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EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (this "Agreement") is entered
into as of the 19th day of September, 1996, by and among the following
corporations, each of which is a Louisiana corporation:
CAMERON COMMUNICATIONS CORPORATION ("Cameron"),
MERCURY, INC. ("Mercury"),
MERCURY CELLULAR TELEPHONE COMPANY ("MCTC"),
MERCURY CELLULAR OF KANSAS, INC. ("MCK"),
MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY ("Miss One"),
CCC HOLDING COMPANY ("Newco"),
CAMERON TELEPHONE COMPANY ("CTC"), and
▇▇▇▇▇▇▇▇▇ TELEPHONE COMPANY ("ETC").
WHEREAS, the parties hereto desire to enter into the reorganization
contemplated hereby so that the wireless communications interests of Cameron
will be separated from its landline telephone business; such wireless interests
of Cameron will be combined with the wireless telephone business of Mercury;
and such landline telephone business of Cameron will be spun off to the
shareholders of Cameron;
NOW THEREFORE, the parties hereto agree as follows.
SECTION 1
THE REORGANIZATION
1.1 Reorganization Transactions. On the Reorganization Date (defined
below) the following transactions (collectively, the "Reorganization
Transactions") will occur, in the sequence in which they are set forth in this
Section 1.1.
(a) Cameron will transfer to Newco, pursuant to an Asset
Transfer Agreement in the form of Schedule 1.1(a) annexed hereto (the "Asset
Transfer Agreement"), the assets (subject to the liabilities) of Cameron
described therein, which assets constitute all of the assets of Cameron other
than its interests in MCTC and Newco (and include the right, following the
consummation of the Reorganization Transactions, to use of the corporate name
"Cameron Communications Corporation") and which liabilities constitute all of
the liabilities and obligations of Cameron.
(b) Following the consummation of the transaction described in
Section 1.1(a), Cameron will distribute to its shareholders all of the capital
stock of Newco (the "Spin-Off").
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(c) Following the consummation of the transaction described in
Section 1.1(b), Cameron will be merged into Mercury pursuant to a Joint
Agreement of Merger in the form of Schedule 1.1(c) annexed hereto (the "Joint
Agreement").
1.2 Optional Further Transactions. Following the consummation of the
Reorganization Transactions described in Section 1.1, Mercury may elect
(subject to the last sentence of Section 1.3) to consummate pursuant to this
Agreement, on the Reorganization Date or within 90 days thereafter, any of the
following further transactions (collectively, the "Optional Transactions"):
(a) MCK, a wholly owned subsidiary of MCTC, may be merged into MCTC pursuant to
a Certificate of Merger in the form of Schedule 1.2(a) (the "MCK/MCTC Merger
Certificate"); (b) MCTC, which will following the Reorganization Transactions
be a wholly owned subsidiary of Mercury, may be merged into Mercury pursuant to
a Certificate of Merger in the form of Schedule 1.2(b) (the "MCTC/Mercury
Merger Certificate"); and (c) Miss One, a wholly owned subsidiary of Mercury,
may be merged into Mercury pursuant to a Certificate of Merger in the form of
Schedule 1.2(c) (the "Miss One/Mercury Merger Certificate" and, collectively
with the Asset Transfer Agreement, the Joint Agreement, the MCK/MCTC Merger
Certificate and the MCTC/Mercury Merger Certificate, the "Ancillary
Agreements").
1.3 Form of Transactions. The transactions described in Sections
1.1(a) and 1.1(b) are intended to constitute a reorganization under Section
368(a)(1)(D) of the Internal Revenue Code of 1986 (the "Code") and a
distribution under Section 355 of the Code. The transaction described in
Section 1.1(c) is intended to constitute a reorganization under Section
368(a)(1)(A) of the Code. The Optional Transactions described in Section 1.2
will, if consummated, be intended to qualify as a reorganization under Section
368(a)(1)(A) or (D) of the Code and/or a liquidation under Section 332 of the
Code, and Mercury may exercise its option to consummate only those Optional
Transactions which, in the opinion of Mercury's tax counsel, will so qualify.
SECTION 2.
REORGANIZATION DATE;
ACTIONS ON AND FOLLOWING THE REORGANIZATION DATE
2.1 Reorganization Date. The Reorganization Date shall be the date
on which shall occur the consummation of the Reorganization Transactions
described in Section 1.1, and shall be such date as Cameron shall determine,
but shall not be earlier than the date on which all conditions to the
obligation of the parties to consummate the Reorganization Transactions are
satisfied or waived.
