consolidated financial position of Parent and its consolidated Subsidiaries
or T and its consolidated Subsidiaries, as applicable, as of its date, and
each of the consolidated statements of operations, cash flows and of
changes in stockholders' equity included in or incorporated by reference
into the Parent Reports and the T Reports (including any related notes and
schedules) fairly presents the results of operations, retained earnings and
changes in financial position, as the case may be, of Parent and its
consolidated Subsidiaries or T and its consolidated Subsidiaries, as
applicable, for the periods set forth therein (subject, in the case of
unaudited statements, to notes and normal year-end audit adjustments that
will not be material in amount or effect), in each case in accordance with
GAAP consistently applied during the periods involved, except as may be
noted therein; provided that with respect to T Reports such representations
are made only to the knowledge of the executive officers of Parent.
(f) Absence of Certain Changes. Since December 31, 2005
there has not been any event, occurrence, discovery or development which
has had or would, individually or in the aggregate, reasonably be likely to
have a Parent Material Adverse Effect. Since December 31, 2005, and through
the date of this Agreement: (i) Parent and its Subsidiaries have conducted
their respective businesses only in, and have not engaged in any material
transaction other than in accordance with, the ordinary and usual course of
such businesses; (ii) except for normal quarterly cash dividends in an
amount equal to $.3325 per share of Parent Common Stock, Parent and its
non-wholly-owned Subsidiaries have not declared, set aside or paid any
dividend or distribution payable in cash, stock or property in respect of
any capital stock; (iii) Parent and its Subsidiaries have not incurred any
material indebtedness for borrowed money or guaranteed such indebtedness of
another Person, or issued or sold any debt securities or warrants or other
rights to acquire any debt security of Parent or any of its Subsidiaries
other than in the ordinary course of business; (iv) Parent and its
Subsidiaries have not acquired any business, whether by merger,
consolidation, purchase of property or assets or otherwise; and (v) Parent
and its Subsidiaries have not made any material change with respect to
accounting policies except as required by changes in GAAP or by Law.
(g) Litigation and Liabilities. There are no (i) civil,
criminal or administrative actions, suits, claims, hearings, investigations
or proceedings pending or, to the knowledge of Parent's executive officers,
threatened against Parent or any of its Subsidiaries, except for those that
would not, individually or in the aggregate, reasonably be likely to have a
Parent Material Adverse Effect or (ii) obligations or liabilities, whether
or not accrued, contingent or otherwise and whether or not required to be
disclosed, or any other facts or circumstances that are reasonably likely
to result in any obligations or liabilities of Parent or any of its
Subsidiaries, except for (A) liabilities or obligations to the extent (x)
reflected on the consolidated balance sheets of Parent or (y) readily
apparent in the notes thereto, in each case included in Parent's annual
report on Form 10-K for the year ended December 31, 2005, (B) liabilities
or obligations incurred in the ordinary course of business since December
31, 2005, none of which has had or would, individually or in the aggregate,
reasonably be likely to have a Parent Material Adverse Effect, (C) payment
or performance obligations under Contracts required in accordance with
their terms, or performance obligations, to the extent required under
applicable Law or (D) those liabilities or obligations that would not,
individually or in the aggregate, reasonably be likely to have a Parent
Material Adverse Effect.
(h) Employee Benefits
-----------------
(i) For purposes of this Section 5.2(h), "Parent
Compensation and Benefit Plan" means each material benefit and compensation
plan, contract, policy or arrangement maintained, sponsored or contributed
to by Parent or any of its Subsidiaries covering current or former
employees of Parent and its Subsidiaries ("Parent Employees") and current
or former directors of Parent, including, but not limited to, "employee
benefit plans" within the meaning of Section 3(3) of ERISA, and incentive
and bonus, deferred compensation, stock purchase, restricted stock, stock
option, stock appreciation rights or stock based compensation plans, other
than those Parent Compensation and Benefit Plans maintained outside of the
United States primarily for the benefit of Parent Employees working outside
of the United States (the "Parent Non U.S. Compensation and Benefit
Plans"). For all purposes under this Agreement other than Section 5.2(h),
Parent Compensation and Benefit Plans shall be read without the word
material.
(ii) Each Parent Compensation and Benefit Plan, other than
Multiemployer Plans (collectively, the "Parent U.S. Compensation and
Benefit Plans"), is in compliance with, to the extent applicable, ERISA,
the Code, and other applicable Laws, in each case except for such failures
as would not, individually or in the aggregate, reasonably be likely to
have a Parent Material Adverse Effect. Each Parent U.S. Compensation and
Benefit Plan which an ERISA Plan that is a Pension Plan and that is
intended to be qualified under Section 401(a) of the Code has received a
favorable determination letter from the IRS covering all tax Law changes
prior to the Economic Growth and Tax Relief Reconciliation Act of 2001 or
has applied to the IRS for such favorable determination letter within the
applicable remedial amendment period under Section 401(b) of the Code and
Parent is not aware of any circumstances likely to result in the loss of
the qualification of such plan under Section 401(a) of the Code.
(iii) No liability under Subtitle C or D of Title IV of
ERISA has been or is expected to be incurred by Parent or any of its
Subsidiaries with respect to any ongoing, frozen or terminated
"single-employer plan", within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any of them, or the single-employer
plan of any entity which is considered one employer with the Parent under
Section 4001 of ERISA or Section 414 of the Code ("Parent ERISA
Affiliate"), except as would not, individually or in the aggregate,
reasonably be likely to have a Parent Material Adverse Effect. Parent and
its Subsidiaries have not incurred and do not expect to incur any
withdrawal liability with respect to a Multiemployer Plan under Subtitle E
of Title IV of ERISA (regardless of whether based on contributions of
Parent ERISA Affiliate), except as would not, individually or in the
aggregate, reasonably be likely to have a Parent Material Adverse Effect.
(iv) Except as provided in this Agreement or as may be
required by Law, none of the execution of this Agreement, shareholder
approval of this Agreement, receipt of approval or clearance from any one
or more Governmental Entities of the Merger, or the consummation of the
Merger will (A) entitle any employees of Parent or its Subsidiaries to
severance pay or any increase in severance pay upon any termination of
employment after the date of this Agreement; or (B) accelerate the time of
payment or vesting or result in any payment or funding (through a grantor
trust or otherwise) of compensation or benefits under, increase the amount
payable or result in any other substantial obligation pursuant to, any
Parent U.S. Compensation and Benefit Plan, in either case, which would be
reasonably likely to result in a Parent Material Adverse Effect.
(i) Compliance with Laws. The businesses of each of Parent
and its Subsidiaries have not been conducted in violation of any Law,
except for violations that would not, individually or in the aggregate,
reasonably be likely to have a Parent Material Adverse Effect. No
investigation or review by any Governmental Entity with respect to Parent
or any of its Subsidiaries is pending or, to the knowledge of Parent's
executive officers, threatened, nor has any Governmental Entity indicated
an intention to conduct the same, except for those the outcome of which
would not, individually or in the aggregate, reasonably be likely to have a
Parent Material Adverse Effect. Each of Parent and its Subsidiaries has
obtained and is in substantial compliance with all Licenses necessary to
conduct its business as presently conducted, except for those the absence
of which, or failure to be in compliance with, would not, individually or
in the aggregate, reasonably be likely to have a Parent Material Adverse
Effect.
(j) Takeover Statutes. No Takeover Statute or any
anti-takeover provision in the Parent's certificate of incorporation or
by-laws is, or at the Effective Time will be, applicable to the Merger or
the other transactions contemplated by this Agreement.
(k) Environmental Matters. Except for such matters that
would not, individually or in the aggregate, reasonably be likely to have a
Parent Material Adverse Effect: (i) each of Parent and its Subsidiaries has
complied, and is in compliance, with all applicable Environmental Laws;
(ii) the properties currently owned, leased or operated by Parent or any of
its Subsidiaries (including soils, groundwater, surface water, buildings or
other structures) ("Parent Current Properties") are not contaminated with
any Hazardous Substances; (iii) the properties formerly owned or operated
by Parent or any of its Subsidiaries ("Parent Former Properties") were not
contaminated with Hazardous Substances during the period of ownership or
operation by Parent or any of its Subsidiaries; (iv) neither Parent nor any
of its Subsidiaries is subject to liability for the transportation,
disposal or arranging for the transportation or disposal of any Hazardous
Substance at any third party property; (v) there have been no releases or
threatened releases of any Hazardous Substance (x) at any Parent Current
Property or, to the knowledge of Parent's executive officers, Parent Former
Properties or (y) caused by Parent or any of its Subsidiaries at any third
party property; (vi) neither Parent nor any of its Subsidiaries has
received any notice, demand, letter, claim or request for information
alleging that Parent or any of its Subsidiaries may be in violation of or
liable under any Environmental Law (including any claims relating to
electromagnetic fields or microwave transmissions); (vii) neither Parent
nor any of its Subsidiaries is subject to any orders, decrees or
injunctions with any Governmental Entity or is subject to any indemnity or
other agreement with any third party relating to liability under any
Environmental Law; and (viii) to the knowledge of Parent's executive
officers, there are no circumstances or conditions involving Parent or any
of its Subsidiaries that could reasonably be likely to result in any
claims, liability, investigations, costs or restrictions on Parent or any
of its Subsidiaries or on the ownership, use, or transfer of Parent Current
Property or Parent Former Property, in each case, pursuant to any
Environmental Law.
(l) Tax Matters. As of the date of this Agreement, neither
Parent nor any of its affiliates has taken or agreed to take any action,
nor do the executive officers of Parent have any knowledge of any fact or
circumstance, that would prevent the Merger and the other transactions
contemplated by this Agreement from qualifying as a "reorganization" within
the meaning of Section 368(a) of the Code.
(m) Taxes. Except as would not, individually or in the
aggregate, reasonably be likely to have a Parent Material Adverse Effect,
Parent and each of its Subsidiaries (i) have duly and timely filed (taking
into account any extension of time within which to file) all Tax Returns
required to be filed by any of them on or prior to the date of this
Agreement and all such filed Tax Returns are complete and accurate in all
material respects; (ii) have paid all Taxes that are required to be paid or
that Parent or any of its Subsidiaries are obligated to withhold from
amounts owing to any employee, creditor or third party, except with respect
to matters contested in good faith or for which adequate reserves have been
established; and (iii) have not waived any statute of limitations with
respect to Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency. Except as would not, individually or in the
aggregate, reasonably be likely to have a Parent Material Adverse Effect,
as of the date of this Agreement there are no audits, examinations,
investigations or other proceedings in respect of Taxes or Tax matters, in
each case, pending or, to the knowledge of the executive officers of Parent
or its Controller, threatened. Except as would not, individually or in the
aggregate, reasonably be likely to have a Parent Material Adverse Effect,
neither Parent nor any member of its "affiliated group" (within the meaning
of Section 1504 of the Code) has any item of income or gain, arising from
an intercompany transaction within the meaning of Treasury Regulation
ss.1.1502-13 that has not yet been taken into account pursuant to Treasury
Regulation ss.1.1502-13. Neither Parent nor any of its Subsidiaries has any
liability for Taxes of any Person (other than Parent and its Subsidiaries)
under Treasury Regulation ss.1.1502-6 (or any comparable provision of
state, local or foreign Law) except as would not, individually or in the
aggregate, reasonably be likely to have a Parent Material Adverse Effect.
Neither Parent nor any of its Subsidiaries is a party to any Tax sharing
agreement (with any Person other than Parent and/or any of its wholly-owned
Subsidiaries), except as would not, individually or in the aggregate,
reasonably be likely to have a Parent Material Adverse Effect. Neither
Parent nor any of its Subsidiaries has constituted either a "distributing
corporation" or a "controlled corporation" within the meaning of Section
355(a)(1)(A) of the Code in any distribution intended to qualify for
tax-free treatment under Section 355 of the Code occurring during the last
30 months.
(n) Labor Matters. Section 5.2(n) of the Parent Disclosure
Letter sets forth a list, as of the date of this Agreement, of each
material collective bargaining agreement or other similar Contract with a
labor union or labor organization to which Parent or any of its
Subsidiaries is a party. Except in each case as would not, individually or
in the aggregate, reasonably be likely to have a Parent Material Adverse
Effect, (i) (except for proceedings involving individual employees arising
in the ordinary course of business) neither Parent or any of its
Subsidiaries is the subject of any proceeding asserting that Parent or any
of its Subsidiaries has committed an unfair labor practice or is seeking to
compel Parent to bargain with any labor union or labor organization and
(ii) there is no pending or, to the knowledge of Parent's executive
officers, threatened in writing, nor has there been for the past five
years, any labor strike, dispute, walkout, work stoppage, slow-down or
lockout involving Parent or any of its Subsidiaries.
(o) Intellectual Property. Each of the Parent and its
Subsidiaries owns or has a valid right to use, or can acquire on reasonable
terms, all Intellectual Property and Information Technology necessary to
carry on its business as operated by it on the date of this Agreement,
except where the absence of such rights would not, individually or in the
aggregate, have a Parent Material Adverse Effect. Neither the Parent nor
any of its Subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property of third parties which would reasonably be likely, individually or
in the aggregate, to have a Parent Material Adverse Effect.
