EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
SHARED TECHNOLOGIES CELLULAR, INC.
(a Delaware Corporation)
AND
SATX, Inc.
(a Nevada Corporation)
Dated as of November 14, 2000
TABLE OF CONTENTS
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ARTICLE I
THE MERGER
1.1. The Merger.........................................................1
1.2. Conversion of SATX Common Stock....................................2
1.3. Effect on STCL Common Stock........................................3
1.4. Treasury Stock.....................................................3
1.5. Effect on Options, Warrants and Convertible Securities.............3
1.6. Dissenting Shares..................................................4
1.7. Exchange of Shares; Exchange Procedures............................5
1.8. Name...............................................................8
1.9. Certificate of Incorporation of the Surviving Corporation..........8
1.10. By-Laws of the Surviving Corporation...............................8
1.11. Directors and Officers of the Surviving Corporation................8
1.12. Closing............................................................8
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1. Representations and Warranties of SATX.............................9
(a) Due Organization, Good Standing and Corporate Power.........9
(b) Authorization and Validity of Agreement.....................9
(c) Capitalization.............................................10
(d) Subsidiaries...............................................10
(e) Consents and Approvals; No Violations......................10
(f) SATX Reports and Financial Statements......................11
(g) Absence of Certain Changes.................................12
(h) Real Property..............................................13
(i) Leases.....................................................13
(j) Compliance with Laws; Permits..............................13
(k) Litigation.................................................13
(l) Government Authorization...................................14
(m) Employee Benefit Plans.....................................14
(n) Insurance..................................................15
(o) Disclosure Documents.......................................15
(p) Broker's or Finder's Fee...................................16
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(q) Environmental Liability....................................16
2.2. Representations and Warranties of STCL............................16
(a) Due Organization; Good Standing and Corporate Power........16
(b) Authorization and Validity of Agreement....................17
(c) Capitalization.............................................17
(d) Subsidiaries...............................................17
(e) Consents and Approvals; No Violations......................18
(f) STCL Reports and Financial Statements......................18
(g) Absence of Certain Changes.................................19
(h) Real Property..............................................20
(i) Leases.....................................................20
(j) Compliance with Laws; Permits..............................20
(k) Litigation.................................................21
(l) Government Authorization...................................21
(m) Employee Benefit Plans.....................................21
(n) Insurance..................................................23
(o) Contracts and Commitments..................................23
(p) Disclosure Documents.......................................23
(q) Broker's or Finder's Fee...................................24
(r) Environmental Liability....................................24
ARTICLE III
ADDITIONAL AGREEMENTS
3.1. Access to Information Concerning Properties and Records...........24
3.2. Confidentiality...................................................25
3.3. Registration Statement............................................25
3.4. Conduct of the Business Pending the Effective Time................26
3.5. STCL and SATX Stockholders Meeting; Joint Proxy Statement;
Form S-4........................................................27
3.6. Reasonable Best Efforts...........................................28
3.7. Supplemental Disclosure...........................................28
3.8. Takeover Statutes.................................................28
ARTICLE IV
CONDITIONS PRECEDENT TO MERGER
4.1. Conditions Precedent to Obligations of SATX and STCL..............29
(a) Approval by SATX's Shareholder.............................29
(b) Approval by STCL's Stockholder.............................29
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(c) Registration Statement.....................................29
(d) Other Approvals............................................29
(e) Injunction.................................................29
(f) Statutes...................................................29
(g) Investment.................................................29
4.2. Conditions Precedent to Obligations of STCL.......................30
(a) Accuracy of Representations and Warranties.................30
(b) Performance by SATX........................................30
(c) Legal Opinion..............................................30
(d) Opinion of Financial Advisor...............................30
4.3. Conditions Precedent to Obligation of SATX........................30
(a) Accuracy of Representations and Warranties.................30
(b) Performance by STCL........................................30
(c) Legal Opinion..............................................31
(d) Opinion of Financial Advisor...............................31
ARTICLE V
TERMINATION AND ABANDONMENT
5.1. Termination.......................................................31
5.2. Effect of Termination.............................................32
ARTICLE VI
MISCELLANEOUS
6.1. Fees and Expenses.................................................32
6.2. Negotiations......................................................32
6.3. Survival of Representations and Warranties........................35
6.4. Extension; Waiver.................................................35
6.5. Public Announcements..............................................35
6.6. Notices...........................................................35
6.7. Entire Agreement; Severability....................................36
6.8. Binding Effect; Benefit; Assignment...............................37
6.9. Amendment and Modification........................................37
6.10. Further Actions...................................................37
6.11. Counterparts......................................................37
6.12. Applicable Law....................................................37
6.13. "Person" Defined..................................................37
6.14. Terms Defined in this Agreement...................................38
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November 14, 2000
("Agreement"), by and between SATX, Inc., a Nevada corporation ("SATX"), and
Shared Technologies Cellular, Inc., a Delaware corporation ("STCL").
WHEREAS, the respective Boards of Directors of SATX and STCL have
determined that it is in the best interests of their respective stockholders for
SATX to merge with and into STCL (the "Merger"), upon the terms and subject to
the conditions set forth in this Agreement; and
WHEREAS, the Board of Directors of SATX has, in light of and upon the
terms and subject to the conditions set forth herein, resolved to approve and
adopt this Agreement and the transactions contemplated hereby and to recommend
approval and adoption by the stockholders of SATX of this Agreement and the
Merger.
WHEREAS, the Board of Directors of STCL has, in light of and upon the
terms and subject to the conditions set forth herein, resolved to approve and
adopt this Agreement and the transactions contemplated hereby and to recommend
approval and adoption by the stockholders of STCL of this Agreement and the
Merger.
WHEREAS, the terms and conditions of the Merger and the mode of
carrying the same into effect are set forth below.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties, conditions and agreements herein
contained and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
THE MERGER
1.1. The Merger.
(a) Subject to the terms and conditions of this
Agreement, at the time of the Closing, a certificate of merger (the "Certificate
of Merger") shall be duly prepared, executed and acknowledged by SATX and STCL
in accordance with the Nevada Revised Statutes (the "NRS") and the General
Corporation Law of the State of Delaware (the "DGCL") and shall be filed,
together with all other filings or recordings required by the NRS and the DGCL
to be made in connection with the Merger, on the Closing Date. The Merger shall
become effective
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at such time as the Certificate of Merger is duly filed with the Secretary of
State of the State of Delaware, or at such time as is specified in the
Certificate of Merger filed with the Secretary of State of the State of Delaware
as the effective time of the Merger, in accordance with the provisions and
requirements of the DGCL. The date and time when the Merger shall become
effective is hereinafter referred to as the "Effective Time".
(b) At the Effective Time, SATX shall be merged with and
into STCL whereupon the separate corporate existence of SATX shall cease, and
STCL shall continue as the surviving corporation under the laws of the State of
Delaware (the "Surviving Corporation").
(c) Immediately prior to the Effective Time, STCL shall
raise a total of $30 million through the sale of shares of Common Stock of STCL,
$0.01 par value ("STCL Common Stock") or debt securities of STCL (the
"Investment").
(d) From and after the Effective Time, the Merger shall
have the effects set forth in Chapter 92A of the NRS and Section 259 of the
DGCL.
1.2. Conversion of SATX Common Stock.
(a) At the Effective Time, every four shares of common
stock of SATX, $0.001 par value (the "SATX Common Stock") issued and outstanding
immediately prior to the Effective Time, except for shares of SATX owned by SATX
as treasury stock and any SATX Dissenting Shares, shall, by virtue of the Merger
and without any action on the part of the holder thereof, be converted into the
right to receive one share (the "Exchange Ratio") of fully paid and
nonassessable common stock, par value $.01 per share (the "Surviving Corporation
Common Stock") of the Surviving Corporation (the "SATX Consideration");
provided, however, that no more than 17 million shares of the Surviving
Corporation's Common Stock may be issued in connection with the conversion of
SATX Common Stock pursuant to this Section 1.2(a).
(b) All of the shares of SATX Common Stock converted into
the right to receive the SATX Consideration pursuant to Section 1.2(a) shall no
longer be outstanding and shall automatically be cancelled and shall cease to
exist as of the Effective Time, and each certificate (each a "Certificate")
previously representing any such shares of SATX Common Stock shall thereafter
represent only the right to receive (i) a certificate representing the number of
whole shares of Surviving Corporation Common Stock and (ii) cash in lieu of
fractional shares into which the shares of SATX Common Stock represented by such
Certificate have been converted pursuant to this Section 1.2 and Section 1.7(e).
Certificates previously representing shares of SATX Common Stock shall be
exchanged for certificates representing whole shares of Surviving Corporation
Common Stock and cash in lieu of fractional shares issued in
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consideration therefor upon the surrender of such Certificates in accordance
with Section 1.7, without any interest thereon.
1.3. Effect on STCL Common Stock.
At the Effective Time, each share of STCL Common Stock issued
and outstanding immediately prior to the Effective Time (except for STCL
Dissenting Shares) shall continue to remain outstanding.
1.4. Treasury Stock.
Notwithstanding anything in this Agreement to the contrary, at
the Effective Time, all outstanding shares of SATX Common Stock that are owned
by SATX as treasury stock or any wholly-owned subsidiary thereof by virtue of
the Merger and without any action on the part of the holders thereof, shall no
longer be outstanding and shall be canceled and retired and shall cease to
exist, and each holder of a certificate representing any such shares of SATX
Common Stock shall thereafter cease to have any rights with respect to such
shares of SATX Common Stock and no consideration shall be delivered in exchange
therefor. At the Effective Time all outstanding shares of STCL Common Stock that
are owned by STCL as treasury stock or any wholly-owned subsidiary thereof,
shall remain outstanding as treasury stock of STCL or as owned by such
wholly-owned subsidiary.
1.5. Effect on Options, Warrants and Convertible Securities.
(a) At the Effective Time, each option or warrant granted
by SATX to purchase shares of SATX Common Stock which is outstanding and
unexercised immediately prior to the Effective Time shall be assumed by STCL and
converted into an option or warrant to purchase shares of STCL Common Stock in
such amount and at such exercise price as provided below and otherwise having
the same terms and conditions as are in effect immediately prior to the
Effective Time (except to the extent that such terms, conditions and
restrictions may be altered in accordance with their terms as a result of the
transactions contemplated hereby):
(i) the number of shares of STCL Common Stock
to be subject to the new option or warrant shall be equal to the product of (x)
the number of shares of SATX Common Stock subject to the original option or
warrant and (y) the Exchange Ratio;
(ii) the exercise price per share of STCL Common
Stock under the new option or warrant shall be equal to (x) the exercise price
per share of the SATX Common Stock under the original option or warrant divided
by (y) the Exchange Ratio; and
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(iii) upon each exercise of options or warrants by
a holder thereof, the aggregate number of shares of STCL Common Stock
deliverable upon such exercise shall be rounded down, if necessary, to the
nearest whole share and the aggregate exercise price shall be rounded up, if
necessary, to the nearest cent.
The adjustments provided herein with respect to any options which are
"incentive stock options" (as defined in Section 422 of the Code) shall be
effected in a manner consistent with Section 424(a) of the Code.