2.2 Actions on the Reorganization Date. On the Reorganization Date
the parties to each of the Reorganization Transactions will cause them to occur
in the sequence described in Section 1.1, to wit: (a) the parties to the Asset
Transfer Agreement will execute that Agreement
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and cause to occur the "Closing" thereunder; (b) Cameron will accomplish the
Spin- Off; and (c) the parties to the Joint Agreement will cause it to be
executed and filed in the office of the Secretary of State of Louisiana (the
"Secretary of State"). Certificates representing shares of Newco distributed
in the Spin-Off shall be legended as provided in Schedule 2.2. To the extent
Mercury may have elected by the Reorganization Date to consummate any of the
Optional Transactions then, as applicable: (i) the parties to the MCK/MCTC
Merger Certificate will cause it to be filed in the office of the Secretary of
State; (ii) the parties to the MCTC/Mercury Merger Certificate will cause it to
be filed in the office of the Secretary of State; and (iii) the parties to the
Miss One/Mercury Merger Certificate will cause it to be filed in the office of
the Secretary of State.
2.3 Actions Following Reorganization Transactions.
(a) If Mercury elects following the Reorganization Date to
consummate any of the Optional Transactions then the filing contemplated by the
last sentence of Section 2.2 shall be made as to such transaction or
transactions as soon as practicable following such election.
(b) Mercury will file certified copies of the certificates of
merger issued by the Secretary of State in each Parish in which such filing is
required pursuant to Section 112F(2)(b) or 112G(3) of the Louisiana Business
Corporation Law.
(c) Mercury will promptly mail to the former shareholders of
Cameron a letter of transmittal for use by such shareholders in exchanging
certificates representing shares of Cameron for certificates representing
shares of Mercury into which such Cameron shares will, as and at the rate
provided in the Joint Agreement, have been converted by virtue of the merger of
Cameron into Mercury. Mercury warrants and represents that such shares of
Mercury will, when issued and delivered in accordance with the Joint Agreement
and this Agreement, be duly and validly issued, fully paid and nonassessable,
and that immediately following such issuance such shares will constitute not
less than 67.45362% of the total outstanding capital stock of Mercury.
Certificates representing such shares will be legended as provided in Schedule
2.2, whether or not the holder of any such certificate has signed the agreement
referred to in Section 5.10.
SECTION 3.
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
Each party represents and warrants to the other parties that:
3.1 Corporate Status; Approvals. It is a corporation duly organized
and validly existing in good standing under the laws of Louisiana. This
Agreement and, to the extent it is a
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party thereto, the Reorganization Transactions have been duly approved by all
necessary corporate action on its part except approval by its shareholders.
3.2 No Conflicts. The execution of this Agreement and the
consummation of the Reorganization Transactions do not and will not conflict
with or cause a breach or default under any provision of its Articles of
Incorporation or its By- Laws (if any), or of any material agreement,
commitment, rule, order or decree to which it is a party or by which it or its
assets is bound.
3.3 Financial Statements. Its financial statements at December 31,
1995, and for the year then ended, and at June 30, 1996, and for the six months
then ended, copies of which are annexed as Schedule 3.3 hereto, fairly present
its financial position as of such dates and the results of its operations for
the respective periods then ended, all in accordance with generally accepted
accounting principles consistently applied, except for the absence of footnote
disclosures and, in the case of interim financial statements, the absence of
adjustments consisting of normal recurring accruals.
3.4 Material Adverse Changes. There have been no material adverse
changes in its financial condition, results of operations, business, properties
or prospects since June 30, 1996.
3.5 Properties. It has good and merchantable title to all of the
properties and assets reflected as owned, and has valid leasehold estates in
any properties reflected as leased, on its balance sheet at June 30, 1996 (its
"June 30 Balance Sheet"), free and clear of any encumbrances other than those
that are reflected in Schedule 3.5 or in its financial statements that are
referred to in Section 3.3, or those that arise by operation of law.
3.6 Compliance With Legal Requirements. It holds all licenses and
franchises that are material to the conduct of its business as the same has
been, and is expected to continue to be, conducted. It is in compliance in all
material respects with all laws, regulations, reporting and licensing
requirements and orders applicable to its business the breach or violation of
which would, either individually or in the aggregate, have a material adverse
effect on its financial condition or results of operations.
3.7 Subsidiaries and Interests. Except as set forth in Schedule 3.7,
it has no interest of any kind in any corporation, partnership, limited
liability company, joint venture or other entity. Those interests reflected in
Schedule 3.7 are owned by it in full ownership and without restriction, other
than as set forth in Schedule 3.7 and other than restrictions under laws and
regulations of general application.