(p) Affiliate Transactions. As of the date of this
Agreement, there are no transactions, arrangements or Contracts between
Parent and its Subsidiaries, on the one hand, and its affiliates (other
than its wholly-owned Subsidiaries) or other Persons, on the other hand,
that would be required to be disclosed under Item 404 of Regulation S-K
under the Securities Act.
(q) Insurance. Parent and its Subsidiaries maintain
insurance coverage with reputable insurers in such amounts and covering
such risks as are in accordance with normal industry practice for companies
engaged in businesses similar to that of Parent or its Subsidiaries (taking
into account the cost and availability of such insurance).
(r) Brokers and Finders. Neither Parent nor any of Parent's
officers, directors or employees has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders, fees
in connection with the Merger or the other transactions contemplated in
this Agreement, except that Parent has employed Xxxxxx Brothers Inc.,
Evercore Financial Advisors LLC, and Rohatyn & Associates as its financial
advisers, the arrangements with which have been disclosed to the Company
prior to the date of this Agreement.
(s) No Other Representations and Warranties. Except for the
representations and warranties of Parent and Merger Sub contained in this
Agreement, Parent and Merger Sub are not making and have not made, and no
other Person is making or has made on behalf of Parent or Merger Sub, any
express or implied representation or warranty in connection with this
Agreement or the transactions contemplated hereby, and no Person is
authorized to make any such representations and warranties on behalf of
Parent or Merger Sub.
ARTICLE VI
COVENANTS
6.1 Interim Operations. (a) The Company covenants and agrees
as to itself and its Subsidiaries that from and after the date of this
Agreement and prior to the Effective Time, the business of the Company and
its Subsidiaries shall be conducted in the ordinary and usual course and,
to the extent consistent therewith, the Company and its Subsidiaries shall
use reasonable best efforts to preserve its business organization intact
and maintain the Company's existing relations and goodwill with customers,
suppliers, regulators, distributors, creditors, lessors, employees and
business associates in each case unless Parent shall approve in writing
(which approval will not be unreasonably withheld or delayed) and except as
expressly contemplated by this Agreement. Nothing contained in this Section
6.1(a) shall require the Company, any of its Subsidiaries or any of their
respective directors or officers to approve or consent to the taking of any
action by Cingular, XX.xxx or any of their respective Subsidiaries. For the
avoidance of doubt, any reference in this Section 6.1(a) to an aggregate
amount with respect to the Company and its Subsidiaries shall be deemed to
refer to the Company and its Subsidiaries on a consolidated basis. The
Company covenants and agrees as to itself and its Subsidiaries that, from
and after the date of this Agreement and prior to the Effective Time
(unless Parent shall otherwise approve in writing (which approval will not
be unreasonably withheld or delayed), and except as otherwise expressly
contemplated by this Agreement or disclosed in the Company Disclosure
Letter):
(i) the Company shall not (A) amend the Company's articles
of incorporation or by-laws; (B) amend, modify or terminate the Rights
Agreement in any manner adverse to Parent's rights hereunder or exempt any
other Person as an Acquiring Person (as defined in the Rights Agreement)
thereunder, (C) amend, modify, terminate or waive any provision under any
standstill agreement unless an amendment, modification, termination or
waiver which is the same in all substantive respects is unconditionally
offered to be made with respect to the standstill agreement applicable to
Parent (provided, that any such amendment to the standstill agreement with
Parent need remain in effect only until the termination of this Agreement),
(D) split, combine, subdivide or reclassify its outstanding shares of
capital stock; (C) declare, set aside or pay any dividend or distribution
payable in cash, stock or property in respect of any capital stock, other
than regular quarterly cash dividends on the Company Shares in amounts not
to exceed $0.29 per fiscal quarter; or (D) repurchase, redeem or otherwise
acquire or permit any of the Company's Subsidiaries to purchase or
otherwise acquire any shares of its capital stock or any securities
convertible into or exchangeable or exercisable for any shares of its
capital stock, except that the Company may repurchase Company Shares in the
ordinary course of business (x) as necessary to effect (I) the issuance of
Company Shares in respect of Company Options and Company Awards or
otherwise under Company Stock Plans and (II) the issuance of Company Shares
under the Company Direct Investment Plan and (y) not to exceed $500 million
in any fiscal quarter;
(ii) the Company shall not merge, consolidate or adopt a
plan of liquidation, or permit any of its Subsidiaries to merge or
consolidate or adopt a plan of liquidation, except for any such
transactions among wholly-owned Subsidiaries of the Company and the Company
and except for acquisitions permitted by clause (ix) below effected by a
means of a merger or consolidation of a Subsidiary of the Company;
(iii) neither the Company nor any of its Subsidiaries shall
take any action that would prevent the Merger from qualifying as a
"reorganization" within the meaning of Section 368(a) of the Code;
(iv) neither the Company nor any of its Subsidiaries shall
terminate, establish, adopt, enter into, make any new grants or awards of
stock-based compensation or other benefits under, amend or otherwise
modify, any Company Compensation and Benefit Plans or increase the salary,
wage, bonus or other compensation of any directors, officers or key
employees except (A) for grants or awards to directors, officers and
employees of the Company or its Subsidiaries under Company Compensation and
Benefit Plans in existence as of the date of this Agreement in such amounts
and on such terms as are consistent with past practice; (B) in the normal
and usual course of business (which shall include normal periodic
performance reviews and related Company Compensation and Benefit Plan
increases in compensation and employee benefits and the provision of
compensation and employee benefits under the Company Compensation and
Benefit Plans consistent with past practice for current, promoted or newly
hired officers and employees and the adoption of Company Compensation and
Benefit Plans for employees of new Subsidiaries in amounts and on terms
consistent with past practice), provided that in no event shall the Company
(x) institute a broad based change in compensation or, (y) increase or
institute any new severance, change in control, termination or deferred
compensation benefits, or (C) for actions necessary to satisfy existing
contractual obligations under Company Compensation and Benefit Plans
existing as of the date of this Agreement, provided that in no event shall
the Company or any of its Subsidiaries (i) take any action to fund or in
any other way secure the payment of compensation or benefits (other than
rabbi trusts listed in Section 5.1(h)(i) of the Company Disclosure Letter
in accordance with their terms), (ii) take any action to accelerate the
vesting or payment of any compensation or benefits (other than with respect
to officers and other employees whose employment terminates prior to the
Effective Time (x) as required by the terms of a Company Compensation and
Benefit Plan in effect on the date of this Agreement or (y) in the ordinary
course of business consistent with past practice (but in the case of (y)
excluding officers of the Company who are subject to Section 16 of the
Exchange Act)), (iii) other than in the ordinary course of business
consistent with past practice, materially change any actuarial or other
assumptions used to calculate funding obligations with respect to any
Compensation and Benefit Plan or change the manner in which contributions
to such plans are made or the basis on which such contributions are
determined, except as may be required by GAAP or applicable Law, or (iv)
amend the terms of any outstanding equity-based award (other than with
respect to officers and other employees whose employment terminates prior
to the Effective Time (x) as required by the terms of a Company
Compensation and Benefit Plan in effect on the date of this Agreement or
(y) in the ordinary course of business consistent with past practice (but
in the case of (y) excluding officers of the Company who are subject to
Section 16 of the Exchange Act));
(v) neither the Company nor any of its Subsidiaries shall
incur any indebtedness for borrowed money or guarantee such indebtedness of
another Person, or issue or sell any debt securities or warrants or other
rights to acquire any debt security of the Company or any of its
Subsidiaries, except for (A) indebtedness for borrowed money incurred in
the ordinary course of business not to exceed $1.5 billion in the
aggregate; (B) indebtedness for borrowed money in replacement of existing
indebtedness for borrowed money or any indebtedness permitted to be
incurred under this clause (v), (C) guarantees by the Company of
indebtedness of its wholly-owned Subsidiaries or (D) interest rate swaps on
customary commercial terms consistent with past practice and not to exceed
$750 million of notional debt in the aggregate in addition to notional debt
currently under swap or similar agreements;
(vi) neither the Company nor any of its Subsidiaries shall
make or commit to any capital expenditures other than in the ordinary
course of business and in any event not in excess of 110% of the aggregate
amount reflected in the Company's capital expenditure budget for the year
in which such capital expenditures are made, a copy of which capital
expenditure budget for 2006 and 2007 is attached to the Company Disclosure
Letter;
(vii) neither the Company nor any of its Subsidiaries shall
(A) transfer, lease, license, sell, mortgage, pledge, place a Lien upon or
otherwise dispose of any of the Company's or its Subsidiaries' interest in
Cingular (other than transfers to the Company or wholly-owned Subsidiaries
of the Company) or (B) otherwise transfer, lease, license, sell, mortgage,
pledge, place a Lien upon or otherwise dispose of any other property or
assets (including capital stock of any of its Subsidiaries) with a fair
market value in excess of $500 million in the aggregate, except in the case
of the clause (B) for (x) transfers, leases, licenses, sales, mortgages,
pledges, Liens, or other dispositions in the ordinary course of business
and (y) mortgages, pledges and Liens to secure indebtedness for borrowed
money permitted to be incurred pursuant to clause (v) above and of a type
and under circumstances consistent with past practice;
(viii) neither the Company nor any of its Subsidiaries shall
issue, deliver, sell, or encumber shares of its capital stock or any
securities convertible into, or any rights, warrants or options to acquire,
any such shares except: (A) any Company Shares issued pursuant to Company
Options and Company Awards outstanding on the date of this Agreement under
the Company Stock Plans, Company Awards and awards of performance shares
granted hereafter under the Company Stock Plans in accordance with this
Agreement and Company Shares issuable pursuant to such Company Awards; (B)
any Company Shares issued pursuant to the Company Direct Investment Plan;
(C) Company Awards or performance shares issued in the ordinary course of
business under the Company Stock Plans; provided that Company Awards and
performance shares in respect of no more than 400,000 Company Shares may be
issued in the aggregate and (D) issuances of capital stock by wholly-owned
Subsidiaries of the Company to the Company or any wholly-owned Subsidiary
of the Company;
(ix) neither the Company nor any of its Subsidiaries shall
spend in excess of $1 billion in the aggregate to acquire any business,
whether by merger, consolidation, purchase of property or assets or
otherwise (valuing any non-cash consideration at its fair market value as
of the date of the agreement for such acquisition); provided that neither
the Company nor any of its Subsidiaries shall make, or agree to make, any
acquisition that would reasonably be likely to prevent or materially delay
or impair the Merger or the Company's ability to consummate the
transactions contemplated hereby. For purposes of this clause (ix), the
amount spent with respect to any acquisition shall be deemed to include the
aggregate amount of capital expenditures that the Company is obligated to
make at any time or is reasonably likely to make as a result of such
acquisition within two years after the date of acquisition;
(x) neither the Company nor any of its Subsidiaries shall
make any change with respect to accounting policies, except as required by
changes in GAAP or by Law, or except as the Company, based upon the advice
of its independent auditors, and after consultation with Parent, determines
in good faith is advisable to conform to best accounting practices;
(xi) except as required by Law, neither the Company nor any
of its Subsidiaries shall (i) make any material Tax election or take any
material position on any material Tax Return filed on or after the date of
this Agreement or adopt any material method therefor that is inconsistent
with elections made, positions taken or methods used in preparing or filing
similar Tax Returns in prior periods or (ii) settle or resolve any material
Tax controversy;
(xii) neither the Company nor any of its Subsidiaries shall
(a) enter into any material line of business in any geographic area other
than the current businesses of the Company or any of its Subsidiaries in
the geographic areas where they are conducted, as of the date of this
Agreement or except as conducted as of the date of this Agreement, engage
in the conduct of any business in any geographic area which would require a
License issued or granted by a Governmental Entity to be obtained by the
Company or any of its Subsidiaries, or file for any License to be issued by
a Governmental Entity outside of the ordinary course of business, if in
each such case a filing would be required to be made with, or a consent or
approval would be required to be obtained from, a Government Entity prior
to the Effective Time with respect to transfer of such License and such
conduct or filing for such License would reasonably be likely to prevent or
delay the Merger or result in the Merger being prevented or delayed;
(xiii) other than investments in marketable securities in
the ordinary course of business, neither the Company nor any of its
Subsidiaries shall make any loans, advances or capital contributions to or
investments in any Person (other than the Company or any direct or indirect
wholly-owned Subsidiary of the Company or Cingular, XX.xxx or any of their
respective Subsidiaries) in excess of $25 million, individually or $100
million in the aggregate;
(xiv) neither the Company nor any of its Subsidiaries shall
enter into (i) any non-competition Contract or other Contract that purports
to limit in any material respect either the type of business in which the
Company or its Subsidiaries (or, after the Effective Time, Parent or its