(b) At the Effective Time, each option or warrant granted
by STCL to purchase shares of STCL Common Stock which is outstanding and
unexercised immediately prior to the Effective Time shall continue in full force
and effect and shall continue to be governed by the agreements by which they
were granted.
1.6. Dissenting Shares.
(a) Notwithstanding anything in this Agreement to the
contrary, STCL Common Stock which is issued and outstanding immediately prior to
the Effective Time and which is held by STCL stockholders who have not voted
such shares in favor of the Merger, who shall have delivered a written demand
for appraisal of such shares of STCL Common Stock in the manner provided in the
DGCL and who, as of the Effective Time, shall not have effectively withdrawn or
lost such right to appraisal ("STCL Dissenting Shares") shall entitle the
holders thereof only to such rights as are granted by Section 262 of the DGCL.
Each holder of STCL Dissenting Shares who becomes entitled to payment for such
shares pursuant to Section 262 of the DGCL shall receive payment therefor from
the Surviving Corporation in accordance with the DGCL; provided, however, that
if (i) any such holder of STCL Dissenting Shares shall have failed to establish
his/her entitlement to appraisal rights as provided in Section 262 of the DGCL,
(ii) any such holder of STCL Dissenting Shares shall have effectively withdrawn
his/her demand for appraisal of such shares of STCL Common Stock or lost his/her
right to appraisal and payment for his/her shares of STCL Common Stock under
Section 262 of the DGCL or (iii) neither any holder of STCL Dissenting Shares
nor the Surviving Corporation shall have filed a petition demanding a
determination of the value of all STCL Dissenting Shares within the time
provided in Section 262 of the DGCL, such holder or holders, as the case may be,
shall forfeit the right to appraisal of such shares and each such share shall
thereupon continue to remain outstanding as of the Effective Time.
(b) Notwithstanding anything in this Agreement to the
contrary, SATX Common Stock which is issued and outstanding immediately prior to
the Effective Time and which is held by SATX stockholders who have not voted
such shares in favor of the Merger, who shall have delivered a written demand
for appraisal of such shares of SATX Common Stock in the manner provided in the
NRS and who, as of the Effective Time, shall not have effectively withdrawn or
lost such right to appraisal ("SATX Dissenting Shares") shall not be
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converted into or represent a right to receive the SATX Consideration pursuant
to Article 1 hereof, but the holders thereof shall be entitled only to such
rights as are granted by Chapter 92A of the NRS. Each holder of SATX Dissenting
Shares who becomes entitled to payment for such shares pursuant to Chapter 92A
of the NRS shall receive payment therefor from the Surviving Corporation in
accordance with the NRS: provided, however, that if (i) any such holder of SATX
Dissenting Shares shall have failed to establish his/her entitlement to
appraisal rights as provided in Chapter 92A of the NRS, (ii) any such holder of
SATX Dissenting Shares shall have effectively withdrawn his/her demand for
appraisal of such shares of SATX Common Stock or lost his/her right to appraisal
and payment for his/her shares of SATX Common Stock under Chapter 92A of the NRS
or (iii) neither any holder of SATX Dissenting Shares nor the Surviving
Corporation shall have filed a petition demanding a determination of the value
of all SATX Dissenting Shares within the time provided in Chapter 92A of the
NRS, such holder or holders, as the case may be, shall forfeit the right to
appraisal of such shares and each such share shall thereupon be deemed to have
been converted, as of the Effective Time, into and represent the right to
receive from the Surviving Corporation the SATX Consideration with respect to
such shares, without interest thereon, as provided in Article 1 hereof.
(c) Each of SATX and STCL shall give the other (i) prompt
notice of any written demands for appraisal, withdrawals of demands for
appraisal and any other instruments served pursuant to Chapter 92A of the NRS
received by SATX or pursuant to Section 262 of the DGCL received by STCL and
(ii) the opportunity to direct all negotiations and proceedings with respect to
demands for appraisal under Chapter 92A of the NRS or Section 262 of the DGCL.
SATX and STCL shall not, except with the prior written consent of the other
party, voluntarily make any payment with respect to any demands for appraisal or
offer to settle or settle any such demands.
1.7. Exchange of Shares; Exchange Procedures.
(a) As of the Effective Time, STCL shall deposit with a
bank or trust company designated by SATX and STCL (the "Exchange Agent"), for
the benefit of the holders of shares of SATX Common Stock, for exchange in
accordance with this Section 1.7, through the Exchange Agent, certificates
representing the shares of STCL Common Stock issuable and the cash payable under
Section 1.7(e) (such shares of STCL Common Stock, together with any dividends or
distributions with respect thereto and any amounts to be paid pursuant to
Section 1.7(e), being hereinafter referred to as the "Exchange Fund") in
exchange for outstanding shares of SATX Common Stock.
(b) As soon as reasonably practicable after the Effective
Time, the Exchange Agent shall mail to each holder of record of a Certificate or
Certificates which immediately prior to the Effective Time represented
outstanding shares of SATX Common Stock
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whose shares were converted pursuant to Article 1 into the right to receive the
SATX Consideration, (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Exchange Agent and shall be
in such form and have such other provisions as SATX and STCL may reasonably
specify) and (ii) instructions for effecting the surrender of the Certificates
in exchange for the SATX Consideration (plus cash in lieu of fractional shares,
if any, of SATX Common Stock as provided below). Upon surrender of a Certificate
for cancellation to the Exchange Agent, together with such letter of
transmittal, duly executed, the holder of such Certificate shall be entitled to
receive in exchange therefor a certificate representing that number of whole
shares of STCL Common Stock which such holder has the right to receive pursuant
to the provisions of this Article 1 (and cash in lieu of fractional shares) and
the Certificate so surrendered shall immediately be canceled. In the event of a
transfer of ownership of SATX Common Stock which is not registered in the
transfer records of SATX, a certificate representing the proper number of shares
of STCL Common Stock may be issued to a transferee if the Certificate formerly
representing such SATX Common Stock is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer and
by evidence that any applicable stock transfer taxes have been paid. Until
surrendered as contemplated by this Section 1.7, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the SATX Consideration that the holder thereof has
the right to receive in respect to such Certificate pursuant to the provisions
of this Article 1, certain dividends or other distributions, if any, in
accordance with Section 1.7(c) and cash in lieu of any fractional shares in
accordance with Section 1.7(e). No interest will be paid or will accrue on any
cash payable to holders of Certificates pursuant to the provisions of this
Article 1.
(c) No dividends or other distributions declared or made
after the Effective Time with respect to STCL Common Stock with a record date
after the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of STCL Common Stock issuable upon
surrender thereof and no cash payment in lieu of fractional shares shall be paid
to any such holder pursuant to subsection (e) below until the holder of record
of such Certificate shall surrender such Certificate. Subject to the effect of
applicable laws, following surrender of any such Certificate, there shall be
paid to the record holder of the certificates representing whole shares of STCL
Common Stock issued in exchange therefor, without interest, (i) at the time of
such surrender, the amount of any cash payable in lieu of a fractional share of
STCL Common Stock to which such holder is entitled pursuant to subsection (e)
below and the amount of dividends or other distributions with respect to such
whole shares of STCL Common Stock with a record date after the Effective Time
and a payment date prior to their date of issuance to such holder, and (ii) at
the appropriate payment date, the amount of dividends or other distributions
with a record date after the Effective Time but prior to surrender and a payment
date subsequent to surrender payable with respect to such whole shares of STCL
Common Stock. Notwithstanding anything in this Agreement to the
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contrary, STCL agrees that from and after the Effective Time it will treat the
shares of STCL Common Stock issuable in connection with the Merger as
outstanding for purposes of notice, quorum and voting.
(d) All shares of STCL Common Stock issued upon the
surrender for exchange of Certificates in accordance with the terms hereof
(including any cash paid pursuant to Section 1.7(c) or (e)) shall be deemed to
have been issued in full satisfaction of all rights pertaining to the shares of
SATX Common Stock. If, after the Effective Time, Certificates are presented to
the Surviving Corporation for any reason, they shall be canceled and exchanged
as provided in this Article 1.
(e) No Certificate or scrip representing fractional
shares of STCL Common Stock shall be issued upon the surrender for exchange of
Certificates, and such fractional share interests will not entitle the owner
thereof to vote or to any other rights of a stockholder of STCL. Each holder of
SATX Common Stock entitled to receive a fractional share of the Surviving
Corporation will receive in lieu thereof an amount in cash equal to the product
obtained by multiplying (A) the fractional share interest to which such former
holder (after taking into account all shares of SATX Common Stock held at the
Effective Time by such holder) would otherwise be entitled by (B) the closing
price for a share of STCL Common Stock as reported on the OTC Electronic
Bulletin Board on the first day shares of STCL Common Stock trade after the
Effective Time. As soon as practicable after the determination of the amount of
cash, if any, to be paid to holders of Certificates with respect to any
fractional share interests, the Exchange Agent shall make available such amounts
to such holders of Certificates subject to and in accordance with the terms of
Section 1.7(c).
(f) Any portion of the Exchange Fund which remains
undistributed to the former holders of the Certificates for 180 days after the
Effective Time shall be delivered to STCL, upon demand, and any holders of the
Certificates who have not previously complied with this Section 1.7 shall
thereafter look only to STCL for payment of their claim for the SATX
Consideration, and any cash in lieu of fractional shares of STCL Common Stock.
(g) Neither STCL nor the Exchange Agent shall be liable
to any former holder of shares of STCL Common Stock or SATX Common Stock, as the
case may be, for such shares (or dividends or distributions with respect
thereto) delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(h) If 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, of required by the
Surviving Corporation, the posting by such person of a bond in such reasonable
amount as the Surviving Corporation may direct as indemnity against any claim
that may be made against it with respect to such Certificate, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed Certificate the SATX
Consideration and, if
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applicable, any cash in lieu of fractional shares deliverable in respect thereof
pursuant to this Agreement.
1.8. Name. The name of the Surviving Corporation shall be
ShareTech, Inc.
1.9. Certificate of Incorporation of the Surviving Corporation.
The Certificate of Incorporation of STCL, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation.
1.10. By-Laws of the Surviving Corporation. The By-Laws of STCL, as
in effect immediately prior to the Effective Time, shall be the By-Laws of the
Surviving Corporation.
1.11. Directors and Officers of the Surviving Corporation. The Board
of Directors of the Surviving Corporation shall be as follows, (as well as three
outside directors to be appointed by the board):
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice Chairman
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
The Officers of the Surviving Corporation shall be as follows:
▇▇▇▇ ▇. ▇▇▇▇▇, President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Chief Financial Officer
1.12. Closing. The closing of the Merger (the "Closing") shall take
place at the offices of Schifino & ▇▇▇▇▇▇▇▇▇, P.A., One Tampa City Center, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, as soon as practicable after
the last of the conditions set forth in Article IV hereof is fulfilled or waived
(subject to applicable law), but in no event later than the fifth business day
thereafter, or at such other time and place and on such other date as SATX and
STCL shall mutually agree (the "Closing Date").
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1. Representations and Warranties of SATX. SATX hereby represents
and warrants to STCL as follows:
(a) Due Organization, Good Standing and Corporate Power.