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3.8 Capital Stock. Its authorized and issued capital stock is as set
forth in Schedule 3.8 and it has no agreement or commitments under which it is
obligated to issue or sell any shares of its capital stock.
3.9 Material Contracts. It has disclosed to each other party hereto
a description of its material contracts. Except as so disclosed it is not in
default under any of such contracts and it knows of no material default
thereunder by any other party to such contracts.
3.10 Absence of Undisclosed Liabilities. It has no obligation or
liability (contingent or otherwise) except (i) as reflected in its financial
statements referred to in Section 3.3, including any notes thereto, (ii) as
reflected by this Agreement, (iii) as has been disclosed to each other party
hereto, and (iv) for commitments and obligations made, or liabilities incurred,
since June 30, 1996, in the ordinary course of its business consistent with
past practices.
3.11 Benefit Plans. It has disclosed to each other party hereto all
pension, retirement, profit sharing, supplemental or excess retirement, stock
option, stock purchase, savings, employee stock ownership, restricted stock,
phantom stock, stock ownership, life insurance, disability, vacation pay,
severance pay, incentive, deferred compensation, bonus or benefit arrangement,
health or hospitalization program, fringe benefit or perquisite arrangement or
other similar plan as in effect with respect to it. Such plans that are
covered by ERISA, if any, comply with the requirements thereof.
3.12 Litigation. There are no pending or known threatened actions,
suits or proceedings, judicial, regulatory or other, that pertain to it except
as set forth on Schedule 3.12, and except for routine litigation incidental to
its business and for which any resultant liability is fully insured (subject to
any normal retention or deductible).
3.13 Insurance. Its businesses and properties are covered by adequate
insurance coverage, except that it does not carry business interruption
insurance.
SECTION 4.
COVENANTS
4.1 Conduct of Business. Until the earlier of the Reorganization
Date or the termination of this Agreement, it will operate its business only in
the usual and customary course and, except as otherwise contemplated by this
Agreement or as consented to by each other party hereto will not until after
the earlier of the Reorganization Date or the termination of this Agreement
amend its articles of incorporation or by-laws; pay any dividends; issue or
commit to issue any shares of its capital stock or rights to purchase or
acquire same; contractually incur any material lien or encumbrance other than
as contemplated by Schedule 5.8; acquire any
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corporation or other entity or any business thereof; take any action that would
reasonably be known by it to cause any breach in any of its warranties and
representations hereunder, as if such warranties and representations were made
immediately following the taking of such action; or sell, except in the
ordinary course of its business consistent with its past practices, any of its
assets or business or any of its interests reflected in Schedule 3.7.
4.2 Investigations. Prior to the Reorganization Date, it will
furnish to each other party hereto such information with respect to its
business and properties as any such party may reasonably request.
4.3 Best Efforts. It will use its best efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things, necessary to
consummate and make effective, as soon as practicable, the transactions
contemplated by this Agreement, and to obtain all consents of all third parties
and governmental bodies necessary or desirable for such purpose; provided, that
no party shall be required by this section to waive any condition to such
party's obligation to consummate the Reorganization Transactions.
4.4 Shareholder Approval. Each party shall call a meeting of its
shareholders to consider approval of the transactions contemplated by this
Agreement. Mercury and Cameron will prepare a Joint Information Statement to
be sent to their respective shareholders with respect to the transactions
contemplated by this Agreement.
4.5 Consents and Approvals. The parties will take appropriate action
to give any required notices to, and obtain any consents of, regulatory
authorities or third parties required with respect to the Reorganization
Transactions or the Optional Transactions, including, without limitation, (a)
approvals of the Federal Communications Commission, (b) approval of the
partners of the Meretel Partnership, and (c) any required notification under
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976. Each of the parties
hereby consents to the Reorganization Transactions and the Optional
Transactions to the extent the consent of such party is required or desirable
in connection therewith and, effective upon the closing under the Asset
Transfer Agreement, each party releases Cameron from those of Cameron's
obligations and liabilities that are being expressly assumed by Newco under the
Asset Transfer Agreement and agrees to look solely to Newco and its
subsidiaries for the performance thereof.
4.6 Confidentiality. If the Reorganization Transactions are not
consummated, each party agrees to maintain the confidentiality of all
information it obtained concerning each other party by reason of, or in
connection with the transactions contemplated by, this Agreement, except to any
extent disclosure may be required by law.