Subsidiaries) may engage or the manner or locations in which any of them
may so engage in any business or (ii) any Contract requiring the Company or
its Subsidiaries to, in any material respect, deal exclusively with a
Person or related group of Persons;
(xv) neither the Company nor any of its Subsidiaries shall
settle any litigation or other proceedings before or threatened to be
brought before a Governmental Entity for an amount to be paid by the
Company or any of its Subsidiaries (excluding amounts paid or reimbursed by
insurance) in excess of $50 million or, in the case of non-monetary
settlements, which would be reasonably likely to have an adverse impact in
any material respect on the operations of the Company and its Subsidiaries
taken as a whole; and
(xvi) neither the Company nor any of its Subsidiaries shall
authorize or enter into any agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its
Subsidiaries that from and after the date of this Agreement and prior to
the Effective Time, the business of Parent and its Subsidiaries shall be
conducted in the ordinary and usual course and, to the extent consistent
therewith, Parent and its Subsidiaries shall use commercially reasonable
efforts to preserve its business organization intact and maintain Parent's
existing relations and goodwill with customers, suppliers, regulators,
distributors, creditors, lessors, employees and business associates, in
each case unless the Company shall approve in writing (which approval will
not be unreasonably withheld or delayed) and except as expressly
contemplated by this Agreement. Nothing contained in this Section 6.1(b)
shall require Parent, any of its Subsidiaries or any of their respective
directors or officers to approve or consent to the taking of any action by
Cingular, XX.xxx or any of their respective Subsidiaries. For the avoidance
of doubt, any reference in this Section 6.1(b) to an aggregate amount with
respect to Parent and its Subsidiaries shall be deemed to refer to Parent
and its Subsidiaries on a consolidated basis. Parent covenants and agrees
as to itself and its Subsidiaries that, from and after the date of this
Agreement and prior to the Effective Time (unless the Company shall
otherwise approve in writing (which approval will not be unreasonably
withheld or delayed), and except as otherwise expressly contemplated by
this Agreement or disclosed in the Parent Disclosure Letter):
(i) Parent shall not (A) amend Parent's certificate of
incorporation or by-laws in any manner that would reasonably be likely to
prevent or materially delay or impair the Merger or the consummation of the
transactions contemplated hereby; provided that any amendment to its
certificate of incorporation to increase the authorized number of shares of
any class or series of the capital stock of Parent shall in no way be
restricted by the foregoing; (B) split, combine, subdivide or reclassify
its outstanding shares of capital stock; (C) declare, set aside or pay any
dividend or distribution payable in cash, stock or property in respect of
any capital stock, other than regular quarterly cash dividends on the
Parent Common Stock in amounts not to exceed $0.3325 per fiscal quarter, as
the same may be increased from time to time in a manner consistent with
past practice; or (D) repurchase, redeem or otherwise acquire or permit any
of Parent's Subsidiaries to purchase or otherwise acquire any shares of its
capital stock or any securities convertible into or exchangeable or
exercisable for any shares of its capital stock except that (x) Parent may
repurchase shares of Parent Common Stock in the ordinary course of business
in connection with the issuance of shares of Parent Common Stock in respect
of Parent Options or otherwise under Parent Compensation and Benefit Plans
and (y) Parent may repurchase shares of Parent Common Stock pursuant to
open market purchases not to exceed $1 billion per fiscal quarter;
(ii) Parent shall not (A) merge or consolidate, or permit
any of its Subsidiaries to merge or consolidate, with any other Person, or
adopt a plan of liquidation, except for any such transactions among
wholly-owned Subsidiaries of Parent and except for acquisitions permitted
by clause (viii) below;
(iii) neither Parent nor any of its Subsidiaries shall take
any action that would prevent the Merger from qualifying as a
"reorganization" within the meaning of Section 368(a) of the Code;
(iv) neither Parent nor any of its Subsidiaries shall incur
any indebtedness for borrowed money or guarantee such indebtedness of
another Person, or issue or sell any debt securities or warrants or other
rights to acquire any debt security of Parent or any of its Subsidiaries,
except for (A) indebtedness for borrowed money incurred in the ordinary
course of business not to exceed $4 billion in the aggregate; (B)
indebtedness for borrowed money in replacement of existing indebtedness for
borrowed money or any indebtedness permitted to be incurred under this
clause (iv), (C) guarantees by Parent of indebtedness of its wholly-owned
Subsidiaries or (D) interest rate swaps on customary commercial terms
consistent with past practice;
(v) neither Parent nor any of its Subsidiaries shall make or
commit to any capital expenditures in excess of 110% of the aggregate
amount reflected in Parent's capital expenditure budget for the year in
which such capital expenditures are made, a copy of which capital
expenditure budget for 2006 and 2007 is attached to Parent Disclosure
Letter;
(vi) neither Parent nor any of its Subsidiaries shall
transfer, lease, license, sell, mortgage, pledge, place a Lien upon or
otherwise dispose of any of Parent's or its Subsidiaries' (A) interest in
Cingular (other than transfers to Parent or wholly-owned Subsidiaries of
Parent or (B) any other property or assets (including capital stock of any
of its Subsidiaries), with a fair market value in excess of $2 billion in
the aggregate, except in the case of the clause (B) for (w) dispositions of
minority interests and real estate no longer being utilized or needed, (x)
transfers, leases, licenses, sales, mortgages, pledges, Liens, or other
dispositions in the ordinary course of business, or transfers, leases,
licenses, sales, mortgages, pledges, Liens, or other dispositions in
connection with sale/leaseback transactions (y) mortgages, pledges and
Liens to secure indebtedness for borrowed money permitted to be incurred
pursuant to clause (v) above or (z) dispositions of assets used as
consideration for acquisitions that are permitted pursuant to clause (viii)
below;
(vii) neither Parent nor any of its Subsidiaries shall
issue, deliver, sell, or encumber shares of its capital stock or any
securities convertible into, or any rights, warrants or options to acquire,
any such shares except: (A) any Parent Common Stock issued pursuant to
options and other awards outstanding on the date of this Agreement under
the Parent Compensation and Benefit Plans, awards of options and other
awards granted hereafter under the Parent Compensation and Benefit Plans in
accordance with this Agreement and shares of Parent Common Stock issuable
pursuant to such awards; (B) any Parent Options and other stock payable
awards issued in the ordinary course of business under the Parent
Compensation and Benefit Plans; provided that such Parent Options and other
awards issued after the date hereof shall not be, or be exercisable, for
more than 121,000,000 shares of Parent Common Stock in the aggregate and
(C) issuances of Parent Common Stock with an aggregate fair market value
not in excess of $1 billion (as of the date of the commitment to issue) in
transactions described in clause (viii) below;
(viii) neither Parent nor any of its Subsidiaries shall
spend in excess of $4 billion in the aggregate to acquire any business,
whether by merger, consolidation, purchase of property or assets or
otherwise (valuing any non-cash consideration at its fair market value as
of the date of the agreement for such acquisition); provided that neither
Parent nor any of its Subsidiaries shall make any acquisition that would,
or would reasonably be likely to prevent or materially delay or impair the
Merger or consummation of the transactions contemplated hereby;
(ix) neither Parent nor any of its Subsidiaries shall enter
into any material line of business other than the current businesses of
Parent and its Subsidiaries if entering into such line of business would
prevent or materially delay or impair the Merger; and
(x) neither Parent nor any of its Subsidiaries shall
authorize or enter into any agreement to do any of the foregoing.
6.2 Acquisition Proposals
(a) No Solicitation or Negotiation. The Company agrees that
neither it nor any of its Subsidiaries nor any of its or its Subsidiaries'
officers and directors shall, and that it shall use its reasonable best
efforts to instruct and cause its and its Subsidiaries' directors,
officers, employees, investment bankers, attorneys, accountants and other
advisors or representatives (such directors, officers, employees,
investment bankers, attorneys, accountants and other advisors or
representatives, collectively, "Representatives") not to, directly or
indirectly:
(i) initiate, solicit, or knowingly facilitate or encourage,
any inquiries or the making of any proposal or offer that constitutes or
could reasonably be likely to lead to an Acquisition Proposal (as defined
below); or
(ii) engage in, continue or otherwise participate in any
discussions or negotiations regarding, or provide any non-public
information or data to any Person who has made, or proposes to make, or
otherwise knowingly facilitate, or encourage an Acquisition Proposal.
Notwithstanding anything in this Agreement to the contrary,
prior to the time, but not after, this Agreement is approved by the
Company's shareholders pursuant to the Company Requisite Vote, the Company
may (A) provide information in response to a request therefor by a Person
who has made a bona fide written Acquisition Proposal that was not
initiated, solicited, facilitated or encouraged, in violation of this
Section 6.2 or by the Company's Representatives, prior to the time such
Acquisition Proposal was first made after the date hereof, if the Company
receives from the Person so requesting such information an executed
confidentiality agreement on terms substantially similar to those contained
in the Non-Disclosure Agreement, dated as of February 16, 2006, (the
"Confidentiality Agreement"), by and between Parent and the Company
together with a customary standstill agreement on terms no more favorable
to such Person than the standstill applicable to Parent except that the
term of such standstill agreement may be shorter than the time of the
standstill applicable to Parent (but not less than 9 months) and other
provisions of the standstill may be more favorable to such Person (to the
extent customary) in which case the term and other provisions of the
standstill applicable to Parent shall, for so long as this Agreement is in
effect, automatically be reduced to be as favorable to Parent as such other
standstill agreement is to such Person or made more favorable to Parent; or
(B) engage in discussions or negotiations with any Person who has made a
bona fide written Acquisition Proposal that was not initiated, solicited,
facilitated or encouraged, in violation of this Section 6.2 or by the
Company's representatives, prior to the time such Acquisition Proposal was
first made after the date hereof, if, in each case referred to in clause
(A) or (B) above, the Board of Directors of the Company determines in good
faith (after consultation with its financial advisers and legal counsel)
that such action is necessary in order for the directors of the Company to
comply with their fiduciary duties under applicable Law; and in the case
referred to in clause (B) above, if the Board of Directors of the Company,
has determined in good faith based on all the information then available
and after consultation with its financial advisers and legal counsel that
such Acquisition Proposal either constitutes a Superior Proposal or is
reasonably likely to result in a Superior Proposal.
(b) Definitions. For purposes of this Agreement:
"Acquisition Proposal" means (i) any proposal or offer with
respect to a merger, joint venture, partnership, consolidation,
dissolution, liquidation, tender offer, recapitalization, reorganization,
share exchange, business combination, acquisition, distribution or similar
transaction outside the ordinary course of business involving the Company
or any direct or indirect interest in Cingular or any of the Company's
Significant Subsidiaries; provided that in no event shall any transaction
involving the Company or any of the Company's Significant Subsidiaries that
is expressly permitted by Sections 6.1(a)(ix) or (xiii) and which proposal
could not reasonably be expected to result in a Superior Proposal be deemed
to constitute an "Acquisition Proposal", or (ii) any proposal or offer to
acquire in any manner, directly or indirectly, 15% or more of the Company
Shares or 15% or more of the consolidated assets (including, without
limitation, equity interests in Subsidiaries of the Company); provided that
in no event shall a proposal or offer made by or on behalf of Parent or any
of its Subsidiaries, be deemed to constitute an "Acquisition Proposal."
"Superior Proposal" means a bona fide Acquisition Proposal
involving assets of the Company or its Subsidiaries representing at least
50% of the fair market value of the consolidated assets of the Company
(including its interest in Cingular and XX.xxx) or at least 50% of the
outstanding Company Shares and otherwise for the purpose of this definition
substituting 50% for each reference to 15% in the definition of
"Acquisition Proposal", that was not initiated, solicited, facilitated or
encouraged, in violation of this Section 6.2 or by the Company's
Representatives prior to the time such Acquisition Proposal was first made
after the date hereof, that the Board of Directors of the Company
determines in good faith (after consultation with its financial advisers
and legal counsel) is reasonably likely to be consummated in accordance
with its terms, taking into account all legal, financial and regulatory
aspects of the proposal and the Person making the proposal, and if
consummated, would result in a transaction more favorable to the Company's
shareholders from a financial point of view than the transaction
contemplated by this Agreement (after taking into account any revisions to
the terms of the transaction contemplated by this Agreement agreed to by
Parent pursuant to Section 6.2(c)).
(c) Company Recommendation. (i) The Board of Directors of
the Company, and each committee thereof, shall not:
(x) except as expressly permitted by this Section 6.2,
withhold or withdraw, or qualify or modify in a manner reasonably
likely to be understood to be adverse to Parent (or publicly
resolve to withhold or withdraw or so publicly qualify or
modify), the Company Recommendation or approve or recommend to
the Company's shareholders any Acquisition Proposal; or
(y) cause or permit the Company to enter into any letter of
intent, memorandum of understanding, agreement in principle,
acquisition agreement, merger agreement or other agreement (other
than a confidentiality agreement referred to in Section 6.2(a)
entered into in the circumstances referred to in Section 6.2(a))
for any Acquisition Proposal.