Each of SATX and its Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, and each such corporation has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. Each of SATX and its Subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except in such jurisdictions
where the failure to be so qualified or licensed and in good standing would not
have a Material Adverse Effect on SATX. For the purposes of this Agreement,
"Material Adverse Effect" means a material adverse effect on the business,
properties, assets, liabilities, operations, results of operations, or condition
(financial or otherwise) of the Person (as defined in Section 6.13) and its
Subsidiaries taken as a whole. The term "Subsidiary" as used in this Agreement
refers to any Person in which SATX or STCL, as the case may be, owns any equity
interest and shall include all joint ventures. SATX has made available to STCL
true and complete copies of its Articles of Incorporation, as amended to date,
its By-Laws, as amended to date and copies of the minutes of its Board of
Directors and of committees of the Board of Directors (except as the same relate
to the transactions contemplated hereby). Except for capital stock of its
Subsidiaries, SATX does not own any stock, partnership or other equity interest
in, or any debt or equity securities of, any person.
(b) Authorization and Validity of Agreement. SATX has
full corporate power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
by SATX, and the consummation by it of the transactions contemplated hereby,
have been duly authorized and approved by its Board of Directors and no other
corporate action on the part of SATX is necessary to authorize the execution,
delivery and performance of this Agreement by SATX and the consummation of the
transactions contemplated hereby (other than the approval of this Agreement and
the Merger by the holders of a majority of the outstanding shares of SATX Common
Stock). This Agreement has been duly executed and delivered by SATX and is a
valid and binding obligation of SATX enforceable against SATX in accordance with
its terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors' rights generally and by general
equitable
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principles. SATX's Board of Directors, at meetings duly called and held, have,
subject to the provisions of Section 6.2 hereof, approved and adopted this
Agreement and the transactions contemplated hereby and authorized the execution
of this Agreement and resolved to recommend approval and adoption of this
Agreement and the Merger by its stockholders.
(c) Capitalization.
(i) The authorized capital stock of SATX
consists of 100,000,000 shares of common stock, $.001 par value, and 20,000,000
shares of preferred stock, $0.001 par value, of which no shares of preferred
stock are outstanding. As of the close of business on November 14, 2000,
73,371,392 shares of SATX Common Stock are issued and outstanding and 8,573,809
shares (based on the market price of the SATX Common Stock as of November 14,
2000 - see Schedule 2.1(c)) are reserved for issuance. All of the issued and
outstanding shares of SATX Common Stock have been validly issued and are fully
paid and nonassessable, and are not subject to, nor were they issued in
violation of, any preemptive rights. Set forth on Schedule 2.1(c) is a true and
correct summary of all outstanding options, warrants, rights, subscriptions or
claims to purchase SATX Common Stock and securities convertible into or
exchangeable for SATX Common Stock, contingent or otherwise, and the material
terms thereof.
(d) Subsidiaries. Schedule 2.1(d) lists all of SATX's
Subsidiaries and the percentage of the outstanding equity interests of each
Subsidiary owned by SATX. All of the outstanding shares of capital stock or
other equity interests, owned by SATX, of each of SATX's Subsidiaries have been
duly authorized and validly issued, are fully paid and nonassessable, are not
subject to, nor were they issued in violation of, any preemptive rights, and are
owned, of record and beneficially, by SATX free and clear of all liens, charges,
encumbrances, options, claims or security interests of any kind or nature
whatsoever. Except as set forth on Schedule 2.1(d), no shares of capital stock
of any of SATX's Subsidiaries are reserved for issuance and there are no
outstanding or authorized options, warrants, rights, subscriptions, claims of
any character, agreements, obligations, convertible or exchangeable securities,
stock appreciation, phantom stock, profit participation or other commitments,
contingent or otherwise, relating to the capital stock of any Subsidiary of
SATX, pursuant to which such Subsidiary is or may become obligated to issue any
shares of capital stock of such Subsidiary or any securities convertible into,
exchangeable for, or evidencing the right to subscribe for, any shares of such
Subsidiary. Except for the Subsidiaries listed on Schedule 2.1(d), SATX does not
own, directly or indirectly, any capital stock or other equity interest in any
Person.
(e) Consents and Approvals; No Violations. Assuming (i)
compliance with any requirements of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (the "Exchange
Act"), and any requirements of the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder (the
-11-
"Securities Act"), relating to the Joint Proxy Statement and the registration of
the Post Merger Common Stock to be issued to holders of SATX Common Stock, (ii)
the filing of the Certificate of Merger and other appropriate merger documents,
if any, as required by the FBCA and DGCL, and (iii) the approval of the Merger
by the holders of a majority of the outstanding shares of SATX Common Stock, the
execution and delivery of this Agreement by SATX and the consummation by SATX of
the transactions contemplated hereby will not: (1) violate any provision of the
Articles of Incorporation or By-Laws of SATX or any of SATX's Subsidiaries; (2)
violate any statute, ordinance, rule, regulation, order or decree of any court
or of any governmental or regulatory body, agency or authority applicable to
SATX or any of SATX's Subsidiaries, or by which any of their respective
properties or assets may be bound; (3) require any filing with, or permit,
consent or approval of, order or authorization of, registration, declaration or
the giving of any notice to, any governmental or regulatory body, agency or
authority; or (4) result in a violation or breach of, conflict with, constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation, payment or acceleration) under, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of SATX or any of SATX's Subsidiaries under
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, franchise, permit, agreement, lease, franchise agreement or
other instrument or obligation to which SATX or any of SATX's Subsidiaries is a
party, or by which it or any of their respective properties or assets may be
bound, excluding from the foregoing clauses (2), (3) and (4) filings, notices,
permits, consents and approvals the absence of which, and violations, breaches,
defaults, conflicts and liens which, in the aggregate, would not have a Material
Adverse Effect on SATX.
(f) SATX Reports and Financial Statements. Since April 4,
2000, SATX has filed all registration statements, prospectuses, schedules,
statements, forms, reports and documents with the Securities and Exchange
Commission (the "Commission") required to be filed by it pursuant to the federal
securities laws and the Commission's rules and regulations promulgated
thereunder, and, except to the extent revised or superseded by a subsequent
filing filed with the Commission prior to the date hereof, all forms,
registration statements, prospectuses, schedules, statements, reports and
documents filed with the Commission have complied in all material respects with
all applicable requirements of the federal securities laws and the Commission
rules and regulations promulgated thereunder. SATX has heretofore made available
to STCL true and complete copies of all forms, reports, registration statements
and other filings filed by SATX with the Commission since April 4, 2000 (such
forms, reports, registration statements and other filings, together with any
amendments thereto, are sometimes collectively referred to as "SATX's Commission
Filings"). As of their respective dates, except to the extent revised or
superseded by a subsequent filing filed with the Commission prior to the date
hereof, SATX's Commission Filings did 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 therein, in light of the circumstances under
which they were
-12-
made, not misleading. Each of the (i) consolidated balance sheets as of the end
of the fiscal years ended December 31, 1997, 1998 and 1999 and as of the end of
the fiscal quarters ended March 31, and June 30 of 2000, and (ii) the
consolidated statements of operations, consolidated statements of stockholders'
equity and consolidated statements of cash flows for the years ended December
31, 1997, 1998 and 1999 and for the six months ended June 30, 2000, as included
in SATX's Commission Filings, were all prepared in accordance with GAAP, as in
effect from time to time, applied on a consistent basis (except as may be
indicated therein or in the notes or schedules thereto) and fairly present in
all material respects the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the results of their
operations and changes in financial position for the periods then ended (subject
to normal year-end adjustments and the absence of notes in the case of any
unaudited interim financial statements, none of which individually or in the
aggregate had or could have a Material Adverse Effect).
(g) Absence of Certain Changes. Except for liabilities
incurred in connection with this Agreement or the transactions contemplated
hereby and except as previously disclosed in SATX's Commission Filings, SATX and
its Subsidiaries have (i) conducted their respective businesses in the ordinary
course, consistent with past practice, and (ii) since December 31, 1999, there
has not been:
(i) any event, occurrence or development which,
individually or in the aggregate, would have a Material Adverse Effect on SATX;
(ii) any declaration, setting aside or payment
of any dividend or other distribution with respect to any shares of SATX Common
Stock, or any repurchase, redemption or other acquisition by SATX or any of its
Subsidiaries of any outstanding shares of SATX Common Stock or any securities
convertible into SATX Common Stock, except as set forth on Schedule 2.1(g)(ii);
(iii) any amendment of any material term of SATX
Common Stock or any securities convertible into SATX Common Stock, other than as
contemplated by this Agreement;
(iv) any material transaction or commitment made,
or any contract, agreement or settlement entered into, by (or judgment, order or
decree affecting) SATX or any of its Subsidiaries relating to its assets or
business (including the acquisition or disposition of any material amount of
assets) or any relinquishment by SATX or any of its Subsidiaries of any contract
or other right, in either case, material to SATX and any of its Subsidiaries,
taken as a whole, other than transactions, commitments, contracts, agreements or
settlements (including without limitation settlements of litigation and tax
proceedings) in the ordinary course of business consistent with past practice
and those contemplated by this Agreement, except as set forth on Schedule
2.1(g)(iv);
-13-
(v) any change in any method of accounting or
accounting practices by SATX or any of its Subsidiaries, except for any such
change which is not material or which is required by reason of a concurrent
change in GAAP;
(h) Real Property. Each of SATX and its Subsidiaries has
good, valid and marketable title to its real property, subject to no
encumbrance, lien, charge or other restriction, except as set forth on Schedule
2.1(h).
(i) Leases. Schedule 2.1(i) contains an accurate and
complete description of the terms of each Lease ("Lease" shall mean each lease
pursuant to which SATX or any of its Subsidiaries leases any real or personal
property). To SATX's knowledge, each Lease is valid, binding and enforceable in
accordance with its terms and is in full force and effect. The leasehold estate
created by each Lease is free and clear of all encumbrances. Except for defaults
which individually or in the aggregate have not had and will not have a Material
Adverse Effect, there are no existing defaults by SATX or any of its
Subsidiaries under any of the Leases. No event has occurred, since June 1, 1999
(whether with or without notice, lapse of time or the happening or occurrence of
any other event), that would constitute a default under any Lease. Neither SATX
nor any of its Subsidiaries has received notice, or has any other reason to
believe, that any lessor under any Lease will not consent (where such consent is
necessary) to the consummation of the Merger without requiring any modification
of the rights or obligations of the lessee thereunder.
(j) Compliance with Laws; Permits. SATX and each of its
Subsidiaries are in material compliance with all applicable laws, regulations,
orders, judgments and decrees except where the failure to so comply would not
have a Material Adverse Effect on SATX. Since December 31, 1999, SATX has not
received any notice alleging non-compliance. SATX and each of its Subsidiaries
(a) has all permits, approvals and other authorizations ("Permits") necessary
for the conduct and operation of its businesses as currently conducted, and (b)
uses its assets in compliance with the terms of such Permits, except for any
Permits not obtained or any noncompliance which would not, individually or in
the aggregate, have a Material Adverse Effect.