4.7 Records Retention and Availability; Confidentiality. The parties
shall retain their respective records in accordance with legal requirements and
existing policy, and each party shall
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make available to any other party such records as such other party may
reasonably require for purposes of preparing tax returns and financial
statements and for any other reasonable purpose. Nonpublic or other
confidential information made available to any party under this Section will be
kept confidential by it except to any extent disclosure may be required by law.
SECTION 5.
CONDITIONS
The obligation of each party to consummate the Reorganization
Transactions is subject to the conditions listed below. Each of such
conditions (other than legal or regulatory requirements) may be waived by any
party, and any unfulfilled condition shall be deemed waived if the transaction
referred to in Section 1.1(a) is consummated. Upon consummation of that
transaction, all of the following conditions shall be deemed to have been
satisfied or waived as to each other Reorganization Transaction.
5.1 Regulatory and Other Consents and Approvals. All notifications
to, and consents, approvals and authorizations of, regulatory authorities or
third persons required with respect to the consummation of the Reorganization
Transactions shall have been duly made or obtained and shall be in full force
and effect, and no such approval or authorization shall be conditioned in such
a manner as would materially and adversely affect the business of the parties
following such consummation.
5.2 Representations, Warranties and Covenants. The representations
and warranties of each other party to this Agreement shall be true and correct
in all material respects on the Reorganization Date, as if made on that Date;
each such other party shall have complied with all of its agreements and
covenants to have been complied with by it prior to the consummation of the
Reorganization Transactions; and each such other party shall have delivered a
certificate of its chief executive and financial officers to that effect.
5.3 Shareholder Approval. The shareholders of each party hereto
shall have duly approved the Reorganization Transactions and the Optional
Transactions to the extent required by the Louisiana Business Corporation Law;
and such approval by the shareholders of Cameron and Mercury shall have been by
a vote of not less than 80% of the total voting power of each.
5.4 Release; No Adverse Proceedings. There shall be no pending or
threatened proceeding to enjoin or prohibit any of the Reorganization
Transactions or to alter the same or obtain damages with respect thereto or
with respect to the business or operations of any party, including (without
limitation) any demand for action or threatened action by shareholders of
Cameron or Mercury, directly or derivatively; and each such shareholder shall
have released
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Cameron and Mercury from any such demand or action by an instrument
satisfactory to Cameron and Mercury.
5.5 Tax Matters. The parties shall have received a private letter
ruling from the Internal Revenue Service with respect to the transactions
contemplated by Sections 1.1(a) and 1.1(b) (the "Spin-Off Transactions"), and
an opinion of tax counsel with respect to the transaction contemplated by
Section 1.1(c) (the "Merger"), in form and substance satisfactory to them, to
the combined effect that the Spin-Off Transactions qualify as tax-free
transactions under Section 368(a)(1)(D) and Section 355 of the Code, and that
the Merger qualifies as a reorganization under Section 368(a)(1)(A) of the
Code.
5.6 Accounting Matters. The independent accountants of Mercury shall
not have taken the position that the Mergers do not qualify for pooling-of-
interests or "as if" pooling-of-interests accounting treatment under generally
accepted accounting principles or the accounting rules and regulations of the
Securities and Exchange Commission.
5.7 Fairness Opinions. Cameron and Mercury shall each have received
an opinion from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, CPA, A Professional Corporation, dated as of
September 19, 1996, in form reasonably satisfactory to the recipient, to the
effect that the terms of the Reorganization Transactions are fair to its
shareholders from a financial point of view, and such opinion shall not have
been withdrawn.
5.8 Refinancing. A commitment to refinance the debt of CTC
Financial, Inc., a subsidiary of CTC, shall have been issued and shall be to
the effect described in Schedule 5.8.
5.9 Tax and Benefits Sharing. The parties shall have entered into an
agreement or agreements satisfactory to them containing provisions for the
sharing of tax and employee benefits liabilities following consummation of the
transactions contemplated by this Agreement.
5.10 Restriction Agreements. Each shareholder of Cameron shall have
(i) entered into an agreement with Mercury not to sell or otherwise transfer,
for a period of two years after the Reorganization Date, shares of Newco
distributed to such shareholder in the Spin-Off or shares of Mercury issued to
such shareholder pursuant to the Joint Agreement (or in any reclassification,
stock split or stock dividend with respect to any such shares) unless Mercury
and Newco are first provided with an opinion of qualified tax counsel,
satisfactory to each of them, to the effect that such sale or transfer will not
jeopardize the tax-free nature of the Reorganization Transactions, and (ii)
represented to Cameron and Mercury, if deemed necessary by either of them with
respect to any exemption from registration relied upon by either of them in
connection with Reorganization Transactions, that such shareholder (a) will
acquire such shares of Mercury and Newco for investment and not for
distribution in violation of federal or state securities laws, and (b) will not
offer, sell, transfer or encumber such shares in violation of federal or state
securities
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laws; and each shareholder shall have made such further representations as
shall be necessary or desirable in connection with any such exemption from
registration.