(ii) Notwithstanding anything to the contrary set forth in
this Agreement, prior to the time, but not after, this Agreement is
approved by the Company's shareholders by the Company Requisite Vote, the
Company's Board of Directors shall be permitted (A) to withhold or
withdraw, or qualify or modify in a manner reasonably likely to be
understood to be adverse to Parent, the Company Recommendation (a "Company
Recommendation Change") if but only if (i) the Company has received a
Superior Proposal, (ii) the Board of Directors of the Company determines in
good faith (after consultation with its financial advisers and outside
legal counsel), that, as a result of such Superior Proposal, a Company
Recommendation Change is necessary in order for the directors of the
Company to comply with their fiduciary duties under applicable Law, (iii)
three business days have elapsed following delivery by the Company to
Parent of written notice advising Parent that the Board of Directors of the
Company intends to so make a Company Recommendation Change, specifying the
material terms and conditions of the Superior Proposal and identifying the
Person making the Superior Proposal, (iv) the Company has given Parent the
opportunity to propose to the Company revisions to the terms of the
transactions contemplated by this Agreement (notwithstanding section 12.10
of the Limited Liability Company Agreement of Cingular, dated as of October
2, 2000, as amended), and the Company and its Representatives shall have,
if requested by Parent, negotiated in good faith with Parent and its
Representatives regarding any revisions to the terms of the transactions
contemplated by this Agreement proposed by Parent and the Board of
Directors of the Company shall continue to believe in good faith, as a
result of such Acquisition Proposal, that a Company Recommendation Change
is necessary in order for the directors of the Company to comply with their
fiduciary duties under applicable Law and in light of any revisions to the
terms of the transaction contemplated by this Agreement to which Parent
shall have agreed and (v) the Company shall have complied with its
obligations set forth in Section 6.2 of this Agreement in all material
respects or (B) to approve, or recommend to the shareholders of the
Company, any Superior Proposal made after the date of this Agreement (any
such action, a "Company Superior Proposal Action") if the Board of
Directors of the Company determines in good faith (after consultation with
its financial advisers and legal counsel) that such action is necessary in
order for the directors of the Company to comply with their fiduciary
duties under applicable Law, provided that the Company's Board of Directors
may not take a Company Superior Proposal Action unless all of the
conditions in clause (A) above have been satisfied (substituting the term
"Company Superior Proposal Action" for the term "Company Recommendation
Change" in clauses (A)(ii) and (iii)) and the Acquisition Proposal
continues to be a Superior Proposal in light of any revisions to the terms
of the transaction contemplated by this Agreement to which Parent shall
have agreed.
(d) Parent Recommendation. The Board of Directors of Parent,
and each committee thereof, shall not, except as expressly permitted by
this Section 6.2, withhold or withdraw, or qualify or modify in a manner
reasonably likely to be understood to be adverse to the Company (or
publicly resolve to withhold or withdraw or so publicly qualify or modify),
the Parent Recommendation or approve or recommend to the Parent's
stockholders any Acquisition Proposal. Notwithstanding anything to the
contrary set forth in this Agreement, prior to the time, but not after, the
issuance of Parent Common Stock required to be issued in the Merger is
approved by Parent's stockholders by the Parent Requisite Vote, Parent's
Board of Directors shall be permitted (A) to withhold or withdraw, or
qualify or modify in a manner reasonably likely to be understood to be
adverse to the Company, the Parent Recommendation (a "Parent Recommendation
Change") if and only if (i) Parent has received a Superior Proposal, (ii)
the Board of Directors of Parent determines in good faith, after receiving
the advice of its financial advisers and of outside legal counsel, that, as
a result of such Superior Proposal, a Parent Recommendation Change is
necessary in order for the directors of Parent to comply with their
fiduciary duties under applicable Law, (iii) three business days have
elapsed following delivery by Parent to the Company of written notice
advising the Company that the Board of Directors of Parent has resolved to
so make a Parent Recommendation Change, specifying the material terms and
conditions of the Superior Proposal and identifying the Person making the
Superior Proposal, (iv) Parent has given the Company the opportunity to
propose to Parent revisions to the terms of the transactions contemplated
by this Agreement, and Parent and its Representatives shall have, if
requested by the Company, negotiated in good faith with the Company and its
Representatives regarding any revisions to the terms of the transactions
contemplated by this Agreement proposed by the Company, and the Board of
Directors of Parent shall continue to believe in good faith, as a result of
such Acquisition Proposal, that a Parent Recommendation Change is necessary
in order for the directors of Parent to comply with their fiduciary duties
under applicable Law in light of any revisions to the terms of the
transaction contemplated by this Agreement to which the Company shall have
agreed or (B) to approve, or recommend to the shareholders of Parent, any
Superior Proposal made after the date of this Agreement (any such action, a
"Parent Superior Proposal Action") if the Board of Directors of Parent
determines in good faith (after consultation with its financial advisers
and legal counsel) that such action is necessary in order for the directors
of Parent to comply with their fiduciary duties under applicable Law,
provided that Parent's Board of Directors may not take a Parent Superior
Proposal Action unless all of the conditions in clause (A) above have been
satisfied (substituting the term "Parent Superior Proposal Action" for the
term "Parent Recommendation Change" in clauses (A)(ii) and (iii)) and the
Acquisition Proposal continues to be a Superior Proposal in light of any
revisions to the terms of the transaction contemplated by this Agreement to
which the Company shall have agreed. Solely for purposes of Sections
6.2(d), 6.2(g) and 8.3(a) to the extent applicable to an Acquisition
Proposal made to Parent all references to "Acquisition Proposal" and
"Superior Proposal" shall be read as if all references to "the Company" in
those terms as defined in Section 6.2(b) were references instead to
"Parent," as if all references to "Company Shares" were references to
"Parent Common Stock," as if all references to "Parent" were references to
"the Company," as if the reference in the definition of "Acquisition
Proposal" to "Section 6.1(a)(ix) or (xiii)" was instead a reference to
"Section 6.1(b)(viii)," and as if the reference in the definition of
"Superior Proposal" to "Section 6.2(c)" was instead a reference to "Section
6.2(d)."
(e) Certain Permitted Disclosure. Nothing contained in this
Section 6.2 shall be deemed to prohibit the Company from complying with its
disclosure obligations under U.S. federal or state Law, including under
Sections 14d-9 and 14e-2 of the Exchange Act; provided, however, that if
such disclosure has the substantive effect of withholding; or withdrawing;
or qualifying or modifying in a manner reasonably likely to be understood
to be adverse to Parent, the Company Recommendation, Parent shall have the
right to terminate this Agreement as set forth in Section 8.4(a). Nothing
contained in this Section 6.2 shall be deemed to prohibit Parent from
complying with its disclosure obligations under U.S. federal or state Law,
including under Sections 14d-9 and 14e-2 of the Exchange Act; provided,
however, that if such disclosure has the substantive effect of withholding;
or withdrawing; or qualifying or modifying in a manner reasonably likely to
be understood to be adverse to the Company the Parent Recommendation, the
Company shall have the right to terminate this Agreement as set forth in
Section 8.3(a).
(f) Existing Discussions. The Company agrees that it will
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any Persons conducted heretofore with
respect to any Acquisition Proposal. The Company agrees that it will take
the necessary steps to promptly inform the individuals or entities referred
to in the first sentence hereof of the obligations undertaken in this
Section 6.2. The Company also agrees that it will promptly request each
Person that has heretofore executed a confidentiality agreement in
connection with its consideration of acquiring it or any of its
Subsidiaries to return or destroy all confidential information heretofore
furnished to such Person by or on behalf of it or any of its Subsidiaries.
(g) Notice. Each of the Company and Parent (the "Receiving
Party") agrees that it will promptly (and, in any event, within 24 hours)
notify the other if any inquiries, proposals or offers with respect to an
Acquisition Proposal with respect to it or its Subsidiaries are received by
it from any Person, any non-public information is requested from the
Receiving Party who has made, or proposes to make, an Acquisition Proposal
with respect to it or its Subsidiaries, or any discussions or negotiation
with the Receiving Party are sought to be initiated or continued by a
Person who has made, or proposes to make, an Acquisition Proposal with
respect to it or its Subsidiaries, indicating, in connection with such
notice, the name of such Person and the material terms and conditions of
any such Acquisition Proposal (including, if applicable, copies of any
written requests, proposals or offers, including proposed agreements) and
thereafter shall keep the other informed, on a current basis, of the status
and terms of any such Acquisition Proposal (including any amendments
thereto that are of, or are related to, any material term) and the status
of any such discussions or negotiations, including any change in the
Receiving Party's intentions as previously notified. The Receiving Party
agrees that it will deliver to Parent or the Company, as the case may be, a
new notice with respect to each Acquisition Proposal with respect to it or
its Subsidiaries that has been materially revised or modified and, prior to
taking any Company Superior Proposal Action or Parent Superior Proposal
Action, as the case may be, or any Company Recommendation Change or Parent
Recommendation Change, as the case may be, with respect to any such
materially revised or modified Acquisition Proposal, a new
three-business-day period shall commence, for purposes of Section 6.2(c) or
6.2(d), as the case may be, from the time Parent or the Company, as the
case may be, receives such notice. The Company also agrees to provide any
information to Parent that it is providing to another Person pursuant to
this Section 6.2 as soon as practicable after it provides such information
to such other Person if the Company has not previously furnished such
information to Parent.
6.3 Information Supplied. (a) Parent and the Company shall
promptly prepare and file with the SEC the Prospectus/Proxy Statement, and
Parent shall prepare and file with the SEC the Registration Statement on
Form S-4 to be filed with the SEC by Parent in connection with the issuance
of shares of Parent Common Stock in the Merger (including the joint proxy
statement and prospectus (the "Prospectus/Proxy Statement") constituting a
part thereof) (the "S-4 Registration Statement") as promptly as
practicable. Parent and the Company each shall use its best efforts to have
the S-4 Registration Statement declared effective under the Securities Act
as promptly as practicable after such filing, and promptly thereafter mail
the Prospectus/Proxy Statement to the respective stockholders of each of
the Company and Parent. The Company and Parent shall also use their
respective best efforts to satisfy prior to the effective date of the S-4
Registration Statement all necessary state securities law or "blue sky"
notice requirements in connection with the Merger and to consummate the
other transactions contemplated by this Agreement and will pay all expenses
incident thereto.
(b) The Company and Parent each agrees, as to itself and its
Subsidiaries, that none of the information supplied or to be supplied by it
or its Subsidiaries for inclusion or incorporation by reference in (i) the
S-4 Registration Statement will, at the time the S-4 Registration Statement
becomes effective under the Securities Act, 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, in light of the
circumstances under which they were made, not misleading, and (ii) the
Prospectus/Proxy Statement and any amendment or supplement thereto will, at
the date of mailing to stockholders and at the times of the Company
Shareholders Meeting and the Parent Stockholders Meeting, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Company and Parent will cause the Form S-4 to comply as to
form in all material respects with the applicable provisions of the
Securities Act and the rules and regulations thereunder.
6.4 Shareholders/Stockholders Meetings. The Company will
take, in accordance with applicable Law and its articles of incorporation
and by-laws, all action necessary to convene and hold a meeting of holders
of Company Shares to consider and vote upon the approval of this Agreement
(the "Company Shareholders Meeting") as promptly as practicable after the
S-4 Registration Statement is declared effective. Parent will take, in
accordance with applicable Law and its certificate of incorporation and
by-laws, all action necessary to convene and hold a meeting of holders of
Parent Common Stock (the "Parent Stockholders Meeting") as promptly as
practicable after the S-4 Registration Statement is declared effective to
consider and vote upon the approval of the issuance of Parent Common Stock
required to be issued pursuant to the Merger. Subject to the provisions of
Section 6.2 hereof, (i) the Company's Board of Directors shall recommend in
the Prospectus/Proxy Statement and at the Company Shareholders Meeting that
the holders of Company Shares approve this Agreement and shall take all
lawful action to solicit such approval; and (ii) Parent's Board of
Directors shall recommend in the Prospectus/Proxy Statement and at Parent
Stockholders Meeting that the holders of Parent Common Stock approve the
issuance of Parent Common Stock required to be issued pursuant to the
Merger and shall take all lawful action to solicit such approval. The
parties shall cooperate in an effort to hold the Company Shareholders
Meeting and the Parent Stockholders Meeting on the same day at the same
time.
6.5 Filings; Other Actions; Notification.
(a) The Company will, within 15 days after the date of this
Agreement, provide Parent with a schedule setting forth a true and complete
list as of the date of this Agreement of (i) all Licenses issued or granted
by the FCC, Licenses issued or granted by a U.S. state PUC, and all
Licenses issued or granted by a local Governmental Entity in respect of
cable franchises, in each case issued or granted to the Company or any of
its Subsidiaries and all other Licenses issued or granted to the Company by
any Governmental Entity regulating telecommunications businesses or
services or the use of radio spectrum; (ii) all pending applications for
Licenses by the Company or any of its Subsidiaries that would be such types
of Licenses if issued or granted; (iii) all pending applications by the
Company or any of its Subsidiaries for modification, extension or renewal
of any such License; and (iv) any agreements to acquire a License that upon
acquisition by the Company would become such a type of License.