(k) Litigation. Except as disclosed in SATX's Commission
Filings or as set forth in Schedule 2.1(k), there is no and, since December 31,
1999 there has been no, action, suit, proceeding at law or in equity, or any
arbitration or any administrative or other proceeding by or before (or to SATX's
knowledge any investigation by) any governmental or other instrumentality or
agency, pending, or, to SATX's knowledge, threatened, against or affecting SATX
or any of its Subsidiaries, or any of their properties or rights which could
have a Material Adverse Effect on SATX or any of its Subsidiaries or prevent or
delay the consummation of the Merger. There are no such suits, actions, claims,
proceedings or investigations pending or, to SATX's knowledge, threatened,
seeking to prevent or challenging the transactions
-14-
contemplated by this Agreement. Except as disclosed in SATX's Commission Filings
or in Schedule 2.1(k), neither SATX or any of its Subsidiaries is subject to any
judgment, order or decree entered in any lawsuit or proceeding which could have
a Material Adverse Effect on SATX or on the ability of SATX or any of its
Subsidiaries to conduct its business as presently conducted. For the purposes of
this Agreement, the term "knowledge" shall mean actual knowledge.
(l) Government Authorization. The execution, delivery and
performance by SATX of this Agreement and the consummation by SATX of the
transactions contemplated hereby require no action by or in respect of, or
filing with, any governmental body, agency, official or authority other than (i)
the filing of a Certificate of Merger in connection with the Merger in
accordance with the FBCA and the DGCL, (ii) compliance with any applicable
requirements of the Exchange Act, (iii) compliance with any applicable
requirements of the Securities Act, or (iv) other actions or filings which if
not taken or made would not, individually or in the aggregate, have a Material
Adverse Effect on SATX or prevent or materially delay SATX's consummation of the
Merger.
(m) Employee Benefit Plans.
(i) List of Plans. Set forth in Schedule 2.2(m) is an
accurate and complete list of all employee benefit plans stock bonus, stock
option, restricted stock, stock appreciation right, stock purchase, bonus,
incentive, deferred compensation, or severance plans, employment or consulting
agreement, or any other employee benefit plan, program, policy or arrangement,
covering employees (or former employees) employed in the United States,
established, maintained or contributed to by SATX or any of its Subsidiaries
(including, for this purpose and for the purpose of all of the representations
in this Section 2.2(m), all employers, whether or not incorporated, which by
reason of common control are treated together with SATX as a single employer
within the meaning of Section 414 of the Code) ("SATX Benefit Plans")
(ii) Status of Plans. None of the SATX Benefit Plans are
"employee benefit plans" as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). Neither SATX nor any of its
Subsidiaries have incurred, or is reasonably likely to incur any material
liability under Title IV of ERISA.
(iii) Contributions. All amounts which SATX or any of its
Subsidiaries is required, under applicable law or under any SATX Benefit Plan or
any agreement relating to any SATX Benefit Plan to which SATX or any of its
Subsidiaries is a party, to have paid as contributions thereto as of the last
day of the most recent fiscal year of such SATX Benefit Plan ended prior to the
date hereof, have either been paid or properly accrued on the financial
statements contained in SATX's financial statements (the "Financial
Statements"). SATX has
-15-
made any accruals on its Financial Statements that are required in accordance
with GAAP for contributions that have not been made because they are not yet due
under the terms of any SATX Benefit Plan or related agreements. Benefits under
all SATX Benefit Plans are as represented and have not been materially increased
subsequent to the date as of which documents have been provided to SATX.
(iv) Documents. SATX has delivered, caused to be
delivered, or made available to STCL or its counsel true and complete copies of
all material SATX Benefit Plans as in effect, together with all material
amendments thereto which will become effective at a later date.
(v) Foreign Plans. SATX and its Subsidiaries do not
maintain or contribute to any plan, program, policy, arrangement or agreement
with respect to employees (or former employees) employed outside the United
States.
(n) Insurance. SATX has made available to STCL a schedule
of insurance coverage and policies currently maintained by SATX and its
Subsidiaries. Since June 1, 1999, (a) neither SATX nor any of its Subsidiaries
has received any notice of cancellation or non-renewal of any such policy or
arrangement nor is the termination of any such policies or arrangements
threatened, (b) there is no claim pending under any of such policies or
arrangements as to which coverage has been questioned, denied or disputed by the
underwriters of such policies or arrangements, (c) neither SATX nor any of its
Subsidiaries has received any notice from any of its insurance carriers that any
insurance premiums will be increased in the future or that any insurance
coverage presently provided for will not be available to SATX or any of its
Subsidiaries in the future or that any insurance coverage presently provided for
will not be available to SATX or any of its Subsidiaries in the future on
substantially the same terms as now in effect, and (d) none of such policies or
arrangements provides for any retrospective premium adjustment,
experienced-based liability or loss sharing arrangement affecting SATX or any of
its Subsidiaries.
(o) Disclosure Documents. Neither the joint proxy
statement (the "Joint Proxy Statement") nor the Registration Statement on Form
S-4 (the "Form S-4"), each to be filed with the Commission in connection with
the Merger, nor any amendment or supplement thereto, will contain (i) at the
date the Joint Proxy Statement or any such amendment or supplement is first
mailed to stockholders of STCL and SATX, (ii) at the time such stockholders vote
on the adoption and approval of this Agreement and the transactions contemplated
hereby, with respect to the Joint Proxy Statement or (iii) the date the Form S-4
or any amendment thereto is filed with the Commission, with respect to the Form
S-4, any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The Joint Proxy Statement and the
Form S-4 will, when filed, each comply as to form in all material respects
-16-
with the applicable requirements of the Securities Act and the Exchange Act.
Notwithstanding the foregoing, no representation or warranty is made by SATX in
this Section 2.1(o) with respect to statements made or incorporated by reference
therein based on information supplied by STCL for inclusion or incorporation by
reference in the Joint Proxy Statement or the Form S-4.
(p) Broker's or Finder's Fee. No agent, broker, Person or
firm on behalf of SATX is, or will be, entitled to any fee, commission or
broker's or finder's fees from any of the parties hereto, or from any Person
controlling, controlled by, or under common control with any of the parties
hereto, in connection with this Agreement or any of the transactions
contemplated hereby.
(q) Environmental Liability. There are no legal,
administrative, arbitral or other proceedings, claims, actions, causes of
action, private environmental investigations or remediation activities or
governmental investigations of any nature seeking to impose, or that could
reasonably result in the imposition, on SATX or any of its Subsidiaries of any
liability or obligation arising under common law or under any local, state or
federal environmental statute, regulation or ordinance including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"), pending or threatened against SATX or any of
its Subsidiaries, which liability or obligation will, either individually or in
the aggregate, have a Material Adverse Effect on SATX or any of its
Subsidiaries. To the knowledge of SATX and its Subsidiaries, there is no
reasonable basis for any such proceeding, claim, action or governmental
investigation that would impose any liability or obligation that will,
individually or in the aggregate, have a Material Adverse Effect on SATX or any
of its Subsidiaries. Neither SATX nor any of its Subsidiaries is subject to any
agreement, order, judgment, decree, letter or memorandum by or with any court,
governmental authority, regulatory agency or third party imposing any liability
or obligation with respect to the foregoing that will have, either individually
or in the aggregate, a Material Adverse Effect on SATX or any of its
Subsidiaries.
2.2. Representations and Warranties of STCL. STCL represents and
warrants to SATX as follows:
(a) Due Organization; Good Standing and Corporate Power.
Each of STCL and its Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, and each such corporation has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. Each of STCL and its Subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except in such jurisdictions
where the failure to be so qualified or licensed
-17-
and in good standing would not have a Material Adverse Effect on STCL. STCL has
made available to SATX true and complete copies of its Certificate of
Incorporation, as amended to date, its By-Laws, as amended to date and copies of
the minutes of its Board of Directors and of committees of the Board of
Directors (except as the same relate to the transactions contemplated hereby).
(b) Authorization and Validity of Agreement. STCL has
full corporate power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
by STCL, and the consummation by it of the transactions contemplated hereby,
have been duly authorized and approved by its Board of Directors and no other
corporate or stockholder action on the part of STCL is necessary to authorize
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby (other than the approval of this
Agreement and the Merger by the holders of a majority of the outstanding shares
of STCL Common Stock). This Agreement has been duly executed and delivered by
STCL and is a valid and binding obligation of STCL, enforceable against STCL in
accordance with its terms, except that such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally, and by general equitable principles.
STCL's Board of Directors, at a meeting duly called and held, has, subject to
the provisions of Section 6.2 hereof, (i) determined that this Agreement and the
transactions contemplated hereby are fair and in the best interest of STCL's
stockholders, (ii) approved and adopted this Agreement and the transactions
contemplated hereby and authorized the execution of this agreement, and (iii)
resolved to recommend approval and adoption of this Agreement and the Merger by
its stockholders.
(c) Capitalization. The authorized capital stock of STCL
consists of 30,000,000 shares of Common Stock, $.01 par value, and 5,000,000
shares of preferred stock, $.01 par value, of which no shares of preferred stock
are outstanding. As of the close of business on October 4, 2000, [ ] shares of
STCL Common Stock are issued and outstanding, and [ ] shares are reserved for
issuance. All issued and outstanding shares of STCL Common Stock have been
validly issued and are fully paid and nonassessable, and are not subject to, nor
were they issued in violation of, any preemptive rights. Set forth on Schedule
2.2(c) is a true and correct summary of all outstanding options, warrants,
rights, subscriptions or claims to purchase STCL Common Stock and securities
convertible into or exchangeable for STCL Common Stock, contingent or otherwise,
and the material terms thereof.
(d) Subsidiaries. Schedule 2.2(d) lists all of STCL's
Subsidiaries, and the percentage of outstanding shares of each Subsidiary owned
by STCL. All of the outstanding shares of capital stock or other equity
interests of each of STCL's Subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable, are not subject to, nor were
-18-
they issued in violation of, any preemptive rights, and are owned, of record and
beneficially, by STCL, free and clear of all liens, charges, encumbrances,
options, claims or security interests of any kind or nature whatsoever. Except
as set forth in Schedule 2.2(d), no shares of capital stock of any of STCL's
Subsidiaries are reserved for issuance and there are no outstanding or
authorized options, warrants, rights, subscriptions, claims of any character,
agreements, obligations, convertible or exchangeable securities, stock
appreciation, phantom stock, profit participation or other commitments,
contingent or otherwise, relating to the capital stock of any Subsidiary of
STCL, pursuant to which such Subsidiary is or may become obligated to issue any
shares of capital stock of such Subsidiary or any securities convertible into,
exchangeable for, or evidencing the right to subscribe for, any shares of such
Subsidiary. Except for the Subsidiaries listed on Schedule 2.2(d), STCL does not
own, directly or indirectly, any capital stock or other equity interest in any
Person or have any direct or indirect equity or ownership interest in any
Person.