SECTION 6.
ALLOCATION OF ASSETS, OBLIGATIONS AND LIABILITIES;
INDEMNIFICATION
6.1 Survival of Representations and Warranties. The representations
and warranties of the parties shall survive the Reorganization Transactions and
Optional Transactions to the extent (and, except as may otherwise be provided
in Section 8.3, only to the extent) they are relevant to the indemnification
and adjustment provisions of this Section 6 and Section 7.
6.2 Allocation of Obligations and Liabilities. Following the
Reorganization Date, the liabilities and obligations of each party as of the
completion of the Reorganization Transactions on the Reorganization Date,
direct or indirect, fixed or contingent, known or unknown, will be discharged
as follows: (a) those reflected in the June 30 Balance Sheet of a party or that
arise in accordance with such party's contracts referred to in Section 3.9
shall be discharged by that party (or its successor by merger in the event it
is merged into another party pursuant to the Reorganization Transactions or
Optional Transactions), except that the liabilities and obligations of Cameron
shall be assumed and discharged by Newco as and to the extent provided in the
Asset Transfer Agreement (for which assumption and discharge CTC and ETC bind
themselves in solido with Newco); and (b) all other liabilities and obligations
existing as of the completion of the Reorganization Transactions on the
Reorganization Date, including those that were unknown or contingent or
otherwise were not reflected on the June 30 Balance Sheet and do not arise in
accordance with the contracts of a party referred to in Section 3.9 shall be
discharged in accordance with the following principles:
(i) Any such obligation or liability that pertains exclusively
to the wireline telephone business ("Wireline Business") is intended, as among
the parties hereto, to be borne by Newco or its then subsidiaries.
(ii) Any such obligation or liability that pertains exclusively
to the wireless communications business ("Wireless Business") is intended, as
among the parties hereto, to be borne by Mercury or its then subsidiaries.
(iii) Any such obligation or liability that pertains both to
the Wireline Business and the Wireless Business is to be borne as provided in
Section 6.2(i) to the extent it pertains to the Wireline Business and as
provided in Section 6.2(ii) to the extent it pertains to the Wireless Business.
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(iv) If it cannot be readily determined whether such an
obligation or liability pertains to the Wireline Business or the Wireless
Business, then the following assumptions will apply: (i) obligations and
liabilities of Cameron, CTC, and ETC pertain to the Wireline Business; and (ii)
obligations and liabilities of MCTC, MCK, Mercury, and Miss One pertain to the
Wireless Business.
(v) Notwithstanding the foregoing, (a) any obligation or
liability of Cameron to indemnify its officers and directors against, and pay
their expenses in connection with, claims made by or against them in their
capacities as such for acts taken in such capacities through the consummation
of the Reorganization Transactions shall be borne by Newco; and (b) any
obligation or liability that pertains to the offer or sale of any security in
connection with the Reorganization Transactions or to the Joint Information
Statement shall be borne as follows: (1) if the obligation or liability arises
from the failure to register any security or to register any transaction
pertaining to a security, such obligation or liability shall be borne by Newco
if the security is common stock of Newco or the transaction involves the common
stock of Newco (such as, without limitation, the Spin-Off), or by Mercury if
the security is common stock of Mercury or the transaction involves the common
stock of Mercury, unless such failure to register arises solely because of a
misstatement or omission in disclosure, in which event any obligation or
liability therefrom shall be borne as set forth in the following clause (2);
and (2) if the obligation or liability arises from a misstatement or omission
of material fact then it shall be borne by Newco to the extent the misstatement
or omission related to Newco or to Cameron, or by Mercury to the extent the
misstatement or omission related to Mercury. Disclosures relating to the
business and affairs of Mercury on a pro forma basis as if the Reorganization
Transactions had been consummated will for the foregoing purpose be deemed to
relate to Cameron to the extent they involve the business and affairs of Newco,
Cameron, CTC, ETC, and/or MCTC, and to Mercury otherwise.
6.3 Indemnification.
(a) Subsequent to the consummation of the Reorganization
Transactions, obligations and liabilities will be allocated, as among the
parties hereto, as provided in Section 6.2. If, following the Reorganization
Date, a third party attempts to compel any party (or its successor) to bear any
obligation or liability other than in accordance with Section 6.2, then such
party shall, following the Reorganization Date, be indemnified by Newco (to the
extent it or its subsidiaries is to bear the obligation or liability in
accordance with Section 6.2) or by Mercury (to the extent it or its
subsidiaries is to bear the obligation or liability in accordance with Section
6.2). Such indemnification will include undertaking the defense of the
indemnified party.