(b) Parent and the Company shall cooperate with each other
and use, and shall cause their respective Subsidiaries (including Cingular,
XX.xxx and their respective Subsidiaries, which shall be deemed a
Subsidiary of Parent and the Company for this purpose) to use, their
respective reasonable best efforts to take or cause to be taken all
actions, and do or cause to be done all things, necessary, proper or
advisable on its part under this Agreement and applicable Laws to
consummate and make effective the Merger and the other transactions
contemplated by this Agreement as promptly as reasonably practicable,
including preparing and filing as promptly as reasonably practicable all
documentation to effect all necessary notices, reports and other filings
(including by filing no later than 15-days after the date of the receipt by
Parent of the schedule described in Section 6.5(b), all applications
required to be filed with the FCC and the notification and required form
under the HSR Act; provided, however, that the failure to file within such
15 day period will not constitute a breach of this Agreement) and to obtain
as promptly as reasonably practicable all consents, registrations,
approvals, permits and authorizations necessary to be obtained from any
third party and/or any Governmental Entity in order to consummate the
Merger or any of the other transactions contemplated by this Agreement.
Each of Parent's and the Company's obligations under this Section 6.5(b)
shall include, without limitation, (a) the obligation to use its reasonable
best efforts to defend any lawsuits or other legal proceedings, whether
judicial or administrative, challenging consummation of the Merger or the
other transactions contemplated hereby, including seeking to avoid the
entry of, or have reversed, terminated or vacated, any stay or other
injunctive relief which could prevent or delay the Merger or the
consummation of the transactions contemplated hereby and (b) the obligation
to use its reasonable best efforts to avoid or eliminate each impediment to
obtaining the Required Governmental Approvals, in each of clauses (a) and
(b) so as to enable the Closing to occur if reasonably practicable by the
initial Termination Date or as promptly thereafter as is reasonably
practicable. Nothing in this Section 6.5 shall require, or be construed to
require (a) Parent or the Company to take or refrain from taking, or to
cause any of its Subsidiaries to take or refrain from taking any action, or
to agree or consent to the Company, Cingular, XX.xxx or any of their
respective Subsidiaries taking any action, or agreeing to any restriction
or condition, with respect to any of the businesses, assets or operations
of Parent, the Company, Cingular, XX.xxx or any of their respective
Subsidiaries, if such action, restriction or condition would take effect
prior to the Closing or is not conditioned on the Closing occurring, or (b)
Parent or the Company to take or to refrain from taking any action, to
agree to any condition or restriction with respect to any assets or
operations of Parent or the Company or their respective Subsidiaries
(including Cingular, XX.xxx and their respective Subsidiaries), or to cause
their respective Subsidiaries (including Cingular, XX.xxx and their
respective Subsidiaries) to do or agree to do any of the foregoing, if any
such action, failure to act, restriction or agreement, individually or in
the aggregate, would reasonably be likely to have a material adverse effect
on the financial condition, properties, assets, liabilities, business or
results of operations of Parent and its Subsidiaries (including Cingular
and XX.Xxx and their respective Subsidiaries) after the Merger (it being
understood that for this purpose only, materiality shall be determined by
referring to the equity market value of Parent on the date of this
Agreement) (a "Regulatory Material Adverse Effect"), it being understood
that, for purposes of determining whether a Regulatory Material Adverse
Effect would reasonably be likely to occur, both the positive and negative
effects of any such actions, restrictions and conditions, including any
sale, divesture, licensing, lease or disposition, shall be taken into
account, and any loss of synergies anticipated from the Merger as a result
of any such actions, restrictions or conditions, including any sale,
divestiture, licensing, lease or disposition shall not be taken into
account. Subject to applicable Laws relating to the exchange of
information, Parent and the Company shall have the right to review in
advance, and to the extent practicable each will consult the other on, all
of the information relating to Parent or the Company, as the case may be,
and any of their respective Subsidiaries, and XX.xxx and Cingular and any
of their respective Subsidiaries, that appears in any filing made with, or
written materials submitted to, any third party and/or any Governmental
Entity in connection with the Merger and the other transactions
contemplated by this Agreement (including the S-4 Registration Statement).
To the extent permitted by Law, each party shall provide the other with
copies of all correspondence between it (or its advisors) and any
Governmental Entity relating to the transactions contemplated by this
Agreement and, to the extent reasonably practicable, all telephone calls
and meetings with a Governmental Entity regarding the transactions
contemplated by this Agreement shall include representatives of Parent and
the Company. In exercising the foregoing rights, each of the Company and
Parent shall act reasonably and as promptly as practicable.
(c) The Company and Parent each shall, upon request by the
other, furnish the other with all information concerning itself, its
Subsidiaries, directors, officers and shareholders and stockholders, as the
case may be, and such other matters as may be reasonably necessary or
advisable in connection with the Prospectus/Proxy Statement, the S-4
Registration Statement or any other statement, filing, notice or
application made by or on behalf of Parent, the Company or any of their
respective Subsidiaries to any third party and/or any Governmental Entity
in connection with the Merger and the transactions contemplated by this
Agreement.
(d) The Company and Parent each shall keep the other
apprised of the status of matters relating to completion of the
transactions contemplated hereby, including promptly furnishing the other
with copies of notice or other communications received by Parent or the
Company, as the case may be, or any of its Subsidiaries or Cingular, XX.xxx
and any of their respective Subsidiaries, from any third party and/or any
Governmental Entity with respect to the Merger and the other transactions
contemplated by this Agreement.
(e) Each of the Company and Parent shall use reasonable best
efforts to cause to be delivered to the other and the other's directors a
letter of its independent auditors, dated (i) the date on which the S-4
Registration Statement shall become effective and (ii) the Closing Date,
and addressed to the other and its directors, in form and substance
customary for "comfort" letters delivered by independent public accountants
in connection with registration statements similar to the S-4 Registration
Statement.
6.6 Access; Consultation. Upon reasonable notice, and except
as may otherwise be required by applicable Law, the Company and Parent each
shall (and shall cause its Subsidiaries to) afford the Parent
Representatives or the Company Representatives, as the case may be,
reasonable access, during normal business hours throughout the period prior
to the Effective Time, to its properties, books, contracts and records and,
during such period, each shall (and shall cause its Subsidiaries to)
furnish promptly to the other all information concerning its or any of its
Subsidiaries' business, properties and personnel as may reasonably be
requested; provided that no investigation pursuant to this Section 6.6
shall affect or be deemed to modify any representation or warranty made by
the Company, Parent or Merger Sub hereunder; and provided further that the
foregoing shall not require the Company or Parent to permit any inspection,
or to disclose any information, that in the reasonable judgment of the
Company or Parent, as the case may be, would result in the disclosure of
any trade secrets of third parties or violate any of its obligations with
respect to confidentiality if the Company or Parent, as the case may be,
shall have used all reasonable best efforts to obtain the consent of such
third party to such inspection or disclosure. All requests for information
made pursuant to this Section 6.6 shall be directed to an executive officer
of the Company or Parent, as the case may be, or such Person as may be
designated by any such executive officer, as the case may be.
6.7 Affiliates. The Company shall, prior to the Company
Shareholders Meeting, deliver to Parent a list identifying all persons who,
to the knowledge of the Company's executive officers, may be deemed as of
the date of the Company Shareholders Meeting to be affiliates of the
Company for purposes of Rule 145 under the Securities Act and such list
shall be updated as necessary to reflect changes from the date thereof
until the Company Shareholders Meeting. The Company shall use its
reasonable best efforts to cause each person identified on such list to
deliver to Parent, not later than five business days prior to Closing, a
written agreement substantially in the form attached as Exhibit B hereto.
6.8 Stock Exchange Listing and De-listing. Parent shall use
its best efforts to cause the shares of Parent Common Stock to be issued in
the Merger and in respect of Company Options and Company Awards and other
outstanding equity awards under the Company Stock Plans to be approved for
listing on the NYSE, subject to official notice of issuance, prior to the
Closing Date. The Company shall take all actions necessary to permit the
Company Shares to be de-listed from the NYSE and de-registered under the
Exchange Act as promptly as reasonably practicable following the Effective
Time.
6.9 Publicity. The initial press release with respect to the
Merger shall be a joint press release and thereafter the Company and Parent
shall consult with each other prior to issuing any press releases or
otherwise making public announcements with respect to the Merger and the
other transactions contemplated by this Agreement and prior to making any
filings with any third party and/or any Governmental Entity (including any
national securities exchange) with respect thereto, except as may be
required by Law or by obligations pursuant to any listing agreement with or
rules of any national securities exchange, and except any consultation that
would not be reasonably practicable as a result of requirements of Law.
6.10 Employee Benefits. (a) Parent agrees that it shall
cause the Surviving Corporation to honor all Company Compensation and
Benefit Plans in accordance with their terms as in effect immediately
before the Effective Time subject to any amendment or termination thereof
that may be permitted by the terms of such plan and applicable Law. Parent
agrees that, commencing at the Effective Time and extending through at
least the later to occur of 12 months after the Effective Time and December
31, 2007, it shall provide or cause to be provided to those individuals who
as of the Effective Time are employees of the Company and its Subsidiaries
(other than employees covered by a collective bargaining agreement) (the
"Affected Employees") compensation and employee benefits (excluding equity
compensation awards or payments or benefits made by reason of the Merger
and the other transactions contemplated by this Agreement) that are no less
favorable in the aggregate than provided to the Affected Employees
immediately before the Effective Time, provided, further, that in
determining the timing, amount and terms and conditions of equity
compensation and other incentive awards to be granted to Affected
Employees, Parent shall, and shall cause its Subsidiaries to, treat in a
substantially similar manner those Affected Employees and those other
employees of Parent and its Subsidiaries who are substantially similar to
such Affected Employees (including, without limitation, by reason of job
duties and years of service). Notwithstanding the foregoing, except as
provided in this Agreement, nothing contained herein shall obligate Parent,
the Surviving Corporation or any affiliate of either of them to (i)
maintain any particular Company Compensation and Benefit Plan, (ii) grant
or issue any equity or equity-based awards or (iii) retain the employment
of any Affected Employee. Notwithstanding the foregoing, Parent shall or
shall cause the Surviving Corporation to continue until the second
anniversary of the Effective Time, each of the Company Compensation and
Benefit Plans identified in Section 6.10 of the Company Disclosure Letter
without any change that is adverse to the participants therein as of the
Effective Time.
(b) For all purposes under the compensation and employee
benefit plans, policies or arrangements of Parent and its affiliates
providing benefits to any Affected Employees after the Effective Time (the
"New Plans"), each Affected Employee shall receive credit for his or her
service with the Company and its affiliates before the Effective Time
(including predecessor or acquired entities or any other entities for which
the Company and its affiliates have given credit for prior service), for
purposes of eligibility, vesting and benefit accrual (but not (i) for
purposes of benefit accrual under defined benefit pension or other
retirement plans or (ii) for any new program for which credit for benefit
accrual for service prior to the effective date of such program is not
given to similarly situated employees of Parent other than the Affected
Employees) to the same extent that such Affected Employee was entitled,
before the Effective Time, to credit for such service under any similar or
comparable Compensation and Benefit Plans (except to the extent such credit
would result in a duplication of accrual of benefits). In addition, if
Affected Employees or their dependents are included in any medical, dental,
health or other welfare benefit plan, program or arrangement (a "Successor
Plan") other than the plan or plans in which they participated immediately
prior to the Effective Time (a "Prior Plan"), each Affected Employee
immediately shall be eligible to participate, without any waiting time, in
any and all Successor Plans and such Successor Plans shall not include any
restrictions, limitations or exclusionary provisions with respect to
pre-existing conditions, exclusions, any actively-at-work requirements or
any proof of insurability requirements (except to the extent such
exclusions or requirements were applicable under any similar Prior Plan at
the time of commencement of participation in such Successor Plan), and any
eligible expenses incurred by any Affected Employee and his or her covered
dependents during the portion of the plan year of the Prior Plan ending on
the date of the Affected Employee's commencement of participation in this
Successor Plan begins shall be taken into account under this Successor Plan
for purposes of satisfying all deductible, coinsurance and maximum
out-of-pocket requirements applicable to the Affected Employee and his or
her covered dependents for the applicable plan year as if these amounts had
been paid in accordance with the Successor Plan.
(c) Without limiting the generality of this Section 6.10,
Parent and the Company agree to the employee matters set forth in Section
6.10 of the Company Disclosure Letter.
(d) Prior to making any written or oral communications to
the directors, officers or employees of the Company or any of its
Subsidiaries pertaining to the compensation and employee benefits of the
current and former employees of the Company and its affiliates that are
affected by the transactions contemplated by this Agreement, the Company
shall provide Parent with a copy of the intended written communication or
any written script or notes in respect of oral communications and Parent
shall have a reasonable period of time to review and comment on the
communication or script, and the Company shall consider in good faith
comments of Parent.
6.11 Expenses. Subject to Section 8.5, whether or not the
Merger is consummated, all costs and expenses incurred in connection with
this Agreement and the Merger and the other transactions contemplated by
this Agreement shall be paid by the party incurring such expense, except
that expenses incurred in connection with the filing fee for the S-4
Registration Statement and printing and mailing the Prospectus/Proxy
Statement and the S-4 Registration Statement shall be shared equally by
Parent and the Company.