(e) Consents and Approvals; No Violations. Assuming (i)
compliance with any requirements of the Exchange Act and any requirements of the
Securities Act, the rules and regulations promulgated thereunder relating to the
Joint Proxy Statement, (ii) the filing of the Certificate of Merger and other
appropriate merger documents, if any, as required by the FBCA and the DGCL, and
(iii) the approval of this Agreement by the holders of a majority of the
outstanding shares of STCL Common Stock, the execution and delivery of this
Agreement by STCL and the consummation by STCL of the transactions contemplated
hereby will not, except as set forth on Schedule 2.2(e): (1) violate any
provision of the Certificate of Incorporation or By-Laws of STCL; (2) violate
any statute, ordinance, rule, regulation, order or decree of any court or of any
governmental or regulatory body, agency or authority applicable to STCL or by
which its properties or assets may be bound; (3) require any filing with, or
permit, consent or approval of, order or authorization of, registration,
declaration or the giving of any notice to any governmental or regulatory body,
agency or authority; or (4) result in a violation or breach of, conflict with,
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of STCL or any of its Subsidiaries under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, franchise, permit, agreement, lease or other instrument or
obligation to which STCL or any of its Subsidiaries is a party, or by which they
or their respective properties or assets may be bound, excluding from the
foregoing clauses (2), (3) and (4) violations, filings, notices, permits,
consents and approvals the absence of which, and violations, breaches, defaults,
conflicts and liens which, in the aggregate, would not have a Material Adverse
Effect on STCL.
(f) STCL Reports and Financial Statements. Since December
31, 1999, STCL has filed all registration statements, prospectuses, schedules,
statements, forms, reports and documents with the Commission required to be
filed by it pursuant to the federal securities
-19-
laws and the Commission rules and regulations promulgated thereunder, and,
except to the extent revised or superseded by a subsequent filing filed with the
Commission prior to the date hereof, all forms, registration statements,
prospectuses, schedules, statements, reports and documents filed with the
Commission have complied in all material respects with all applicable
requirements of the federal securities laws and the Commission's rules and
regulations promulgated thereunder. STCL has heretofore made available to SATX
true and complete copies of all forms, reports, registration statements and
other filings filed by STCL with the Commission since December 31, 1999 (such
forms, reports, registration statements and other filings, together with any
amendments thereto, are sometimes collectively referred to as "STCL's Commission
Filings"). As of their respective dates, except to the extent revised or
superseded by a subsequent filing filed with the Commission prior to the date
hereof, STCL's Commission Filings did 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 therein, in light of the circumstances under
which they were made, not misleading. Each of the (i) consolidated balance
sheets as of the end of the fiscal years ended December 31, 1997, 1998 and 1999
and as of the end of the fiscal quarters ended March 31, and June 30 of 2000,
and (ii) the consolidated statements of operations, consolidated statements of
stockholders' equity and consolidated statements of changes in financial
position for the years ended December 31, 1997, 1998 and 1999 and for each of
the fiscal quarters ended March 31 and June 30 2000, as included in STCL's
Commission Filings, were all prepared in accordance with generally accepted
accounting principles (as in effect from time to time) applied on a consistent
basis (except as may be indicated therein or in the notes or schedules thereto)
and fairly present in all material respects the consolidated financial position
of STCL and its consolidated Subsidiaries as of the dates thereof, and the
results of their operations and changes in financial position for the periods
then ended (subject to normal year-end adjustments and the absence of notes in
the case of any unaudited interim financial statements, none of which
individually or in the aggregate had or could have a Material Adverse Effect).
(g) Absence of Certain Changes. Except for liabilities
incurred in connection with this Agreement or the transactions contemplated
hereby and except as previously disclosed in STCL's Commission Filings, STCL and
its Subsidiaries have (i) conducted their respective businesses in the ordinary
course, consistent with past practice, and (ii) since December 31, 1999, there
has not been:
(i) any event, occurrence or development which,
individually or in the aggregate, would have a Material Adverse Effect on STCL;
(ii) any declaration, setting aside or payment of
any dividend or other distribution with respect to any shares of STCL Common
Stock, or any repurchase, redemption or other acquisition by STCL or any of its
Subsidiaries of any outstanding shares of
-▇▇-
▇▇▇▇ ▇▇▇▇▇▇ Stock or any securities convertible into STCL Common Stock except as
set forth on Schedule 2.2(g);
(iii) any amendment of any material term of any
outstanding security of STCL or any of its Subsidiaries;
(iv) any material transaction or commitment made,
or any contract, agreement or settlement entered into, by (or judgment, order or
decree affecting) STCL or any of its Subsidiaries relating to its assets or
business (including the acquisition or disposition of any material amount of
assets) or any relinquishment by STCL or any of its Subsidiaries of any contract
or other right, in either case, material to STCL and any of its Subsidiaries,
taken as a whole, other than transactions, commitments, contracts, agreements or
settlements (including without limitation settlements of litigation and tax
proceedings) in the ordinary course of business consistent with past practice
and those contemplated by this Agreement;
(v) any change in any method of accounting or
accounting practices by STCL or any of its Subsidiaries, except for any such
change which is not material or which is required by reason of a concurrent
change in GAAP;
(h) Real Property. Neither STCL nor any of its
Subsidiaries own any real estate.
(i) Leases. Schedule 2.2(i) contains an accurate and
complete description of the terms of each Lease ("Lease" shall mean in this
Section 2.2(i) each lease pursuant to which STCL or any of its Subsidiaries
leases any personal property). To STCL's knowledge, each Lease is valid, binding
and enforceable in accordance with its terms and is in full force and effect.
The leasehold estate created by each Lease is free and clear of all
encumbrances. Except for defaults which individually or in the aggregate have
not had and will not have a Material Adverse Effect, there are no existing
defaults by STCL or any of its Subsidiaries under any of the Leases. No event
has occurred (whether with or without notice, lapse of time or the happening or
occurrence of any other event) that would constitute a default under any Lease.
Neither STCL nor any of its Subsidiaries has received notice, or has any other
reason to believe, that any lessor under any Lease will not consent (where such
consent is necessary) to the consummation of the Merger without requiring any
modification of the rights or obligations of the lessee thereunder.
(j) Compliance with Laws; Permits. STCL and its
Subsidiaries are in material compliance with all applicable laws, regulations,
orders, judgments and decrees, except where the failure to so comply would not
have a Material Adverse Effect on STCL. Since December 31, 1999 STCL has not
received any notice alleging any such non-compliance. Each of STCL and its
Subsidiaries (a) has all Permits necessary for the conduct and operation of its
businesses as currently conducted and (b) uses its assets in compliance with the
terms of
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such Permits, except for any Permits not obtained or any noncompliance which
would not, individually or in the aggregate, have a Material Adverse Effect.
(k) Litigation. Except as disclosed in the STCL's
Commission Filings or as set forth in Schedule 2.2(k), there is no and, since
December 31, 1999 there has been no, action, suit, proceeding at law or in
equity, or any arbitration or any administrative or other proceeding by or
before (or to STCL's knowledge, any investigation by) any governmental or other
instrumentality or agency, pending, or, to STCL's knowledge, threatened, against
STCL or any of its Subsidiaries, or any of their properties or rights which
could have a Material Adverse Effect on STCL or prevent or delay the
consummation of the Merger. There are no such suits, actions, claims,
proceedings or investigations pending or, to STCL's knowledge, threatened,
seeking to prevent or challenging the transactions contemplated by this
Agreement. Except as disclosed in STCL's Commission Filings or Schedule 2.2(k),
neither STCL nor any of its Subsidiaries is subject to any judgment, order or
decree entered in any lawsuit or proceeding which could have a Material Adverse
Effect on STCL.
(l) Government Authorization. The execution, delivery and
performance by STCL of this Agreement and the consummation by STCL of the
transactions contemplated hereby require no action by or in respect of, or
filing with, any governmental body, agency, official or authority other than
(i) the filing of a Certificate of Merger in
connection with the Merger in accordance with the NRS and the DGCL,
(ii) compliance with any applicable environmental
transfer statutes,
(iii) compliance with any applicable requirements
of the Exchange Act,
(iv) compliance with any applicable requirements
of the Securities Act, or
(v) other actions or filings which if not taken
or made would not, individually or in the aggregate, have a Material Adverse
Effect on STCL or prevent or materially delay STCL's consummation of the Merger.
(m) Employee Benefit Plans.
(i) List of Plans. Set forth in Schedule 2.2(m)(i) is an
accurate and complete list of all employee benefit plans, stock bonus, stock
option, restricted stock, stock appreciation right, stock purchase, bonus,
incentive, deferred compensation, or severance plans, employment or consulting
agreement, or any other employee benefit plan, program, policy or
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arrangement, covering employees (or former employees) employed in the United
States, established, maintained or contributed to by STCL or any of its
Subsidiaries (including, for this purpose and for the purpose of all of the
representations in this Section 2.2(m), all employers, whether or not
incorporated, which by reason of common control are treated together with STCL
as a single employer within the meaning of Section 414 of the Code) ("STCL
Benefit Plans")
(ii) Status of Plans. Neither STCL nor any of its
Subsidiaries maintains or contributes to any STCL Benefit Plan subject to ERISA
which is not in substantial compliance with ERISA. None of the STCL Benefit
Plans are subject to the minimum funding requirements of Section 412 of the
Code, or subject to Title IV of ERISA, or multiemployer plans (as defined in
Section 4001(a)(3) of ERISA). Neither STCL nor any of its Subsidiaries have
incurred, or is reasonably likely to incur any material liability under Title IV
of ERISA.
(iii) Contributions. All amounts which STCL or any of its
Subsidiaries is required, under applicable law or under any STCL Benefit Plan or
any agreement relating to any STCL Benefit Plan to which STCL or any of its
Subsidiaries is a party, to have paid as contributions thereto as of the last
day of the most recent fiscal year of such STCL Benefit Plan ended prior to the
date hereof, have either been paid or properly accrued on the financial
statements contained in STCL's financial statements (the "Financial
Statements"). STCL has made any accruals on its Financial Statements that are
required in accordance with GAAP for contributions that have not been made
because they are not yet due under the terms of any STCL Benefit Plan or related
agreements. Benefits under all STCL Benefit Plans are as represented and have
not been materially increased subsequent to the date as of which documents have
been provided to STCL.
(iv) Transactions. Neither STCL nor any of its
Subsidiaries has engaged in any transaction with respect to the STCL Benefit
Plans which would subject it to a material tax, penalty or liability for
prohibited transactions under ERISA or the Code nor has any of their respective
directors, officers or employees to the extent they or any of them are
fiduciaries with respect to such Plans, materially breached any of their
responsibilities or obligations imposed upon fiduciaries under Title I of ERISA.
(v) Documents. STCL has delivered, caused to be
delivered, or made available to SATX or its counsel true and complete copies of
(1) all material STCL Benefit Plans as in effect, together with all material
amendments thereto which will become effective at a later date, as well as the
latest Internal Revenue Service determination letter obtained with respect to
any such STCL Benefit Plan qualified under Section 401 or 501 of the Code, and
(2) the most recent Form 5500 for the STCL Benefit Plan, if applicable.
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(vi) Foreign Plans. STCL and its Subsidiaries do not
maintain or contribute to any plan, program, policy, arrangement or agreement
with respect to employees (or former employees) employed outside the United
States.