(b) A party entitled to indemnification pursuant to Section
6.3(a) ("indemnified party") will give prompt notice of the existence of any
matter or claims as to which indemnification is provided to the party obligated
to provide indemnification ("indemnifying
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party"), but the failure to give or any delay in giving such notice shall not
prejudice the claim for indemnification except to the extent the indemnifying
party is actually prejudiced in connection with such indemnification by such
failure or delay. The indemnifying party shall defend against such claim
through counsel selected by it (and at its expense), and the indemnified party
may participate in the defense through counsel of its choosing (and at its
expense unless the indemnifying party fails to provide, or to continue
providing, such defense). The indemnified party shall not seek indemnification
for any settlement effected without the consent of the indemnifying party
unless such consent is withheld wholly without a reasonable basis.
(c) Each party hereto (an "indemnifying party") shall
indemnify each other party hereto (an "indemnified party") for all losses,
costs and expenses (including reasonable attorney's fees and expenses) incurred
by the indemnified party by reason of any breach by the indemnifying party of
any covenant that is to be performed by the indemnifying party subsequent to
the consummation of the Reorganization Transactions.
6.4 Allocation of Assets. The parties intend their assets, including
(without limitation) any contingent or unknown assets, to be allocated in a
manner comparable to that provided in Section 6.3, mutatis mutandis.
6.5 Licenses. If by reason of the Reorganization Transactions or
Optional Transactions a party is or would be deprived of the use of any asset
of another party of which it had use prior to the Reorganization Transactions
or Optional Transactions and which remains necessary to its intended business
following such Transactions, then the party entitled to such asset following
the Reorganization Transactions shall, upon request from such deprived party,
license or otherwise make available to the deprived party the use of such asset
on substantially comparable terms as existed prior to the Reorganization
Transactions and Optional Transactions but only to the extent such use remains
necessary to the intended business of the deprived party following the
Reorganization Transactions.
SECTION 7.
ADJUSTMENTS
7.1 Exclusive Remedy. An adjustment in accordance with this Section
7 will, following the consummation of the Reorganization Transactions, be the
exclusive remedy of a party by reason of the breach of any other party or any
of its representations or warranties in this Agreement.
7.2 Adjustment of Exchange Ratio. The ratio by which shares of
Cameron are exchanged into shares of Mercury pursuant to the Joint Agreement
("Exchange Ratio") has been set by the Boards of Directors of Cameron and
Mercury based in part on the correctness in all
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material respects of all of the representations and warranties of the parties
set forth in this Agreement. If it becomes apparent to the Board of Directors
of Mercury that any of such representations and warranties has been breached in
any material respect then such Board may (but shall not be required to)
determine to adjust the Exchange Ratio in accordance with this Section 7,
provided that no adjustment will be made unless it changes the Exchange Ratio
by more than five percent.
7.3 Adjustment. If the Board of Directors of Mercury determines to
make an adjustment, the Exchange Ratio shall be adjusted to that ratio which,
in the opinion of the Board of Directors, based on such financial advice as it
may deem relevant to consider (the expense of which shall be borne by Mercury),
would have been fair to the shareholders of Mercury and the shareholders of
Cameron had all incorrectnesses, both positive and negative, that became known
in such representations and warranties been known as of the Reorganization
Date, but otherwise not taking into account any events or transactions
following the Reorganization Date. The adjustment to the Exchange Ratio so
determined, if any, shall be made by the issuance of an appropriate number of
additional shares of Mercury to the persons who held the shares of Cameron or
Mercury, as the case may be, immediately prior to the consummation of the
Reorganization Transactions. The adjustment shall be calculated as if all of
the shares of Mercury common stock outstanding immediately following the
Reorganization Date (including those issuable to shareholders of Cameron
pursuant to the Joint Agreement), or any shares into which such shares may have
by then been reclassified, were still outstanding on the payment date for such
adjustment, but any holder entitled to receive the adjustment who has by such
payment date converted any such shares or reclassified shares into shares of
any other class of Mercury shall have his adjustment reduced by the proportion
of his shares that have been so converted. If on the payment date for the
adjustment there is outstanding any class of Mercury common stock other than
the class in which the adjustment is being made, then (i) a reverse stock split
will be effected in the class of Mercury common stock in which the adjustment
is being made and/or (ii) a stock split will be effected or a stock dividend
paid with respect to the shares of each other then outstanding class of Mercury
common stock, so that the proportionate equity represented by the shares of
each such other class will not be reduced by the issuance of additional shares
in connection with any adjustment made pursuant to this Section.
7.4 Limitation Date; Restriction on Issuance of Shares. No
adjustment pursuant to Section 7 shall be made after the second anniversary of
the Reorganization Date. Until such anniversary no additional shares shall be
issued of the same class held by the shareholders of Mercury immediately
following the Reorganization Transactions except pursuant to this Section 7 or
in accordance with any stock split or stock dividend and, if Mercury wishes to
issue additional shares not permitted by this prohibition, it shall create an
additional class or classes for that purpose (and in that event shall
reclassify the class held by the shareholders of Mercury immediately following
the Reorganization Transactions into a separately designated class which shall
be governed by the restrictions of this Section 7.4).
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SECTION 8.
TERMINATION
8.1 Termination. Notwithstanding any other provision of this
Agreement or the Ancillary Agreements and notwithstanding the approval of this
Agreement and the Ancillary Agreements by the shareholders of the parties, as
applicable, this Agreement and the Ancillary Agreements may be terminated and
the Reorganization Transactions abandoned at any time prior to the consummation
of the Asset Transfer Agreement:
(a) By mutual consent of the Boards of Directors of Mercury
and Cameron;
(b) By the Board of Directors of a party in the event of a
material breach by any other party of any representation, warranty, covenant or
agreement of such other party contained herein which would result in the
failure to satisfy the closing condition set forth in Section 5.2 of this
Agreement;
(c) By the Board of Directors of any party in the event that
the Reorganization Transactions shall not have been consummated by October 31,
1996;
(d) By the Board of Directors of any party in the event (i)
any approval of any governmental or other regulatory authority required for
consummation of the Reorganization Transactions shall have been denied by such
authority, or (ii) the shareholders of Mercury or Cameron fail to have approved
this Agreement and the Reorganization Transactions, as applicable, and the
consummation of the transactions contemplated hereby and thereby, as
applicable, to the extent required by law and by the provisions of any
governing instruments; or
(e) By the Board of Directors of a party in the event that any
of the conditions precedent to the obligation of such party to consummate the
Reorganization Transactions cannot be satisfied or fulfilled on or before
October 31, 1996 (other than by reason of a breach by the party seeking to
terminate).
8.2 Effect of Termination. In the event of the termination of this
Agreement and the Ancillary Agreements pursuant to Section 8.1 of this
Agreement, this Agreement and the Ancillary Agreements shall become void and
have no effect and the parties will be relieved of all obligations and
liabilities under this Agreement and the Ancillary Agreements, except that (i)
the provisions of the last sentence of Section 4.6 and the provisions of
Section 10 of this Agreement shall survive any such termination and
abandonment, (ii) a termination pursuant to Section 8.1(b), 8.1(c) or 8.1(e) of
this Agreement shall not relieve a breaching party from liability for any
breach
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giving rise to such termination, and (iii) the parties shall remain obligated
under, and liable for any breach of, any of the provisions of this Agreement
that survive its termination.
8.3 Survival of Representations, Warranties and Covenants. The
respective representations, warranties, obligations, covenants and agreements
of the parties shall not survive the Reorganization Transactions except for (i)
this Section 8.3, Section 1.2 (which shall survive for 90 days following the
Reorganization Date), Section 2.3, Section 4.7, Section 6, Section 7, and
Section 9 of this Agreement, and (ii) the obligations, covenants and agreements
set forth in the Ancillary Agreements; provided that no such representations,
warranties, obligations, covenants or agreements shall be deemed to be
terminated or extinguished so as to deprive any party (or any director, officer
or controlling person thereof) of any defense in law or equity which otherwise
would be available against the claims of any person, including, without
limitation, any shareholder or former shareholder of any party, the aforesaid
representations, warranties, obligations, covenants, and agreements being
material inducements to consummation by the parties of the transactions
contemplated hereby.
SECTION 9.
MISCELLANEOUS
9.1 Expenses. Except pursuant to Section 6.3 or Section 8.2 of this
Agreement, each of the parties shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial or
other consultants, appraisers, accountants and counsel except that expenses of
the financial advisors identified in Section 5.7 shall be borne by Cameron and
Mercury if the Reorganization Transactions are not consummated, or by Mercury
if such Transactions are consummated.
9.2 Brokers and Finders. Each of the parties represents and warrants
that neither it nor any of its 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 this Agreement or the
transactions contemplated hereby. In the event of a claim by any broker or
finder based upon its representing or being retained by or allegedly
representing or being retained by any party, such party agrees to indemnify and
hold the other parties harmless of and from such claim.
9.3 Entire Agreement. Except as otherwise expressly provided herein,
this Agreement and the Ancillary Agreements contain the entire agreement among
the parties with respect to the transactions contemplated hereunder and
thereunder, and such agreements supersede all prior arrangements or
understanding with respect thereto, written or oral. There are no
representations or warranties of the parties except as expressly set forth
herein, all others being expressly disclaimed. The terms and conditions of
this Agreement and the Ancillary Agreements shall
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inure to the benefit of and be binding upon the parties and their respective
successors. Nothing in this Agreement or the Ancillary Agreements, expressed
or implied, is intended to confer upon any party, other than the parties or
their respective successors, any rights, remedies, obligations or liabilities
under or by reason of this Agreement or the Ancillary Agreements except for the
warranty and representation of Mercury in Section 2.3, which shall inure to the
benefit of the shareholders of Cameron, and except for the right of
shareholders of Cameron to receive the merger consideration under the Joint
Agreement.
9.4 Amendments. To the extent permitted by law, this Agreement and
the Ancillary Agreements may be amended by a subsequent writing signed by each
of the parties upon the approval of the Boards of Directors of such parties,
either before or after shareholders of the parties have approved this
Agreement; provided, however, that the provisions of this Agreement and the
Joint Agreement relating to the manner or basis in which shares of Cameron
common stock will be exchanged for Mercury common stock shall not be amended
without the requisite approval of the holders of the issued and outstanding
shares of Cameron and Mercury entitled to vote thereon. The parties may,
without approval of their respective Boards of Directors, make such technical
changes to this Agreement or the Ancillary Agreements, not inconsistent with
the purposes hereof and thereof, as may be required to effect or facilitate any
governmental approval or acceptance of the Reorganization Transactions or
Optional Transactions or of this Agreement or the Ancillary Agreements or to
effect or facilitate any filing or recording required for the consummation of
any of the transactions contemplated hereby or thereby, or for any other
purpose.
9.5 Waivers. Each party shall, as to such party's rights hereunder,
have the right (i) to waive any default in the performance of any term of this
Agreement or any Ancillary Agreement by any other party, (ii) to waive or
extend the time for the compliance or fulfillment by any other party of any and
all of its obligations under this Agreement or any Ancillary Agreement, and
(iii) to waive any or all of the conditions precedent to the obligations of
such party under this Agreement or any Ancillary Agreement.
9.6 No Assignment. None of the parties may assign any of its rights
or obligations under this Agreement or the Ancillary Agreements to any other
persons, and any such purported assignment shall be deemed null and void.
9.7 Notices. All notices or other communications which are required
or permitted hereunder shall be in writing and sufficient if delivered by hand,
by facsimile transmission or by registered or certified mail, postage pre-paid,
to the chief executive officer of each party at the address indicated and shall
be deemed to have been delivered as of the date so delivered:
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If to Mercury, MCTC, MCK, or Miss One, to it at:
CM Tower, Suite ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Attention: Chief Executive Officer)
If to Cameron, Newco, CTC or ETC, to it at:
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Attention: Chief Executive Officer)
9.8 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Louisiana without regard to the
conflict of laws principles thereof.
9.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute one and the same instrument.
9.10 Captions. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf and attested by officers thereunto duly authorized all
as of the day and year first above written.
CAMERON COMMUNICATIONS
CORPORATION
ATTEST:
By:
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-------------------------------
Secretary
MERCURY, INC.
ATTEST:
By:
-------------------------------------
-------------------------------
Secretary
MERCURY CELLULAR TELEPHONE
COMPANY
ATTEST:
By:
-------------------------------------
-------------------------------
Secretary
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MERCURY CELLULAR OF KANSAS, INC.
ATTEST:
By:
-------------------------------------
-------------------------------
Secretary
MISSISSIPPI ONE CELLULAR TELEPHONE
COMPANY
ATTEST:
By:
-------------------------------------
-------------------------------
Secretary
CCC HOLDING COMPANY
ATTEST:
By:
-------------------------------------
-------------------------------
Secretary
CAMERON TELEPHONE COMPANY
ATTEST:
By:
-------------------------------------
-------------------------------
Secretary
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▇▇▇▇▇▇▇▇▇ TELEPHONE COMPANY
ATTEST:
By:
-------------------------------------
-------------------------------
Secretary
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