6.12 Indemnification; Directors' and Officers' Insurance.
(a) From and after the Effective Time, Parent shall, and shall cause the
Surviving Corporation to, jointly and severally, indemnify and hold
harmless, and provide advancement of expenses to, each present and former
director and officer of the Company (when acting in such capacity)
determined as of the Effective Time (the "Indemnified Parties") against any
costs or expenses (including reasonable attorney's fees), judgments, fines,
losses, claims, damages or liabilities incurred in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to matters
existing or occurring at or prior to the Effective Time (including for acts
or omissions occurring in connection with the approval of this Agreement
and the consummation of the transactions contemplated hereby), whether
asserted or claimed prior to, at or after the Effective Time, (i) to the
same extent such individuals are indemnified or have the right to
advancement of expenses as of the date of this Agreement by the Company
pursuant to its articles of incorporation and by-laws and indemnification
agreements identified in Section 5.1(h)(i) of the Company Disclosure Letter
with, or for the benefit of, any such individuals and (ii) without regard
to the limitations in subclause (i) above, to the fullest extent permitted
by Law.
(b) Any Indemnified Party wishing to claim indemnification
under Section 6.12(a), upon learning of any such claim, action, suit,
proceeding or investigation, shall promptly notify Parent and the Surviving
Corporation thereof, but the failure to so notify shall not relieve Parent
and the Surviving Corporation of any liability they may have to such
Indemnified Party if such failure does not materially prejudice Parent or
the Surviving Corporation, as the case may be. In the event of any such
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), (i) the Surviving Corporation shall have the
right to assume the defense thereof and the Surviving Corporation shall not
be liable to such Indemnified Parties for any legal expenses of other
counsel or any other expenses subsequently incurred by such Indemnified
Parties in connection with the defense thereof, except that if the
Surviving Corporation elects not to assume such defense or counsel for the
Indemnified Parties advises that there are issues which raise conflicts of
interest between the Surviving Corporation and the Indemnified Parties, the
Indemnified Parties may retain counsel satisfactory to them, and the
Surviving Corporation shall pay all reasonable fees and expenses of such
counsel for the Indemnified Parties promptly; provided, however, that the
Surviving Corporation shall be obligated pursuant to this paragraph (b) to
pay for only one firm of counsel for all Indemnified Parties in any
jurisdiction (unless there is a conflict of interest as provided above,
(ii) the Indemnified Parties will cooperate in the defense of any such
matter and (iii) the Surviving Corporation shall not be liable for any
settlement effected without its prior written consent.
(c) Parent shall cause the Surviving Corporation to and the
Surviving Corporation shall maintain a policy or policies of officers' and
directors' liability insurance for acts and omissions occurring prior to
the Effective Time ("D&O Insurance") with coverage in amount and scope at
least as favorable as the Company's existing directors' and officers'
liability insurance coverage for a period of six years after the Effective
Time; provided, however, that, if the existing D&O Insurance expires, is
terminated or cancelled, or if the annual premium therefor is increased to
an amount in excess of 300% of the last annual premium paid prior to the
date of this Agreement (such amount, as stated in Section 6.12 of the
Company Disclosure Letter, the "Current Premium"), in each case during such
six year period, the Surviving Corporation will use its reasonable best
efforts to obtain D&O Insurance in an amount and scope as great as can be
obtained for the remainder of such period for a premium not in excess (on
an annualized basis) of 300% of the Current Premium; and provided further
that in lieu of such coverage, Parent may substitute a prepaid "tail"
policy for such coverage, which it may cause the Company to obtain prior to
the Closing.
(d) If Parent or any of its successors or assigns (i) shall
consolidate with or merge into any other corporation or entity and shall
not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) shall transfer all or substantially all of
its properties and assets to any individual, corporation or other entity,
then and in each such case, proper provisions shall be made so that the
successors and assigns of Parent shall assume all of the obligations set
forth in this Section 6.12.
(e) The provisions of this Section are intended to be for
the benefit of, and shall be enforceable by, each of the Indemnified
Parties, their heirs and their representatives, notwithstanding any release
executed by any Indemnified Party in connection with his or her departure
from the Company or its Subsidiaries unless a release of the provisions of
this Section is specifically provided for in such release.
6.13 Regulatory Compliance. The Company and each of its
Subsidiaries agrees to use its reasonable best efforts to (a) cure no later
than the Effective Time any material violations and defaults by any of them
under any applicable rules and regulations of the FCC ("FCC Rules"), (b)
comply in all material respects with the terms of the FCC Licenses and file
or cause to be filed with the FCC all reports and other filings to be filed
under applicable FCC Rules and (c) to the extent reasonably requested by
Parent in writing, take all actions for each of them to be in compliance
upon the consummation of the Closing with the provisions of Sections 271
and 272 of the Communications Act (including any orders issued by the FCC
interpreting or implementing such provisions). Parent agrees that, if this
Agreement is terminated by the Company pursuant to Section 8.3(b), it shall
promptly thereafter reimburse the Company for any reasonable out-of-pocket
expenses incurred by the Company following incurrence and delivery of
reasonable documents by the Company at the direction of Parent pursuant to
clause (c) of this Section 6.13. The Parent and each of its Subsidiaries
agrees to use its reasonable best efforts to (a) cure no later than the
Effective Time any material violations and defaults by any of them under
any applicable FCC Rules, and (b) comply in all material respects with the
terms of the FCC Licenses and file or cause to be filed with the FCC all
reports and other filings to be filed under applicable FCC Rules.
6.14 Takeover Statute; Rights Agreement. (a) If any Takeover
Statute is or may become applicable to the Merger or the other transactions
contemplated by this Agreement, each of Parent and the Company and their
respective Boards of Directors shall grant such approvals and take such
actions as are necessary so that such transactions may be consummated as
promptly as practicable on the terms contemplated by this Agreement or by
the Merger and otherwise use reasonable best efforts to act to eliminate or
minimize the effects of such statute or regulation on such transactions.
(b) The Company will take, by no later than the fifth
business day after the date of this Agreement, all necessary action with
respect to all of the outstanding Rights (as defined in the Rights
Agreement) so that, as of immediately prior to the Effective Time, as a
result of entering into this Agreement or consummating the Merger and/or
the other transactions contemplated by this Agreement, (A) neither the
Company nor Parent will have any obligations under the Rights or the Rights
Agreement, (B) the holders of the Rights will have no rights under the
Rights or the Rights Agreement and (C) the Rights Agreement will expire.
6.15 Dividends. The Company shall coordinate with Parent the
declaration, setting of record dates and payment dates of dividends on
Company Shares so that holders of Company Shares do not receive dividends
on both Company Shares and Parent Common Stock received in the Merger in
respect of any calendar quarter or fail to receive a dividend on either
Company Shares or Parent Common Stock received in the Merger in respect of
any calendar quarter.
6.16 Control of the Company's or Parent's Operations.
Nothing contained in this Agreement shall give Parent or the Company,
directly or indirectly, rights to control or direct the operations of the
other prior to the Effective Time. Prior to the Effective Time, each of
Parent and the Company shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision of its
operations.
6.17 Section 16(b). The Board of Directors of each of the
Company and Parent shall, prior to the Effective Time, take all such
actions as may be necessary or appropriate pursuant to Rule 16b-3(d) and
Rule 16b-3(e) under the Exchange Act to exempt from Section 16 of the
Exchange Act (i) the disposition of Company Shares and "derivative
securities" (as defined in Rule 16a-1(c) under the Exchange Act) with
respect to Company Shares and (ii) the acquisition of Parent Common Stock
and derivative securities with respect to Parent Common Stock pursuant to
the terms of this Agreement by officers and directors of the Company
subject to the reporting requirements of Section 16(a) of the Exchange Act
or by employees or directors of the Company who may become an officer or
director of Parent subject to the reporting requirements of Section 16(a)
of the Exchange Act.
6.18 Tax-Free Qualification. (a) Each of the Company and
Parent shall use its reasonable best efforts to and to cause each of its
Subsidiaries to, (i) cause the Merger to qualify as a "reorganization"
within the meaning of Section 368(a) of the Code and (ii) obtain the
opinions of counsel referred to in Sections 7.2(d) and 7.3(c) of this
Agreement.
(b) From and after the Effective Time, Parent shall not take
any action that is reasonably likely to cause the Merger to fail to qualify
as a "reorganization" within the meaning of Section 368(a) of the Code,
including any action that is reasonably likely to cause the Merger to fail
to satisfy the "continuity of business enterprise" requirement described in
Treasury Regulation ss.1.368-1(d). If the opinion conditions contained in
Sections 7.2(d) and 7.3(c) of this Agreement have been satisfied, each of
the Company and Parent shall report the Merger for U.S. federal income tax
purposes as a "reorganization" within the meaning of Section 368(a) of the
Code.
6.19 Tax Representation Letters. The Company shall use its
reasonable best efforts to deliver to Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx LLP and to Xxxxxxxx & Xxxxxxxx LLP a "Tax Representation Letter,"
dated as of the Closing Date and signed by an officer of the Company,
containing representations of the Company, and Parent shall use its
reasonable best efforts to deliver to Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx LLP and to Xxxxxxxx & Xxxxxxxx LLP a "Tax Representation Letter,"
dated as of the Closing Date and signed by an officer of Parent, containing
representations of Parent, in each case as shall be reasonably necessary or
appropriate to enable Xxxxxxxx & Xxxxxxxx LLP to render the opinion
described in Section 7.2(d) of this Agreement and Fried, Frank, Harris,
Xxxxxxx & Xxxxxxxx LLP to render the opinion described in Section 7.3(c) of
this Agreement.
6.20 Cingular Headquarters. From and after the Effective
Time until at least the 5th anniversary of the Effective Time, Parent
agrees to maintain the corporate headquarters of Cingular in Atlanta,
Georgia.
6.21 Direct Investment Plan. As promptly as reasonably
practicable after the date of this Agreement, the Company will cease to
allow Persons who are not participants in the Company Direct Investment
Plan during the five business days prior to the date of this Agreement into
the Company Direct Investment Plan. In addition, from and after the date of
this Agreement all Company Shares sold under such plan shall be acquired by
the Company in an open market purchase.
ARTICLE VII
CONDITIONS
7.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver at or prior to the Closing of each of
the following conditions:
(a) Shareholder/Stockholder Approval. This Agreement shall
have been duly approved by holders of Company Shares constituting the
Company Requisite Vote, and the issuance of Parent Common Stock required to
be issued in the Merger shall have been duly approved by the holders of
shares of Parent Common Stock constituting Parent Requisite Vote.
(b) NYSE Listing. The shares of Parent Common Stock issuable
to the Company stockholders pursuant to the Merger shall have been
authorized for listing on the NYSE upon official notice of issuance.
(c) Regulatory Consents. (i) The waiting period applicable
to the consummation of the Merger under the HSR Act and the EC Merger
Regulation (if applicable) shall have expired or been earlier terminated,
(ii) all Governmental Consents required to be obtained from the FCC for the
consummation of the Merger shall have been obtained, (iii) all Governmental
Consents required to be obtained, from any U.S. state PUC in order to
consummate the Merger shall have been obtained, and (iv) all other
Governmental Consents, the failure of which to make or obtain would, (A)
individually or in the aggregate, reasonably be likely to result in a
Regulatory Material Adverse Effect or (B) be reasonably likely to result in
an officer or director of Parent or the Company being subject to criminal
liability, shall have been made or obtained (such Governmental Consents,
together with those described in Section 7.1(c)(i), 7.1(c)(ii) and
7.1(c)(iii), the "Required Governmental Consents"). For purposes of this
Agreement, the term "Governmental Consents" shall mean all notices,
reports, and other filings required to be made prior to the Effective Time
by the Company or Parent or any of their respective Subsidiaries (including
Cingular) with, and all consents, registrations, approvals, permits,
clearances and authorizations required to be obtained prior to the
Effective Time by the Company or Parent or any of their respective
Subsidiaries (including Cingular) from, any Governmental Entity in
connection with the execution and delivery of this Agreement and the
consummation of the Merger and the other transactions contemplated hereby.
(d) Orders. No court in the U.S. or U.S. federal or state
legislature or other Qualifying Governmental Entity shall have enacted,
issued, promulgated, enforced or entered after the date of this Agreement
any Law, order, decree or injunction (whether temporary, preliminary or
permanent) that is in effect and enjoins or otherwise prohibits
consummation of the Merger (collectively, an "Order"). No Governmental
Entity not referred to in the prior sentence shall have enacted, issued,
promulgated, enforced or entered an Order which is, individually or in the
aggregate, reasonably likely to result in a Regulatory Material Adverse
Effect or subject any officer or director of Parent or the Company to
criminal liability.
(e) S-4 Registration Statement. The S-4 Registration
Statement shall have become effective under the Securities Act. No stop
order suspending the effectiveness of the S-4 Registration Statement shall
have been issued.