(n) Insurance. STCL has made available to SATX a schedule
of insurance coverage and policies currently maintained by STCL and its
Subsidiaries. Furthermore, (a) neither STCL nor any of its Subsidiaries has
received any notice of cancellation or non-renewal of any such policy or
arrangement nor is the termination of any such policies or arrangements
threatened, (b) there is no claim pending under any of such policies or
arrangements as to which coverage has been questioned, denied or disputed by the
underwriters of such policies or arrangements, (c) neither STCL nor any of its
Subsidiaries has received any notice from any of its insurance carriers that any
insurance premiums will be increased in the future or that any insurance
coverage presently provided for will not be available to STCL or any of its
Subsidiaries in the future or that any insurance coverage presently provided for
will not be available to STCL or any of its Subsidiaries in the future on
substantially the same terms as now in effect, and (d) none of such policies or
arrangements provides for any retrospective premium adjustment,
experienced-based liability or loss sharing arrangement affecting STCL or any of
its Subsidiaries.
(o) Contracts and Commitments. Except as provided in
STCL's Financial Statements, or except as set forth on Schedule 2.2(o):
(i) Neither STCL nor any of its Subsidiaries has
any outstanding contracts with stockholders, directors, officers, employees,
agents, consultants, advisors, salesmen, sales representatives, distributors or
dealers outside the ordinary course of business.
(ii) Neither STCL nor any of its Subsidiaries is
a party to any agreement that materially restricts it from carrying on its
business as currently conducted.
(iii) Neither STCL nor any of its Subsidiaries is
a party to any agreement to assume or become obligated for any debt obligations
of others.
(p) Disclosure Documents. Neither the Joint Proxy
Statement nor the Form S-4, nor any amendment or supplement thereto, will
contain (i) at the date the Joint Proxy Statement or any such amendment or
supplement is first mailed to stockholders of STCL and SATX, (ii) at the time
such stockholders vote on the adoption and approval of this Agreement and the
transactions contemplated hereby, with respect to the Joint Proxy Statement, or
(iii) the date the Form S-4 or any amendment thereto is filed with the
Commission, with respect to the Form S-4, any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Notwithstanding the foregoing, this representation or warranty
is made by STCL in this Section 2.2(p) only with respect to statements made or
incorporated
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by reference therein based on information supplied by STCL for inclusion or
incorporation by reference in the Joint Proxy Statement or the Form S-4.
(q) Broker's or Finder's Fee. Except for Credit Suisse
First Boston, no agent, broker, Person or firm acting on behalf of STCL is, or
will be, entitled to any fee, commission or broker's or finder's fees from any
of the parties hereto, or from any Person controlling, controlled by, or under
common control with any of the parties hereto, in connection with this Agreement
or any of the transactions contemplated hereby.
(r) Environmental Liability. There are no legal,
administrative, arbitral or other proceedings, claims, actions, causes of
action, private environmental investigations or remediation activities or
governmental investigations of any nature seeking to impose, or that could
reasonably result in the imposition, on STCL or any of its Subsidiaries of any
liability or obligation arising under common law or under any local, state or
federal environmental statute, regulation or ordinance including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"), pending or threatened against STCL or any of
its Subsidiaries, which liability or obligation will, either individually or in
the aggregate, have a Material Adverse Effect on STCL or any of its
Subsidiaries. To the knowledge of STCL and its Subsidiaries, there is no
reasonable basis for any such proceeding, claim, action or governmental
investigation that would impose any liability or obligation that will,
individually or in the aggregate, have a Material Adverse Effect on STCL or any
of its Subsidiaries. Neither STCL nor any of its Subsidiaries is subject to any
agreement, order, judgment, decree, letter or memorandum by or with any court,
governmental authority, regulatory agency or third party imposing any liability
or obligation with respect to the foregoing that will have, either individually
or in the aggregate, a Material Adverse Effect on STCL or any of its
Subsidiaries.
ARTICLE III
ADDITIONAL AGREEMENTS
3.1. Access to Information Concerning Properties and Records. During
the period commencing on the date hereof and ending at the Effective Time, each
of SATX and STCL shall, and shall cause each of their respective Subsidiaries
to, upon reasonable notice and subject to applicable laws relating to the
exchange of information, afford the other party, and its respective counsel,
accountants and other authorized representatives, full access during normal
business hours to the properties, books and records of itself and its
Subsidiaries in order that they may have the opportunity to make such
investigations as they shall desire. No such investigation shall, however,
affect the representations and warranties made by each party to this Agreement.
Each party hereto agrees to cause its officers and employees to furnish such
additional
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financial and operating data and other information and respond to such inquiries
as the other party may from time to time request. Neither SATX nor STCL nor any
of their respective Subsidiaries shall be required to provide access to or to
disclose information where such access or disclosure would violate or prejudice
the rights of SATX's or STCL's, as the case may be, customers, jeopardize the
attorney-client privilege of the institution in possession or control of such
information or contravene any law, rule, regulation, order, judgment, decree,
fiduciary duty or binding agreement entered into prior to the date of this
Agreement. The parties hereto will make appropriate substitute disclosure
arrangements under circumstances in which the restrictions of the preceding
sentence apply. Each of SATX and STCL shall hold all information furnished by or
on behalf of the other party or any of such party's subsidiaries or
representatives pursuant to this Section 3.1 in confidence to the extent
required by, and in accordance with, the provisions of Section 3.2.
3.2. Confidentiality. Prior to the Effective Time and for a period of
one year after any termination of this Agreement each party hereto will hold,
and will use its best efforts to cause its officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence,
unless compelled to disclose by judicial or administrative process or by other
requirements of law, including but not limited to the securities laws, all
confidential documents and information concerning the other parties hereto and
their Subsidiaries, furnished to such party in connection with the transactions
contemplated by this Agreement, except to the extent that such information is
finally determined by a court of competent jurisdiction to have been (i)
previously known on a nonconfidential basis by such party, (ii) in the public
domain through no fault of such party, or (iii) later lawfully acquired by such
party from sources other than the parties hereto who such party has a bona fide
belief is not subject to a confidentiality agreement regarding such information;
provided, however, that such party may disclose such information to its
officers, directors, employees, accountants, counsel, consultants, advisors,
agents and representatives (collectively, "Agents") in connection with the
transactions contemplated by this Agreement, so long as such Persons are
informed by such party of the confidential nature of such information and are
directed by such party to treat such information confidentially and any breach
by any such Agent shall be deemed to conclusively be a breach by the applicable
party hereto for whom such Agent is an Agent. If this Agreement is terminated
for any reason, each party hereto will, and will use its best efforts to cause
its Agents to, destroy or deliver to the party from whom such material was
obtained, upon request, all documents and other materials, and all copies
thereof, obtained by such party or on its behalf from any such other parties in
connection with this Agreement that are subject to such confidence.
3.3. Registration Statement. As promptly as practicable, STCL and SATX
shall in consultation with each other prepare and file with the SEC the Joint
Proxy Statement in preliminary form. Each of them shall use its reasonable best
efforts to have the Joint Proxy Statement cleared by the SEC and the Form S-4
declared effective as soon as practicable.
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STCL shall also use its reasonable best efforts to obtain all necessary state
securities law or "Blue Sky" permits and approvals required to carry out the
transactions contemplated by this Agreement, and each of STCL and SATX shall
furnish all information concerning STCL and SATX and the holders of STCL Common
Stock or SATX Common Stock as may be reasonably requested in connection with any
such action. If, at any time prior to the Effective Time, any event or
circumstances relating to SATX, any Subsidiary of SATX, STCL, any Subsidiary of
STCL, or their respective officers or directors, should be discovered by such
party which should be set forth in an amendment or a supplement to the Form S-4
or Joint Proxy Statement, such party shall promptly inform the other thereof and
take appropriate action in respect thereof.
3.4. Conduct of the Business Pending the Effective Time. SATX and STCL
each agrees, except as permitted, required or specifically contemplated by, or
otherwise described in this Agreement, or otherwise consented to or approved in
writing by the other (such consent not to be unreasonably withheld or delayed),
that during the period commencing on the date hereof and ending at the Effective
Time:
(a) Each of SATX and STCL and their respective
Subsidiaries will (i) conduct their operations according to their ordinary and
usual course of business, (ii) use their reasonable best efforts to preserve
intact their respective business organization, keep available the services of
their officers and employees, and maintain satisfactory relationships with
licensors, suppliers, distributors, clients and others having business
relationships with them and (iii) take no action which would adversely affect or
delay the ability of either SATX or STCL to obtain any necessary approvals of
any Regulatory Agency or other Governmental Entity required for the transactions
contemplated hereby or to perform its covenants and agreements under this
Agreement or to consummate the transactions contemplated hereby;
(b) Neither SATX, STCL nor any of their respective
Subsidiaries shall, except as otherwise contemplated in this Agreement, (i) make
any change in or amendment to their charter or by-laws (or comparable governing
documents); (ii) issue or sell any shares of their capital stock (other than in
connection with the exercise of options, warrants or convertible securities
outstanding on the date hereof) or any of its other securities, or issue any
securities convertible into, or options, warrants or rights to purchase or
subscribe to, or enter into any arrangement or contract with respect to the
issuance or sale of, any shares of its capital stock or any of its other
securities, or make any other changes in their capital structure; (iii) declare,
pay or make any dividend or other distribution or payment with respect to, or
split, redeem or reclassify, any shares of their capital stock; (iv) enter into
any contract or commitment except contracts in the ordinary course of business;
(v) acquire a material amount of assets or securities; (vi) amend any employee
or non-employee benefit plan or program, employment agreement, license agreement
or retirement agreement, or pay any bonus or contingent compensation; provided,
however, that SATX, STCL and their respective Subsidiaries
-27-
may take such actions so long as and to the extent that the same are consistent
with prior practices; (vii) change or permit to change any method of accounting
or accounting practices used by it, except for any such change which is not
material or which is required by reason of a concurrent change in GAAP; (viii)
agree, in writing or otherwise, to take any of the foregoing actions; (ix) other
than in the ordinary course of business, incur any indebtedness for borrowed
money, assume, guarantee, endorse or otherwise as an accommodation become
responsible for the obligations of any other individual, corporation or other
entity, or make any loan or advance (it being understood and agreed that
incurrence of indebtedness in the ordinary course of business shall include,
without limitation, the creation of deposit liabilities, purchases of Federal
funds, sales of certificates of deposit and entering into repurchase
agreements); (x) sell, transfer, mortgage, encumber or otherwise dispose of any
of its material properties or assets to any individual, corporation or other
entity other than a Subsidiary, or cancel, release or assign any indebtedness to
any such person or any claims held by any such person or release or relinquish
any material contract rights, in each case other than in the ordinary course of
business or pursuant to contracts or agreements in force at the date of this
Agreement; (xi) settle any material claim, action or proceeding involving money
damages; or (xii) make or change any material tax election; and
(c) Neither SATX nor STCL shall, nor permit any of their
Subsidiaries to, take any action, engage in any transaction or enter into any
agreement which would cause any of the representations or warranties set forth
in this Agreement to be untrue as of the Closing Date or in any of the
conditions to the merger set forth in Article IV not being satisfied or in
violation of any provisions of this Agreement, except in every case, as may be
required by applicable law.
3.5 STCL and SATX Stockholders Meeting; Joint Proxy
Statement; Form S-4.
(a) STCL and SATX, acting through their respective Boards
of Directors, shall, subject to and in accordance with applicable law and their
respective Certificates of Incorporation and By-Laws, promptly and duly call,
give notice of, convene and hold, as soon as practicable following the date on
which the Form S-4 becomes effective, meetings of the holders of STCL Common
Stock and SATX Common Stock for the purpose of voting to approve and adopt this
Agreement and the transactions contemplated hereby, and (i) except as required
to comply with the fiduciary duties of the respective Boards of Directors as
advised by outside counsel, recommend approval and adoption of this Agreement
and the transactions contemplated hereby, by the holders of STCL Common Stock
and SATX Common Stock and include in the Joint Proxy Statement such
recommendation, and (ii) except as required to comply with the fiduciary duties
of their respective Boards of Directors as advised by outside counsel, take all
reasonable action to solicit and obtain such approval.
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(b) Each of SATX and STCL, as promptly as practicable
following effectiveness of the Form S-4, shall cause the definitive Joint Proxy
Statement to be mailed to its stockholders.
3.6. Reasonable Best Efforts. Each of SATX and STCL shall, and each
shall cause its respective Subsidiaries to, cooperate and use their respective
reasonable best efforts to take, or cause to be taken, all appropriate actions,
and to make, or cause to be made, all filings necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation,
their respective reasonable best efforts to obtain, prior to the Closing Date,
all licenses, permits, consents, approvals, authorizations, qualifications and
orders of governmental authorities and third parties as are necessary for
consummation of the transactions contemplated by this Agreement and to fulfill
the conditions to the Merger. The parties hereto agree that they will consult
with each other with respect to the obtaining of all permits, consents,
approvals and authorizations of all third parties and Governmental Entities
necessary or advisable to consummate the transactions contemplated by this
Agreement and each party will keep the other apprised of the status of matters
relating to completion of the transactions contemplated herein.
3.7. Supplemental Disclosure. Each of SATX and STCL shall give the
other party prompt notice of (i) the occurrence, or non-occurrence, of any event
the occurrence, or non-occurrence, of which would be likely to cause (x) any
representation or warranty contained in this Agreement to be untrue or
inaccurate or (y) any covenant, condition or agreement contained in this
Agreement not to be complied with or satisfied and (ii) any failure of SATX or
STCL, as the case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided, however,
that the delivery of any notice pursuant to this Section shall not have any
effect for the purpose of determining the satisfaction of the conditions set
forth in Article IV of this Agreement or otherwise limit or affect the remedies
available hereunder to any party.
3.8. Takeover Statutes. If any anti-takeover or similar statute or
regulation is or may become applicable to the transactions contemplated hereby,
each of the parties and its Board of Directors shall grant such approvals and
take all such reasonable actions as are legally permissible so that the
transactions contemplated hereby may be consummated as promptly as practicable
on the terms contemplated hereby and otherwise act to eliminate or minimize the
effects of any such statute or regulation on the transactions contemplated
hereby.
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ARTICLE IV
CONDITIONS PRECEDENT TO MERGER
4.1. Conditions Precedent to Obligations of SATX and STCL. The
respective obligations of SATX, on the one hand, and STCL, on the other, to
effect the Merger are subject to the satisfaction or waiver (subject to
applicable law), at or prior to the Effective Time, of each of the following
conditions:
(a) Approval by SATX's Stockholders. This Agreement and
the Merger shall have been approved and adopted by the requisite vote or consent
of the stockholders of SATX in accordance with applicable law and the provisions
of SATX's Articles of Incorporation and By-Laws;
(b) Approval by STCL's Stockholders. This Agreement and
the Merger shall have been approved and adopted by the requisite vote or consent
of the stockholders of STCL in accordance with applicable law and the provisions
of STCL's Certificate of Incorporation and By-Laws;
(c) Registration Statement. The Form S-4 shall have
become effective in accordance with the provisions of the Securities Act. No
stop order suspending the effectiveness of the Form S-4 shall have been issued
by the Commission and no proceedings for that purpose shall have been initiated
by the Commission;
(d) Other Approvals. All regulatory approvals required to
consummate the transactions contemplated hereby shall have been obtained and
shall remain in full force and effect and all statutory waiting periods in
respect thereof shall have expired;
(e) Injunction. No injunction, decree or other order
shall have been issued by any court or by any governmental or regulatory agency,
body or authority of competent jurisdiction which is then in effect and has the
effect of making the Merger illegal or otherwise prohibiting the consummation of
the Merger or any of the other transactions contemplated by this Agreement; and
(f) Statutes. No statute, rule, regulation, executive
order, decree or order of any kind shall have been enacted, entered, promulgated
or enforced by any court or governmental authority which prohibits, materially
restricts or makes illegal the consummation of the Merger.
(g) Investment. The Investment shall have been
consummated on terms reasonably acceptable to each of STCL and SATX.
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4.2. Conditions Precedent to Obligations of STCL. The obligation of
STCL to effect the Merger are also subject to the satisfaction or waiver, at or
prior to the Effective Time, of each of the following conditions:
(a) Accuracy of Representations and Warranties. All
representations and warranties of SATX contained herein shall be true and
correct in all material respects as of the date hereof and at and as of the
Closing, with the same force and effect as though made on and as of the Closing
Date (except as to any such representation and warranty which relates to a
specific date, which shall be true and correct as of such specific date), and
STCL shall have received a certificate signed on behalf of SATX by the chief
executive officer or the chief financial officer of SATX to such effect;
(b) Performance by SATX. SATX shall have performed in all
material respects all obligations and agreements, and complied in all material
respects with all covenants and conditions, contained in this Agreement to be
performed or complied with by them prior to the Closing Date; and STCL shall
have received a certificate signed on behalf of SATX by the chief executive
officer or the chief financial officer of SATX to such effect;
(c) Legal Opinion. STCL shall have received the favorable
opinion of special Nevada counsel for SATX, in a form satisfactory to STCL.
(d) Opinion of Financial Advisor.
STCL shall have received the opinion of its financial advisor as to the
fairness of the transaction to its shareholders, from a financial point of view.
4.3. Conditions Precedent to Obligation of SATX. The obligation of
SATX to effect the Merger is also subject to the satisfaction or waiver, at or
prior to the Effective Time, of each of the following conditions:
(a) Accuracy of Representations and Warranties. All
representations and warranties of STCL contained herein shall be true and
correct in all material respects as of the date hereof and at and as of the
Closing, with the same force and effect as though made on and as of the Closing
Date (except as to any such representation and warranty which relates to a
specific date, which shall be true and correct as of such specific date), and
SATX shall have received a certificate signed on behalf of STCL by the chief
executive officer or the chief financial officer of STCL to such effect;
(b) Performance by STCL. STCL shall have performed in all
material respects all obligations and agreements, and complied in all material
respects with all covenants and conditions, contained in this Agreement to be
performed or complied with by it prior to
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the Closing Date; SATX shall have received a certificate signed on behalf of
STCL by the chief executive officer or the chief financial officer of STCL to
such effect.
(c) Legal Opinion. SATX shall have received the favorable
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for STCL, substantially in a form
satisfactory to SATX.
(d) Opinion of Financial Advisor.
SATX shall have received the opinion of its financial advisor as to the
fairness of the transaction to its shareholders, from a financial point of view.
ARTICLE V
TERMINATION AND ABANDONMENT
5.1. Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned, at any time prior to the
Effective Time, whether before or after approval of the Merger by STCL's and
SATX's respective stockholders:
(a) by mutual consent of the Board of Directors of SATX
and STCL;
(b) by the Board of Directors of SATX or STCL, if the
Effective Time shall not have occurred by February 28, 2001 (provided that the
terminating party is not then in breach of any representation, warranty,
covenant or other agreement contained herein);
(c) by any of the parties, if any permanent injunction,
order, decree or ruling by any governmental entity or competent jurisdiction
preventing the consummation of the Merger and the Investment shall become final
and nonappealable;
(d) by the Boards of Directors of SATX on the one hand
and STCL on the other (provided that the terminating party is not then in breach
of any representation, warranty, covenant or other agreement contained herein),
if there has been a material breach of any representation, warranty, obligation,
covenant, agreement or condition set forth in this Agreement on the part of the
other party; provided, however, that each of SATX on the one hand and STCL on
the other shall have the right to cure any such breach within fifteen days of
written notice of any such breach given by the other party;
(e) by the Boards of Directors of SATX or STCL, if the
approval of this Agreement and the Merger by the required number of holders of
the STCL Common Stock on the one hand and SATX Common Stock on the other hand
shall not have been obtained by reason of the failure to obtain the required
vote at a duly held meeting (including any adjournment
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or postponement thereof) of STCL's or SATX's respective stockholders; provided,
however, that if the failure to obtain such required vote is the result of the
failure of STCL or SATX to obtain a quorum at its meeting of stockholders, STCL
or SATX will immediately call an additional meeting if so requested by the other
party; or
(f) by the Board of Directors of SATX on the one hand or
STCL on the other if the Board of Directors of STCL or SATX shall have withdrawn
its approval or recommendation of the Merger or modified its approval or
recommendation in any manner adverse to the other party; provided, however, that
the right to terminate this Agreement shall not be available to a party that has
breached in any material respect its obligations under the Agreement in any
manner that shall have proximately contributed to the failure of the Merger to
be consummated.
5.2. Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 5.1 hereof by SATX or STCL, written notice thereof
shall promptly be given to the other party specifying the provision hereof
pursuant to which such termination is made, and this Agreement shall become void
and have no effect, and, except as set forth in Section 6.2(e), there shall be
no liability hereunder on the part of SATX or STCL, except that Sections 3.2,
6.1 and 6.2 hereof shall survive any termination of this Agreement. Nothing in
this Section 5.2 shall relieve any party to this Agreement of liability or
damages for willful breach of any provision of this Agreement.
ARTICLE VI
MISCELLANEOUS
6.1. Fees and Expenses. Except as set forth in Section 6.2 below, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such costs
and expenses; provided however, that if the Merger is consummated, all of such
reasonable costs and expenses shall be borne by the Surviving Corporation.