7.2 Conditions to Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to effect the Merger are also subject
to the satisfaction or waiver by Parent at or prior to the Closing of the
following conditions:
(a) Representations and Warranties. (i) The representations
and warranties of the Company set forth in Section 5.1(b)(i) relating to
the capital stock of the Company shall be true and correct in all material
respects (A) on the date of this Agreement and (B) at the Closing (except
to the extent that such representation and warranty expressly speaks as of
a particular date, in which case such representation and warranty shall be
true and correct in all material respects as of such earlier date); (ii)
the representations and warranties of the Company set forth in this
Agreement that are qualified by Company Material Adverse Effect shall be
true and correct (A) on the date of this Agreement and (B) at the Closing
(except to the extent that any such representation and warranty expressly
speaks as of a particular date, in which case such representation and
warranty shall be true and correct as of such earlier date); (iii) the
other representations and warranties of the Company set forth in this
Agreement shall be true and correct (A) on the date of this Agreement and
(B) at the Closing (except to the extent that any such representation and
warranty speaks as of a particular date, in which case such representation
and warranty shall be so true and correct as of such date); provided,
however, that notwithstanding anything herein to the contrary, the
condition set forth in this Section 7.2(a)(iii) shall be deemed to have
been satisfied even if any representations and warranties of the Company
are not so true and correct unless the failure of such representations and
warranties of the Company to be so true and correct (read for purposes of
this Section 7.2(a)(iii) without any materiality qualification),
individually or in the aggregate, has had or would reasonably be likely to
have a Company Material Adverse Effect; and (iv) Parent shall have received
at the Closing a certificate signed on behalf of the Company by an
executive officer of the Company to the effect that the condition set forth
in this Section 7.2(a) has been satisfied.
(b) Performance of Obligations of the Company. The Company
shall have performed in all material respects all obligations required to
be performed by it under this Agreement at or prior to the Closing, and
Parent shall have received a certificate signed on behalf of the Company by
an executive officer of the Company to such effect.
(c) Consents Under Agreements. The Company shall have
obtained the consent or approval of each Person whose consent or approval
shall be required in order to consummate the transactions contemplated by
this Agreement under any Contract to which the Company or any of its
Subsidiaries is a party, except those for which the failure to obtain such
consent or approval would not, individually or in the aggregate, reasonably
be likely to have a Company Material Adverse Effect.
(d) Tax Opinion. Parent shall have received the written
opinion of Xxxxxxxx & Xxxxxxxx LLP, counsel to Parent, or other counsel
reasonably satisfactory to Parent, dated the Closing Date, to the effect
that the Merger will be treated for Federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code. In
rendering such opinion, counsel to Parent shall be entitled to rely upon
assumptions, representations, warranties and covenants, including those
contained in this Agreement and in the Tax Representation Letters described
in Section 6.19 of this Agreement.
(e) Governmental Consents. All Governmental Consents that
have been obtained shall have been obtained without the imposition of any
term, restriction, condition or consequence that would, individually or in
the aggregate, reasonably be likely to have or result in a Regulatory
Material Adverse Effect, and all Required Governmental Consents obtained
from the FCC shall have been obtained by Final Order. For the purpose of
this Agreement, "Final Order" means an action or decision that has been
granted as to which (i) no request for a stay or any similar request is
pending, no stay is in effect, the action or decision has not been vacated,
reversed, set aside, annulled or suspended and any deadline for filing such
a request that may be designated by statute or regulation has passed, (ii)
no petition for rehearing or reconsideration or application for review is
pending and the time for the filings of any such petition or application
has passed, (iii) no Governmental Entity has undertaken to reconsider the
action on its own motion and the time within which it may effect such
reconsideration has passed and (iv) no appeal is pending (including other
administrative or judicial review) or in effect and any deadline for filing
any such appeal that may be specified by statute or rule has passed, which
in any such case (i), (ii), (iii) or (iv) is reasonably likely to result in
vacating, reversing, setting aside, annulling, suspending or modifying such
action or decision (in the case of any modification in a manner that would
impose any term, condition or consequence that would, individually or in
the aggregate, reasonably be likely to have or result in a Regulatory
Material Adverse Effect).
7.3 Conditions to Obligation of the Company. The obligation
of the Company to effect the Merger is also subject to the satisfaction or
waiver by the Company at or prior to the Closing of the following
conditions:
(a) Representations and Warranties. (i) The representations
and warranties of Parent and Merger Sub set forth in Section 5.2(b)(i)
relating to the capital stock of Parent and Merger Sub shall be true and
correct in all material respects (A) on the date of this Agreement and (B)
at the Closing (except to the extent that any such representation and
warranty expressly speaks as of a particular date, in which case such
representation and warranty shall be true and correct in all material
respects as of such date); (ii) the representations and warranties of
Parent and Merger Sub set forth in this Agreement that are qualified by
Parent Material Adverse Effect shall be true and correct (A) on the date of
this Agreement and (B) at the Closing (except to the extent that any such
representation and warranty expressly speaks as of a particular date, in
which case such representation and warranty shall be so true and correct as
of such date); (iii) the other representations and warranties of Parent set
forth in this Agreement shall be so true and correct (A) on the date of
this Agreement and (B) at the Closing (except to the extent that any such
representation or warranty speaks as of a particular date, in which case
such representation and warranty shall be true and correct as of such date)
as of such date; provided, however, that notwithstanding anything herein to
the contrary, the condition set forth in this Section 7.3(a)(iii) shall be
deemed to have been satisfied even if any representations and warranties of
Parent and Merger Sub are not so true and correct unless the failure of
such representations and warranties of Parent and Merger Sub to be so true
and correct (read for purposes of this Section 7.3(a)(iii) without any
materiality qualification), individually or in the aggregate, has had or
would reasonably be likely to have a Parent Material Adverse Effect; and
(iv) the Company shall have received at the Closing a certificate signed on
behalf of Parent by an executive officer of Parent to the effect that the
condition set forth in this Section 7.3(a) has been satisfied.
(b) Performance of Obligations of Parent and Merger Sub.
Each of Parent and Merger Sub shall have performed in all material respects
all obligations required to be performed by it under this Agreement at or
prior to the Closing, and the Company shall have received a certificate
signed on behalf of Parent by an executive officer of Parent to such
effect.
(c) Tax Opinion. The Company shall have received the written
opinion of Fried Frank, Harris, Xxxxxxx & Xxxxxxxx LLP, counsel to the
Company, or other counsel reasonably satisfactory to the Company, dated the
Closing Date, to the effect that the Merger will be treated for Federal
income tax purposes as a reorganization within the meaning of Section
368(a) of the Code. In rendering such opinion, counsel to the Company shall
be entitled to rely upon assumptions, representations, warranties and
covenants, including those contained in this Agreement and in the Tax
Representation Letters described in Section 6.19 of this Agreement.
7.4 Invoking Certain Conditions. Any party seeking to claim
that a condition to its obligation to effect the Merger has not been
satisfied by reason of the fact that a Company Material Adverse Effect, a
Parent Material Adverse Effect or Regulatory Material Adverse Effect has
occurred or is reasonably likely to occur or result shall have the burden
of proof to establish that fact.
ARTICLE VIII
TERMINATION
8.1 Termination by Mutual Consent. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the
Effective Time, whether before or after the approval by shareholders or
stockholders of the Company and Parent, respectively, referred to in
Section 7.1(a), by mutual written consent of the Company and Parent, by
action of their respective Boards of Directors.
8.2 Termination by Either Parent or the Company. This
Agreement may be terminated and the Merger may be abandoned at any time
prior to the Effective Time by action of the Board of Directors of either
Parent or the Company if (a) the Merger shall not have been consummated by
March 6, 2007 (the "Termination Date"), whether such date is before or
after the date of approval by the shareholders or stockholders of the
Company or Parent, respectively; provided, however, that, if Parent or the
Company determines that additional time is necessary in order to obtain a
Required Governmental Consent, the Termination Date may be extended from
time to time by Parent or the Company one or more times by written notice
to the other party up to a date not beyond September 6, 2007, which date
shall thereafter be deemed to be the Termination Date, (b) the approval of
this Agreement by the Company's shareholders required by Section 7.1(a)
shall not have occurred at a meeting duly convened therefor or at any
adjournment or postponement thereof at which a vote upon this Agreement was
taken, (c) the approval of Parent's stockholders necessary for the issuance
of Parent Common Stock required to be issued pursuant to the Merger as
required by Section 7.1(a) shall not have been obtained at a meeting duly
convened therefor or at any adjournment or postponement thereof at which a
vote on such issuance was taken or (d) any Order permanently restraining,
enjoining or otherwise prohibiting consummation of the Merger shall become
final and non-appealable, except for any Order the existence of which would
not result in the failure of the condition set forth in Section 7.1(c) or
(d) (whether before or after the approval by the shareholders or
stockholders of the Company or Parent, respectively); provided that the
right to terminate this Agreement pursuant to clause (a) above shall not be
available to any party that has breached in any material respect its
obligations under this Agreement in any manner that shall have proximately
contributed to the failure of the Merger to be consummated.
8.3 Termination by the Company. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the
Effective Time, whether before or after the approval of this Agreement by
the shareholders of the Company referred to in Section 7.1(a), by action of
the Board of Directors of the Company if:
(a) the Board of Directors of Parent shall have withheld or
withdrawn, or qualified or modified in a manner reasonably likely to be
understood to be adverse to the Company, the Parent Recommendation prior to
the receipt of the approval of Parent's stockholders satisfying the
relevant portion of the condition set forth in Section 7.1(a);
(b) prior to the receipt of the approval of the Company's
shareholders satisfying the relevant portion of the condition set forth in
Section 7.1(a), the Board of Directors of the Company approves a Superior
Proposal in accordance with Section 6.2(c) and authorizes the Company to
enter into a binding written agreement providing for such Superior Proposal
and, prior to or simultaneous with entering into such agreement pays to
Parent in immediately available funds the Termination Fee required to be
paid as set forth in Section 8.5; or
(c) there has been a breach of any representation, warranty,
covenant or agreement made by Parent or Merger Sub in this Agreement, or
any such representation and warranty shall have become untrue after the
date of this Agreement, such that Section 7.3(a) or 7.3(b) would not be
satisfied and such breach or failure to be true is not curable or, if
curable, is not curable by the Termination Date (as the same may be
extended).
8.4 Termination by Parent. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time,
before or after the approval by the stockholders of Parent referred to in
Section 7.1(a), by action of the Board of Directors of Parent if:
(a) the Board of Directors of the Company shall have
withheld or withdrawn, or qualified or modified in a manner reasonably
likely to be understood to be adverse to Parent, the Company
Recommendation, or shall have approved or recommended to the shareholders
of the Company any Acquisition Proposal, in any such case prior to the
receipt of the approval of the Company's shareholders satisfying the
relevant portion of the condition set forth in Section 7.1(a);
(b) there has been a breach of any representation, warranty,
covenant or agreement made by the Company in this Agreement, or any such
representation and warranty shall have become untrue after the date of this
Agreement, such that Section 7.2(a) or 7.2(b) would not be satisfied and
such breach or failure to be true is not curable or, if curable, is not
curable by the Termination Date (as the same may be extended), or
(c) the Company shall have willfully or intentionally
breached in any material respect its obligations under Section 6.2.
8.5 Effect of Termination and Abandonment. (a) In the event
of termination of this Agreement and the abandonment of the Merger pursuant
to this Article VIII, this Agreement (other than as set forth in Section
6.2 (as to the Parent-Company standstill agreement), Section 6.11, this
Section 8.5 and Article IX) shall become void and of no effect with no
liability on the part of any party hereto (or of any of its directors,
officers, employees, agents, legal or financial advisors or other
representatives); provided, however, that no such termination shall relieve
any party hereto from any liability for damages to any other party
resulting from any prior willful or intentional breach of this Agreement or
from any obligation to pay, if applicable, the fees and reimbursement of
expenses in accordance with Sections 6.11, 8.5(b) or 8.5(c).