6.2. Negotiations.
(a) STCL, SATX and their respective Agents shall
immediately cease any discussions or negotiations with any parties that may be
ongoing with respect to an Acquisition Proposal (as hereinafter defined). From
and after the date hereof until the Closing or earlier termination of this
Agreement, each of STCL and SATX shall not, nor shall either permit any of their
respective Agents or any investment banker, financial advisor, attorney,
accountant or other representative retained by either SATX or STCL to, directly
or indirectly, (i) solicit,
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initiate or knowingly encourage (including by way of furnishing non-public
information), or knowingly take any other action to facilitate, the making of
any proposal which constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal, or (ii) participate in any discussions or negotiations
regarding any Acquisition Proposal; provided, however, that if, at any time the
Board of Directors of STCL or SATX, as the case may be, determines in good
faith, after consultation with legal counsel, that it may be necessary to do so
in order to comply with its fiduciary duties to STCL's or SATX's stockholders
under applicable law, STCL or SATX, as the case may be, may, in response to an
unsolicited Superior Proposal, and subject to compliance with Section 6.2(c),
(x) furnish information with respect to STCL or SATX to the person making such
unsolicited Superior Proposal pursuant to a confidentiality agreement no less
restrictive than the terms contained in Section 3.2, and (y) participate in
discussions or negotiations regarding such Superior Proposal. For purposes of
this Agreement, "Acquisition Proposal" means any inquiry, proposal or offer from
any person relating to any direct or indirect acquisition or purchase of 20% or
more of the assets of STCL or SATX or 20% or more of any class of equity
securities of STCL or SATX, any tender offer or exchange offer that if
consummated would result in any person beneficially owning 20% or more of any
class of equity securities of STCL or SATX, any merger, consolidation, business
combination, sale of all or substantially all the assets, recapitalization,
liquidation, dissolution or similar transaction involving STCL or SATX (other
than the transactions between the parties hereto contemplated by this
Agreement), or any other transaction of a similar nature the consummation of
which could reasonably be expected to impede, interfere with, prevent or
materially delay the Merger. For purposes of this Agreement, a "Superior
Proposal" means any bona fide Acquisition Proposal made by a third party on
terms which the Board of Directors of STCL or SATX determines in its good faith
judgment (after consultation with an experienced investment banker) to be more
favorable to STCL's or SATX's stockholders than the terms of the Merger set
forth in this Agreement.
(b) Except as set forth in this Section 6.2, neither the
Board of Directors of STCL or SATX nor any committee thereof shall (i) withdraw
or modify, or propose to withdraw or modify, in a manner adverse to SATX or
STCL, as the case may be, the approval or recommendation of this Agreement or
the Merger by such Board of Directors or such committee, (ii) approve or
recommend, or propose to approve or recommend, any Acquisition Proposal, or
(iii) cause STCL or SATX to enter into any agreement with respect to any
Acquisition Proposal. Notwithstanding the foregoing, in the event that the Board
of Directors of STCL or SATX, as the case may be, determines in good faith,
after consultation with legal counsel (who may be STCL's or SATX's regularly
engaged counsel), that it may be necessary to do so in order to comply with its
fiduciary duties to STCL's or SATX's stockholders under applicable law, the
Board of Directors of STCL or SATX may (subject to the other provisions of this
Article VI) withdraw or modify its approval or recommendation of this Agreement
and the Merger, approve or recommend a Superior Proposal, cause STCL or SATX, as
the case may be, to enter into an agreement with respect to a Superior Proposal
or terminate this
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Agreement, but in each case only at a time that is after the fifth business day
following SATX's or STCL's receipt of written notice (a "Notice of Superior
Proposal") advising SATX or STCL, as the case may be, that the Board of
Directors of STCL or SATX has received a Superior Proposal, specifying the
material terms and conditions of such Superior Proposal and identifying the
person making such Superior Proposal. Upon receiving the Notice of Superior
Proposal, SATX or STCL shall have the opportunity to propose an amendment to
this Agreement. If after taking into account such amendment, the Board of
Directors of STCL or SATX still determines in good faith that the Acquisition
Proposal constitutes a Superior Proposal, the Board may then (1) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to SATX or STCL,
as the case may be, the approval or recommendation of this Agreement or the
Merger by such Board of Directors or such committee, (2) approve or recommend,
or propose to approve or recommend, such Superior Proposal, or (3) cause STCL or
SATX, as the case may be, to enter into any agreement with respect to such
Superior Proposal.
(c) In addition to the obligations of STCL and SATX set
forth in paragraphs (a) and (b) of this Section 6.2, STCL and SATX shall
promptly advise the other parties hereto orally and in writing of any request
for information or of any Acquisition Proposal, the material terms and the
financial consideration in respect of such request or Acquisition Proposal and
the identity of the person making such request or Acquisition Proposal.
(d) Nothing contained in this Section 6.2 shall prohibit
STCL or SATX from taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or from making
any disclosure to STCL's or SATX's stockholders if, in the good faith judgment
of the Board of Directors of STCL or SATX, after consultation with independent
legal counsel, failure to so disclose would be inconsistent with its fiduciary
duties to STCL's or SATX's stockholders under applicable law.
(e) In the event SATX or STCL terminates this Agreement
pursuant to Section 5.1(d) or 5.1(f), SATX or STCL, as the case may be, will pay
to the other party the sum of $500,000.
(f) In the event STCL or SATX breaches the provisions of
Section 6.2(a) or 6.2(b), or the Board of Directors of STCL or SATX determines
as provided in Section 6.2(b) that an Acquisition Proposal constitutes a
Superior Proposal and it (1) withdraws or modifies, or proposes to withdraw or
modify, in a manner adverse to SATX or STCL, as the case may be, the approval or
recommendation of this Agreement or the Merger by such Board of Directors or
committee thereof, (2) approves or recommends, or proposes to approve or
recommend, any Acquisition Proposal, (3) causes STCL or SATX, as the case may
be, to enter into any agreement with respect to any Acquisition Proposal, then
the party in breach of such provision or whose board has taken such action will
pay to the other party the sum of $3,000,000.
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(g) The provisions of this Section 6.2 will survive the
termination of this Agreement prior to the Closing.
6.3. Survival of Representations and Warranties. The respective
representations and warranties of SATX and STCL contained herein, or in any
certificates or other documents delivered prior to or at the Closing, shall not
be deemed waived or otherwise affected by any investigation made by any party.
Each and every such representation and warranty shall expire with, and be
terminated and extinguished by, the Closing and thereafter neither SATX nor STCL
shall be under any liability whatsoever with respect to any such representation
or warranty. This Section 6.3 shall have no effect upon any other obligation of
the parties hereto, whether to be performed before or after the Effective Time.
6.4. Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by or on behalf of the respective
Boards of Directors of SATX or STCL, may, to the extent legally allowed, (i)
extend the time for the performance of any of the obligations or other acts of
the other parties hereto, (ii) waive any inaccuracies in the representations and
warranties contained herein by any other applicable party or in any document,
certificate or writing delivered pursuant hereto by any other applicable party
or (iii) waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of any party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party, but such extension or waiver or failure to insist on strict
compliance with an obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
6.5. Public Announcements. SATX on the one hand and STCL on the other
hand will consult with each other before issuing any press release or making any
public statement with respect to this Agreement and the transactions
contemplated hereby and shall not issue any press release or make any public
statement without the prior consent of the other party, which consent shall not
be unreasonably withheld. Notwithstanding the foregoing, any such press release
or public statement as may be required by applicable law or any listing
agreement with any national securities exchange may be issued without the
consent of the other party prior to such disclosure if the party making the
release or statement has, in light of the applicable legal requirements
regarding timing, used its reasonable efforts to consult with the other party.
6.6. Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered in person or
mailed, certified or registered mail with postage prepaid, or sent by
telecopier, as follows:
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(a) if to SATX, to it at:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇-▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Schifino & ▇▇▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to STCL, to it at:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
Eighty ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date of
delivery unless if mailed, in which case on the third business day after the
mailing thereof except for a notice of a change of address, which shall be
effective only upon receipt thereof.
6.7. Entire Agreement; Severability. This Agreement and the schedules
and other documents referred to herein or delivered pursuant hereto, contain the
entire understanding of the parties hereto with respect to the subject matter
contained herein and supersede all prior agreements and understandings, oral and
written, with respect thereto, including the letter of intent dated September 7,
2000 previously entered into by the parties. In the event that any provision
hereof would, under applicable law, be invalid or unenforceable in any respect
(a) if
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such provision is enforceable in part, such provision shall be enforced to the
maximum extent permissible under applicable law, and (b) the invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall
remain in full force and effect; provided, however, that if enforcement of the
Agreement without giving effect to an invalid or unenforceable provision would
deny either party the benefit of the transaction contemplated hereby, then the
Agreement as a whole will terminate.
6.8. Binding Effect; Benefit; Assignment. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties. Nothing
in this Agreement, expressed or implied, is intended to confer on any Person
other than the parties hereto or their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
6.9. Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified and supplemented in writing by the parties
hereto in any and all respects before the Effective Time (notwithstanding any
stockholder approval), by action taken by the respective Boards of Directors of
SATX and STCL or by the respective officers authorized by such Boards of
Directors; provided, however, that after any stockholder approval, no amendment
shall be made which changes the amount or form of the consideration to be
delivered hereunder to the holders of STCL Common Stock or SATX Common Stock,
other than as contemplated by this Agreement or which by law requires further
approval by such stockholders without such further approval.
6.10. Further Actions. Each of the parties hereto agrees that, subject
to its legal obligations, it will use its best efforts to fulfill all conditions
precedent specified herein, to the extent that such conditions are within its
control, and to do all things reasonably necessary to consummate the
transactions contemplated hereby.
6.11. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
6.12. Applicable Law. This Agreement and the legal relations between
the parties under this Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflict of laws rules thereof.
6.13. "Person" Defined. "Person" shall mean and include an individual,
a partnership, a joint venture, a corporation, a trust, an unincorporated
organization, a group and a government or other department or agency thereof.
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6.14. Terms Defined in this Agreement. The following capitalized terms
used herein shall have the meanings ascribed in the indicated sections.
Acquisition Proposal..................... 6.2(a)
Agents................................... 3.2
Agreement................................ preamble
Certificate.............................. 1.2(b)
Certificate of Merger.................... 1.1(a)
Closing.................................. 1.12
Closing Date............................. 1.12
Commission............................... 2.1(f)
Commission............................... 2.2(f)
DGCL..................................... 1.1(a)
Effective Time........................... 1.1(a)
ERISA.................................... 2.2(m)
Exchange Act............................. 2.1(e)
Exchange Agent........................... 1.7(a)
Exchange Fund............................ 1.7(a)
Exchange Ratio........................... 1.2(a)
Financial Statements..................... 2.2(m)(iii)
Form S-4................................. 2.1(o)
GAAP..................................... 2.1(g)(v)
Investment............................... 1.1(c)
Joint Proxy Statement.................... 2.1(o)
knowledge................................ 2.1(k)
Lease.................................... 2.1(i) and 2.2(i)
Material Adverse Effect.................. 2.1(a)
Merger................................... preamble
Notice of Superior Proposal.............. 6.2(b)
NRS...................................... 1.1(a)
Permits.................................. 2.1(j)
SATX..................................... preamble
SATX Common Stock........................ 1.2(a)
SATX Consideration....................... 1.2(a)
SATX Dissenting Shares................... 1.6(b)
SATX's Commission Filings................ 2.1(f)
Securities Act........................... 2.1(e)
STCL..................................... preamble
STCL Benefit Plans....................... 2.2(m)
STCL Common Stock........................ 1.1(c)
STCL Dissenting Shares................... 1.6(b)
-▇▇-
▇▇▇▇'▇ ▇▇▇▇▇▇▇▇▇▇ Filings................ 2.2(f)
Subsidiary............................... 2.1(a)
Surviving Corporation.................... 1.1(b)
Surviving Corporation Common Stock....... 1.2(a)
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IN WITNESS WHEREOF, each of SATX and STCL has caused this Agreement to
be executed by their respective officers thereunto duly authorized, all as of
the date first above written.
SATX, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Chairman and Chief Executive Officer
Shared Technologies Cellular, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Chairman and Chief Executive Officer