(b) If this Agreement is terminated by the Company pursuant
to Section 8.3(b), the Company shall pay to Parent a fee equal to $1.7
billion (the "Termination Fee") at the time set forth in Section 8.3(b). If
this Agreement is terminated by Parent pursuant to Section 8.4(c) the
Company shall promptly, but in no event later than two days after such
termination, pay to Parent the Termination Fee by wire transfer of same day
funds. If (i) this Agreement is terminated (x) by Parent or the Company
pursuant to Section 8.2(b) or (y) by Parent pursuant to Section 8.4(a) or
pursuant to Section 8.4(b) (solely with respect to a willful and
intentional breach), (ii) in the case of clause (x), prior to the vote on
adoption of this Agreement at the Company Shareholders Meeting, but after
the date of this Agreement, one or more bona fide Acquisition Proposals
(other than from Parent or any of its Subsidiaries) involving 50% or more
of the outstanding Company Shares or assets of the Company (including its
interests in Cingular) representing 50% or more of the fair market value of
the consolidated assets of the Company (including its interests in
Cingular) or otherwise involving a transaction or series of transactions
that could reasonably be expected to result in value to holders of Company
Shares comparable to or more favorable than the transactions contemplated
by this Agreement (a "Covered Proposal") shall have been publicly made or
any Person shall have publicly announced an intention (whether or not
conditional) to make a Covered Proposal and, in the case of clause (y), a
Covered Proposal shall have been made after the date of this Agreement and
(iii) within 12 months after the date of a termination, any Person (other
than Parent or any of its affiliates or the Company and any of its
Subsidiaries) (an "Acquiring Person") has acquired, or has entered into an
agreement to acquire, by acquisition, merger, consolidation or other
business combination transaction or by purchase, sale, assignment, lease,
transfer or otherwise, in one transaction or in a series of related
transactions, at least 50% of the outstanding Company Shares (or
shareholders of the Company immediately prior to such transaction cease to
hold at least 50% of the Company Shares (or any successor shares) after
such transaction) or at least 50% of the fair market value of the Company's
consolidated assets (including its interests in Cingular) or the Company or
one or more of its Subsidiaries transfers or otherwise disposes of at least
50% of the fair market value of the Company's consolidated assets or the
Company or one or more of its Subsidiaries publicly announces its intention
to effect any such acquisition, transfer or disposition that in, one or a
series of related transactions, includes as the principal part thereof an
extraordinary dividend, spin-off, split-off, distribution,
reclassification, issuer tender offer or similar transaction and thereafter
completes such transaction or a substantially similar transaction (it being
understood that a difference in consideration shall not be taken into
account in determining if the completed transaction is substantially
similar), then the Company shall promptly, but in no event later than two
days after the completion of such transaction or the time such agreement is
entered into as the case may be, pay Parent the Termination Fee (less any
amounts reimbursed to Parent pursuant to the next sentence), payable by
wire transfer of same day funds. If this Agreement is terminated by Parent
or the Company pursuant to Section 8.2(b) or by Parent pursuant to Section
8.4(a), then the Company shall promptly, but in no event later than two
days after a request from Parent, reimburse Parent for all fees and
expenses (up to a maximum of $120 million) incurred by Parent and its
Subsidiaries (plus 60% of all fees and expenses incurred by Cingular and
its Subsidiaries) in connection with this Agreement and the transactions
contemplated hereby, such reimbursement amount to be payable by wire
transfer of same day funds. The Company acknowledges that the agreements
contained in this Section 8.5(b) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, Parent
and Merger Sub would not enter into this Agreement; accordingly, if the
Company fails to pay promptly the amount due pursuant to this Section
8.5(b), and, in order to obtain such payment, Parent or Merger Sub
commences a suit which results in a judgment against the Company for the
fee set forth in this Section 8.5(b), the Company shall pay to Parent or
Merger Sub its costs and expenses (including attorneys' fees) in connection
with such suit, together with interest on the amount of the fee at the
prime rate of Citibank N.A. in effect on the date such payment should have
been made.
(c) If (i) this Agreement is terminated by Parent or the
Company pursuant to Section 8.2(c) or by the Company pursuant to Section
8.3(a), (ii) prior to Parent Stockholders Meeting, but after the date of
this Agreement, a Covered Proposal (for this purpose substituting therein
Parent for each reference to the Company and Parent Common Stock for each
reference to Company Shares and disregarding the second proviso in the
definition of "Acquisition Proposal" and substituting "Section
6.1(b)(viii)" for "Section 6.1(a)(ix) or (xiii)" in the definition of
"Acquisition Proposal") other than any such Acquisition Proposal from the
Company or any of its Subsidiaries (a "Parent Covered Proposal") shall have
been publicly made or any Person shall have publicly announced an intention
(whether or not conditional) to make a Parent Covered Proposal and (iii)
within 12 months after the date of a termination, any Person (other than
Parent or any of its Subsidiaries or the Company and any of its
Subsidiaries) (a "Parent Acquiring Person") has acquired, or has entered
into an agreement to acquire, by acquisition, merger, consolidation or
other business combination transaction or by purchase, sale, assignment,
lease, transfer or otherwise, in one transaction or in a series of related
transactions, at least 50% of the outstanding shares of Parent Common Stock
(or stockholders of Parent immediately prior to such transactions cease to
hold at least 50% of the shares of Parent Common Stock (or successor
shares) after such transaction) or at least 50% of the fair market value of
Parent's consolidated assets (including its interest in Cingular) or Parent
or one or more of its Subsidiaries transfers or otherwise disposes of at
least 50% of the fair market value of Parent's consolidated assets or
Parent or one or more of its Subsidiaries publicly announces its intention
to effect any such acquisition, transfer or disposition that, in one or a
series of related transactions, includes as the principal part thereof an
extraordinary dividend, spin-off, split-off, distribution,
reclassification, issuer tender offer or similar transaction and thereafter
completes such transaction or a substantially similar transaction (it being
understood that a difference in consideration shall not be taken into
account in determining if the completed transaction is substantially
similar), then Parent shall promptly, but in no event later than two days
after the date of consummation of such acquisition or at the time such
agreement is entered into, as the case may be, pay to the Company the
Termination Fee (less any amounts reimbursed to the Company pursuant to the
next sentence), payable by wire transfer of same day funds. If this
Agreement is terminated by Parent or the Company pursuant to Section 8.2(c)
or by the Company pursuant to Section 8.3(a), then Parent shall promptly,
but in no event later than two days after a request from the Company,
reimburse the Company for all fees and expenses (up to a maximum of $120
million) incurred by the Company and its Subsidiaries (plus 40% of all fees
and expenses incurred by Cingular and its Subsidiaries) in connection with
this Agreement and the transactions contemplated hereby, such reimbursement
amount to be payable by wire transfer of same day funds. Parent
acknowledges that the agreements contained in this Section 8.5(c) are an
integral part of the transactions contemplated by this Agreement, and that,
without these agreements, the Company would not enter into this Agreement;
accordingly, if Parent fails to pay promptly the amount due pursuant to
this Section 8.5(c), and, in order to obtain such payment, the Company
commences a suit which results in a judgment against Parent for the fee or
reimbursement set forth in this Section 8.5(c), Parent shall pay to the
Company its costs and expenses (including attorneys' fees) in connection
with such suit, together with interest on the amount of the fee at the
prime rate of Citibank N.A. in effect on the date such payment should have
been made.
ARTICLE IX
MISCELLANEOUS AND GENERAL
9.1 Survival. None of the covenants or agreements of the
Company, Parent or Merger Sub contained in this Agreement shall survive the
consummation of the Merger, except for those covenants and agreements
contained herein that by their terms apply or are to be performed in whole
or in part after the consummation of the Merger, including without
limitation, the agreements of the Company, Parent and Merger Sub contained
in Section 3.3 (Parent Board of Directors), Article IV, Section 6.12
(Indemnification; Directors' and Officers' Insurance), Section 6.10
(Employee Benefits), Section 6.18(b) (Tax-Free Qualification), and Section
6.20 (Cingular Headquarters), and this Article IX, which shall survive the
consummation of the Merger. All other representations, warranties,
covenants and agreements in this Agreement shall not survive the
consummation of the Merger or the termination of this Agreement.
9.2 Modification or Amendment. Subject to any limitations
under applicable Law, at any time prior to the Effective Time, the parties
hereto may modify or amend this Agreement, by written agreement executed
and delivered by duly authorized officers of the respective parties.
9.3 Waiver of Conditions. (a) Any provision of this
Agreement may be waived prior to the Effective Time if, and only if, such
waiver is in writing and signed by the party against whom the waiver is to
be effective.
(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.
Except as otherwise herein provided, the rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by Law.
9.4 Counterparts. This Agreement may be executed in any
number of counterparts, each such counterpart being deemed to be an
original instrument, and all such counterparts shall together constitute
the same agreement.
9.5 GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.
---------------------------------------------
(a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL
RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE
WITH THE LAW OF THE STATE OF DELAWARE, except that with respect to matters
mandatorily governed by the GBCC, the GBCC shall govern. The parties hereby
irrevocably submit exclusively to the jurisdiction of the State of Delaware
and the Federal courts of the United States of America located in the State
of Delaware, and agree not to assert, as a defense in any action, suit or
proceeding for the interpretation or enforcement hereof or of any such
document, that it is not subject thereto or that such action, suit or
proceeding may not be brought or is not maintainable in said courts or that
the venue thereof may not be appropriate or that this Agreement or any such
document may not be enforced in or by such courts, and the parties hereto
irrevocably agree that all claims with respect to such action or proceeding
shall be heard and determined in such a Federal or state court. The parties
hereby consent to and grant any such court jurisdiction over the Person of
such parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 9.6 or in such other manner as
may be permitted by Law, shall be valid and sufficient service thereof.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS WAIVER
VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.5.
9.6 Notices. Notices, requests, instructions or other
documents to be given under this Agreement shall be in writing and shall be
deemed given, (i) when sent if sent by facsimile, provided that the fax is
promptly confirmed by telephone confirmation thereof, (ii) when delivered,
if delivered personally to the intended recipient, and (iii) one business
day later, if sent by overnight delivery via a national courier service,
and in each case, addressed to a party at the following address for such
party:
if to Parent or Merger Sub
AT&T Inc.
000 X. Xxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxx, Esq.,
Senior Vice President and Associate General Counsel
Fax: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Xxxx X. Xxxxxxxxxxx
Fax: (000) 000-0000
if to the Company
BellSouth Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxx, Esq.
Fax: (000) 000-0000
with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx, Xx.
Xxxxx Xxxxxx
Xxxxxx Xxxxxxx
Fax: (000) 000-0000
or to such other persons or addresses as may be designated in writing by
the party to receive such notice as provided above.
9.7 Entire Agreement. This Agreement (including any exhibits
hereto), the Confidentiality Agreement, the Company Disclosure Letter and
the Parent Disclosure Letter constitute the entire agreement, and supersede
all other prior agreements, understandings, representations and warranties
both written and oral, among the parties, with respect to the subject
matter hereof.
9.8 No Third Party Beneficiaries. Except as provided in
Section 6.12 (Indemnification; Directors' and Officers' Insurance), this
Agreement is not intended to, and does not, confer upon any Person other
than the parties hereto any rights or remedies hereunder.
9.9 Obligations of Parent and of the Company. Whenever this
Agreement requires a Subsidiary of Parent (including Cingular) to take any
action, such requirement shall be deemed to include an undertaking on the
part of Parent to cause such Subsidiary to take such action. Whenever this
Agreement requires a Subsidiary of the Company (including Cingular) to take
any action, such requirement shall be deemed to include an undertaking on
the part of the Company to cause such Subsidiary to take such action and,
after the Effective Time, on the part of the Surviving Corporation to cause
such Subsidiary to take such action.
9.10 Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability or the other provisions
hereof. If any provision of this Agreement, or the application thereof to
any Person or any circumstance, is invalid or unenforceable, (a) a suitable
and equitable provision shall be substituted therefor in order to carry
out, so far as may be valid and enforceable, the intent and purpose of such
invalid or unenforceable provision and (b) the remainder of this Agreement
and the application of such provision to other Persons or circumstances
shall not, subject to clause (a), be affected by such invalidity or
unenforceability, except as a result of such substitution, nor shall such
invalidity or unenforceability affect the validity or enforceability of
such provision, or the application thereof, in any other jurisdiction.
9.11 Interpretation. (a) The table of contents and headings
herein are for convenience of reference only, do not constitute part of
this Agreement and shall not be deemed to limit or otherwise affect any of
the provisions hereof. Where a reference in this Agreement is made to a
Section or Exhibit, such reference shall be to a Section of or Exhibit to
this Agreement unless otherwise indicated. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
to be followed by the words "without limitation." The term "Qualifying
Governmental Entity" shall have the meaning set out on Section 9.11(a) of
the Parent Disclosure Letter.
(b) The parties have participated jointly in negotiating and
drafting this Agreement. In the event that an ambiguity or a question of
intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the parties, and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any
provision of this Agreement.
9.12 Captions. The Article, Section and paragraph captions
herein are for convenience of reference only, do not constitute part of
this Agreement and shall not be deemed to limit or otherwise affect any of
the provisions hereof.
9.13 Specific Performance. The parties acknowledge and agree
that any breach of this Agreement would give rise to irreparable harm for
which monetary damages would not be an adequate remedy. The parties
accordingly agree that, in addition to other remedies, the parties shall be
entitled to enforce the terms of this Agreement by decree of specific
performance without the necessity of proving the inadequacy of monetary
damages as a remedy and to obtain injunctive relief against any breach or
threatened breach hereof.
9.14 Assignment. This Agreement shall not be assignable by
operation of law or otherwise; provided, however, that Parent may designate
prior to the Effective Time, by written notice to the Company, another
wholly-owned direct or indirect Subsidiary to be a party to the Merger in
lieu of Merger Sub (unless doing so would prevent or delay or impair the
Merger or consummation of the transactions contemplated hereby), in which
event all references herein to Merger Sub shall be deemed references to
such other Subsidiary (except with respect to representations and
warranties made herein with respect to Merger Sub as of the date of this
Agreement) and all representations and warranties made herein with respect
to Merger Sub as of the date of this Agreement shall also be made with
respect to such other Subsidiary as of the date of such designation. Any
assignment in contravention of the preceding sentence shall be null and
void.
IN WITNESS WHEREOF, this Agreement has been duly executed
and delivered by the duly authorized officers of the parties hereto as of
the date first written above.
BELLSOUTH CORPORATION
By: /s/ F. Xxxxx Xxxxxxxx
-----------------------------------
Name: F. Xxxxx Xxxxxxxx
Title: Chairman and Chief
Executive Officer
AT&T INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
-----------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Chairman and CEO
ABC CONSOLIDATION CORP.
By: /s/ Xxxxxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title:
