AGREEMENT AND PLAN OF MERGER among ATLANTIS HOLDINGS LLC, ATLANTIS MERGER SUB, INC. and ALLTEL CORPORATION Dated as of May 20, 2007
Exhibit
2.1
AGREEMENT
AND PLAN OF MERGER
among
ATLANTIS
HOLDINGS LLC,
ATLANTIS
MERGER SUB, INC.
and
ALLTEL
CORPORATION
Dated
as
of May 20, 2007
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TABLE
OF CONTENTS
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Pages
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ARTICLE
I THE MERGER
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Section
1.1
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The
Merger
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1
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Section
1.2
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Closing
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2
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Section
1.3
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Effective
Time
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2
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Section
1.4
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Effects
of the Merger
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2
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Section
1.5
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Company
Charter and By-laws of the Surviving Corporation
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2
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Section
1.6
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Directors
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2
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Section
1.7
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Officers
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2
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Section
1.8
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Further
Assurances
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2
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ARTICLE
II CONVERSION OF SHARES; EXCHANGE OF
CERTIFICATES
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3
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Section
2.1
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Effect
on Capital Stock
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3
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Section
2.2
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Exchange
of Certificates
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5
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Section
2.3
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Effect
of the Merger on Company Stock Options and Company Restricted
Shares
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7
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ARTICLE
III REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
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9
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Section
3.1
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Qualification,
Organization, Subsidiaries, etc.
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9
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Section
3.2
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Capital
Stock
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10
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Section
3.3
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Subsidiaries
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11
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Section
3.4
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Corporate
Authority Relative to This Agreement; No Violation
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11
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Section
3.5
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Reports
and Financial Statements
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13
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Section
3.6
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No
Undisclosed Liabilities
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14
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Section
3.7
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Compliance
with Law; Permits
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14
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Section
3.8
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Environmental
Laws and Regulations
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15
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Section
3.9
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Employee
Benefit Plans
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16
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Section
3.10
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Interested
Party Transactions
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17
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Section
3.11
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Absence
of Certain Changes or Events
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18
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Section
3.12
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Investigations;
Litigation
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18
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Section
3.13
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Proxy
Statement; Other Information
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18
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Section
3.14
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Tax
Matters
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18
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Section
3.15
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Labor
Matters
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19
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Section
3.16
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Intellectual
Property
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20
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Section
3.17
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Property
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20
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Section
3.18
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Required
Vote of the Company Shareholders
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21
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Section
3.19
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Material
Contracts
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21
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Section
3.20
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Insurance
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23
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Section
3.21
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Finders
or Brokers
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23
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Section
3.22
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Fairness
Opinion
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23
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Section
3.23
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State
Takeover Statutes; Charter Provisions; Company Rights
Agreement
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23
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ARTICLE
IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER
SUB
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24
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Section
4.1
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Qualification;
Organization
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24
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Section
4.2
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Corporate
Authority Relative to This Agreement; No Violation
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24
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Section
4.3
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Proxy
Statement; Other Information
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25
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Section
4.4
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Financing
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25
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Section
4.5
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Ownership
and Operations of Merger Sub
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26
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Section
4.6
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Finders
or Brokers
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26
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Section
4.7
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Certain
Arrangements
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26
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Section
4.8
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Investigations;
Litigation
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27
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Section
4.9
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Guarantee
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27
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Section
4.10
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Solvency
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27
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Section
4.11
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No
Other Information
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27
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Section
4.12
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Ownership
of Parent; Other Investments of Parent Affiliates
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28
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ARTICLE
V COVENANTS AND AGREEMENTS
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28
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Section
5.1
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Conduct
of Business
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28
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Section
5.2
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No
Solicitation
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32
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Section
5.3
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Filings;
Other Actions
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35
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Section
5.4
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Employee
Matters
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36
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Section
5.5
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Required
Approvals
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37
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Section
5.6
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Takeover
Statute
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40
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Section
5.7
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Public
Announcements
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40
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Section
5.8
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Indemnification
and Insurance
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41
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Section
5.9
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Financing
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42
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Section
5.10
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Access;
Confidentiality
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46
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Section
5.11
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Notification
of Certain Matters
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46
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Section
5.12
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Rule
16b-3
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47
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Section
5.13
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Control
of Operations
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47
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Section
5.14
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Certain
Transfer Taxes
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47
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Section
5.15
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Obligations
of Merger Sub
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47
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Section
5.16
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Treatment
of Certain Notes
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47
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Section
5.17
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Termination
of Certain Other Indebtedness
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49
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ARTICLE
VI CONDITIONS TO THE MERGER
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50
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Section
6.1
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Conditions
to Each Party’s Obligation to Effect the Merger
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50
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Section
6.2
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Conditions
to Obligation of the Company to Effect the Merger
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50
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Section
6.3
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Conditions
to Obligation of Parent and Merger Sub to Effect the
Merger
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50
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Section
6.4
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Frustration
of Closing Conditions
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51
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ARTICLE
VII TERMINATION
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51
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Section
7.1
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Termination
or Abandonment
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51
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Section
7.2
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Termination
Fees
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54
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ARTICLE
VIII MISCELLANEOUS
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56
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Section
8.1
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No
Survival of Representations and Warranties
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56
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Section
8.2
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Expenses
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56
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Section
8.3
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Counterparts;
Effectiveness
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56
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Section
8.4
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Governing
Law
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57
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Section
8.5
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Jurisdiction;
Enforcement
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57
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Section
8.6
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WAIVER
OF JURY TRIAL
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57
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Section
8.7
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Notices
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58
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Section
8.8
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Assignment;
Binding Effect
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59
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Section
8.9
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Severability
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59
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Section
8.10
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Entire
Agreement; No Third-Party Beneficiaries
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59
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Section
8.11
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Amendments;
Waivers
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60
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Section
8.12
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Headings
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60
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Section
8.13
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Interpretation
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60
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Section
8.14
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No
Recourse
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60
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Section
8.15
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Certain
Definitions
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61
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AGREEMENT
AND PLAN OF MERGER, dated as of May 20, 2007 (this “Agreement”),
among
Atlantis Holdings LLC, a Delaware limited liability company (“Parent”),
Atlantis Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary
of Parent (“Merger
Sub”),
and
Alltel Corporation, a Delaware corporation (the “Company”).
W
I T N E S
S E T H
:
WHEREAS,
the parties intend that Merger Sub be merged with and into the Company, with
the
Company surviving that merger on the terms and subject to the conditions set
forth in this Agreement (the “Merger”);
WHEREAS,
the Board of Directors of the Company has (i) determined that it is in the
best
interests of the Company and its shareholders, and declared it advisable, to
enter into this Agreement, (ii) approved the execution, delivery and performance
by the Company of this Agreement and the consummation of the transactions
contemplated hereby, including the Merger and (iii) resolved to recommend
adoption of this Agreement by the shareholders of the Company;
WHEREAS,
the members of Parent and the Board of Directors of Merger Sub have each
approved this Agreement and declared it advisable for Parent and Merger Sub,
respectively, to enter into this Agreement;
WHEREAS,
concurrently with the execution of this Agreement, and as a condition and
inducement to the Company’s willingness to enter into this Agreement, each of
TPG Partners V, L.P. and GS Capital Partners VI Fund, L.P. (the “Guarantors”)
has
provided a guarantee (the “Guarantee”)
in
favor of the Company, in the form set forth on Section 4.9 of the Parent
Disclosure Letter, with respect to certain of Parent’s obligations under this
Agreement; and
WHEREAS,
Parent, Merger Sub and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and the
transactions contemplated by this Agreement and also to prescribe certain
conditions to the Merger as specified herein.
NOW,
THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein, and intending to be
legally bound hereby, Parent, Merger Sub and the Company hereby agree as
follows:
ARTICLE
I
THE
MERGER
Section
1.1 The
Merger.
At the
Effective Time, upon the terms and subject to the conditions set forth in this
Agreement and in accordance with the applicable provisions of the Delaware
General Corporation Law (the “DGCL”),
Merger Sub shall be merged with and into the Company, whereupon the separate
corporate existence of Merger Sub shall cease, and the Company shall continue
as
the surviving company in the Merger (the “Surviving
Corporation”)
and a
wholly owned subsidiary of Parent.
1
Section
1.2 Closing.
The
closing of the Merger (the “Closing”)
shall
take place at the offices of Wachtell,
Lipton, ▇▇▇▇▇ & ▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ at 10:00 a.m., local time, on the date (the “Closing
Date”)
following the satisfaction or waiver (to the extent permitted by applicable
Law)
of the conditions set forth in Article VI (other than those conditions that
by
their nature are to be satisfied at the Closing, but subject to the satisfaction
or waiver of such conditions)
that is
the earlier of (a) any Business Day as may be specified by Parent on no less
than three Business Days’ prior notice to the Company and (b) the final day of
the Marketing Period, or such other date or time specified by the parties in
writing.
Section
1.3 Effective
Time.
On
the Closing Date,
the
Company
shall
cause the Merger to be consummated by executing, delivering and filing the
Certificate of Merger (the “Certificate
of Merger”)
with
the Secretary of State of the State of Delaware in accordance with the relevant
provisions of the DGCL and other applicable Delaware Law. The Merger shall
become effective at such time as the Certificate of Merger is duly filed with
the Secretary of State of the State of Delaware, or at such later date or time
as may be agreed by Parent and the Company in writing and specified in the
Certificate of Merger in accordance with the DGCL (such time as the Merger
becomes effective is referred to herein as the “Effective
Time”).
Section
1.4 Effects
of the Merger.
The
Merger shall have the effects set forth in this Agreement and the applicable
provisions of the DGCL.
Section
1.5 Company
Charter and By-laws of the Surviving Corporation.
(a) The
Amended and Restated Certificate of Incorporation of the Company (the
“Company
Charter”)
shall,
by virtue of the Merger, be amended in its entirety to be the same as set forth
in Exhibit 1.5(a) and, as so amended, shall be the certificate of
incorporation of the Surviving Corporation following the Merger until thereafter
amended in accordance with the provisions thereof, hereof and of applicable
Law,
in each case consistent with the obligations set forth in Section
5.8.
(b) The
by-laws of Merger Sub, as in effect as of immediately prior to the Effective
Time, shall, by virtue of the Merger, be the by-laws of the Surviving
Corporation until thereafter amended in accordance with the provisions thereof,
hereof and of applicable Law, in each case consistent with the obligations
set
forth in Section 5.8.
Section
1.6 Directors.
The
directors of Merger Sub as of immediately prior to the Effective Time shall
be
the initial directors of the Surviving Corporation and shall hold office until
their respective successors are duly elected and qualified, or their earlier
death, resignation or removal.
Section
1.7 Officers.
The
officers of the Company as of immediately prior to the Effective Time Date
shall
be the initial officers of the Surviving Corporation and shall hold office
until
their respective successors are duly elected and qualified, or their earlier
death, resignation or removal.
Section
1.8 Further
Assurances.
If at
any time after the Effective Time the Surviving Corporation shall consider
or be
advised that any deeds, bills of sale, assignments or assurances or any other
acts or things are necessary, desirable or proper (a) to vest, perfect or
2
confirm,
of record or otherwise, in the Surviving Corporation its right, title or
interest in, to or under any of the rights, privileges, powers, franchises,
properties or assets of either Merger Sub or the Company, or (b) otherwise
to carry out the purposes of this Agreement, the Surviving Corporation and
its
proper officers and directors or their designees shall be authorized to execute
and deliver, in the name and on behalf of either of Merger Sub and the
Company, all such deeds, bills of sale, assignments and assurances and to do,
in
the name and on behalf of either Merger Sub or the Company, all such other
acts and things as may be necessary, desirable or proper to vest, perfect or
confirm the Surviving Corporation’s right, title or interest in, to or under any
of the rights, privileges, powers, franchises, properties or assets
of Merger Sub or the Company and otherwise to carry out the purposes of
this Agreement.
ARTICLE
II
CONVERSION
OF SHARES; EXCHANGE OF CERTIFICATES
Section
2.1 Effect
on Capital Stock.
At the
Effective Time, by virtue of the Merger and without any action on the part
of
the Company, Parent, Merger Sub or the holders of any securities of the Company,
Parent or Merger Sub:
(a) Conversion
of Company Common Stock and Company Preferred Stock.
(i)
Subject to Section 2.1(b), 2.1(d) and 2.1(e), each issued and outstanding share
of common stock, par value $1.00, of the Company outstanding immediately prior
to the Effective Time (such shares, collectively, “Company
Common Stock”,
and
each, a “Common
Share”),
other
than (i) any Common Shares held by any direct or indirect wholly owned
subsidiary of the Company, which Common Shares shall remain outstanding except
that the number of such Common Shares shall be appropriately adjusted in the
Merger to maintain relative ownership percentages (if any, the “Remaining
Common Shares”),
(ii)
any shares of Company Common Stock (the “Dissenting
Common Shares”)
that
are owned by stockholders (the “Dissenting
Common Stockholders”)
properly exercising appraisal rights pursuant to Section 262 of the DGCL,
and (iii) any Cancelled Shares (as defined, and to the extent provided in
Section 2.1(b)), shall thereupon be converted automatically into and shall
thereafter represent the right to receive an amount in cash equal to $71.50
(the
“Common
Stock Merger Consideration”).
(ii)
Subject to Section 2.1(b), 2.1(d) and 2.1(e), each issued and outstanding share
of $2.06 No Par Cumulative Convertible Preferred Stock, Series C, of the Company
outstanding immediately prior to the Effective Time (such shares, collectively,
“Company
Series C Preferred Stock”
and
each, a “Series
C Preferred Share”),
other
than (i) any Series C Preferred Shares held by any direct or indirect wholly
owned subsidiary of the Company, which Series C Preferred Shares shall remain
outstanding except that the number of such Series C Preferred Shares shall
be
appropriately adjusted in the Merger to maintain relative ownership percentages
(if any, the “Remaining
Series C Preferred Shares”),
(ii)
any shares of Company Series C Preferred Stock (the “Dissenting
Series C Preferred Shares”)
that
are owned by stockholders (the “Dissenting
Series C Preferred Stockholders”)
properly exercising appraisal rights pursuant to Section 262 of the DGCL,
and (iii) any Cancelled Shares (to the extent provided in Section 2.1(b)),
shall
3
thereupon
be converted automatically into and shall thereafter represent the right to
receive an amount in cash equal to $523.22 (the “Series
C Preferred Stock Merger Consideration”).
(iii)
Subject to Section 2.1(b), 2.1(d) and 2.1(e), each issued and outstanding share
of $2.25 No Par Cumulative Convertible Preferred Stock, Series D, of the Company
outstanding immediately prior to the Effective Time (such shares, collectively,
“Company
Series D Preferred Stock”,
and
each, a “Series
D Preferred Share”
and
collectively with the Series C Preferred Shares and the Common Shares, the
“Shares”),
other
than (i) any Series D Preferred Shares held by any direct or indirect wholly
owned subsidiary of the Company, which Series D Preferred Shares shall remain
outstanding except that the number of such Series D Preferred Shares shall
be
appropriately adjusted in the Merger to maintain relative ownership percentages
(if any, the “Remaining
Series D Preferred Shares”
and
collectively with the Remaining Series C Preferred Shares and the Remaining
Common Shares, the “Remaining
Shares”),
(ii)
any shares of Company Series D Preferred Stock (the “Dissenting
Series D Preferred Shares”
and
collectively with the Dissenting Series C Preferred Shares and the Dissenting
Common Shares, the “Dissenting
Shares”)
that
are owned by stockholders (the “Dissenting
Series D Preferred Stockholders”
and,
collectively with the Dissenting Common Stockholders and the Dissenting Series
C
Preferred Stockholders, the “Dissenting
Stockholders”)
properly exercising appraisal rights pursuant to Section 262 of the DGCL,
and (iii) any Cancelled Shares (to the extent provided in Section 2.1(b)),
shall
thereupon be converted automatically into and shall thereafter represent the
right to receive an amount in cash equal to $481.37 (the “Series
D Preferred Stock Merger Consideration”
and
collectively with the Series C Preferred Stock Merger Consideration and the
Common Stock Merger Consideration, the “Merger
Consideration”).
(iv)
All
Shares that have been converted into the right to receive the Merger
Consideration as provided in this Section 2.1 shall be automatically cancelled
and shall cease to exist, and the holders of certificates which immediately
prior to the Effective Time represented such Shares shall cease to have any
rights with respect to such Shares other than the right to receive the
applicable Merger Consideration in accordance with Section 2.2.
(b) Parent,
Merger Sub and Company-Owned Shares.
Each
Share that is owned, directly or indirectly, by Parent or Merger Sub immediately
prior to the Effective Time, if any, or held by the Company immediately prior
to
the Effective Time (in each case, other than any such Shares held on behalf
of
third parties or Shares held in the trust to fund Company obligations) (the
“Cancelled
Shares”)
shall,
by virtue of the Merger and without any action on the part of the holder
thereof, be cancelled and retired and shall cease to exist, and no consideration
shall be delivered in exchange for such cancellation and retirement.
(c) Conversion
of Merger Sub Common Stock.
At the
Effective Time, by virtue of the Merger and without any action on the part
of
the holder thereof, each share of common stock, par value $0.01 per share,
of
Merger Sub issued and outstanding immediately prior to the Effective Time shall
be converted into and become one validly issued, fully paid and nonassessable
share of common stock, par value $0.01 per share, of the Surviving Corporation
and shall with the Remaining Shares, if any, constitute the only outstanding
shares of capital stock of the Surviving Corporation. From and after the
Effective Time, all certificates representing the common stock of Merger Sub
shall be deemed for all purposes to represent the
4
number
of
shares of common stock of the Surviving Corporation into which they were
converted in accordance with the immediately preceding sentence.
(d) Adjustments.
If at
any time during the period between the date of this Agreement and the Effective
Time there is any change in the outstanding shares of capital stock of the
Company, or securities convertible or exchangeable into or exercisable for
shares of capital stock, shall occur as a result of any reclassification,
recapitalization, stock split (including a reverse stock split) or subdivision
or combination, exchange or readjustment of shares, or any stock dividend or
stock distribution with a record date during such period (excluding, in each
case, normal quarterly cash dividends), merger or other similar transaction,
the
applicable Merger Consideration shall be equitably adjusted, without
duplication, to reflect such change; provided
that
nothing in this Section 2.1(d) shall be construed to permit the Company to
take
any action with respect to its securities that is prohibited by the terms of
this Agreement.
(e) Dissenters’
Rights.
Any
Person who otherwise would be deemed a Dissenting Stockholder shall not be
entitled to receive the applicable Merger Consideration with respect to the
Shares owned by such Person unless and until such Person shall have failed
to
perfect or shall have effectively withdrawn or lost such holder’s right to
dissent from the Merger under the DGCL. Each Dissenting Stockholder shall be
entitled to receive only the payment provided by Section 262 of the DGCL
with respect to Shares owned by such Dissenting Stockholder. The Company shall
give Parent (i) prompt notice of any written demands for appraisal,
attempted withdrawals of such demands, and any other instruments served pursuant
to applicable Law received by the Company relating to stockholders’ rights of
appraisal and (ii) the opportunity to direct all negotiations and proceedings
with respect to demand for appraisal under the DGCL. The Company shall not,
except with the prior written consent of Parent, voluntarily make any payment
with respect to any demands for appraisals of Dissenting Shares, offer to settle
or settle any such demands or approve any withdrawal of any such
demands.
Section
2.2 Exchange
of Certificates.
(a) Paying
Agent.
At or
immediately prior to the Effective Time, Parent shall deposit, or shall cause
to
be deposited, with a U.S. bank or trust company that shall be appointed by
Parent and approved in advance by the Company (such approval not to be
unreasonably withheld) to act as a paying agent hereunder (the “Paying
Agent”),
in
trust for the benefit of holders of the Shares, cash in U.S. dollars sufficient
to pay the aggregate Merger Consideration in exchange for all of the Shares
outstanding immediately prior to the Effective Time pursuant to the provisions
of this Article II (such cash being hereinafter referred to as the “Exchange
Fund”).
(b) Payment
Procedures.
(i) As
soon
as reasonably practicable after the Effective Time and in any event not later
than the fifth Business Day following the Effective Time, the Paying Agent
shall
mail to each holder of record of Shares whose Shares were converted into the
Merger Consideration pursuant to Section 2.1, (A) a letter of transmittal
which shall specify that delivery shall be effected, and risk of loss and title
to the certificates that immediately prior to the Effective Time represented
Shares (“Certificates”)
shall
pass, only upon delivery of Certificates to the Paying Agent (and shall be
in
such form and have such other provisions as Parent and the
5
Company
may reasonably determine prior to the Effective Time) and (B) instructions
for use in effecting the surrender of Certificates (or effective affidavits
of
loss in lieu thereof) or non-certificated Shares represented by book-entry
(“Book-Entry
Shares”)
in
exchange for the Merger Consideration.
(ii) Upon
surrender of Certificates (or effective affidavits of loss in lieu thereof)
or
Book-Entry Shares to the Paying Agent together with such letter of transmittal,
duly completed and validly executed in accordance with the instructions thereto,
and such other documents as may customarily be required by the Paying Agent,
the
holder of such Certificates or Book-Entry Shares shall be entitled to receive
in
exchange therefor an amount (after giving effect to any required Tax
withholdings) equal to the product of (x) the number of Shares represented
by such holder’s properly surrendered Certificates (or effective affidavits of
loss in lieu thereof) and Book-Entry Shares multiplied by (y) the
applicable Merger Consideration. No interest will be paid or accrued on any
amount payable upon due surrender of Certificates or Book-Entry Shares. In
the
event of a transfer of ownership of Shares that is not registered in the
transfer or stock records of the Company, any cash to be paid upon due surrender
of the Certificate formerly representing such Shares may be paid to such a
transferee if such Certificate is presented to the Paying Agent, accompanied
by
all documents required to evidence and effect such transfer and to evidence
that
any applicable stock transfer or other similar Taxes have been paid or are
not
applicable.
(iii) The
Surviving Corporation, Parent and the Paying Agent shall be entitled to deduct
and withhold from the consideration otherwise payable under this Agreement
to
any Person such amounts as are required to be withheld or deducted under the
Internal Revenue Code of 1986, as amended (the “Code”),
or
any provision of U.S. state, local or foreign Tax Law with respect to the making
of such payment. To the extent that amounts are so withheld or deducted and
paid
over to the applicable Governmental Entity, such withheld or deducted amounts
shall be treated for all purposes of this Agreement as having been paid to
such
Person in respect of which such deduction and withholding were made.
(c) Closing
of Transfer Books.
At the
Effective Time, the stock transfer books of the Company shall be closed, and
there shall be no further registration of transfers on the stock transfer books
of the Surviving Corporation of the Shares that were outstanding immediately
prior to the Effective Time. If, after the Effective Time, Certificates are
presented to the Surviving Corporation or Parent for transfer, they shall be
cancelled and exchanged for the proper amount pursuant to and subject to the
requirements of this Article II.
(d) Termination
of Exchange Fund.
Any
portion of the Exchange Fund (including the proceeds of any investments thereof)
that remains undistributed to the former holders of Shares for one year after
the Effective Time shall be delivered to the Surviving Corporation upon demand,
and any former holders of Shares who have not surrendered their Shares in
accordance with this Section 2.2 shall thereafter look only to the Surviving
Corporation for payment of their claim for the Merger Consideration, without
any
interest thereon, upon due surrender of their Shares.
(e) No
Liability.
Notwithstanding anything herein to the contrary, none of the Company, Parent,
Merger Sub, the Surviving Corporation, the Paying Agent or any other person
6
shall
be
liable to any former holder of Shares for any amount properly delivered to
a
public official pursuant to any applicable abandoned property, escheat or
similar Law. If any Certificate or Book-Entry Share shall not have been
surrendered prior to the date on which the related Merger Consideration would,
pursuant to applicable Law, escheat to or become the property of any
Governmental Entity, any such Merger Consideration shall, to the extent
permitted by applicable Law, immediately prior to such time, become the property
of the Surviving Corporation, free and clear of all claims or interests of
any
Person previously entitled thereto.
(f) Investment
of Exchange Fund.
The
Paying Agent shall invest all cash included in the Exchange Fund as reasonably
directed by Parent; provided,
however,
that any
investment of such cash shall in all events be limited to direct short-term
obligations of, or short-term obligations fully guaranteed as to principal
and
interest by, the U.S. government, in commercial paper rated A-1 or P-1 or better
by ▇▇▇▇▇’▇ Investors Service, Inc. or Standard & Poor’s Corporation,
respectively, or in certificates of deposit, bank repurchase agreements or
banker’s acceptances of commercial banks with capital exceeding $10 billion
(based on the most recent financial statements of such bank that are then
publicly available), and that no such investment or loss thereon shall affect
the amounts payable to holders of Certificates or Book-Entry Shares pursuant
to
this Article II. Any interest and other income resulting from such investments
shall be paid to the Surviving Corporation upon demand.
(g) Lost
Certificates.
In the
case of any Certificate that has been lost, stolen or destroyed, upon the making
of an affidavit, in form and substance reasonably acceptable to Parent, of
that
fact by the person claiming such Certificate to be lost, stolen or destroyed
and, if required by Parent or the Paying Agent, the posting by such person
of an
indemnity agreement or, at the election of Parent or the Paying Agent, a bond
in
customary amount as indemnity against any claim that may be made against it
or
the Surviving Corporation with respect to such Certificate, the Paying Agent
will deliver in exchange for such lost, stolen or destroyed Certificate an
amount equal to the number of Shares represented by such lost, stolen or
destroyed Certificate multiplied by the Merger Consideration.
(h) No
Further Ownership Rights.
All
cash paid upon the surrender of Certificates in accordance with the terms of
this Article II shall be deemed to have been paid in full satisfaction of all
rights pertaining to the Shares formerly represented by such Certificates.
Section
2.3 Effect
of the Merger on Company Stock Options and Company Restricted
Shares.
Except
for Company Stock Options and Restricted Shares as to which the treatment in
the
Merger is hereafter separately agreed by Parent and the holder thereof, which
Company Stock Options and Restricted Shares shall be treated as so
agreed:
(a) Each
outstanding option to acquire shares of Company Common Stock (each, a
“Company
Stock Option”),
whether or not then vested or exercisable, that is outstanding immediately
prior
to the Effective Time shall, as of immediately prior to the Effective Time,
become fully vested and, subject to the terms of the Company Stock Plans, be
converted into the right to receive a payment in cash, payable in U.S. dollars
and without interest, equal to the product of (i) the excess, if any, of (x)
the
Common Stock Merger Consideration over (y) the exercise price per share of
Company Common Stock subject to such Company Stock Option,
7
multiplied
by (ii) the number of shares of Company Common Stock for which such Company
Stock Option shall not theretofore have been exercised. The Surviving
Corporation shall pay the holders of Company Stock Options the cash payments
described in this Section 2.3(a) on or as soon as reasonably practicable after
the date on which the Effective Time occurs, but in any event within five
Business Days thereafter.
(b) Immediately
prior to the Effective Time, except as separately agreed by Parent and the
holder thereof, each award of restricted Company Common Stock (the “Company
Restricted Shares”)
and
any accrued stock dividends shall
vest in full and be converted into the right to receive the Common Stock Merger
Consideration as provided in Section 2.1(a). The Surviving Corporation will
vest
and pay all cash dividends accrued on such Company Restricted Shares to the
holders thereof within five Business Days after the Effective Time.
(c)
No later
than seven days prior to the Effective Time, the then-current Option Period
(as
defined in the Company’s Employee Stock Purchase Plan (the “ESPP”))
shall
terminate (the “Final
Date”)
and
each participant therein shall be entitled to apply the payroll deductions
of
such participant accumulated as of the Final Date for the then-current Option
Period to the purchase of whole shares of Company Common Stock in accordance
with the terms of the ESPP, which number of shares shall be canceled and be
converted into the right to receive the Common Stock Merger Consideration as
provided in Section 2.1(a).
(d) The
Surviving Corporation shall be entitled to deduct and withhold from the amounts
otherwise payable pursuant to this Section 2.3 to any holder of Company Stock
Options or Company Restricted Shares such amounts as the Surviving Corporation
is required to deduct and withhold with respect to the making of such payment
under the Code, or any provision of state, or local Tax Law, and the Surviving
Corporation shall make any required filings with and payments to Tax authorities
relating to any such deduction or withholding. To the extent that amounts are
so
deducted and withheld by the Surviving Corporation, such withheld amounts shall
be treated for all purposes of this Agreement as having been paid to the holder
of the Company Stock Options or Company Restricted Shares in respect of which
such deduction and withholding was made by the Surviving
Corporation.
(e) The
Board
of Directors of the Company (or the appropriate committee thereof) shall take
such actions of such Board or Committee as are necessary in connection with
the
foregoing provisions of this Section 2.3, it being understood that, except
to
the extent otherwise agreed between Parent and a holder of a Company Stock
Option or Company Restricted Share, the intention of the parties is that
following the Effective Time no holder of an Option or Restricted Share or
any
participant in any Plan or other employee benefit arrangement of the Company
shall have any right thereunder to acquire any capital stock (including any
“phantom” stock or stock appreciation rights) of the Company, any Subsidiary or
the Surviving Corporation.
8
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except
(i) as disclosed in, and reasonably apparent from, the Company SEC Documents
publicly available prior to the date of this Agreement and only as and to the
extent disclosed therein (other than any forward looking disclosures set forth
in any risk factor section, any disclosures in any section relating to forward
looking statements and any other disclosures included therein to the extent
they
are primarily predictive or forward-looking in nature) or (ii) as
disclosed in the disclosure letter delivered by the Company to Parent
immediately prior to the execution of this Agreement (the “Company
Disclosure Letter”,
it
being agreed that disclosure of any item in any section of the Company
Disclosure Letter shall also be deemed disclosure with respect to any other
section of this Agreement to which the relevance of such item is reasonably
apparent), the Company represents and warrants to Parent and Merger Sub as
follows:
Section
3.1 Qualification,
Organization, Subsidiaries, etc.
(a) Each
of
the Company and its Subsidiaries is a legal entity duly organized, validly
existing and in good standing under the Laws of its respective jurisdiction
of
organization, except for such failures with respect to any Subsidiaries that
would not, individually or in the aggregate, have a Company Material Adverse
Effect. Each of the Company and its Subsidiaries has all requisite corporate,
partnership or similar power and authority to own, lease and operate its
properties and assets and to carry on its business as presently conducted,
except for such failures that would not, individually or in the aggregate,
have
a Company Material Adverse Effect.
(b) Each
of
the Company and its Subsidiaries is duly qualified to do business and is in
good
standing as a foreign corporation (or other legal entity) in each jurisdiction
where the ownership, leasing or operation of its assets or properties or conduct
of its business requires such qualification, except where the failure to be
so
qualified or in good standing would not, individually or in the aggregate,
have
a Company Material Adverse Effect. The organizational or governing documents
of
the Company and each of its Subsidiaries, as previously provided to Parent,
are
in full force and effect and neither the Company nor any Subsidiary is in
violation of its organizational or governing documents, in each case except
for
such failures with respect to any Subsidiaries that would not, individually
or
in the aggregate, have a Company Material Adverse Effect.
(c) As
used
in this Agreement, any reference to any fact, circumstance, event, change,
effect or occurrence having a “Company
Material Adverse Effect”
means
any fact, circumstance, event, change, effect or occurrence that, individually
or in the aggregate with all other facts, circumstances, events, changes,
effects, or occurrences, (1) has or would be reasonably expected to have a
material adverse effect on or with respect to the business, results of operation
or financial condition of the Company and its Subsidiaries taken as a whole,
or
(2) that prevents the Company from consummating, or materially delays or
materially impairs the ability of the Company to consummate, the Merger,
provided,
however,
that,
Company Material Adverse Effect shall not include facts, circumstances, events,
changes, effects or occurrences (i) (A) generally affecting the U.S. mobile
wireless voice and data communications industry or
9
the
segments thereof in which the Company and its Subsidiaries operate, or (B)
generally affecting the economy or the financial, debt, credit or securities
markets, in the United States, including effects on such industry, segments,
economy or markets resulting from any political conditions or developments
in
general, or resulting from any outbreak or escalation of hostilities, declared
or undeclared acts of war or terrorism (other than any of the foregoing to
the
extent that it causes any direct damage or destruction to or renders physically
unusable or inaccessible any facility or property of the Company or any of
its
Subsidiaries); (ii) reflecting or resulting from changes or proposed changes
in
Law (including rules and regulations), interpretations thereof, regulatory
conditions or GAAP (or authoritative interpretations thereof);
or
(iii) resulting from actions of the Company or any of its Subsidiaries
which Parent has expressly requested in writing, or resulting from the
announcement of this Agreement and the transactions contemplated hereby;
except
to
the extent that, with respect to clause (i), the impact of such fact,
circumstance, event, change, effect or occurrence is materially
disproportionately adverse to the business, results of operations or financial
condition of the Company and its Subsidiaries, taken as a whole, and is not
otherwise excluded from the definition thereof.
Section
3.2 Capital
Stock.
(a) (x)
The
authorized capital stock of the Company consists of 1,000,000,000 shares of
Company Common Stock, 50,000,000 shares of Cumulative Preferred Stock, par
value
$25.00 per share, and 50,000,000 shares of No Par Cumulative Preferred Stock
(together, the “Authorized
Preferred Stock”),
600,000 of which have been designated as Company Series C Preferred Stock and
773,111 of which have been designated as Company Series D Preferred Stock.
As of
May 17, 2007, (i) 343,781,230 shares of Company Common Stock were issued and
outstanding, (ii) no shares of Company Common Stock were held in treasury,
(iii)
(A) 16,587,512 shares of Company Common Stock were reserved for issuance
pursuant to the outstanding Company Stock Options and 85,360 shares of Company
Common Stock were reserved for issuance upon conversion of convertible
debentures of a Subsidiary of the Company, (B) 12,600,186
additional shares of Company Common Stock were reserved for issuance for future
grant pursuant to the Company Stock Plans and (C) 74,107 shares of Company
Common Stock were reserved for issuance upon conversion of the Company Series
C
Preferred Stock and 175,534 shares of Company Common Stock were reserved for
issuance upon conversion of the Company Series D Preferred Stock,
and (iv)
10,127 shares of Company Series C Preferred Stock were issued and outstanding
and 26,073 shares of Company Series D Preferred Stock were issued and
outstanding. All outstanding Shares, and all shares of Company Common Stock
reserved for issuance as noted in clause (iii) of the foregoing sentence, when
issued in accordance with the respective terms thereof, are or will be duly
authorized, validly issued, fully paid and non-assessable and free of
pre-emptive or similar rights.
(y) No
Subsidiary of the Company owns any Shares. Section 3.2(a) of the Company
Disclosure Letter lists, as of May 18, 2007, each outstanding Company Stock
Option and share of Restricted Stock, and, as applicable, the exercise price
and
expiration date thereof. The per share exercise price or purchase price for
each
Company Stock Option is equal to or greater than the fair market value of the
underlying Shares on the date of the corporate action effectuating the grant
of
such Company Stock Option.
(b) Except
as
set forth in subsection (a) above, as of the date hereof, (i) the
Company does not have any shares of its capital stock issued or outstanding
other than shares of Company Common Stock that have become outstanding after
May
18, 2007 upon exercise of
10
Company
Stock Options outstanding as of such date and (ii) there are no outstanding
subscriptions, options, warrants, calls, convertible securities, stock-based
performance units or other similar rights, agreements or commitments relating
to
the issuance of capital stock or other equity interests to which the Company
or
any of its Subsidiaries is a party obligating the Company or any of its
Subsidiaries to (A) issue, transfer or sell any shares of capital stock or
other equity interests of the Company or any of its Subsidiaries or securities
convertible into or exchangeable for such shares or equity interests,
(B) issue, grant, extend or enter into any such subscription, option,
warrant, call, convertible securities or other similar right, agreement or
arrangement, (C) redeem or otherwise acquire any such shares of capital
stock or other equity interests or (D) provide a material amount of funds
to, or make any material investment (in the form of a loan, capital contribution
or otherwise) in, the Company or any Subsidiary of the Company.
(c) Except
as
set forth in subsection (a) or (b) above, neither the Company nor any of its
Subsidiaries has outstanding bonds, debentures, notes or other obligations,
the
holders of which have the right to vote (or which are convertible into or
exercisable for securities having the right to vote) with the shareholders
of
the Company on any matter.
(d) There
are
no shareholder agreements, voting trusts or other agreements or understandings
to which the Company or any of its Subsidiaries is a party with respect to
the
voting, registration, redemption, repurchase or disposition of the capital
stock
or other equity interest of the Company or any of its Subsidiaries.
Section
3.3 Subsidiaries. Section
3.3 of the Company Disclosure Letter sets forth a complete and correct list
of each “significant subsidiary” of the Company as such term is defined in
Regulation S-X promulgated by the SEC (each, a “Significant
Subsidiary”).
Section 3.3 of the Company Disclosure Letter also sets forth the
jurisdiction of organization and percentage of outstanding equity interests
(including partnership interests and limited liability company interests) owned
by the Company or its Subsidiaries of each Significant Subsidiary. All equity
interests (including partnership interests and limited liability company
interests) of the Company’s Subsidiaries held by the Company or by any other
Subsidiary have been duly and validly authorized and are validly issued, fully
paid and non-assessable and were not issued in violation of any preemptive
or
similar rights, purchase option, call or right of first refusal or similar
rights. All such equity interests owned by the Company or its Subsidiaries
are
free and clear of any Liens, other than restrictions on transfer imposed by
applicable Law. Except for its interests in Subsidiaries of the Company, the
Company does not own, directly or indirectly, 5% or more of the outstanding
capital stock of, or other equity interests, in any Person, or any options,
warrants, rights or securities convertible, exchangeable or exercisable
therefor, in each case if the book value thereof as of December 31, 2006
exceeded $25 million.
Section
3.4 Corporate
Authority Relative to This Agreement; No Violation.
(a) The
Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement and, subject to receipt of the
Company Shareholder Approval, to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of the
11
Company
and, except for (i) the Company Shareholder Approval and (ii) the filing of
the
Certificate of Merger with the Secretary of State of the State of Delaware,
no
other corporate proceedings on the part of the Company are necessary to
authorize the consummation of or to consummate the transactions contemplated
hereby. Subject to Section 5.2(d), the Board of Directors of the Company has,
by
resolutions duly adopted at a meeting duly called and held, (x) duly and validly
approved and declared advisable this Agreement and the transactions contemplated
hereby, (y) determined that the transactions contemplated by this Agreement
are
advisable and in the best interests of the Company and its shareholders and
(z)
resolved to recommend in accordance with applicable Law that the Company’s
shareholders vote in favor of adoption and approval of this Agreement and the
transactions contemplated hereby, including the Merger (the “Recommendation”).
This
Agreement has been duly and validly executed and delivered by the Company and,
assuming this Agreement constitutes the valid and binding agreement of Parent
and Merger Sub, constitutes the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar Laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a proceeding
in
equity or at Law).
(b) Other
than the filing of the Certificate of Merger pursuant to the DGCL or as required
by (i) the Securities Exchange Act of 1934, as amended (the “Exchange
Act”),
and
the rules and regulations promulgated thereunder, (ii) the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the rules
and regulations promulgated thereunder (the “HSR
Act”),
(iii) the Federal Communications Commission (the “FCC”);
(iv) those state public service or public utility commissions or similar
state regulatory bodies (“State
Commissions”)
set
forth in Section 3.4(b)(iv) of the Company Disclosure Letter, (v) foreign
Governmental Entities regulating competition and telecommunications businesses
(the “Foreign
Regulators”)
set
forth in Section 3.4(b)(v) of the Company Disclosure Letter, and (vi) the
approvals set forth on Section 3.4(b)(vi) of the Company Disclosure
Letter (collectively, the “Company
Approvals”),
no
authorization, consent, approval or order of, or filing with, or notice to,
any
United States or foreign governmental or regulatory agency, commission, court,
body, entity or authority (each, a “Governmental
Entity”)
is
necessary, under applicable Law, in connection with the execution, delivery
and
performance of this Agreement by the Company or the consummation by the Company
of the transactions contemplated hereby, except for such authorizations,
consents, approvals, orders, filings or notices that, if not obtained or made,
would not, individually or in the aggregate, have a Company Material Adverse
Effect.
(c) The
execution, delivery and performance by the Company of this Agreement does not,
and the consummation of the transactions contemplated hereby and compliance
with
the provisions hereof by the Company will not, (i) result in any breach or
violation of, or default (with or without notice or lapse of time, or both)
under, require consent under, or give rise to a right of termination,
cancellation, modification or acceleration of any obligation or to the loss
of
any benefit under any loan, guarantee of indebtedness or credit agreement,
note,
bond, mortgage, indenture, lease, agreement, contract, purchase or sale order,
instrument, permit, concession, franchise, right or license binding upon the
Company or any of its Subsidiaries or result in the creation of any liens,
claims, mortgages, encumbrances, pledges, security interests, equities or
charges of any kind (each, a “Lien”)
upon
any of the properties, assets or rights of the Company or any of its
Subsidiaries, (ii) conflict with or result in any
12
violation
of any provision of the certificate or articles of incorporation or by-laws
or
other equivalent organizational document of the Company or any of its
Subsidiaries or (iii) assuming that all Company Approvals are duly
obtained, conflict with or violate any applicable Laws, other than, in the
case
of clauses (i), (ii) (to the extent relating to Subsidiaries) and (iii), as
would not, individually or in the aggregate, have a Company Material Adverse
Effect and other than as may arise in connection with the Financing or facts
and
circumstances particular to Parent and its Affiliates.
Section
3.5 Reports
and Financial Statements; Internal Controls.
(a) The
Company and its Subsidiaries have timely filed all forms, documents, statements
and reports required to be filed by them with the Securities and Exchange
Commission (the “SEC”)
since
January 1, 2004 (the forms, documents, statements and reports filed with
the SEC since January 1, 2004, including any amendments thereto, the
“Company
SEC Documents”).
As of
their respective dates, or, if amended or superseded by a subsequent filing,
as
of the date of the last such amendment or superseding filing prior to the date
hereof, the Company SEC Documents complied, and each of the Company SEC
Documents filed subsequent to the date of this Agreement will comply, in all
material respects with the requirements of the Securities Act of 1933, as
amended (the “Securities
Act”),
the
Exchange Act and the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act”),
as
the case may be, and the applicable rules and regulations promulgated
thereunder. As of the time of filing with the SEC, none of the Company SEC
Documents so filed or that will be filed subsequent to the date of this
Agreement contained or will contain, as the case may be, any untrue statement
of
a material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of
the circumstances under which they were made, not misleading. No Subsidiary
of
the Company is subject to the periodic reporting requirements of the Exchange
Act.
(b) Each
of
the financial statements (including all related notes and schedules) of the
Company and its Subsidiaries included in the Company SEC Documents complied
as
to form in all material respects with the published rules and regulations of
the
SEC with respect thereto, fairly present in all material respects the financial
position of the Company and its Subsidiaries, as at the respective dates
thereof, and the results of their operations and their cash flows for the
respective periods then ended (subject, in the case of the unaudited statements,
to normal year-end audit adjustments and to any other adjustments expressly
described therein, including the notes thereto, none of which are expected
to
have a Company Material Adverse Effect) and were prepared in conformity with
United States generally accepted accounting principles (“GAAP”)
(except, in the case of the unaudited statements, as permitted by the SEC)
applied on a consistent basis during the periods involved (except as may be
expressly indicated therein or in the notes thereto).
(c) The
Company (i) has implemented and maintains disclosure controls and procedures
(as
such terms are defined in Rule 13a-15(e) under the Exchange Act) to ensure
the
material information relating to the Company, including its Subsidiaries, is
made known to the chief executive officer and the chief financial officer of
the
Company by others within those entities and (ii) has disclosed, based on its
most recent evaluation prior to the date hereof, to the Company’s outside
auditors and the audit committee of the Board of Directors of the
Company
13
(A)
any
significant deficiencies and material weaknesses in the design or operation
of
internal controls over financial reporting (as defined in Rule 13a-15(f) of
the
Exchange Act) which are reasonably likely to adversely affect the Company’s
ability to record, process, summarize and report financial information and
(B)
any fraud, whether or not material, that involves management or other employees
who have a significant role in the Company’s internal controls over financial
reporting.
Section
3.6 No
Undisclosed Liabilities.
Except
(i) as reflected or reserved against in the Company’s consolidated balance
sheet as of December 31, 2006 (or the notes thereto) included in the Company
SEC
Documents filed prior to the date hereof, (ii) for liabilities or
obligations incurred in connection with the transactions contemplated by this
Agreement or the financing of such transactions and
(iii)
for liabilities and obligations incurred in the ordinary course of
business,
neither
the Company nor any Subsidiary of the Company has any liabilities or obligations
of any nature, whether or not accrued, contingent or otherwise and whether
due
or to become due, that would, individually or in the aggregate, have a Company
Material Adverse Effect.
Section
3.7 Compliance
with Law; Permits.
(a) Since
January 1, 2004, the businesses of each of the Company and its Subsidiaries
have
not been conducted in violation of any federal, state, local or foreign law,
statute, ordinance, rule, regulation, judgment, order, injunction, decree,
arbitration award, agency requirement or License of any Governmental Entity
(collectively, “Laws”),
except for such violations that would not, individually or in the aggregate,
have a Company Material Adverse Effect. No investigation or review by any
Governmental Entity with respect to the Company or any of its Subsidiaries
is
pending or, to the Knowledge of the Company, threatened, nor has any
Governmental Entity indicated an intention to conduct the same except for such
investigations or reviews that would not, individually or in the aggregate,
have
a Company Material Adverse Effect. The Company and its Subsidiaries each has
all
governmental permits, licenses, franchises, variances, exemptions, orders issued
or granted by a Governmental Entity and all other authorizations, consents
and
approvals issued or granted by a Governmental Entity (“Licenses”)
necessary to conduct its business as presently conducted, except those the
absence of which would not, individually or in the aggregate, have a Company
Material Adverse Effect (the “Material
Licenses”).
(b) Section
3.7(b) of the Company Disclosure Letter sets forth a list, as of the date of
this Agreement, of (A) all Material Licenses and, to the extent not otherwise
constituting Material Licenses, all Licenses issued or granted to the Company
or
any of its Subsidiaries by the FCC (“FCC
Licenses”)
(other
than point to point microwave licenses), all Licenses issued or granted to
the
Company or any of its Subsidiaries by State Commissions regulating
telecommunications businesses (“State
Licenses”),
and
all Licenses issued or granted to the Company or any of its Subsidiaries by
foreign Governmental Entities regulating telecommunications businesses (together
with such Material Licenses, FCC Licenses and State Licenses, the “Company
Licenses”);
(B)
all pending applications for Licenses that would be Company Licenses if issued
or granted; and (C) all pending applications by the Company or any of its
Subsidiaries for modification, extension or renewal of any Company License.
Each
of the Company and its Subsidiaries is in compliance with its obligations under
each of the FCC
14
Licenses
and the rules and regulations of the FCC, and with its obligations under each
of
the other Company Licenses, in each case except for such failures to be in
compliance as would not, individually or in the aggregate, have a Company
Material Adverse Effect. There is not pending or, to the Knowledge of the
Company, threatened before the FCC, the Federal Aviation Administration (the
“FAA”)
or any
other Governmental Entity any proceeding, notice of violation, order of
forfeiture or complaint or investigation against the Company or any of its
Subsidiaries relating to any of the Company Licenses, in each case, except
as
would not, individually or in the aggregate, have a Material Adverse Effect.
The
FCC actions granting all FCC Licenses, together with all underlying construction
permits, have not been reversed, stayed, enjoined, annulled or suspended, and
there is not pending or, to the Knowledge of the Company, threatened, any
application, petition, objection or other pleading with the FCC, the FAA or
any
other Governmental Entity which challenges or questions the validity of or
any
rights of the holder under any such License, in each case, except as would
not,
individually or in the aggregate, have a Company Material Adverse
Effect.
Section
3.8 Environmental
Laws and Regulations.
(a) Except
as
would not, individually or in the aggregate, have a Company Material Adverse
Effect, (i) the Company and each of its Subsidiaries have conducted their
respective businesses in compliance with all, and have not violated any,
applicable Environmental Laws, (ii) there has been no release of any
Hazardous Substance by the Company or any of its Subsidiaries or at, on or
under
any property currently or, to the Knowledge of the Company, formerly owned,
leased or operated by the Company or any of its Subsidiaries in any manner
that
could reasonably be expected to give rise to any remedial obligation, corrective
action requirement or liability under applicable Environmental Laws,
(iii) since January 1, 2004, neither the Company nor any of its
Subsidiaries has received in writing any claims, notices, demand letters or
requests for information (except for such claims, notices, demand letters or
requests for information the subject matter of which has been resolved prior
to
the date of this Agreement) from any Governmental Entity or any other Person
asserting that the Company or any of its Subsidiaries is or may be in violation
of, or liable under, any Environmental Law, (iv) no Hazardous Substance has
been disposed of, arranged to be disposed of, released or transported in
violation of any applicable Environmental Law, or in a manner giving rise to,
or
that would reasonably be expected to give rise to, any liability under
Environmental Law, from any current or former properties or facilities while
owned or operated by the Company or any of its Subsidiaries or as a result
of
any operations or activities of the Company or any of its Subsidiaries at any
location and, to the Knowledge of the Company, Hazardous Substances are not
otherwise present at or about any such properties or facilities in amount or
condition that would reasonably be expected to result in liability to the
Company or any of its Subsidiaries under Environmental Law, and (v) neither
the Company, its Subsidiaries nor any of their respective properties or
facilities are subject to, or are threatened to become subject to, any
liabilities relating to any suit, settlement, court order, administrative order,
regulatory requirement, judgment or written claim asserted or arising under
any
Environmental Law or any agreement relating to environmental
liabilities.
(b) As
used
herein, “Environmental
Law”
means
any Law relating to (i) the protection, preservation or restoration of the
environment (including air, surface water, groundwater, drinking water supply,
surface land, subsurface land, plant and animal life or any
15
other
natural resource), or (ii) the exposure to, or the use, storage, recycling,
treatment, generation, transportation, processing, handling, labeling,
production, release or disposal of Hazardous Substances.
(c) As
used
herein, “Hazardous
Substance”
means
any substance listed, defined, designated, classified or regulated as a waste,
pollutant or contaminant or as hazardous, toxic, radioactive or dangerous or
any
other term of similar import under any Environmental Law, including petroleum,
radon, asbestos, toxic molds, urea formaldehyde or polychlorinated biphenyls.
Section
3.9 Employee
Benefit Plans.
(a) Section
3.9(a) of the Company Disclosure Letter sets forth a true and complete list
of
each material Company Benefit Plan. For purposes of this Agreement, the term
“Company
Benefit Plan”
shall
mean any employee or director benefit plan, program, arrangement or agreement,
including, without limitation, any such plan, program, arrangement or agreement
that is an employee welfare benefit plan within the meaning of Section 3(1)
of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
an
employee pension benefit plan within the meaning of Section 3(2) of ERISA
(whether or not such plan is subject to ERISA) or a bonus, incentive, deferred
compensation, vacation, stock purchase, stock option, severance, employment,
change of control or fringe benefit plan, program, arrangement or agreement
for
the benefit of the current or former employees, independent contractors or
directors of the Company or its Subsidiaries that is sponsored or maintained
by
the Company or any of its Subsidiaries to or for which Company or any of its
Subsidiaries has any liability, whether contingent or otherwise.
(b) The
Company has heretofore made available to Parent true and complete copies of
each
of the material Company Benefit Plans and (i) each writing constituting a part
of such Company Benefit Plan, including all amendments thereto; (ii) the most
recent (A) Annual Reports (Form 5500 Series) and accompanying schedules, if
any,
(B) audited financial statements and (C) actuarial valuation reports; (iii)
the
most recent determination letter from the Internal Revenue Service
(“IRS”)
(if
applicable) for such Company Benefit Plan; and (iv) any related trust agreement
or funding instrument now in effect or required in the future as a result of
the
transactions contemplated by this Agreement.
(c) Except
as
would not, individually or in the aggregate, have a Company Material Adverse
Effect: (i) each of the Company Benefit Plans has been established, operated
and
administered in all respects with applicable Laws, including, but not limited
to, ERISA, the Code and in each case the regulations thereunder; (ii) each
of
the Company Benefit Plans intended to be “qualified” within the meaning of
Section 401(a) of the Code has received a favorable determination letter from
the IRS, and to the Knowledge of the Company, there are no existing
circumstances or events that have occurred that could reasonably be expected
to
result in the revocation of such letter; (iii) no Company Benefit Plan is
subject to Title IV of ERISA; (iv) no Company Benefit Plan provides health,
life
insurance or disability benefits (whether or not insured), with respect to
current or former employees or directors of the Company or its Subsidiaries
beyond their retirement or other termination of service, other than (A) coverage
mandated by applicable Law or (B) death benefits or retirement benefits under
any “employee
16
pension
plan” (as such term is defined in Section 3(2) of ERISA); (v) no liability under
Title IV of ERISA has been incurred by the Company, its Subsidiaries or any
ERISA Affiliate of the Company that has not been satisfied in full, and, to
the
Knowledge of the Company, no condition exists that presents a risk to the
Company, its Subsidiaries or any ERISA Affiliate of the Company of incurring
a
liability thereunder; (vi) no
Company Benefit Plan is a “multiemployer pension plan” (as such term is defined
in Section 3(37) of ERISA) or a plan that has two or more contributing sponsors
at least two of whom are not under common control, within the meaning of Section
4063 of ERISA; (vii)
all
contributions or other amounts payable by the Company or its Subsidiaries as
of
the date hereof with respect to each Company Benefit Plan in respect of current
or prior plan years have been paid or accrued in accordance with GAAP; (viii)
neither the Company nor its Subsidiaries has engaged in a transaction in
connection with which the Company or its Subsidiaries could reasonably be
expected to be subject to either a civil penalty assessed pursuant to Section
409 or 502(i) of ERISA or a Tax imposed pursuant to Section 4975 or 4976 of
the
Code; (ix) each Company Benefit Plan that is a “nonqualified deferred
compensation plan” within the meaning of Section 409A(d)(1) of the Code and any
award thereunder, in each case that is subject to Section 409A of the Code,
has
been operated in good faith compliance with Section 409A of the Code since
January 1, 2005 and all applicable regulations and notices issued thereunder,
(x) no “reportable event” (as defined in Section 4043 of ERISA) has occurred
with respect to any Company Benefit Plan and no Company Benefit Plan has
incurred any “accumulated funding deficiency” (as defined in Section 302 of
ERISA and section 412 of the Code, respectively), whether or not waived, and
neither the Company nor any of its Subsidiaries has provided, or is required
to
provide, security to any Company Benefit Plan pursuant to Section 401(a)(29)
of
the Code; and (xi) there are no pending, threatened or anticipated claims (other
than routine claims for benefits) by, on behalf of or against any of the Company
Benefit Plans or any trusts related thereto which could reasonably be expected
to result in any liability of the Company or any of its Subsidiaries.
“ERISA
Affiliate”
means,
with respect to any entity, trade or business, any other entity, trade or
business that is a member of a group described in Section 414(b), (c), (m)
or
(o) of the Code or Section 4001(b)(1) of ERISA that includes the first entity,
trade or business, or that is a member of the same “controlled group” as the
first entity, trade or business pursuant to Section 4001(a)(14) of
ERISA.
(d) Neither
the execution of this Agreement nor the consummation of the transactions
contemplated by this Agreement will, either alone or in combination with another
event, (i) entitle any employee or officer of the Company or any of its
Subsidiaries to severance pay, unemployment compensation or any other payment,
except as expressly provided in this Agreement or as required by applicable
Law,
(ii) accelerate the time of payment or vesting, or increase the amount of
compensation due any such employee, consultant or officer, except as expressly
provided in this Agreement, or (iii) result in payments under any of the Company
Benefit Plans which would not be deductible under Section 280G of the
Code.
Section
3.10 Interested
Party Transactions.
Except
for employment-related Contracts filed or incorporated by reference as an
exhibit to the Company SEC Documents filed prior to the date of this Agreement
or Company Benefit Plans, Section 3.10 of the Company Disclosure
Letter sets forth a correct and complete list of the contracts or
arrangements that are in existence as of the date of this Agreement between
the
Company or any of its Subsidiaries, on the one hand, and, on the other hand,
any
(A) present executive officer or director of either the Company or any of
its Subsidiaries or any person that has served as such an executive officer
or
17
director
within the last two years or any of such officer’s or director’s immediate
family members or (B) record or beneficial owner of more than 5% of the
Shares as of the date hereof (each, an “Affiliate
Transaction”).
Section
3.11 Absence
of Certain Changes or Events.
(a)
Since December 31, 2006 through the date of this Agreement, except for the
transactions contemplated hereby, the business of the Company and its
Subsidiaries has been conducted, in all material respects, in the ordinary
course of business consistent with past practice and neither the Company nor
any
of its Subsidiaries has taken or permitted to occur any action that were it
to
be taken from and after the date hereof would require the approval of Parent
pursuant to clauses (ii), (v), (vi), (vii), (viii), (ix), (xiii), (xiv), (xvi),
(xvii), (xviii) or, with respect to such preceding clauses, (xix) of Section
5.1(b); and (b) since December 31, 2006, there have not been any facts,
circumstances, events, changes, effects or occurrences that, individually or
in
the aggregate, have had or would have a Company Material Adverse
Effect.
Section
3.12 Investigations;
Litigation.
There
are no
(i) actions, suits, or proceedings pending or, to the Knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries,
any Company Benefit Plan or any of their respective properties or assets, at
Law
or in equity, or (ii) material orders, judgments or decrees of any Governmental
Entity against the Company or any of its Subsidiaries or any Company Benefit
Plan, which, in the case of clause (i), individually or in the aggregate, have
had or would have a Company Material Adverse Effect.
Section
3.13 Proxy
Statement; Other Information.
The
Proxy Statement will not at the time of the mailing of the Proxy Statement
to
the shareholders of the Company, at the time of the Company Meeting, and at
the
time of any amendments thereof or supplements thereto, contain any untrue
statement of a material fact or omit to state any material fact required to
be
stated therein or necessary in order to make the statements therein, in light
of
the circumstances under which they were made, not misleading; provided
that no
representation is made by the Company with respect to information supplied
by,
or the sufficiency of disclosures related to, Parent, Merger Sub or any
Affiliate of Parent or Merger Sub. The Proxy Statement will comply as to form
in
all material respects with the requirements of the Exchange Act. The letter
to
shareholders, notice of meeting, proxy statement, forms of proxy and any other
soliciting materials to be distributed to shareholders in connection with the
Merger to be filed with the SEC in connection with seeking the adoption and
approval of this Agreement are collectively referred to herein as the
“Proxy
Statement.”
Section
3.14 Tax
Matters.
(a) Except
as
would not have, individually or in the aggregate, a Company Material Adverse
Effect, (i) the Company and each of its Subsidiaries have prepared and
timely filed (taking into account any valid extension of time within which
to
file) all Tax Returns required to be filed by any of them and all such Tax
Returns are complete and accurate, (ii) the Company and each of its
Subsidiaries have timely paid all Taxes that are required to be paid by any
of
them (whether or not shown on any Tax Return), except with respect to matters
contested in good faith through appropriate proceedings and for which adequate
reserves have been established on the financial statements of the Company and
its Subsidiaries in accordance with
18
GAAP,
(iii) the U.S. consolidated federal income Tax Returns of the Company
through the Tax year ending December 31, 2003 have been examined and the U.S.
consolidated federal income Tax Returns of the Company for the Tax years ending
December 31, 2004 and 2005 are as of the date hereof being examined by the
IRS
(or the period for assessment of the Taxes in respect of which such Tax Returns
were required to be filed has expired), (iv) all assessments for Taxes due
with respect to completed and settled examinations or any concluded litigation
have been fully paid, (v) there are no audits, examinations, investigations
or other proceedings pending or threatened in writing in respect of Taxes or
Tax
matters of the Company or any of its Subsidiaries, (vi) there are no Liens
for Taxes on any of the assets of the Company or any of its Subsidiaries other
than statutory Liens for Taxes not yet due and payable or Liens for Taxes that
are being contested in good faith through appropriate proceedings and for which
adequate reserves have been established on the financial statements of the
Company and its Subsidiaries in accordance with GAAP, (vii) none of the
Company or any of its Subsidiaries has been a “controlled corporation” or a
“distributing corporation” in any distribution that was purported or intended to
be governed by Section 355 of the Code (or any similar provision of state,
local or foreign Law) occurring during the two-year period ending on the date
hereof, (viii) neither the Company nor any of its Subsidiaries is a party
to any agreement or arrangement relating to the apportionment, sharing,
assignment or allocation of any Tax or Tax asset (other than an agreement or
arrangement solely among members of a group the common parent of which is the
Company or a Subsidiary of the Company) or has any liability for Taxes of any
Person (other than the Company or any of its Subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any analogous or similar provision of
state, local or foreign Tax Law), and (ix) none of the Company or any of its
Subsidiaries has been a party to any “listed transaction” within the meaning of
Treasury Regulation 1.6011-4(b)(2).
(b) As
used
in this Agreement, (i) ”Tax”
or
“Taxes”
means
any and all federal, state, local or foreign taxes, imposts, levies or other
like assessments, including all net income, gross receipts, capital, sales,
use,
ad valorem, value added, transfer, franchise, profits, inventory, capital stock,
license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation, property and estimated taxes, customs
duties, and other taxes of any kind whatsoever, including any and all interest,
penalties, additions to tax or additional amounts imposed by any Governmental
Entity in connection with respect thereto, and (ii) ”Tax
Return”
means
any return, report or similar filing (including any attached schedules,
supplements and additional or supporting material) filed or required to be
filed
with respect to Taxes, including any information return, claim for refund,
amended return or declaration of estimated Taxes (and including any amendments
with respect thereto).
Section
3.15 Labor
Matters.
Neither
the Company nor any of its Subsidiaries is a party to, or bound by, any
collective bargaining agreement, contract or other agreement or understanding
with a labor union or labor organization. Neither the Company nor any of its
Subsidiaries is subject to a dispute, strike or work stoppage except as would
not, individually or in the aggregate, have a Company Material Adverse Effect.
To the Knowledge of the Company, there are no organizational efforts with
respect to the formation of a collective bargaining unit presently being made
or
threatened involving employees of the Company or any of its
Subsidiaries.
19
Section
3.16 Intellectual
Property.
(a)
Except
as would not, individually or in the aggregate, have a Company Material Adverse
Effect, either the Company or a Subsidiary of the Company owns, or is licensed
or otherwise possesses adequate rights to use, all trademarks, trade names,
service marks, service names, ▇▇▇▇ registrations, logos, assumed names, domain
names, registered and unregistered copyrights, software, patents or other
intellectual property, and all applications and registrations used in their
respective businesses as currently conducted (collectively, the “Intellectual
Property”).
Except as would not, individually or in the aggregate, have a Company Material
Adverse Effect, (i) there are no pending or, to the Knowledge of the
Company, threatened claims by any person alleging (x) infringement by the
Company or any of its Subsidiaries of any intellectual property rights of any
person or conduct by Company or any of its Subsidiaries that constitutes unfair
competition or unfair trade practices or (y) challenging the ownership, validity
or enforceability of any Intellectual Property owned or exclusively licensed
by
Company or its Subsidiaries, and there have not been any claims or threats
against Company or its Subsidiaries within the past five years that would fall
within the scope of (x) or (y), (ii) to the Knowledge of the Company, the
conduct of the business of the Company and its Subsidiaries does not infringe
any intellectual property rights of any person or otherwise constitute unfair
competition or unfair trade practices, (iii) neither the Company nor any of
its Subsidiaries has made any claim of a violation or infringement by others
of
its rights to or in connection with the Intellectual Property of the Company
or
any of its Subsidiaries and (iv) to the Knowledge of the Company, no person
is infringing any Intellectual Property of the Company or any of its
Subsidiaries.
(b) Except
as
would not, individually or in the aggregate, have a Company Material Adverse
Effect, the Company and its Subsidiaries (i) take reasonable actions to protect
the security of their software, systems, networks and the confidentiality of
their data, information, and trade secrets, (ii) abide by all Laws and internal
policies regarding the collection, use and disclosure of personally identifiable
information, including customer and client information, and (iii) are not
subject to any pending or, to the Knowledge of the Company, threatened claim
that alleges a breach of the foregoing.
(c) Except
as
would not, individually or in the aggregate, have a Company Material Adverse
Effect, the Intellectual Property owned or exclusively licensed by Company
and
its Subsidiaries are (i) free and clear of any Liens, (ii) not subject to any
judgment, order, writ, injunction or decree that would restrict or impair their
use, and (iii) to the Knowledge of Company, valid and enforceable.
Section
3.17 Property. (a)
Except
as would not, individually or in the aggregate, have a Company Material Adverse
Effect, the Company or a Subsidiary of the Company owns and has good and valid
title to all of its owned real property and good title to all its personal
property and has valid leasehold interests in all of its leased properties,
sufficient to conduct their respective businesses as currently conducted, free
and clear of all Liens (except in all cases for Liens permissible under any
applicable loan agreements and indentures and for title exceptions, defects,
encumbrances, liens, charges, restrictions, restrictive covenants and other
matters, whether or not of record, which in the aggregate do not materially
affect the continued use of the property for the purposes for which the property
is currently being used). Except as would not, individually or in the aggregate,
have a Company Material Adverse Effect, all leases under which the Company
or
any of its Subsidiaries lease any real or personal property are valid and
in
20
full
force and effect against the Company or any of its Subsidiaries and, as of
the
date hereof, to the Company’s Knowledge, the counterparties thereto, in
accordance with their respective terms, and there is not, under any of such
leases, any event which, with notice or lapse of time or both, would become
a
default by the Company or any of its Subsidiaries or, to the Knowledge of the
Company, the other parties thereto.
(b) Except
as
would not, individually or in the aggregate, have a Company Material Adverse
Effect, neither the Company nor any of its Subsidiaries is obligated under
or
bound by any option, right of first refusal, purchase contract or other
contractual right to sell, lease or purchase any real property or any portions
thereof or interests therein.
Section
3.18 Required
Vote of the Company Shareholders.
Assuming the accuracy of the representations and warranties in Section 4.5,
the
affirmative vote of the holders of outstanding shares of Company Common Stock,
voting together as a single class, representing at least a majority of all
the
votes then entitled to vote at a meeting of shareholders, is the only vote
of
holders of any class of securities of the Company which is required to approve
this Agreement, the Merger and the other transactions contemplated hereby (the
“Company
Shareholder Approval”).
Section
3.19 Material
Contracts.
(a) The
Company has made available to Parent, true, correct and complete copies of
(including all amendments or modifications to), as of the date of this
Agreement, all Contracts to which the Company or any of its Subsidiaries is
a
party or by which the Company, any of its Subsidiaries or any of their
respective properties or assets is bound (other than Plans) that:
(i) are
or
would be required to be filed by the Company as a “material contract” pursuant
to Item 601(b)(10)(i) of Regulation S-K under the Securities Act or disclosed
by
the Company on a Current Report on Form 8-K;
(ii) with
respect to a joint venture, partnership, limited liability or other similar
agreement or arrangement, relate to the formation, creation, operation,
management or control of any partnership or joint venture that is material
to
the business of the Company and the Subsidiaries, taken as a whole;
(iii) relate
to
Indebtedness and having an outstanding principal amount in excess of $100
million;
(iv) were
entered into after December 31, 2006 or not yet consummated, and involve the
acquisition from another person or disposition to another Person, directly
or
indirectly (by merger or otherwise), of assets or capital stock or other equity
interests of another Person for aggregate consideration under such Contract
(or
series of related Contracts) in excess of $50 million (other than acquisitions
or dispositions of inventory in the ordinary course of business; capital
expenditures and capital commitments (which are covered in clause (vi) and
dispositions of cash in connection with the repayment of Indebtedness at the
maturity thereof);
21
(v) relate
to
an acquisition, divestiture, merger or similar transaction that contains
representations, covenants, indemnities or other obligations (including
indemnification, “earn-out” or other contingent obligations), that are still in
effect and, individually or in the aggregate, could reasonably be expected
to
result in payments in excess of $50 million;
(vi) other
than an acquisition subject to clause (v) above, obligate the Company to make
any capital commitment or capital expenditure, other than acquisitions of
inventory, (including pursuant to any joint venture) in excess of $50
million;
(vii) relate
to
any guarantee or assumption of other obligations of any third party or
reimbursement of any maker of a letter of credit, except for agreements entered
into in the ordinary course of business consistent with past practice which
agreements relate to obligations which do not exceed $50 million in the
aggregate for all such agreements;
(viii) are
license agreements that are material to the business of the Company and its
Subsidiaries, taken as a whole, pursuant to which the Company or any of its
Subsidiaries is a party and licenses in Intellectual Property owned by a third
party or licenses out Intellectual Property owned by the Company or its
Subsidiaries, other than license agreements for software that is generally
commercially available;
(ix) any
Affiliate Transaction;
(x) are
development, marketing, distribution or resale agreements that are material
to
the business of Company and its Subsidiaries, taken as a whole;
(xi) are
roaming or interconnection agreements that are material to the business of
the
Company and its Subsidiaries, taken as a whole; or
(xii) would
by
their terms impair or restrict in any material respect the Company or any of
its
Affiliates (including, following the consummation of the Merger, Parent and
any
of its Affiliates) from developing, conducting or otherwise engaging in any
line
of business, product or service, including without limitation by means of a
noncompete, grant of exclusivity, right of first refusal or most-favored-pricing
provision.
Each
contract of the type described in clauses (i) through (xii) above is referred
to
herein as a “Company
Material Contract.”
(b) (i)
Each Company Material Contract is valid and binding on the Company and any
of
its Subsidiaries to the extent such Subsidiary is a party thereto, as
applicable, and, as of the date hereof, to the Knowledge of the Company, each
other party thereto, and is in full force and effect and enforceable in
accordance with its terms, except for such failures that would not, either
individually or in the aggregate, have a Company Material Adverse Effect,
(ii) the Company and each of its Subsidiaries, and, as of the date hereof,
to the Knowledge of the Company, any other party thereto, has performed all
obligations required to be performed by it under each Company Material Contract,
except where such noncompliance, would not, individually or in the aggregate,
have a Company Material Adverse Effect, and (iii) neither the
22
Company
nor any of its Subsidiaries has received written notice of, the existence of
any
event or condition which constitutes, or, after notice or lapse of time or
both,
will constitute, a default on the part of the Company or any of its Subsidiaries
under any such Company Material Contract, except where such default would not,
either individually or in the aggregate, have a Company Material Adverse Effect.
Section
3.20 Insurance.
Each of
the Company and its Subsidiaries maintains insurance policies with reputable
insurance carriers against all risks of a character and in such amounts as
are
usually insured against by similarly situated companies in the same or similar
businesses. Except in each case as would not, individually or in the aggregate,
have a Company Material Adverse Effect, all such policies are in full force
and
effect and were in full force and effect during the periods of time such
insurance policies are purported to be in effect, and neither the Company nor
any of its Subsidiaries is in breach or default (including any such breach
or
default with respect to the payment of premiums or the giving of notice), and
no
event has occurred which, with notice or the lapse of time, would constitute
such a breach or default, or permit termination or modification, under any
such
policy. There is no claim by the Company or any of its Subsidiaries pending
under any such policies that (a) has been denied or disputed by the insurer
other than denials and disputes in the ordinary course of business consistent
with past practice or (b) if not paid would have, individually or in the
aggregate, a Company Material Adverse Effect.
Section
3.21 Finders
or Brokers.
Except
for ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc., and ▇▇▇▇▇▇▇▇
Inc., neither the Company nor any of its Subsidiaries has engaged any investment
banker, broker or finder in connection with the transactions contemplated by
this Agreement who might be entitled to any fee or any commission in connection
with or upon consummation of the Merger or the other transactions contemplated
hereby.
The
Company has provided Parent with true, correct and complete information with
respect to the fees payable in connection with the transactions contemplated
hereby.
Section
3.22 Fairness
Opinion.
The
Company has received the opinion of each of ▇▇▇▇▇▇▇▇, Inc., ▇.▇. ▇▇▇▇▇▇
Securities Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc., dated the date of this
Agreement, to the effect that, as of such date, the Common Stock Merger
Consideration is fair, from a financial point of view, to the holders of Shares
of the Company Common Stock.
Section
3.23 State
Takeover Statutes; Charter Provisions.
Assuming
the accuracy of the representations and warranties in Sections 4.7, the Board
of
Directors of the Company has taken all actions necessary so that neither Article
VIII of the Company Charter nor any “fair price,” “moratorium,” “business
combination,” “control share acquisition” or other form of anti-takeover statute
or regulation shall be applicable to the execution, delivery or performance
of
this Agreement, the consummation of the Merger and the other transactions
contemplated by this Agreement.
23
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB
Except
as
disclosed in the disclosure letter delivered by Parent to the Company
immediately prior to the execution of this Agreement (the “Parent
Disclosure Letter”),
Parent and Merger Sub jointly and severally represent and warrant to the Company
as follows:
Section
4.1 Qualification;
Organization.
(a) Each
of
Parent and Merger Sub is a legal entity duly organized, validly existing and
in
good standing under the Laws of its respective jurisdiction of organization.
Each of Parent and Merger Sub has all requisite corporate, partnership or
similar power and authority to own, lease and operate its properties and assets
and to carry on its business as presently conducted.
(b) Each
of
Parent and Merger Sub is duly qualified to do business and is in good standing
as a foreign corporation (or other legal entity) in each jurisdiction where
the
ownership, leasing or operation of its assets or properties or conduct of its
business requires such qualification, except where the failure to be so
qualified or in good standing would not, individually or in the aggregate,
have
a Parent Material Adverse Effect. The organizational or governing documents
of
the Parent and Merger Sub, as previously provided to the Company, are in full
force and effect. Neither Parent nor Merger Sub is in violation of its
organizational or governing documents.
Section
4.2 Corporate
Authority Relative to This Agreement; No Violation.
(a) Each
of
Parent and Merger Sub has all requisite limited liability company or corporate
power and authority to enter into and perform its obligations under this
Agreement and to consummate the transactions contemplated by this Agreement,
including the consummation of the Financing by Parent. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated by this Agreement, including the Financing, have been duly and
validly authorized by the members of Parent and the Board of Directors of Merger
Sub and no other limited liability company or corporate proceedings on the
part
of Parent or Merger Sub are necessary to authorize the consummation of or to
consummate the transactions contemplated hereby (other than the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware).
This Agreement has been duly and validly executed and delivered by Parent and
Merger Sub and, assuming this Agreement constitutes the valid and binding
agreement of the Company, this Agreement constitutes the valid and binding
agreement of Parent and Merger Sub, enforceable against each of Parent and
Merger Sub in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
Laws relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at
Law).
(b) Other
than the filing of the Certificate of Merger pursuant to the DGCL or as required
by (i) the Exchange Act, (ii) the HSR Act, the FCC, the State
Commissions and the Foreign Regulators, and (iii) the approvals set forth
on Section 4.2(b) of the Parent Disclosure
24
Letter (collectively,
the “Parent
Approvals”),
no
authorization, consent, approval or order of, or filing with, or notification
to, any Governmental Entity is necessary, under applicable Law, in connection
with the execution, delivery and performance of this Agreement by Parent or
Merger Sub or the consummation by Parent or Merger Sub of the transactions
contemplated by this Agreement, except for such authorizations, consents,
approvals, orders, filings or notices that, if not obtained or made, would
not,
individually or in the aggregate, have a Parent Material Adverse
Effect.
(c) The
execution, delivery and performance by Parent and Merger Sub of this Agreement
does not, and the consummation of the transactions contemplated hereby,
including the Financing, and compliance with the provisions hereof will not
(i) result in any breach or violation of, or default (with or without
notice or lapse of time, or both) under, require consent under, or give rise
to
a right of termination, cancellation, modification or acceleration of any
obligation or to the loss of any benefit under any loan, guarantee of
indebtedness or credit agreement, note, bond, mortgage, indenture, lease,
agreement, contract, purchase or sale order, instrument, permit, concession,
franchise, right or license binding upon Parent or any of its Subsidiaries
or
result in the creation of any Lien upon any of the properties, assets or rights
of Parent or any of its Subsidiaries, (ii) conflict with or result in any
violation of any provision of the certificate of incorporation or by-laws or
other equivalent organizational document, in each case as amended, of Parent
or
any of its Subsidiaries or (iii) assuming that all Parent Approvals are
obtained, conflict with or violate any applicable Laws, other than, (x) in
the
case of clauses (i) and (iii), as would not, individually or in the aggregate,
have a Parent Material Adverse Effect and (y) in the case of clause (i) or
(iii), to the extent relating to the Company or its Subsidiaries or a change
of
control thereof.
Section
4.3 Proxy
Statement; Other Information.
None of
the information supplied or to be supplied by Parent or Merger Sub expressly
for
inclusion or incorporation by reference in the Proxy Statement will at the
time
of the mailing of the Proxy Statement to the shareholders of the Company, at
the
time of the Company Meeting, and at the time of any amendments thereof or
supplements thereto, contain any untrue statement of a material fact or omit
to
state any material fact required to be stated therein or necessary in order
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading.
Parent
and Merger Sub will take all commercially reasonable efforts to supply
information necessary for the Proxy Statement as promptly as
practicable.
Section
4.4 Financing.
Section
4.4 of the Parent Disclosure Letter sets forth true, accurate and complete
copies, as of the date hereof, of (i) the executed equity commitment
letters to provide equity financing to Parent (the “Equity
Commitment Letters”)
and
(ii) executed debt commitment letters and related term sheets (the
“Debt
Commitment Letters”
and
together with the Equity Commitment Letters, the “Financing
Commitments”)
pursuant to which, and subject to the terms and conditions thereof, certain
lenders have committed to provide Parent or the Surviving Corporation with
funds
in the amounts described therein, the proceeds of which may be used to
consummate the Merger and the other transactions contemplated hereby (the
“Debt
Financing”
and,
together with the equity financing referred to in clause (i), the “Financing”).
As of
the date hereof, each of the Financing Commitments, in the form so delivered,
is
a legal, valid and binding obligation of Parent and, to the Knowledge of Parent,
of the other parties thereto. As of the date hereof, the Financing Commitments
are in full force and
25
effect
and have not been withdrawn or terminated (and no party thereto has indicated
an
intent to so withdraw or terminate) or otherwise amended or modified in any
respect and Parent is not in breach of any of the terms or conditions set forth
therein and, subject to the accuracy of the representations and warranties
of
the Company set forth in Article III, no event has occurred which, with or
without notice, lapse of time or both, could reasonably be expected to
constitute a breach or failure to satisfy a condition precedent set forth
therein or a default thereunder. As of the date hereof, subject to the accuracy
of the representations and warranties of the Company set forth in Article III
and assuming compliance by the Company with its covenants in this Agreement,
Parent has no reason to believe that it will be unable to satisfy on a timely
basis any term or condition contemplated to be satisfied by it contained in
the
Financing Commitments. The proceeds from the Financing when funded in accordance
with the Financing Commitments are sufficient for the satisfaction of all of
Parent’s and Merger Sub’s obligations under this Agreement, including the
payment of the Merger Consideration and the consideration in respect of the
Company Stock Options and other equity-based awards under Section 2.3, to fund
any required refinancings or repayments of any existing indebtedness and to
pay
all related fees and expenses. As of the date hereof, Parent has fully paid
any
and all commitment fees or other fees on the dates and to the extent required
by
the Financing Commitments. The Financing Commitments contain all of the
conditions precedent to the obligations of the parties thereunder to make the
Financing available to Parent. Notwithstanding anything in this Agreement to
the
contrary, the Debt Commitment Letters may be superseded at the option of Parent
after the date of this Agreement but prior to the Effective Time, but only
by
the New Financing Commitments in accordance with Section 5.9. In such event,
the
term “Debt Commitment Letters” and “Financing Commitments” as used herein shall
be deemed to include the New Financing Commitments to the extent then in
effect.
Section
4.5 Ownership
and Operations of Merger Sub.
As of
the date of this Agreement, the authorized capital stock of Merger Sub consists
of 900 shares of common stock, par value $0.01 per share, 100 shares of which
are validly issued and outstanding, and 100 shares of preferred stock, par
value
$0.01 per share. All of the issued and outstanding capital stock of Merger
Sub
is, and at the Effective Time will be, owned by Parent or a direct or indirect
wholly owned Subsidiary of Parent. Neither Parent nor Merger Sub has conducted
any business other than (x) incident to its formation for the sole purpose
of
carrying out the transactions contemplated by this Agreement and (y) in relation
to this Agreement, the Merger and the other transactions contemplated hereby
and
the financing of such transactions.
Section
4.6 Finders
or Brokers.
Neither
Parent nor any of its Subsidiaries has engaged any investment banker, broker
or
finder in connection with the transactions contemplated by this Agreement who,
if the Merger is not consummated, might be entitled to any fee or any commission
from the Company.
Section
4.7 Certain
Arrangements.
There
are no Contracts between Parent, Merger Sub or the Guarantor, on the one hand,
and any member of the Company’s management or directors, on the other hand, as
of the date hereof that relate in any way to the Company or the transactions
contemplated by this Agreement.
Prior to
the Board of Directors of the Company approving this Agreement, the Merger
and
the other transactions contemplated thereby for purposes of the applicable
provisions of the DGCL, neither Parent nor Merger Sub, alone or together with
any other person, was at any time, or became, an “interested
shareholder”
26
thereunder
or has taken any action that would cause any anti-takeover statute under the
DGCL to be applicable to this Agreement, the Merger, or any transactions
contemplated by this Agreement.
Section
4.8 Investigations;
Litigation.
There
are no suits, claims, actions, proceedings, arbitrations, mediations or
investigations pending or, to the Knowledge of Parent, threatened against Parent
or any of its Subsidiaries that would, individually or in the aggregate, have
a
Parent Material Adverse Effect. Neither Parent nor any of its Subsidiaries
nor
any of their respective properties is or are subject to any order, writ,
judgment, injunction, decree or award that would, individually or in the
aggregate, have a Parent Material Adverse Effect.
Section
4.9 Guarantee.
Concurrently with the execution of this Agreement, the Guarantors have delivered
to the Company the Guarantees, dated as of the date hereof, in favor of the
Company, in the form set forth in Section 4.9 of the Parent Disclosure
Letter.
Each
Guarantee is in full force and effect.
Section
4.10 Solvency.
As of
the Effective Time, assuming (a) satisfaction of the conditions to Parent’s
obligation to consummate the Merger as set forth herein, or the waiver of such
conditions, and (b) the accuracy of the representations and warranties of the
Company set forth in Article III hereof (for such purposes, such representations
and warranties shall be true and correct in all material respects without giving
effect to any knowledge, materiality or “Company Material Adverse Effect”
qualification or exception) and (c) any estimates, projections or forecasts
of
the Company and its Subsidiaries provided by the Company to Parent have been
prepared in good faith based upon reasonable assumptions, immediately after
giving effect to all of the transactions contemplated by this Agreement,
including, without limitation, the Financing, any alternative financing and
the
payment of the aggregate Merger Consideration and the consideration in respect
of the Company Stock Options and other equity-based awards under Section 2.3
and
any other repayment or refinancing of debt that may be contemplated in the
Financing Commitments, and payment of all related fees and expenses, the
Surviving Corporation will be Solvent. For purposes of this Section 4.11, the
term “Solvent” with respect to the Surviving Corporation means that, as of any
date of determination, (a) the amount of the fair saleable value of the assets
of the Surviving Corporation and
its
Subsidiaries, taken as a whole,
exceeds,
as of such date, the sum of (i) the value of all liabilities of the Surviving
Corporation and its Subsidiaries, taken as a whole, including contingent and
other liabilities, as of such date, as such quoted terms are generally
determined in accordance with the applicable federal Laws governing
determinations of the solvency of debtors, and (ii) the amount that will be
required to pay the probable liabilities of the Surviving Corporation and its
Subsidiaries, taken as a whole on its existing debts (including contingent
liabilities) as such debts become absolute and matured; (b) the Surviving
Corporation will not have, as of such date, an unreasonably small amount of
capital for the operation of the business in which it is engaged or proposed
to
be engaged by Parent following such date; and (c) the Surviving Corporation
will
be able to pay its liabilities, including contingent and other liabilities,
as
they mature.
Section
4.11 No
Other Information.
Parent
and Merger Sub acknowledge that the Company makes no representations or
warranties as to any matter whatsoever except as expressly set forth in Article
III.
The
representations and warranties set forth in Article III are made solely by
the
Company, and no Representative of the Company shall have any responsibility
or
liability related thereto.
27
Section 4.12 Ownership
of Parent; Other Investments of Parent Affiliates.
The term
“Parent
Group”
shall
mean each of the Guarantors and each of their respective corporate or other
parent entities, Affiliates and any other person or entity under common control
with any of the foregoing. Except as set forth on Section 4.12 of the Parent
Disclosure Letter, no member of the Parent Group nor any person or entity
holding 5% or more of the issued common or preferred stock (or other comparable
equity interests) of any member of the Parent Group owns or controls, directly
or indirectly, 5% or more of the issued common or preferred stock (or other
comparable equity interest) of any entity that directly or indirectly offers
commercial mobile radio service in the United States. No member of the Parent
Group or any of its shareholders or other owners or affiliates is controlled
by
a foreign government or a representative thereof. Individually and collectively
the members of the Parent Group and such shareholders and other owners and
affiliates (a) do not have more than one-fifth of their capital stock or other
equity interests directly or indirectly owned of record or voted by aliens
or
their representatives or by a foreign government or representative thereof
or by
any corporation organized under the laws of a foreign country, or (b)
are not directly or indirectly controlled by any other corporation or other
entity of which more than one-fourth of the capital stock or other equity
interests is owned of record or voted by aliens, their representatives, or
by a
foreign government or representative thereof, or by any corporation organized
under the laws of a foreign country.
ARTICLE
V
COVENANTS
AND AGREEMENTS
Section 5.1 Conduct
of Business.
(a) From
and
after the date hereof and prior to the earlier of the Effective Time and the
date, if any, on which this Agreement is terminated pursuant to Section 7.1
(the
“Termination
Date”),
and
except (i) as may be otherwise required by applicable Law, (ii) with
the prior written consent of Parent (not to be unreasonably withheld or
delayed), (iii) as expressly contemplated or required by this Agreement or
(iv)
as disclosed in Section 5.1(a) of the Company Disclosure Letter, the Company
shall, and shall cause each of its Subsidiaries to, (1) conduct its
business in all material respects in the ordinary course, and (2) use reasonable
best efforts to maintain and preserve intact its business organization and
business relationships, preserve its assets, rights and properties in good
repair and condition and to retain the services of its key officers and key
employees in each case, in all material respects.
(b) Without
limiting the foregoing, the Company agrees with Parent that between the date
hereof and the earlier of the Effective Time and the Termination Date, except
as
set forth in Section 5.1(b) of the Company Disclosure Letter or as
otherwise expressly contemplated or expressly required by this Agreement, the
Company shall not, and shall not permit any of its Subsidiaries to, without
the
prior written consent of Parent (not to be unreasonably withheld or
delayed):
(i) adjust,
split, combine or reclassify any capital stock or other equity interests or
otherwise amend the terms of its capital stock or other equity
interests;
28
(ii) other
than as required by the terms of any Company Series C Preferred Stock or the
Company Series D Preferred Stock (together, the “Company
Preferred Stock”),
make,
declare or pay any dividend, or make any other distribution on, or directly
or
indirectly redeem, purchase or otherwise acquire or encumber, any shares of
its
capital stock or other equity interests or any securities or obligations
convertible (whether currently convertible or convertible only after the passage
of time or the occurrence of certain events) into or exchangeable for any shares
of its capital stock or other equity interests, except in connection with the
exercise of stock options or settlement of other awards or obligations
outstanding as of the date hereof (or permitted hereunder to be granted after
the date hereof); provided
that the
Company may continue to pay its quarterly cash dividends in the ordinary course
of its business consistent with past practices (but in no event in an amount
in
excess of $0.125 per quarter per share of Company Common Stock) and dividends
required by the terms of the Company Preferred Stock, in each case with record
dates consistent with the record dates for comparable quarterly periods of
2006;
provided,
further,
that
this Section 5.1(b)(ii) shall not apply to dividends or distributions paid
in
cash by Subsidiaries to the Company or to other wholly-owned
Subsidiaries;
(iii) except
as
set forth in Section 5.1(b)(iii) of the Company Disclosure Letter, grant any
person any right to acquire any shares of its capital stock or other equity
interests, other than as may be contemplated pursuant to any applicable
exceptions to Section 5.1(b)(iv);
(iv) except
as
set forth in Section 5.1(b)(iv) of the Company Disclosure Letter, other than
as
required by the terms of any Company Preferred Stock, issue or sell any shares
of capital stock or other equity interests, any securities convertible into,
or
any rights, warrants or options to acquire, any such shares of capital stock
or
other equity interests, except pursuant to the exercise of conversion rights
of
currently outstanding securities, the exercise of stock options or settlement
of
other awards outstanding as of the date hereof (or permitted hereunder to be
granted after the date hereof) and in accordance with the terms of such
instruments or as required under any Company Benefit Plan;
(v) except
with respect to the repayment of Indebtedness, sell, lease, license, transfer,
mortgage, abandon, encumber or otherwise subject to a Lien or otherwise dispose
of, in whole or in part, any properties, rights or assets having a value in
excess of $50 million individually or $100 million in the aggregate (other
than
(x) sales of inventory, (y) commodity, sale or hedging agreements which can
be
terminated on 90 days or less notice without penalty, in each case in the
ordinary course of business consistent with past practice or (z) the use of
cash
as payment consideration);
(vi) except
as
set forth in Section 5.1(b)(vi) of the Company Disclosure Letter, make any
capital expenditures (or authorization or commitment with respect thereto)
in a
manner reasonably expected to cause expenditures to exceed the respective
amounts set forth in such Section for the applicable periods;
29
(vii) except
(i) as set forth in Section 5.1(b)(vii) of the Company Disclosure Letter, (ii)
in
connection with refinancings of existing Indebtedness at the maturity thereof
(provided that any such refinancing Indebtedness may be prepaid without premium
or penalty on the Closing Date), (iii) for
borrowings under the Company’s existing credit and securitization facilities or
issuances or repayment of commercial paper in the ordinary course of business,
(iv) in connection with outstanding surety bonds or surety bonds entered into
in
the ordinary course of business or (v) in an aggregate amount not exceeding
$100
million in aggregate principal amount and not subject to any premium or penalty
if prepaid at Closing, incur, create, assume or otherwise become liable for,
or
repay or prepay, any indebtedness for borrowed money (including the issuance
of
any debt security), any capital lease obligations, any guarantee of any such
indebtedness or debt securities of any other Person, or any “keep well” or other
agreement to maintain any financial statement condition of another Person (such
obligations collectively, “Indebtedness”),
or
amend, modify or refinance any existing Indebtedness;
(viii) other
than in connection with capital expenditures, except as set forth in Section
5.1(b)(viii) of the Company Disclosure Letter, make any investment in excess
of
$75 million individually or $100 million in the aggregate, whether by purchase
of stock or securities, contributions to capital, loans to, property transfers,
or entering into binding agreements with respect to any such investment;
(ix) make
any
acquisition of another Person or business in excess of $75 million individually
or $100 million in the aggregate, whether by merger, purchase of stock or
securities, contributions to capital, loans to, property transfers, or entering
into binding agreements with respect to any such acquisition (including any
conditional or installment sale Contract or other retention Contract relating
to
purchased property);
(x) except
in
the ordinary course of business or as set forth in Section 5.1(b)(x) of the
Company Disclosure Letter, enter into, renew, extend, materially amend, cancel
or terminate any Contract that is a Material Contract under clause (i), (ii),
(viii), (ix), (xi) or (xii) of the definition thereof or Contract which if
entered into prior to the date hereof would be a Material Contract under clause
(i), (ii), (viii), (ix), (xi) or (xii) of the definition thereof; in
each
case, other than any Contract relating to Indebtedness that would not be
prohibited under clause (vii) of this Section 5.1(b) or Contracts relating
to
compensation or benefits or Company Benefit Plans to the extent not prohibited
under clause (xi) of this Section 5.1(b);
(xi) except
as
required by Company Benefit Plans in effect as of the date hereof,
(A) increase the compensation or benefits of any of its current or former
employees, independent contractors or directors, other than increases for
Persons who are not executive officers or directors in the ordinary course
of
business consistent with past practice, (B) amend or adopt any Company
Benefit Plan or any other plan, program arrangement or agreement (including
without limitation any employment, severance or change in control agreement)
that would be a Company Benefit Plan were it in effect on the date hereof except
for amendments or adoptions that are immaterial and otherwise made in the
ordinary course of business consistent with past practice or (C) accelerate
the
30
vesting
of, or the lapsing of restrictions with respect to, or
payment of the compensation payable or the benefits provided or to become
payable or provided to any of its current or former directors, officers,
employees, consultants or service providers, or otherwise pay any amounts not
due or otherwise payable to such individual in the ordinary course of business
consistent with past practice, including, without limitation, with respect
to
severance, any stock options or other stock-based compensation or (D) agree
to
grant or grant any stock or stock-based awards or any other award that may
be
settled in Shares or other securities of the Company or any of its Subsidiaries
or any restricted stock units or stock appreciation rights, regardless of
whether they are settled in cash or Shares or other securities of the Company
or
any of its Subsidiaries;
(xii) except
with respect to Taxes (which are covered in clause (xviii)) or as set forth
in
Section 5.1(b)(xii) of the Company Disclosure Letter, compromise, settle or
agree to settle any suit, action, claim, proceeding or investigation (including
any suit, action, claim, proceeding or investigation relating to this Agreement
or the transactions contemplated hereby), or consent to the same, other than
compromises, settlements or agreements in the ordinary course of business
consistent with past practice that involve only the payment of monetary damages
(x) not in excess of $10 million individually or $25 million in the aggregate
or
(y) consistent with the reserves reflected in the Company's balance sheet at
December 31, 2006, in any case without the imposition of material equitable
relief on, or the admission of wrongdoing by, the Company or any of its
Subsidiaries;
(xiii) amend
or
waive any material provision of its Charter or its by-laws or other equivalent
organizational documents or, in the case of the Company, enter into any
agreement with any of its shareholders in their capacity as such;
(xiv) enter
into any new line of business outside of its existing business and reasonable
extensions thereof;
(xv) enter
into any new lease or amend the terms of any existing lease of real property
which would require payments over the remaining term of such lease in excess
of
$15 million (excluding any renewal terms);
(xvi) adopt
or
enter into a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of such
entity (other than among wholly owned Subsidiaries);
(xvii) implement
or adopt any material change in its financial accounting principles, practices
or methods, other than as required by GAAP, the Company’s outside auditors,
applicable Law or regulatory guidelines;
(xviii) except
as
set forth in Section 5.1(b)(xviii) of the Company Disclosure Letter or to the
extent any such settlement or compromise is consistent with reserves reflected
in the Company’s balance sheet at December 31, 2006, change any method of Tax
accounting, enter into any closing agreement with respect to material Taxes,
settle or compromise any material liability for Taxes, make, revoke or change
any
31
material
Tax election, file or surrender any claim for a material refund of Taxes or
file
any material amended Tax Return, in each case other than in the ordinary course
of business consistent with past practice; or
(xix) agree
to
take, make any commitment to take, or adopt any resolutions of its Board of
Directors in support of, any of the actions prohibited by this Section
5.1(b).
(c) From
and
after the date hereof and prior to the earlier of the Effective Time or the
Termination Date, and except (i) as may be otherwise required by applicable
Law or (ii) as expressly contemplated or permitted by this Agreement, neither
party shall take, or permit any of its Affiliates to take, any action which
is
intended to or which would reasonably be expected to materially adversely affect
or materially delay the ability of such party from obtaining any necessary
approvals of any regulatory agency or other Governmental Entity required for
the
transactions contemplated hereby, performing its covenants and agreements under
this Agreement or consummating the transactions contemplated hereby or otherwise
materially delay or prohibit consummation of the Merger or other transactions
contemplated hereby.
(d) The
parties hereto agree to take the actions set forth on Schedule 5.1(d)
hereto.
Section 5.2 No
Solicitation.
(a) Subject
to Section 5.2(c), the Company agrees that neither it nor any Subsidiary of
the
Company shall, and that it shall cause its and their respective officers,
directors, employees, agents and representatives, including any investment
banker, attorney or accountant retained by it or any of its Subsidiaries
(“Representatives”)
not
to, directly or indirectly, (i) initiate, solicit, knowingly encourage
(including by providing information) or knowingly facilitate any inquiries,
proposals or offers with respect to, or the making or completion of, an
Alternative Proposal or any inquiry, proposal or offer that is reasonably likely
to lead to an Alternative Proposal, (ii) engage, continue or participate in
any negotiations concerning, or provide or cause to be provided any information
or data relating to the Company or any of its Subsidiaries in connection with,
or have any discussions (other than to state that they are not permitted to
have
discussions and to refer to this Agreement) with any person relating to, or
that
is reasonably likely to lead to, an actual or proposed Alternative Proposal,
or
otherwise knowingly encourage or knowingly facilitate any effort or attempt
to
make or implement an Alternative Proposal, (iii) approve, endorse or
recommend, or propose publicly to approve, endorse or recommend, any Alternative
Proposal, (iv) execute or enter into, any letter of intent, agreement in
principle, merger agreement, acquisition agreement, option agreement or other
similar agreement relating to any Alternative Proposal, or (v) resolve to
propose or agree to do any of the foregoing; provided,
however,
it is
understood and agreed that any determination or action by the Board of Directors
of the Company permitted under Section 5.2(c) or (d), or Section 7.1(c)(ii),
shall not, in and of itself, be deemed to be a breach or violation of this
Section 5.2(a) or, in the case of Section 5.2(c), give Parent a right to
terminate this Agreement pursuant to Section 7.1(d)(ii).
32
(b) The
Company shall, shall cause each of its Subsidiaries to, and shall direct each
of
its Representatives to, immediately cease any solicitations, discussions or
negotiations with any Person (other than the parties hereto) that has made
or
indicated an intention to make an Alternative Proposal, in each case that exist
as of the date hereof, and shall request the prompt return or destruction of
all
confidential information previously furnished in connection
therewith.
(c) Notwithstanding
anything to the contrary in Section 5.2(a) or (b), at any time prior to the
Company Shareholder Approval, the Company may, in response to an unsolicited
bona fide written Alternative Proposal received after the date hereof which
the
Board of Directors of the Company determines, in good faith, after consultation
with its outside counsel and financial advisors, constitutes or is reasonably
expected to lead to a Superior Proposal, and subject to the Board of Directors
of the Company determining, after consultation with its outside counsel, that
the failure to take such action would be inconsistent with its fiduciary duties
under applicable law, (i) furnish
non-public information with respect to the Company and its Subsidiaries to
the
person or group making such Alternative Proposal and their Representatives
and
potential debt and equity financing sources pursuant to a customary
confidentiality agreement that contains provisions that are no less favorable
in
the aggregate to the Company than those contained in the Confidentiality
Agreements, and (ii) participate in discussions or negotiations with such
person or group and their respective Representatives regarding such Alternative
Proposal; provided,
however,
that the
Company shall provide or make available to Parent any non-public information
concerning the Company or any of its Subsidiaries that is provided to the person
making such Alternative Proposal or its Representatives which was not previously
provided or made available to Parent prior to or, concurrently with or as soon
as practicable after providing such information to such other
Person.
(d) Except
as
set forth in Section 7.1(c)(ii) or this Section 5.2(d), neither the Board of
Directors of the Company nor any committee thereof shall (i) withhold,
withdraw or modify in a manner adverse to Parent or Merger Sub, or publicly
propose to withhold, withdraw or modify in a manner adverse to Parent or Merger
Sub, the Recommendation, (ii) approve or recommend any letter of intent,
agreement in principle, acquisition agreement, option agreement or similar
agreement constituting or relating to, or that is intended to be or would
reasonably be likely to result in, any Alternative Proposal or
(iii) approve or recommend, or publicly propose to approve, endorse or
recommend, any Alternative Proposal. Notwithstanding the foregoing, if, prior
to
receipt of the Company Shareholder Approval, the Board of Directors of the
Company determines in good faith, after consultation with outside counsel and
its financial advisor, that (A) an unsolicited bona fide written Alternative
Proposal received by the Company constitutes a Superior Proposal (after
complying with, and giving effect to any commitments offered by Parent pursuant
to, Section 7.1(c)(ii)) and (B) the failure to take such action would be
inconsistent with the Board of Directors of the Company’s exercise of its
fiduciary duties under the DGCL, the Board of Directors of the Company or any
committee thereof may withdraw, or modify or qualify its Recommendation (a
“Change
of Recommendation”);
provided
that
prior to
such Change of Recommendation, (A) the Company shall have notified Parent
in writing, at least five Business Days in advance, of its intention to effect
a
Change of Recommendation and included with such notice the identity of the
person making such Superior Proposal, the most current written draft agreement
relating to the transaction that constitutes such Superior Proposal and all
related transaction agreements to which the Company would be a party,
(B) the Company shall, and shall cause its financial and legal advisers to,
negotiate with Parent in good faith
33
during
such five Business Day period (to the extent Parent desires to negotiate) to
make any adjustments in the terms and conditions of this Agreement as would
permit the Board of Directors not to effect a Change of Recommendation and
(C)
the Board of Directors shall have determined in good faith and after
consultation with its outside counsel and financial advisors that such Superior
Proposal continues to be more favorable to the shareholders of the Company
from
a financial point of view than any revised proposal committed to by Parent;
provided that any material amendment to the terms of such Superior Proposal
shall require a new notice and new two Business Day advance notice
period.
(e) The
Company promptly (and in any event within 48 hours) shall advise Parent orally
and in writing of (i) any inquiries, proposals or offers regarding any
Alternative Proposal, (ii) any request for information relating to the
Company or its Subsidiaries, other than requests for information not reasonably
expected to be related or lead to an Alternative Proposal, and (iii) any
inquiry or request for discussion or negotiation regarding or that would
reasonably be expected to result in an Alternative Proposal, including in each
case the identity of the person making any such Alternative Proposal or
indication or inquiry or offer or request and the material terms and conditions
of any such Alternative Proposal or indication or inquiry or offer. The Company
shall keep Parent reasonably informed on a reasonably current basis of the
status (including any material changes to the terms thereof) of any such
discussions or negotiations regarding any such Alternative Proposal or
indication or inquiry or offer or any material developments relating thereto
(the Company agreeing that it shall not, and shall cause its Subsidiaries not
to, enter into any confidentiality agreement with any person subsequent to
the
date of this Agreement which prohibits the Company from providing such
information to Parent but it being agreed that the third parties’ debt financing
sources may impose confidentiality restrictions on the Company with respect
to
their proposed financing).
(f) Nothing
contained in this Agreement shall prohibit the Company or its Board of Directors
from (i) disclosing to its shareholders a position contemplated by Rules 14d-9
and 14e-2(a) promulgated under the Exchange Act
or (ii)
making any required disclosure to the Company’s shareholders if, in the good
faith judgment of such Board of Directors, after consultation with its outside
counsel, it is required to do so under applicable Law; provided,
however,
that in
no event shall this Section 5.2(f) affect the obligations of the Company
specified in Sections 5.2(d) or (e); and provided, further
that,
any such
disclosure (other than a “stop, look and listen” communication or similar
communication of the type contemplated by Section 14d-9(f) under the Exchange
Act) which would otherwise constitute a Change of Recommendation shall be deemed
to be a Change of Recommendation unless the Board of Directors of the Company
expressly publicly reaffirms its Recommendation at least two Business Days
prior
to the Company Meeting (after giving effect to any postponement or adjournment
thereof).
(g) As
used
in this Agreement, “Alternative
Proposal”
shall
mean any bona
fide inquiry,
proposal or offer from any Person or group of Persons other than Parent or
one
of its Subsidiaries relating to, in a single transaction or series of related
transactions, (i) a merger, reorganization, consolidation, share exchange,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving a direct or indirect acquisition of the Company (or any
Subsidiary or Subsidiaries of the Company whose business constitutes 20% or
more
of the net revenues, net income or assets (based on fair market value) of the
Company and its Subsidiaries, taken as a whole) or (ii) the acquisition
(including by way of tender or exchange
34
offer)
in
any manner, directly or indirectly, of over 20% of (x) the Company Common Stock
or (y) consolidated total assets (based on fair market value) of the Company
and
its Subsidiaries, in each case other than the Merger.
(h) As
used
in this Agreement, “Superior
Proposal”
shall
mean any bona fide written Alternative Proposal on terms which the Board of
Directors of the Company determines in good faith, after consultation with
the
Company’s outside legal counsel and financial advisors, to be more favorable
from a financial point of view to the holders of Company Common Stock than
the
Merger, taking into account all the terms and conditions of such proposal
(including the likelihood and timing of consummation thereof), and this
Agreement (including any changes to the terms of this Agreement committed to
by
Parent in good faith to the Company in response to such proposal or otherwise)
provided
that for
purposes of the definition of “Superior Proposal”, the references to “20%” in
the definition of Alternative Proposal shall be deemed to be references to
“50%.”
Section 5.3 Filings;
Other Actions.
(a) As
promptly as reasonably practicable following the date of this Agreement, the
Company shall prepare and file with the SEC the Proxy Statement, and Parent
and
the Company shall cooperate with each other in connection with the preparation
of the Proxy Statement. The Company will use its reasonable best efforts to
have
the Proxy Statement cleared by the staff of the SEC as promptly as reasonably
practicable after such filing. The Company will use its reasonable best efforts
to cause the Proxy Statement to be mailed to the Company’s shareholders as
promptly as reasonably practicable after the Proxy Statement is cleared by
the
staff of the SEC. The Company shall as promptly as reasonably practicable notify
Parent of the receipt of any oral or written comments from the staff of the
SEC
relating to the Proxy Statement. The Company shall cooperate and provide Parent
with a reasonable opportunity to review and comment on, (i) the draft of the
Proxy Statement (including each amendment or supplement thereto) and (ii) all
written responses to requests for additional information by and replies to
written comments of the staff of the SEC, prior to filing of the Proxy Statement
with or sending such to the SEC, and the Company will provide to Parent copies
of all such filings made and correspondence with the SEC or its staff with
respect thereto. If at any time prior to the Effective Time, any information
should be discovered by any party hereto which should be set forth in an
amendment or supplement to the Proxy Statement so that the Proxy Statement
would
not include any misstatement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
the party which discovers such information shall promptly notify the other
parties hereto and, to the extent required by applicable Law, an appropriate
amendment or supplement describing such information shall be promptly filed
by
the Company with the SEC and disseminated by the Company to the shareholders
of
the Company.
(b) Subject
to Section 5.3(c), the Company shall (i) take all action necessary in
accordance with the DGCL and the Company Charter and the by-laws of the Company
(the “By-laws”)
to
duly call, give notice of, convene and hold a meeting of its shareholders as
promptly as reasonably practicable following the clearance of the Proxy
Statement by the SEC for the purpose of obtaining the Company Shareholder
Approval (such meeting or any adjournment or postponement thereof, the
“Company
Meeting”),
and
(ii) subject to the Board of
35
Directors
of the Company’s withdrawal or modification of its Recommendation in accordance
with Section 5.2(d), use reasonable best efforts to solicit from its
shareholders proxies in favor of the adoption and approval of this Agreement,
the Merger and the other transactions contemplated hereby and include its
Recommendation in the Proxy Statement. Notwithstanding anything in this
Agreement to the contrary, unless this Agreement is terminated in accordance
with Section 7.1 and subject to compliance with Section 7.2, the Company,
regardless of whether the Board of Directors has approved, endorsed or
recommended an Alternative Proposal or has withdrawn, modified or amended the
Recommendation, will submit this Agreement for adoption by the shareholders
of
the Company at the Company Meeting.
(c) Notwithstanding
Section 5.3(a) or (b), if on a date for which the Company Meeting is scheduled
(the “Original
Date”),
the
Company has not received proxies representing a sufficient number of shares
of
Company Common Stock to approve the Merger, whether or not a quorum is present,
the Company shall have the right to postpone or adjourn the Company Meeting
to a
date which shall not be more than 45 days after the Original Date. If the
Company continues not to receive proxies representing a sufficient number of
shares of Company Common Stock to approve the Merger, whether or not a quorum
is
present, the Company may make one or more successive postponements or
adjournments of the Company Meeting as long as the date of the Company Meeting
is not postponed or adjourned more than an aggregate of 45 days from the
Original Date in reliance on this subsection. In the event that the Company
Meeting is adjourned or postponed as a result of applicable Law, including
the
need to supplement the Proxy Statement, any days resulting from such adjournment
or postponement shall not be included for purposes of the calculations of
numbers of days pursuant to this Section.
Section
5.4 Employee
Matters.
(a) From
the
Effective Time until December 31, 2009, Parent shall provide, or shall cause
to
be provided, to those individuals employed by the Company or any of its
Subsidiaries at the Effective Time (“Company
Employees”)
annual
base salary and base wages, cash incentive compensation opportunities (excluding
equity-based compensation and benefits under any supplemental or excess
retirement plans) and benefits, that are no less favorable in the aggregate
than
such annual base salary and base wages, cash incentive compensation
opportunities (excluding equity-based compensation and benefits under any
supplemental or excess retirement plans) and benefits provided to the Company
Employees immediately prior to the Effective Time. Notwithstanding any other
provision of this Agreement to the contrary, (x) (i) Parent shall or shall
cause
the Surviving Corporation to provide Company Employees whose employment
terminates during the two-year period following the Effective Time with
severance benefits at the levels and pursuant to the terms of the Company’s
severance plan set forth on Section 5.4(a) of the Company Disclosure Letter
and
(ii) during such two-year period following the Effective Time, severance
benefits offered to Company Employees thereunder shall be determined without
taking into account any reduction after the Effective Time in base salary or
base wages paid to Company Employees and taking into account the service
crediting provisions set forth in Section 5.4(b) below, and (y) the Company
shall be entitled to establish a retention plan (the “Retention
Plan”)
pursuant to which awards not in the aggregate in excess of the amount set forth
on Section 5.4(a) of the Company Disclosure Letter may be granted by the Chief
Executive Officer of the Company to officers and employees of the Company and
its Subsidiaries, payable on such terms and conditions as determined by the
Chief Executive Officer
36
of
the
Company in consultation with Parent.
Parent
shall or shall cause the Surviving Corporation to honor the Retention Plan
in
accordance with its terms.
(b) For
all
purposes (including purposes of vesting, eligibility to participate and level
of
benefits) under the employee benefit plans of Parent and its Subsidiaries
providing benefits to any Company Employees after the Effective Time (including
the Company Benefits Plans) (the “New
Plans”),
each
Company Employee shall be credited with his or her years of service with the
Company and its Subsidiaries and their respective predecessors before the
Effective Time, to the same extent as such Company Employee was entitled, before
the Effective Time, to credit for such service under any similar Company
employee benefit plan in which such Company Employee participated or was
eligible to participate immediately prior to the Effective Time, provided
that the
foregoing shall not apply with respect to benefit accrual under any final
average pay defined benefit pension plan or to the extent that its application
would result in a duplication of benefits with respect to the same period of
service. In addition, and without limiting the generality of the foregoing,
to
the extent legally permissible, (i) each Company Employee shall be
immediately eligible to participate, without any waiting time, in any and all
New Plans to the extent coverage under such New Plan is replacing comparable
coverage under a Company Benefit Plan in which such Company Employee
participated immediately before the Effective Time (such plans, collectively,
the “Old
Plans”),
and
(ii) for purposes of each New Plan providing medical, dental,
pharmaceutical and/or vision benefits to any Company Employee, Parent shall
cause all pre-existing condition exclusions and actively-at-work requirements
of
such New Plan to be waived for such employee and his or her covered dependents,
unless such conditions would not have been waived under the comparable Old
Plans
of the Company or its Subsidiaries in which such employee participated
immediately prior to the Effective Time and Parent shall cause any eligible
expenses incurred by such employee and his or her covered dependents during
the
portion of the plan year of the Old Plan ending on the date such employee’s
participation in the corresponding New Plan begins to be taken into account
under such New Plan for purposes of satisfying all deductible, coinsurance
and
maximum out-of-pocket requirements applicable to such employee and his or her
covered dependents for the applicable plan year as if such amounts had been
paid
in accordance with such New Plan.
(c) From
and
after the Effective Time, Parent shall cause the Surviving Corporation and
its
Subsidiaries to honor all obligations under the Company Benefit Plans in
accordance with their terms as in effect on the date hereof or as may be amended
in accordance with Section 5.1, provided that, subject to the requirements
of
Section 5.4(a), nothing herein shall prohibit the Surviving Corporation from
amending or terminating any particular Company Benefit Plan to the extent
permitted by its terms or applicable Law.
(d) The
provisions of this Section 5.4 are solely for the benefit of the parties to
this
Agreement, and no current or former employee or any other individual associate
therewith shall be regarded for any purpose as a third party beneficiary of
the
Agreement and nothing herein shall be construed as an amendment to any Company
Benefit Plan for any purpose.
Section 5.5 Required
Approvals.
(a) Subject
to the terms and conditions set forth in this Agreement, each of the parties
hereto shall use its reasonable best efforts to take, or to cause to be taken,
all actions, to
37
file,
or
cause to be filed, all documents and to do, or to cause to be done, and to
assist, to cooperate and, in the case of Parent, to cause the members of the
Parent Group to cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective the Merger and the other
transactions contemplated hereby, including using reasonable best efforts to
accomplish the following, (i) the obtaining as promptly as practicable of
all necessary actions or nonactions, waivers, consents, clearances, approvals,
and expirations or terminations of waiting periods, including the Company
Approvals and the Parent Approvals, from Governmental Entities and the making
of
all necessary registrations and filings and the taking of all steps as may
be
necessary to obtain an approval, clearance, or waiver from, or to avoid an
action or proceeding by, any Governmental Entity, (ii) the obtaining as
promptly as practicable of all necessary consents, approvals or waivers from,
or
participation in other discussions or negotiations with, third parties and
cooperating with the other party to obtain any consents or waivers reasonably
requested by such other party in connection with the consummation of the Merger
and the other transactions contemplated hereby, (iii) the defending of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the Merger and the other
transactions contemplated hereby and (iv) the execution and delivery of any
additional instruments necessary to consummate the transactions contemplated
hereby; provided,
however,
that in
no event shall the Company or any of its Subsidiaries be required to pay prior
to the Effective Time any fee, penalties or other consideration to any third
party to obtain any consent or approval required for the consummation of the
Merger under any Contract and neither the Company nor any of its Subsidiaries
shall commit to the payment of any fee, penalty or other consideration in
connection with obtaining any consent without the prior consent of Parent.
(b) Subject
to the terms and conditions herein provided and without limiting the foregoing,
the Company and Parent shall (i) promptly,
but in
no event later than 15 Business Days after the date hereof,
file any
and all Notification and Report Forms required under the HSR Act with respect
to
the Merger and the other transactions contemplated hereby, and use best efforts
to cause the expiration or termination of any applicable waiting periods under
the HSR Act, and promptly, but in no event later than 15 Business Days after
the
date hereof, file all initial applications required to be filed with the FCC,
(ii) use best efforts to cooperate with each other and, in the case of Parent,
to cause each member of the Parent Group to cooperate in (x) determining
promptly whether any filings are required to be made with, or consents, permits,
authorizations, waivers, clearances, approvals, and expirations or terminations
of waiting periods are required to be obtained from, any third parties or other
Governmental Entities in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and
(y) making promptly all such filings and obtaining all such consents,
permits, authorizations or approvals, in each case, as promptly as practicable,
(iii) supplying to any Governmental Entity as promptly as reasonably practicable
any additional information or documentary material that may be requested
pursuant to any Regulatory Law or by such Governmental Entity, and (iv) use
reasonable best efforts to take promptly, or cause to be taken promptly, all
other actions and do, or cause to be done, all other things necessary, proper
or
advisable to consummate and make effective the Merger, the Financing and the
other transactions contemplated hereby, as promptly as practicable, including
using reasonable best efforts to take all such further action, and, in the
case
of Parent, to cause each member of the Parent Group to take all such further
action, as may be necessary (A) to resolve such objections, if any, as the
United States Federal Trade Commission, the Antitrust Division of the
United
38
States
Department of Justice, state antitrust enforcement authorities or competition
authorities of any other nation or other jurisdiction, the FCC or any State
Commission or any other person may assert under any Regulatory Law with respect
to the Merger and the other transactions contemplated hereby, and (B) to avoid
or eliminate each and every impediment under any Law that may be asserted by
any
Governmental Entity with respect to the Merger so as to enable the Closing
to
occur as promptly as practicable and in any event no later than the End Date,
including, without limitation (x) proposing, negotiating, committing to and
effecting, by consent decree, preservation of assets or other trust, hold
separate order or otherwise, the sale, divestiture or disposition of any assets
or businesses of any member of the Parent Group, Parent or its partners or
any
of their respective Subsidiaries or Affiliates or of the Company or its
Subsidiaries and (y) otherwise taking or committing to take any actions, or,
in
the case of Parent, to cause the members of the Parent Group to take any action,
that after the Closing would limit the freedom of the Parent Group, Parent
or
its Subsidiaries’ (including the Surviving Corporation’s) or Affiliates’ freedom
of action with respect to, or its ability to retain, one or more of its or
its
Subsidiaries’ (including the Surviving Corporation’s) or Affiliates’ businesses,
product lines or assets, in each case as may be required in order to avoid
the
entry of, or to effect the dissolution of, any injunction, temporary restraining
order or other order in any suit or proceeding which would otherwise have the
effect of preventing the Closing or delaying the Closing beyond the End Date;
provided
that,
neither the Company nor any of its Subsidiaries shall, nor shall Parent or any
of its Subsidiaries or Affiliates be obligated to, become subject to, or consent
or agree to or otherwise take any action with respect to, any requirement,
condition, understanding, agreement or order of a Governmental Entity to sell,
to hold separate or otherwise dispose of, or to conduct, restrict, operate,
invest or otherwise change the assets or business of the Company or any of
its
Subsidiaries or Parent or any of its Subsidiaries or Affiliates, as the case
may
be, unless such requirement, condition, understanding, agreement or order is
binding on the Company or Parent, its Subsidiaries or Affiliates, respectively,
only in the event that the Closing occurs.
(c) Subject
to applicable legal limitations, the Company and Parent shall keep each other
reasonably apprised of the status of matters relating to the completion of
the
Merger and the other transactions contemplated by this Agreement, including
promptly furnishing the other with copies of notices or other written
communications received by the Company or Parent, as the case may be, or any
of
their respective Subsidiaries or Affiliates, from any third party and/or any
Governmental Entity with respect to such Merger or transactions. The
Company
and Parent shall permit counsel for the other party reasonable opportunity
to
review in advance, and consider in good faith the views of the other party
in
connection with, any proposed written communication to any Governmental Entity.
Each
of
the Company and Parent agrees that, during the term of this Agreement, it will
not withdraw its filing under the HSR Act or any other applicable Regulatory
Law
without the written consent of the other party, and each of the Company and
Parent agrees that it will not enter into any timing agreement with any
Governmental Entity without the written consent of the other party. To
the
extent practicable under the circumstances, each of the Company and Parent
agrees not to participate in any substantive meeting or discussion, either
in
person or by telephone, with any Governmental Entity in connection with the
proposed transactions unless it consults with the other party in advance and,
to
the extent not prohibited by such Governmental Entity, gives the other party
the
opportunity to attend and participate.
39
(d) In
furtherance and not in limitation of the covenants of the parties contained
in
this Section 5.5, if any administrative or judicial action or proceeding,
including any proceeding by a private party, is instituted (or threatened to
be
instituted) challenging the Merger or any other transaction contemplated by
this
Agreement as violative of any Regulatory Law, each of the Company and Parent
shall cooperate, and Parent shall cause each of the members of the Parent Group
to cooperate, in all reasonable respects with each other and shall use its
respective reasonable best efforts to contest and resist any such action or
proceeding and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the Merger or any other transaction contemplated hereby.
(e) For
purposes of this Agreement, “Regulatory
Law”
means
any and all state, federal and foreign statutes, acts, rules, regulations,
orders, decrees, administrative and judicial doctrines and other Laws requiring
notice to, filings with, or the consent, clearance or approval of, any
Governmental Entity, or that otherwise may cause any restriction, in connection
with the Merger and the transactions contemplated thereby, including
(i) the ▇▇▇▇▇▇▇ Act of 1890, the ▇▇▇▇▇▇▇ Antitrust Act of 1914, the HSR
Act, the Federal Trade Commission Act of 1914 and all other Laws that are
designed or intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade or lessening
competition through merger or acquisition, (ii) any rules or regulations of
the
FCC or any State Commission or any other Laws relating to the provision of
mobile wireless voice or data services and any statute under the authority
of
which such rules or regulations have been promulgated, (iii) any Law
governing the direct or indirect ownership or control of any of the operations
or assets of the Company and its Subsidiaries or (iv) any Law with the
purpose of protecting the national security or the national economy of any
nation. For the avoidance of doubt, “Regulatory Law” shall not include any
corporation, contract, partnership or similar Law.
Section
5.6 Takeover
Statute.
If any
“fair price,” “moratorium,” “business combination,” “control share acquisition”
or other form of anti-takeover statute or regulation shall become applicable
to
the Merger or the other transactions contemplated by this Agreement after the
date of this Agreement, each of the Company and Parent and the members of their
respective Boards of Directors shall grant such approvals and take such actions
as are reasonably necessary so that the Merger and the other transactions
contemplated hereby may be consummated as promptly as practicable on the terms
contemplated herein and otherwise act to eliminate or minimize the effects
of
such statute or regulation on the Merger, and the other transactions
contemplated hereby.
Nothing
in this Section 5.6 shall be construed to permit Parent or Merger Sub to do
any
act that would constitute a violation or breach of, or as a waiver of any of
the
Company’s rights under, any other provision of this Agreement.
Section
5.7 Public
Announcements.
The
Company and Parent will consult with and provide each other the reasonable
opportunity to review and comment upon any press release or other public
statement or comment prior to the issuance of such press release or other public
statement or comment relating to this Agreement or the transactions contemplated
herein and shall not issue any such press release or other public statement
or
comment prior to such consultation except as may be required by applicable
Law
or by obligations pursuant to any listing agreement with any national securities
exchange. Parent and the Company agree that the
40
press
release announcing the execution and delivery of this Agreement shall be a
joint
release of, and shall not be issued prior to the approval of each of, Parent
and
the Company.
Section
5.8 Indemnification
and Insurance.
(a) Parent
and Merger Sub agree that all rights to exculpation, indemnification and
advancement of expenses for acts or omissions occurring at or prior to the
Effective Time, whether asserted or claimed prior to, at or after the Effective
Time, now existing in favor of the current or former directors, officers or
employees, as the case may be, of the Company or its Subsidiaries as provided
in
their respective certificates of incorporation or by-laws or other organization
documents or in any agreement as in effect on the date hereof and which has
previously been or will be made available to Parent shall survive the Merger
and
shall continue in full force and effect to the extent provided in the following
sentence. Parent shall cause the Surviving Corporation to maintain in effect
any
and all exculpation, indemnification and advancement of expenses provisions
of
the Company’s and any of its Subsidiaries’ articles of incorporation and by-laws
or similar organization documents or in any indemnification agreements of the
Company or its Subsidiaries with any of their respective current or former
directors, officers or employees, in each case in effect as of the date hereof
and which has previously been provided to Parent, and shall not, for a period
of
six years from the date hereof, amend, repeal or otherwise modify any such
provisions in any manner that would adversely affect the rights thereunder
of
any individuals who at the Effective Time were current or former directors,
officers or employees of the Company or any of its Subsidiaries and all rights
to indemnification thereunder in respect of any Action pending or asserted
or
any claim made within such period shall continue until the disposition of such
Action or resolution of such claim.
(b) From
and
after the Effective Time, the Surviving Corporation shall, and Parent shall
cause the Surviving Corporation to, to the fullest extent permitted under
applicable Law, indemnify and hold harmless (and advance funds in respect of
each of the foregoing) each current and former director, officer or employee
of
the Company or any of its Subsidiaries (each, together with such person’s heirs,
executors or administrators, an “Indemnified
Party”)
against any costs or expenses (including advancing reasonable attorneys’ fees
and expenses in advance of the final disposition of any claim, suit, proceeding
or investigation to each Indemnified Party to the fullest extent permitted
by
Law upon the receipt of any customary undertaking required by the Surviving
Corporation), judgments, fines, losses, claims, damages, liabilities and amounts
paid in settlement in connection with any actual or threatened claim, action,
suit, proceeding or investigation, whether civil, criminal, administrative
or
investigative (an “Action”),
arising out of, relating to or in connection with any action or omission
occurring or alleged to have occurred whether before or at the Effective Time
in
connection with such persons serving as an officer, director, employee or other
fiduciary of the Company or any of its Subsidiaries or of any entity if such
service was at the request or for the benefit of the Company.
(c) For
a
period of six (6) years from the Effective Time, Parent shall either cause
to be
maintained in effect the current policies of directors’ and officers’ liability
insurance and fiduciary liability insurance maintained by the Company and its
Subsidiaries or cause to be provided substitute policies or purchase or cause
the Surviving Corporation to purchase, a “tail policy,” in either case of at
least the same coverage and amounts containing terms and conditions that are
not
less advantageous than such policy with respect to matters arising on or before
the
41
Effective
Time and from insurance carriers with comparable credit ratings. The Company
may, and shall upon request of Parent, in lieu of the foregoing insurance
coverage, purchase, prior to the Effective Time, a six-year prepaid “tail
policy” on terms and conditions (in both amount and scope) providing
substantially equivalent benefits as the current policies of directors’ and
officers’ liability insurance and fiduciary liability insurance maintained by
the Company and its Subsidiaries with respect to matters arising on or before
the Effective Time, covering without limitation the transactions contemplated
hereby. Notwithstanding the foregoing, Parent and the Surviving Corporation
shall not be obligated to, and the Company shall not, incur costs with respect
to such policies of directors’ and officers’ liability insurance in excess of
the amount specified on Section 5.8(c)(i) of the Company Disclosure Letter
in
the case of an annual payment or in excess of the amount specified on Section
5.8(c)(ii) of the Company Disclosure Letter in the case of a tail policy;
provided that Parent and the Surviving Corporation shall be obligated to obtain
policies with the greatest coverage available for a cost not exceeding such
amount.
(d) The
rights of each Indemnified Party hereunder shall be in addition to, and not
in
limitation of, any other rights such Indemnified Party may have under the
Company Charter, the By-laws or other similar organizational documents of the
Company or any of its Subsidiaries or the Surviving Corporation, any other
indemnification agreement or arrangement, the DGCL or otherwise. The agreements
and covenants contained herein shall not be deemed to be exclusive of any other
rights to which any Indemnified Party is entitled, whether pursuant to Law,
contract or otherwise. Nothing in this Agreement is intended to, shall be
construed to or shall release, waive or impair any rights to directors’ and
officers’ insurance claims under any policy that is or has been in existence
with respect to the Company or any of its Subsidiaries or their respective
officers, directors and employees, it being understood and agreed that the
indemnification provided for in this Section 5.8 is not prior to, or in
substitution for, any such claims under any such policies. The provisions of
this Section 5.8 shall survive the consummation of the Merger and,
notwithstanding any other provision of this Agreement that may be to the
contrary, expressly are intended to benefit, and are enforceable by, each of
the
Indemnified Parties.
(e) In
the
event Parent, the Surviving Corporation or any of their respective successors
or
assigns (i) consolidates with or merges into any other Person and shall not
be the continuing or surviving corporation or entity in such consolidation
or
merger or (ii) transfers all or substantially all of its properties and
assets to any person, then, and in either such case, proper provision shall
be
made so that the successors and assigns of Parent or the Surviving Corporation,
as the case may be, shall assume all of the obligations set forth in this
Section 5.8.
Section
5.9 Financing.
(a) Parent
shall use its reasonable best efforts to obtain the Financing on the terms
and
conditions described in the Financing Commitments or, at Parent’s election, on
other terms that would not adversely impact the ability of Parent or Merger
Sub
to timely consummate the transactions contemplated hereby, including using
its
reasonable best efforts (i) to maintain in effect the Financing Commitments
and to negotiate definitive agreements with respect thereto on the terms and
conditions contained in the Financing Commitments (or, at Parent’s election, on
other terms that would not adversely impact the ability of Parent or Merger
Sub
to timely consummate the transactions contemplated hereby), (ii) to satisfy
all conditions applicable to
42
Parent
in
such definitive agreements and consummate the Financing at or prior to the
Closing, except to the extent requiring action by the Company or any of its
Subsidiaries, (iii) to comply with its obligations under the Financing
Commitments and
(iv)
to enforce all of its rights under the Financing Commitments.
Parent
shall give the Company prompt notice upon becoming aware of any material breach
by any party of the Financing Commitments or any termination of the Financing
Commitments. Parent shall keep the Company informed on a reasonably current
basis and in reasonable detail of the status of its efforts to arrange the
Financing and provide to the Company copies of all documents related to the
Financing (other than any ancillary documents subject to confidentiality
agreements). In connection with its obligations under this Section 5.9, Parent
shall be permitted to amend, modify or replace the Debt Commitment Letters
with
new Debt Commitment Letters (the “New
Financing Commitments”),
provided
that
Parent shall not permit any replacement of, or amendment or modification to
be
made to, or any waiver of any material provision or remedy under, the Debt
Commitment Letter if, in the reasonable judgment of Parent, such replacement,
amendment, modification, waiver or remedy (1) reduces the aggregate amount
of
the Debt Financing below that amount required to consummate the Merger and
the
other transactions contemplated hereby, (2) adversely amends or expands the
conditions to the drawdown of the Debt Financing in any respect that could
make
such conditions less likely to be satisfied by the End Date or that would expand
the possible circumstances under which such conditions would not be satisfied
by
such date, (3) can reasonably be expected to delay the Closing or the date
on
which the Financing would be obtained, or (4) is otherwise adverse to the
interests of the Company prior to the occurrence of the Closing in any other
material respect; and provided,
further,
that
nothing in this Section 5.9 shall be deemed to excuse, waive compliance with
or
modify any of the obligations set forth in the Confidentiality Agreement. In
the
event that all conditions to the Financing Commitments (other than, in
connection with the Debt Financing, the availability or funding of any of the
Equity Financing) have been satisfied, Parent shall, from and after the final
day of the Marketing Period and subject to the satisfaction of the conditions
set forth in Sections 6.1 and 6.3 hereof, use its reasonable best efforts to
cause the lenders and other Persons providing such Financing to fund the
Financing required to consummate the Merger on the Closing Date. In the event
that Parent becomes aware of any event or circumstance that makes procurement
of
any portion of the Financing unlikely to occur in the manner or from the sources
contemplated in the Financing Commitments, Parent shall notify the Company
and
shall use its reasonable best efforts to arrange as promptly as practicable,
but
in no event later than one day prior to the Closing Date, any such portion
from
alternative debt financing sources on terms and conditions no less favorable
to
Parent and no more adverse to the ability of Parent to consummate the
transactions contemplated by this Agreement (in each case, as determined in
the
reasonable judgment of Parent). In the event that on the final day of the
Marketing Period (1) all or any portion of the Debt Financing structured as
high
yield financing has not been consummated, (2) all closing conditions contained
in Article VI shall have been satisfied or waived (other than those conditions
that by their nature will not be satisfied until the Closing) and (3) the bridge
financing as described in the Debt Commitment Letters, (or alternative bridge
financing obtained in accordance with the preceding sentence) is available
substantially on the terms and conditions described in the Debt Commitment
Letters (or replacements thereof as contemplated by the preceding sentence),
then Parent shall borrow under and use the proceeds of the bridge financing
(or
such alternative bridge financing) to replace such affected portion of the
high
yield financing no later than the last day of the Marketing Period. For purposes
of this Agreement, “Marketing
43
Period”
shall
mean the first period of 20 consecutive calendar days after the date hereof
throughout and at the end of which (x) Parent shall have all of the Required
Information (as defined below), including updates thereof prior to any such
information going stale under applicable SEC rules and regulations and for
purposes of the issuance by the Company’s independent registered accounting firm
of a customary comfort letter (including “negative assurance” comfort) to
purchasers (in accordance with its normal practices and procedures) of debt
securities contemplated by the Debt Financing Commitments, and during which
period such information shall remain compliant at all times with applicable
provisions of Regulation S-X and Regulation S-K under the Securities Act ,
(y)
the conditions set forth in Section 6.1(a), (b), (c) and (d) shall have been
satisfied and (z) nothing has occurred and no condition exists that would cause
any of the conditions set forth in Section 6.3(a) or (b) to fail to be satisfied
assuming the Closing were to be scheduled for any time during such period;
provided
that (i)
the Marketing Period occurs
either entirely before or entirely after each of the periods (1) from and
including August 17, 2007 through and including September 3, 2007, (2)
from and including November 21, 2007 through and including
November 25, 2007 and (3) from and including December 21, 2007
through and including January 1, 2008;
and
(ii) the Marketing Period shall not be deemed to have commenced if, prior to
the
completion of the Marketing Period, (A) the Company’s independent registered
accounting firm shall have withdrawn its audit opinion with respect to any
financial statements contained in the Required Information, in which case the
Marketing Period will be deemed to commence at such time as a new unqualified
audit opinion is issued with respect to the consolidated financial statements
for the applicable periods by the Company’s independent registered accounting
firm or another independent registered accounting firm reasonably acceptable
to
Parent, (B) the Company shall have publicly announced any intention to restate
any of its financial information contained in any SEC filing (including annual
or quarterly financial statements), in which case the Marketing Period will
be
deemed to commence at such time as the restatement has been completed and the
Company SEC Documents have been amended to reflect such restatement or the
Company has announced that it has concluded that no restatement shall be
required in accordance with GAAP, or (C) the Company shall have failed to file
any Annual Report on Form 10-K, Quarterly Report on Form 10-Q or Current Report
on Form 8-K, with the SEC by the date required under the Exchange Act, in which
case the Marketing Period will not be deemed to commence at the earliest unless
and until all such reports have been filed and (iii) if the financial statements
included in the Required Information that is available to Parent on the first
day of any such 20-consecutive-day period would not be sufficiently current
on
any day during such 20-consecutive-day period to permit (I) a registration
statement using such financial statements to be declared effective by the SEC
on
the last day of the 20-consecutive-day period and (II) the Company’s
independent registered accounting firm to issue a customary comfort letter
(including “negative assurance” comfort) to purchasers (in accordance with its
normal practices and procedures) on the last day of the 20-consecutive-day
period, then a new 20-consecutive day Marketing Period shall commence upon
Parent receiving updated Required Information that would be sufficiently current
to permit the actions described in (I) and (II) on the last day of such
20-consecutive-day-period.
(b) The
Company shall provide, shall cause its Subsidiaries to provide, and shall use
reasonable best efforts to cause its Representatives, including legal and
accounting, to provide, all cooperation reasonably requested by Parent in
connection with the Financing and the other transactions contemplated by this
Agreement (provided
that
such requested cooperation does not unreasonably interfere with the ongoing
operations of the Company and its
44
Subsidiaries),
including (i) as promptly as practical, providing such financial and other
information as Parent shall reasonably request in order to consummate the Debt
Financing, including all Company information, financial statements and financial
data of the type required by Regulation S-X and Regulation S-K under the
Securities Act and the other accounting rules and regulations of the SEC, and
of
a type and form customarily included in private placements pursuant to Rule
144A
under the Securities Act (including, to the extent applicable with respect
to
such financial statements, the report of the Company’s auditors thereon and
related management discussion and analysis of financial condition and results
of
operations) or as is necessary to satisfy the conditions set forth in the Debt
Commitment Letters (as in effect on the date hereof) (all such information
in
this clause (i), the “Required
Information”),
(ii) participating in meetings, drafting sessions and due diligence
sessions in connection with the Financing, (iii) assisting in the
preparation of (A) one or more offering documents or confidential
information memoranda for any of the Debt Financing (including the execution
and
delivery of one or more customary representation letters in connection
therewith), provided
that any
private placement memoranda or prospectuses in relation to high yield debt
securities need not be issued by the Company or any of its Subsidiaries, and
provided,
further,
that
any private placement memoranda or prospectuses shall contain disclosure and
financial statements reflecting the Surviving Corporation and/or its
Subsidiaries as the obligor and (B) materials for rating agency
presentations, (iv) reasonably cooperating with the marketing efforts for
any of the Debt Financing, including providing assistance in the preparation
for, and participating in, road shows, meetings, due diligence sessions and
similar presentations to and with, among others, prospective lenders, investors
and rating agencies, (v) providing monthly financial statements (excluding
footnotes) within 30 days after the end of each month prior to the Closing
Date,
(vi) taking all actions reasonably necessary to (A) permit the prospective
lenders involved in the Financing to evaluate the Company’s current assets, cash
management and accounting systems, policies and procedures relating thereto
for
the purpose of establishing collateral arrangements and (B) establish bank
and
other accounts and blocked account agreements and lock box arrangements in
connection with the foregoing, (vii) executing and delivering (or using
reasonable best efforts to obtain from advisors), and causing its Subsidiaries
to execute and deliver (or use reasonable best efforts to obtain from advisors),
on or more credit agreements or indentures, customary certificates (including
with respect to solvency matters), representation letters, accounting comfort
letters, consents of accountants, legal opinions (which may be reasoned if
circumstances require), hedging agreements, appraisals, surveys, engineering
reports, title insurance or other documents and instruments relating to
guarantees, the pledge of collateral and other matters ancillary to the
Financing, including the pay-off of existing indebtedness and release of any
related Liens, as may be reasonably requested by Parent in connection with
the
Financing and otherwise reasonably facilitating the pledge of collateral and
providing of guarantees contemplated by the Debt Commitment Letter, and (viii)
use its reasonable best efforts to permit any cash of the Company and its
Subsidiaries to be made available to the Company at the Effective Time;
provided,
however,
that the
foregoing shall not be deemed to require the Company or any Subsidiary of the
Company to, prior to the Effective Time, consummate any tender offer or consent
solicitation with respect to, or enter into any supplemental indenture with
respect to or otherwise amend the terms of any instruments governing, any
existing outstanding indebtedness of the Company or its Subsidiaries; and
provided
further,
that,
except for fees and liabilities subject to reimbursement or indemnification
pursuant to the next sentence, no obligation of the Company or any of its
Subsidiaries under any
45
such
certificate, document or instrument (other than the representation letter
referred to above) shall be effective until the Effective Time and, except
for
fees and liabilities subject to reimbursement or indemnification pursuant to
the
next sentence, none of the Company or any of its Subsidiaries shall be required
to pay any commitment or other similar fee or incur any other liability or
obligation in connection with the Financing prior to the Effective
Time.
The
Company will, to the extent it is aware of any applicable developments,
periodically update any such Required Information to be included in an offering
document to be used in connection with the Debt Financing in order to ensure
that such Required Information does not contain any untrue statement of material
fact or omit to state any material fact necessary in order to make the
statements contained therein, in light of the circumstances in which they were
made, not misleading. The Company consents, prior to the termination of this
Agreement, to the reasonable use of its and its Subsidiaries’ logos in
connection with the Debt Financing in a manner customary for such financing
transactions. Parent shall promptly, upon request by the Company, reimburse
the
Company for all reasonable out-of-pocket costs (including reasonable attorneys’
fees) incurred by the Company or any of its Subsidiaries in connection with
the
cooperation of the Company and its Subsidiaries contemplated by this Section
5.9
and shall indemnify and hold harmless the Company, its Subsidiaries and their
respective directors, officers, employees and representatives from and against
any and all losses, damages, claims, costs or expenses suffered or incurred
by
any of them in connection with the arrangement of the Financing and any
information used in connection therewith, except with respect to any information
provided by the Company or any of its Subsidiaries. The immediately preceding
sentence shall survive termination of this Agreement.
Section
5.10 Access;
Confidentiality.
Subject
to applicable Law and to any contractual confidentiality restrictions, the
Company shall afford to Parent, and to Parent’s officers, employees,
accountants, counsel, consultants, financial advisors and other Representatives
and financing sources, reasonable access during normal business hours during
the
period prior to the earlier of the Effective Time and the Termination Date
to
all of its and its Subsidiaries’ properties, Contracts, books and records and to
those officers, employees and agents of the Company to whom Parent reasonably
requests access, and, during such period, the Company shall furnish, as promptly
as practicable, to Parent all information concerning its and its Subsidiaries’
business, properties, personnel and financial information as Parent may
reasonably request. Parent shall treat, and shall cause its officers, employees,
accountants, counsel, financial advisors and other Representatives to treat,
all
information received from the Company or its Representatives, directly or
indirectly, in accordance with the Confidentiality Agreement.
Section
5.11 Notification
of Certain Matters.
The
Company shall keep Parent informed, on a current basis, of any material events,
discussions, notices or changes with respect to any criminal or regulatory
investigation or action involving the Company or any of its Subsidiaries.
Without limiting the foregoing, the Company shall give prompt notice to Parent,
and Parent shall give prompt notice to the Company, of (i) any notice or
other communication received by such party from any Governmental Entity in
connection with the Merger or the other transactions contemplated hereby or
from
any person alleging that the consent of such person is or may be required in
connection with the Merger or the other transactions contemplated hereby, if
the
subject matter of such communication or the failure of such party to obtain
such
consent could be material to the Company, the Surviving Corporation or Parent,
(ii) any actions, suits,
46
claims,
investigations or proceedings commenced or, to such party’s Knowledge,
threatened against, relating to or involving or otherwise affecting such party
or any of its Subsidiaries which relate to the Merger or the other transactions
contemplated hereby, (iii) the discovery of any fact or circumstance that,
or the occurrence or non-occurrence of any event the occurrence or
non-occurrence of which, would cause or result in any of the Conditions to
the
Merger set forth in Article VI not being satisfied or satisfaction of those
conditions being materially delayed in violation of any provision of this
Agreement; provided,
however,
that the
delivery of any notice pursuant to this Section 5.11 shall not (x) cure any
breach of, or non-compliance with, any other provision of this Agreement or
(y) limit the remedies available to the party receiving such notice; and,
provided,
further,
that an
unintentional failure to give prompt notice hereunder pursuant to clause (iii)
shall not constitute a failure of a Condition to the Merger set forth in Article
VI except to the extent that the underlying fact or circumstance not so notified
would standing alone constitute such a failure.
Section
5.12 Rule
16b-3.
Prior
to the Effective Time, the Company shall be permitted to take such steps as
may
be reasonably necessary or advisable hereto to cause dispositions of Company
equity securities (including derivative securities) pursuant to the transactions
contemplated by this Agreement by each individual who is a director or officer
of the Company to be exempt under Rule 16b-3 promulgated under the Exchange
Act.
Section
5.13 Control
of Operations.
Without
in any way limiting any party’s rights or obligations under this Agreement, the
parties understand and agree that (i) nothing contained in this Agreement shall
give Parent, directly or indirectly, the right to control or direct the
Company’s operations prior to the Effective Time, and (ii) prior to the
Effective Time, the Company shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision over its
operations.
Section
5.14 Certain
Transfer Taxes.
Any
liability arising out of any real estate transfer Tax with respect to interests
in real property owned directly or indirectly by the Company or any of its
Subsidiaries immediately prior to the Merger, if applicable and due with respect
to the Merger, shall be borne by the Surviving Corporation and expressly shall
not be a liability of shareholders of the Company.
Section
5.15 Obligations
of Merger Sub.
Parent
shall take all action necessary to cause Merger Sub and the Surviving
Corporation to perform their respective obligations under this
Agreement.
Section
5.16 Treatment
of Certain Notes.
(a) The
Company shall, and shall cause its Subsidiaries to, use their reasonable best
efforts to commence, promptly after the receipt of a written request from Parent
to do so, one or more offers to purchase, and related consent solicitations
with
respect to, all of the outstanding aggregate principal amount of the notes
identified on Section 5.16 of the Parent Disclosure Letter (collectively, the
“Notes”)
on the
terms and conditions specified by Parent (collectively, the “Debt
Offers”),
it
being understood that Parent may elect to exclude one or more series of such
Notes from the Debt Offers; provided,
that
the Company shall not be required to commence any Debt Offers until Parent
shall
have provided the Company with the
47
necessary
offer to purchase, related letter of transmittal, and other related documents
(collectively, the “Offer
Documents”).
The
closing of the Debt Offers shall be conditioned on the completion of the Merger
and shall be conducted in compliance with applicable Laws, including SEC rules
and regulations. The Company and Parent shall, and shall cause their respective
Subsidiaries to, and shall use their reasonable best efforts to cause their
respective Representatives to, provide cooperation and assistance reasonably
requested by the other in connection with the Debt Offers.
(b) With
respect to any series of Notes, if requested by Parent in writing, the Company
will cooperate with Parent to permit the Surviving Corporation after the
Effective Time, to the extent permitted by the indenture and officers’
certificates or supplemental indenture governing such series of Notes, to
redeem, satisfy or discharge or defease any series of Notes.
(c) The
Company shall, and shall cause its Subsidiaries to, waive any of the conditions
to the Debt Offers (other than that the Merger shall have been consummated
and
that there shall be no Law, injunction or other legal restraint prohibiting
consummation of the Debt Offers) as may be reasonably requested by Parent and
shall not, without the written consent of Parent, waive any condition to the
Debt Offers or make any changes to the Debt Offers other than as agreed in
writing between Parent and the Company. Notwithstanding the immediately
preceding sentence, neither the Company nor any of its Subsidiaries shall be
required to make any change to the terms and conditions of the Debt Offers
requested by Parent that decreases the price per Note payable in the Debt Offers
or related consent solicitation as set forth in Section 5.16(c) of the Parent
Disclosure Letter or imposes conditions to the Debt Offers or related consent
solicitation in addition to those set forth in Section 5.16(c) of the Parent
Disclosure Letter that are adverse to the holders of the Notes, unless such
change is previously approved by the Company in writing.
(d) The
Company covenants and agrees that, promptly following the consent solicitation
expiration date, assuming the requisite consents are received, each of the
Company and its applicable Subsidiaries as is necessary shall (and shall use
their commercially reasonable efforts to cause the applicable trustee to)
execute supplemental indentures to the indentures governing each series of
Notes
for which the requisite consent has been received, which supplemental indentures
shall implement the amendments described in the Offer Documents and shall become
operative only concurrently with the Effective Time, subject to the terms and
conditions of this Agreement (including the conditions to the Debt Offers).
Concurrently with the Effective Time, Parent shall cause the Surviving
Corporation to accept for payment and thereafter promptly pay for the Notes
that
have been properly tendered and not properly withdrawn pursuant to the Debt
Offers and in accordance with the Debt Offers using funds provided by or at
the
direction of Parent.
(e) Parent
shall prepare all necessary and appropriate documentation in connection with
the
Debt Offers, including the Offer Documents. Parent and the Company shall, and
shall cause their respective Subsidiaries to, reasonably cooperate with each
other in the preparation of the Offer Documents. The Offer Documents (including
all amendments or supplements thereto) and all mailings to the holders of the
Notes in connection with the Debt Offers shall be subject to the prior review
of, and comment by, the Company and Parent and
48
shall
be
reasonably acceptable to each of them. If at any time prior to the completion
of
the Debt Offers, any information should be discovered by the Company or Parent
which should be set forth in an amendment or supplement to the Offer Documents,
so that the Offer Documents shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of circumstances
under which they are made, not misleading, the party that discovers such
information shall use commercially reasonable efforts to promptly notify the
other party, and an appropriate amendment or supplement prepared by Parent
describing such information shall be disseminated by or on behalf of the Company
to the holders of the applicable Notes (which supplement or amendment and
dissemination may, at the reasonable direction of Parent, take the form of
a
filing of a Current Report on Form 8−K). Notwithstanding anything to the
contrary in this Section 5.16(e), the Company shall and shall cause its
Subsidiaries to comply with the requirements of Rule 14e−1 under the Exchange
Act and any other applicable Law to the extent such laws are applicable in
connection with the Debt Offers and such compliance will not be deemed a breach
hereof.
(f) In
connection with the Debt Offers, Parent may select one or more dealer managers,
information agents, depositaries and other agents, in each case as shall be
reasonably acceptable to the Company, to provide assistance in connection
therewith and the Company shall, and shall cause its Subsidiaries to, enter
into
customary agreements (including indemnities) with such parties so selected.
Parent shall pay the fees and out-of-pocket expenses of any dealer manager,
information agent, depositary or other agent retained in connection with the
Debt Offers upon the incurrence of such fees and out-of-pocket expenses, and
Parent further agrees to reimburse the Company and their Subsidiaries for all
of
their reasonable and documented out-of-pocket costs incurred in connection
with
the Debt Offers promptly following the incurrence thereof.
Section 5.17 Termination
of Certain Other Indebtedness.
(a) The
Company shall use commercially reasonable efforts to (i) negotiate payoff
letters from third-party lenders and trustees, in form and substance reasonably
satisfactory to Parent, with respect to the Indebtedness of the Company and
its
Subsidiaries identified on Section 5.17(a) of the Parent Disclosure Letter
and
any other indebtedness specified by Parent to the Company no later than 10
days
prior to the Closing and (ii) deliver or cause to be delivered such payoff
letters to Parent at the Closing.
(b) On
the
Closing Date, subject to Parent making available necessary funds to do so,
the
Company shall use commercially reasonable efforts to, and to cause its
Subsidiaries to, permanently (i) terminate the credit facilities requested
by
Parent to be so terminated, if and to the extent such facilities are either
identified on Section 5.17(b) of the Parent Disclosure Letter or specified
by
Parent to the Company no later than five days prior to Closing, and all related
Contracts to which the Company and its Subsidiaries is a party and (ii) to
the
extent the related facility is terminated pursuant to this Section 5.17, release
any Liens on its assets relating to those facilities.
49
ARTICLE
VI
CONDITIONS
TO THE MERGER
Section
6.1 Conditions
to Each Party’s Obligation to Effect the Merger.
The
respective obligations of each party to effect the Merger shall be subject
to
the fulfillment (or waiver by all parties) at or prior to the Effective Time
of
the following conditions:
(a) The
Company Shareholder Approval shall have been obtained.
(b) No
Governmental Entity of competent jurisdiction shall have enacted, issued or
entered any restraining order, preliminary or permanent injunction or similar
order or legal restraint or prohibition which remains in effect that enjoins
or
otherwise prohibits consummation of the Merger.
(c) Any
applicable waiting period under the HSR Act (and any extension thereof) shall
have expired or been terminated.
(d) All
approvals and authorizations required to be obtained from the FCC for the
transfer of control of the FCC Licenses in connection with the Merger shall
have
been obtained, except for those approvals and authorizations to be obtained
from
the FCC that in the aggregate are immaterial to the Company and have not been
denied by the FCC regardless of whether a Final Order shall have been
issued.
Section
6.2 Conditions
to Obligation of the Company to Effect the Merger.
The
obligation
of the
Company to effect the Merger is further subject to the fulfillment or waiver
by
the Company of the following
conditions:
(a) The
representations and warranties of Parent and Merger Sub set forth in this
Agreement shall be true and correct as of the date of this Agreement and as
of
the Closing Date as though made on and as of the Closing Date (unless any such
representation or warranty is made only as of a specific date, in which event
such representation or warranty shall be true and correct only as of such
specific date),
except
where the failure of such representations and warranties to be so true and
correct would not, individually or in the aggregate, have a Parent Material
Adverse Effect.
(b) Parent
and Merger Sub shall have in all material respects performed all obligations
and
complied with all covenants required by this Agreement to be performed or
complied with by them prior to the Effective Time.
(c) Parent
shall have delivered to the Company a certificate, dated as of the Closing
Date
and signed by its Chief Executive Officer or another senior executive officer,
certifying to the effect that the conditions set forth in Section 6.2(a)
and
6.2(b) have been satisfied.
Section
6.3 Conditions
to Obligation of Parent and Merger Sub to Effect the Merger.
The
obligation of Parent and Merger Sub to effect the Merger is further subject
to
the fulfillment or waiver by Parent and Merger Sub of the following
conditions:
50
(a) The
representations and warranties of the Company (i) set forth in (A) Section
3.2(a)(x) and 3.2(b),(c) and (d) shall be true and correct in all material
respects, and (B) 3.11(b) shall be true and correct in all respects, as at
the
date of this Agreement and as of the Closing Date as if made on the Closing
Date
(except to the extent such representations and warranties expressly relate
to an
earlier date, in which case as of such earlier date), and (ii) set forth in
this
Agreement (other than those described in clause (i) above) shall be true and
correct (disregarding all qualifications or limitations as to “materiality”,
“Company Material Adverse Effect” and words of similar import set forth therein)
as of the date of this Agreement and as of the Closing Date as though made
on
the Closing Date (except to the extent such representations and warranties
expressly relate to an earlier date, in which case as of such earlier date),
except, in the case of this clause (ii), where the failure of such
representations and warranties to be so true and correct would not, individually
or in the aggregate, have a Company Material Adverse Effect.
(b) The
Company shall have in all material respects performed all obligations and
complied with all covenants required by this Agreement to be performed or
complied with by it prior to the Effective Time.
(c) The
Company shall have delivered to Parent a certificate, dated as of the Closing
Date and signed by its Chief Executive Officer or another senior executive
officer, certifying to the effect that the conditions set forth in Section
6.3(a)and Section 6.3(b) have been satisfied.
Section 6.4 Frustration
of Closing Conditions.
Neither
the Company nor Parent may rely, either as a basis for not consummating the
Merger or terminating this Agreement and abandoning the Merger, on the failure
of any condition set forth in Section 6.1, 6.2 or 6.3, as the case may be,
to be
satisfied if such failure was caused by such party’s breach in any material
respect of any provision of this Agreement or failure to use all best efforts
to
consummate the Merger and the other transactions contemplated hereby, as
required by and subject to Section 5.5.
ARTICLE
VII
TERMINATION
Section
7.1 Termination
or Abandonment.
Notwithstanding anything contained in this Agreement to the contrary, this
Agreement may be terminated and abandoned at any time prior to the Effective
Time, whether before or after any approval of the matters presented in
connection with the Merger by the shareholders of the Company:
(a) by
the
mutual written consent of the Company and Parent;
(b) by
either
the Company or Parent, if:
(i) the
Effective Time shall not have occurred on or before the 12-month anniversary
of
the date hereof (provided however
that in
the event that as of such 12-month anniversary any of the conditions set forth
in any of Section 6.1(b), (c) or (d) has not been satisfied, the Termination
Date may be extended from time to time by either Parent or the Company one
or
more times to a date not beyond the 14-month anniversary of the date hereof
(such later date, including as it may be further extended pursuant to
the
51
proviso
at the end of this Section 7.1(b)(i), the “End
Date”)),
and
the party seeking to terminate this Agreement pursuant to this Section 7.1(b)(i)
shall not have breached in any material respect its obligations under this
Agreement in any manner that shall have proximately caused the failure to
consummate the Merger on or before the End Date;
provided
however
that if
the Marketing Period shall have commenced on or before the End Date, but not
ended on or before the End Date, the End Date shall (x) be automatically
extended by 30 days after the initial commencement date of such Marketing Period
and (y) in no event occur sooner than three business days after the final day
of
the Marketing Period; provided,
further,
that in
no event shall the End Date be later than the 15-month anniversary of the date
hereof;
(ii) if
any
court of competent jurisdiction shall have issued or entered an injunction
or
similar legal restraint or order permanently enjoining or otherwise prohibiting
the consummation of the Merger and such injunction, legal restraint or order
shall have become final and non-appealable, provided
that the
party seeking to terminate this Agreement pursuant to this Section 7.1(b)(ii)
shall have used such efforts as may be required by Section 5.5 to prevent,
oppose and remove such injunction;
(iii) the
Company Meeting (including any adjournments or postponements thereof) shall
have
concluded and the Company Shareholder Approval contemplated by this Agreement
shall not have been obtained;
(c) by
the
Company:
(i) if
Parent
or
Merger
Sub shall
have breached or failed to perform any of its representations, warranties,
covenants or other agreements contained in this Agreement, which breach or
failure to perform (A) would result in a failure of a condition set forth
in Section 6.1 or Section 6.2 and (B) cannot be cured by the End Date,
provided
that (x)
the Company shall have given Parent written notice, delivered at least thirty
(30) days prior to such termination, stating the Company’s intention to
terminate this Agreement pursuant to this Section 7.1(c)(i) and the basis for
such termination and (y) the Company is not then in material breach of this
Agreement;
(ii) in
order
to enter into a transaction that is a Superior Proposal, if, prior to the
receipt of the Company Shareholder Approval, (A) the Board of Directors of
the Company determines that it has received a Superior Proposal, (B) the
Company has notified Parent in writing of its intention to terminate this
Agreement pursuant to this Section 7.1(c)(ii), and included with such notice
the
identity of the person making such proposal, the most current written draft
agreement relating to the transaction that constitutes such Superior Proposal
and all related transaction agreements to which the Company would be a party,
(C) the Company has negotiated with Parent in good faith during the five
Business Day period following receipt by Parent of the notice referred to in
clause (B) above (to the extent Parent desires to negotiate) regarding
adjustments in the terms and conditions of this Agreement as would permit the
Board of Directors to determine that such Superior Proposal no longer
constitutes a Superior Proposal, (D) following such period referred to in
clause (C) above, and taking into account any revised proposal committed to
by
Parent during such period, the Board of Directors shall
52
have
determined in good faith and after consultation with its outside counsel and
financial advisors that such Superior Proposal continues to be more favorable
to
the shareholders of the Company from a financial point of view than the revised
proposal committed to by Parent, if any, (E) concurrently with such termination,
the Company enters into a definitive agreement with respect to such Superior
Proposal, and (F) prior to or concurrently with such termination, the
Company pays the fee due under Section 7.2;
provided
that any material amendment to the terms of such Superior Proposal shall require
a new notice and a new two Business Day period;
(iii) if
the
Merger shall not have been consummated on the third Business Day after the
final
day of the Marketing Period and all of the conditions set forth in Section
6.3(a) and Section 6.3(b) have been satisfied and at the time of such
termination such conditions continue to be satisfied; or
(d) by
Parent, if:
(i) the
Company shall have breached or failed to perform any of its representations,
warranties, covenants or other agreements contained in this Agreement, which
breach or failure to perform (A) would result in a failure of a condition
set forth in Section 6.1 or Section 6.3 to be satisfied and (B) cannot be
cured by the End Date, provided
that (x)
Parent shall have given the Company written notice, delivered at least thirty
(30) days prior to such termination, stating Parent’s intention to terminate
this Agreement pursuant to this Section 7.1(d)(i) and the basis for such
termination and (y) neither Parent nor Merger Sub is then in material breach
of
this Agreement;
(ii) the
Board
of Directors of the Company (A) effects a Change of Recommendation, (B) fails
to
include in the Proxy Statement its recommendation to the Company’s shareholders
that they give the Company Shareholder Approval, (C) publicly approves, endorses
or recommends any Alternative Proposal
(it
being agreed that the taking by the Company or any of its Representatives of
any
of the actions permitted by Section 5.2(c) shall not give rise to a right to
terminate pursuant to this clause (ii)) or (D) fails to publicly recommend
against acceptance of a tender offer or exchange offer that constitutes an
Alternative Proposal (other than by Parent or any of its Affiliates), including
by taking no position with respect to the acceptance of such tender offer or
exchange offer by its shareholders, within 10 Business Days after commencement
thereof; or
(iii) the
Company gives Parent the notification contemplated by Section
7.1(c)(ii)(B).
In
the
event of termination of this Agreement pursuant to this Section 7.1, this
Agreement shall forthwith become null and void and there shall be no liability
or obligation on the part of the Company, Parent, Merger Sub or their respective
Subsidiaries or Affiliates, except that the Confidentiality Agreements, the
Guarantees (only to the extent reflected therein) and the provisions of Section
5.9, Section 7.2 and Article VIII will survive the termination hereof;
provided,
however,
that,
without limiting the right to receive any payment pursuant to Section 7.2,
the
Company agrees that, to the extent it has incurred losses or damages in
connection with
53
this
Agreement, the maximum aggregate liability of Parent and Merger Sub shall be
limited to an amount equal to the aggregate amount of the Guarantees (to the
extent any amount is payable thereunder), and in no event shall the Company
seek
to recover any money damages in excess of such amount from Parent, Merger Sub
or
any Guarantor (only to the extent reflected in any Guarantee) or any of their
respective Representatives or Affiliates; and provided,
further,
that
subject to Section 7.2(e), nothing herein shall relieve the Company from
liability for willful and material breach of its covenants or agreements set
forth in this Agreement prior to such termination.
Section
7.2 Termination
Fees.
(a) In
the
event that:
(i) (A)
after
the date hereof, a bona fide Alternative Proposal shall have been publicly
disclosed or any Person shall have publicly announced or publicly made known
any
intention (whether or not conditional) to make any Alternative Proposal (and
such Alternative Proposal or publicly announced intention shall not have been
abandoned), and (B) following the occurrence of an event described in the
preceding clause (A), this Agreement is terminated by the Company or Parent
pursuant to Section 7.1(b)(iii) or 7.1(d)(i), and (C) the Company
consummates, or enters into a definitive agreement providing for, any
Alternative Proposal within twelve months of the date this Agreement is
terminated, which need not be the same Alternative Proposal that shall have
been
publicly disclosed after the date hereof in respect of the preceding clause
(A)
(provided
that for
purposes of this Section 7.2(a)(i), the references to “20%” in the definition of
Alternative Proposal shall be deemed to be references to “50%”);
or
(ii) this
Agreement is terminated by the Company pursuant to Section 7.1(c)(ii);
or
(iii) this
Agreement is terminated by Parent pursuant to Section 7.1(d)(ii) or
7.1(d)(iii);
then
in
any such event under clause (i), (ii) or (iii) of this Section 7.2(a), the
Company shall pay at the direction of Parent to
any
Person that is a U.S. person for U.S. federal income tax purposes, a
termination fee of $625,000,000 in cash (the “Termination
Fee”),
less
the amount of any Expenses previously reimbursed by the Company pursuant to
Section 8.2, it being understood that in no event shall the Company be required
to pay the Termination Fee on more than one occasion.
(b) In
the
event that
(i) (x)
the
Company shall terminate this Agreement pursuant to Section 7.1(c)(i) and (y)
at
the time of such termination there are not facts or circumstances that would
reasonably be expected to cause the conditions in Section 6.3(a) or Section
6.3(b) not to be satisfied on the End Date, or
(ii) the
Company shall terminate this Agreement pursuant to Section 7.1(c)(iii),
or
54
(iii) this
Agreement shall be terminated by the Company or Parent pursuant to (x) Section
7.1(b)(i) and at the time of such termination the conditions set forth in
Sections 6.1 and Sections 6.3(a) and (b) (substituting the time of such
termination for references to the “Closing Date” and the “Effective Time” in
such Sections 6.3(a) and (b)) are satisfied, or (y) Section 7.1(b)(i) or Section
7.1(b)(ii) (in the case of clause (ii), if the applicable injunction, legal
restraint or order relates to a Regulatory Law) and at the time of such
termination any of the conditions set forth in Section 6.1(b) (in the case
of
clause (b), if the applicable order, injunction, restraint or prohibition
relates to a Regulatory Law), (c) or (d) or Section 6.2 shall not have been
satisfied,
then
in
any such event under clause (i), (ii) or (iii) of this Section 7.2(b), Parent
shall pay to the Company a termination fee of $625,000,000 in cash (the
“Parent
Termination Fee”),
it
being understood that in no event shall Parent be required to pay the Parent
Termination Fee on more than one occasion.
(c) Any
payment required to be made pursuant to clause (i) of Section 7.2(a) shall
be
made at the direction of Parent to any Person that is a U.S. person for U.S.
federal income tax purposes, promptly following the earlier of the consummation
of or entry into a definitive agreement with respect to the transaction referred
to therein, as the case may be (and in any event not later than two Business
Days after delivery to the Company of notice of demand for payment after such
event); any payment required to be made pursuant to clause (ii) of Section
7.2(a) shall be made at the direction of Parent to any Person that is a U.S.
person for U.S. federal income tax purposes, concurrently with, and as a
condition to the effectiveness of, the termination of this Agreement by the
Company pursuant to Section 7.1(c)(ii); any payment required to be made pursuant
to clause (iii) of Section 7.2(a) shall be made at the direction of Parent
to
any Person that is a U.S. person for U.S. federal income tax purposes, promptly
following termination of this Agreement by Parent pursuant to Section 7.1(d)(ii)
or (iii), as applicable (and in any event not later than two Business Days
after
delivery to the Company of notice of demand for payment after such event),
and
such payment shall be made by wire transfer of immediately available funds
to an
account to be designated by Parent. Any payment required to be made pursuant
to
Section 7.2(b) shall be made to the Company promptly following termination
of
this Agreement by the Company or Parent, as applicable (and in any event not
later than two Business Days after delivery to Parent of notice of demand for
payment), and such payment shall be made by wire transfer of immediately
available funds to an account to be designated by the Company.
(d) In
the
event that the Company shall fail to pay the Termination Fee, or Parent shall
fail to pay the Parent Termination Fee, required pursuant to this Section 7.2
when due, such fee shall accrue interest for the period commencing on the date
such fee became past due, at a rate equal to the rate of interest publicly
announced by ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ from time to time during such period, as such
bank’s prime lending rate. In addition, if either party shall fail to pay such
fee when due, such owing party shall also pay to the owed party all of the
owed
party’s costs and expenses (including reasonable attorneys’ fees) in connection
with efforts to collect such fee or expenses. Each of Parent and the Company
acknowledges that the fees and the other provisions of this Section 7.2 are
an
integral part of the Merger and that, without these agreements, Parent and
the
Company would not enter into this Agreement.
55
(e) Each
of
the parties hereto acknowledges that the agreements contained in this Section
7.2 are an integral part of the transactions contemplated by this Agreement
and
that neither the Termination Fee nor the Parent Termination Fee is a penalty,
but rather is liquidated damages in a reasonable amount that will compensate
Parent and Merger Sub or the Company, as the case may be, in the circumstances
in which such Termination Fee is payable for the efforts and resources expended
and opportunities foregone while negotiating this Agreement and in reliance
on
this Agreement and on the expectation of the consummation of the transactions
contemplated hereby, which amount would otherwise be impossible to calculate
with precision. Notwithstanding anything to the contrary in this Agreement,
the
Company’s right to receive payment of the Parent Termination Fee from Parent
pursuant to this Section 7.2 or the guarantee thereof pursuant to the Guarantees
shall be the sole and exclusive remedy of the Company and its Subsidiaries
against Parent, Merger Sub, the Guarantors and any of their respective former,
current or future general or limited partners, stockholders, managers, members,
directors, officers, Affiliates or agents for the loss suffered as a result
of
the failure of the Merger to be consummated, and upon payment of such amount,
none of Parent, Merger Sub, the Guarantors or any of their former, current
or
future general or limited partners, stockholders, managers, members, directors,
officers, Affiliates or agents shall have any further liability or obligation
relating to or arising out of this Agreement or the transactions contemplated
hereby.
ARTICLE
VIII
MISCELLANEOUS
Section
8.1 No
Survival of Representations and Warranties.
None of
the representations and warranties in this Agreement
or in
any instrument delivered pursuant to this Agreement shall survive the occurrence
of the Merger.
Section
8.2 Expenses.
Whether
or not the Merger is consummated, all costs and expenses incurred in
connection
with the Merger, this Agreement and the transactions contemplated
hereby shall be paid by the party incurring or required to incur such expenses,
except (x) all fees paid in respect of any HSR Act, FCC or other regulatory
filing shall be borne one-half by the Company and one-half by Parent and (y)
as
otherwise set forth in Section 5.9
or
Section 7.2(d). Notwithstanding the foregoing, in the event this Agreement
is
terminated pursuant to Section 7.1(b)(iii), the Company shall reimburse and
pay
to Parent all of its reasonable out-of-pocket expenses (including fees and
expenses of accountants, counsel, investment bankers, financing sources, experts
and consultants to Parent and its affiliates and equity holders) incurred in
connection with the authorization, preparation, negotiation, execution and
performance of this Agreement and the transactions contemplated hereby
(“Expenses”),
in an
amount not exceeding $35,000,000.
Section
8.3 Counterparts;
Effectiveness.
This
Agreement may be executed in two or more consecutive counterparts (including
by
facsimile), each of which shall be an original, with the same effect as if
the
signatures thereto and hereto were upon the same instrument, and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered (by telecopy or otherwise) to the other parties.
56
Section
8.4 Governing
Law.
This
Agreement, and all claims or causes of action (whether at Law, in contract
or in
tort) that may be based upon, arise out of or relate to this Agreement or the
negotiation, execution or performance hereof, shall be governed by and construed
in accordance with the Laws of the State of Delaware, without giving effect
to
any choice or conflict of Law provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the
Laws
of any jurisdiction other than the State of Delaware.
Section
8.5 Jurisdiction;
Enforcement.
The
parties agree that irreparable damage would occur in the event that any of
the
provisions of this Agreement to be performed by the Company or any of its
Subsidiaries were not performed in accordance with their specific terms or
were
otherwise breached. It is accordingly agreed that prior to the valid and
effective termination of this Agreement in accordance with Article VII Parent
shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this Agreement
exclusively in the Delaware Court of Chancery and any state appellate court
therefrom within the State of Delaware (or, if the Delaware Court of Chancery
declines to accept jurisdiction over a particular matter, any state or federal
court within the State of Delaware). The parties acknowledge and agree that
neither the Company nor any of its Subsidiaries shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement or to enforce
specifically the terms and provisions of this Agreement and their sole and
exclusive remedy with respect to any such breach shall be the monetary damages
set forth in Section 7.2(b). In addition, each of the parties hereto irrevocably
agrees that any legal action or proceeding with respect to this Agreement and
the rights and obligations arising hereunder, or for recognition and enforcement
of any judgment in respect of this Agreement and the rights and obligations
arising hereunder brought by the other party hereto or its successors or
assigns, shall be brought and determined exclusively in the Delaware Court
of
Chancery and any state appellate court therefrom within the State of Delaware
(or, if the Delaware Court of Chancery declines to accept jurisdiction over
a
particular matter, any state or federal court within the State of Delaware).
Each of the parties hereto hereby irrevocably submits with regard to any such
action or proceeding for itself and in respect of its property, generally and
unconditionally, to the personal jurisdiction of the aforesaid courts and agrees
that it will not bring any action relating to this Agreement or any of the
transactions contemplated by this Agreement in any court other than the
aforesaid courts. Each of the parties hereto hereby irrevocably waives, and
agrees not to assert as a defense, counterclaim or otherwise, in any action
or
proceeding with respect to this Agreement, (a) any claim that it is not
personally subject to the jurisdiction of the above named courts for any reason
other than the failure to serve in accordance with this Section 8.5,
(b) any claim that it or its property is exempt or immune from jurisdiction
of any such court or from any legal process commenced in such courts (whether
through service of notice, attachment prior to judgment, attachment in aid
of
execution of judgment, execution of judgment or otherwise) and (c) to the
fullest extent permitted by the applicable Law, any claim that (i) the
suit, action or proceeding in such court is brought in an inconvenient forum,
(ii) the venue of such suit, action or proceeding is improper or
(iii) this Agreement, or the subject mater hereof, may not be enforced in
or by such courts.
Section
8.6 WAIVER
OF JURY TRIAL.
EACH OF
THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY
LEGAL PROCEEDING BETWEEN THE PARTIES HERETO ARISING OUT OF OR
57
RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section
8.7 Notices.
Any
notice required to be given hereunder shall be sufficient if in writing, and
sent by facsimile transmission with electronic confirmation, by reliable
overnight delivery service (with proof of service), hand delivery or certified
or registered mail (return receipt requested and first-class postage prepaid),
addressed as follows:
To
Parent
or Merger Sub:
Atlantis
Holdings LLC
c/o
TPG
Partners V, L.P.
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇
▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
with
a
copy to:
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇
▇.
▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
Weil,
Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
To
the
Company:
Alltel
Corporation
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
58
with
a
copy to:
Wachtell,
Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
or
to
such other address as any party shall specify by written notice so given, and
such notice shall be deemed to have been delivered as of the date so
telecommunicated and confirmed, personally delivered or mailed. Any party to
this Agreement may notify any other party of any changes to the address or
any
of the other details specified in this paragraph; provided,
however,
that
such notification shall only be effective on the date specified in such notice
or five (5) Business Days after the notice is given, whichever is later.
Rejection or other refusal to accept or the inability to deliver because of
changed address or facsimile of which no notice was given shall be deemed to
be
receipt of the notice as of the date of such rejection, refusal or inability
to
deliver.
Section
8.8 Assignment;
Binding Effect.
Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of Law or
otherwise) without the prior written consent of the other parties, except that
Parent and Merger Sub may assign, in its sole discretion, any of or all of
its
rights, interest and obligations under this Agreement to Parent or any of its
Affiliates, but no such assignment shall relieve the assigning party of its
obligations hereunder or under the Guarantee. Subject to the preceding sentence,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns.
Parent
shall cause Merger Sub, and any assignee thereof, to perform its obligations
under this Agreement and shall be responsible for any failure of Merger Sub
or
such assignee to comply with any representation, warranty, covenant or other
provision of this Agreement.
Section
8.9 Severability.
Any
term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement in any other jurisdiction.
If any provision of this Agreement is so broad as to be unenforceable, such
provision shall be interpreted to be only as broad as is
enforceable.
Section
8.10 Entire
Agreement; No Third-Party Beneficiaries.
This
Agreement (including the exhibits and letters hereto), the Confidentiality
Agreements and the Guarantees constitute the entire agreement, and supersede
all
other prior agreements and understandings, both written and oral, between the
parties, or any of them, with respect to the subject matter hereof and thereof
and, other than as set forth in Section 5.8, is not intended to and shall not
confer upon any person other than the parties hereto any rights or remedies
hereunder.
59
Section
8.11 Amendments;
Waivers.
At any
time prior to the Effective Time, any provision of this Agreement may be amended
or waived if, and only if, such amendment or waiver is in writing and signed,
in
the case of an amendment, by the Company, Parent and Merger Sub, or in the
case
of a waiver, by the party against whom the waiver is to be effective;
provided,
however,
that
after receipt of Company Shareholder Approval, if any such amendment or waiver
shall by applicable Law or in accordance with the rules and regulations of
the
New York Stock Exchange require further approval of the shareholders of the
Company, the effectiveness of such amendment or waiver shall be subject to
the
approval of the shareholders of the Company. Notwithstanding the foregoing,
no
failure or delay by the Company or Parent in exercising any right hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise of any other right
hereunder.
Section
8.12 Headings.
Headings of the Articles and Sections of this Agreement are for convenience
of
the parties only and shall be given no substantive or interpretive effect
whatsoever. The table of contents to this Agreement is for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
Section
8.13 Interpretation.
When a
reference is made in this Agreement to an Article or Section, such reference
shall be to an Article or Section of this Agreement unless otherwise
indicated. Whenever the words “include,” “includes” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without
limitation.” The words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and
not to any particular provision of this Agreement. The word “or” shall be deemed
to mean “and/or.” All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant thereto unless otherwise defined therein. The definitions contained
in
this Agreement are applicable to the singular as well as the plural forms of
such terms and to the masculine as well as to the feminine and neuter genders
of
such term. Any agreement, instrument or statute defined or referred to herein
or
in any agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
Each
of the parties has participated in the drafting and negotiation of this
Agreement. If an ambiguity or question of intent or interpretation arises,
this
Agreement must be construed as if it is drafted by all the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party
by
virtue of authorship of any of the provisions of this Agreement.
Section
8.14 No
Recourse.
This
Agreement may only be enforced against, and any claims or causes of action
that
may be based upon, arise out of or relate to this Agreement, or the negotiation,
execution or performance of this Agreement may only be made against the entities
that are expressly identified as parties hereto or the Guarantors (to the extent
set forth in the Guarantees) and no past, present or future Affiliate, director,
officer, employee, incorporator, member, manager, partner, shareholder, agent,
attorney or representative of any party hereto (other than the Guarantors (to
the extent set forth in the Guarantees)) shall have any liability for any
obligations or liabilities of the parties to this Agreement or for any claim
based on, in respect of, or by reason of, the transactions contemplated
hereby.
60
Section
8.15 Certain
Definitions.
For
purposes of this Agreement, the following terms will have the following meanings
when used herein:
(a) “Affiliates”
shall
mean, as to any person, any other person which, directly or indirectly,
controls, or is controlled by, or is under common control with, such person.
As
used in this definition, “control”
(including, with its correlative meanings, “controlled by” and “under common
control with”) shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of management or policies of a person, whether
through the ownership of securities or partnership or other ownership interests,
by Contract or otherwise. Without limiting the foregoing, the “Affiliates” of
Parent shall include the Guarantors and their respective
Affiliates.
(b) “Business
Day”
shall
mean any day other than a Saturday, Sunday or a day on which the banks in New
York, New York are authorized by Law or executive order to be closed.
(c) “Company
Stock Plans”
means
each of the plans providing for the grant of Company Stock Options or Company
Restricted Stock and the Employee Stock Purchase Plan.
(d) “Confidentiality
Agreements”
means
the confidentiality agreement, dated as of April 9, 2007, by and between TPG
Capital, L.P. and the Company and the confidentiality agreement, dated as of
April 25, 2007, by and between GS Capital Partners VI Fund, L.P. and the
Company.
(e) “Contracts”
means
any contracts, agreements, licenses (or sublicenses), notes, bonds, mortgages,
indentures, commitments, leases (or subleases) or other instruments or
obligations, whether written or oral.
(f) “Final
Order”
means
an action or decision that has been granted as to which (I) no request for
a
stay or any similar request is pending, no stay is in effect, the action or
decision has not been vacated, reversed, set aside, annulled or suspended and
any deadline for filing such a request that may be designated by statute or
regulation has passed, (ii) no petition for rehearing or reconsideration or
application for review is pending and the time for the filings of any such
petition or application has passed, (iii) no Governmental Entity has undertaken
to reconsider the action on its own motion and the time within which it may
effect such reconsideration has passed and (iv) no appeal is pending (including
other administrative or judicial review) or in effect and any deadline for
filing any such appeal that may be specified by statute or rule has
passed.
(g) “Governmental
Consents”
mean
all notices, reports, and other filings required to be made prior to the
Effective Time by the Company or Parent or any of their respective Subsidiaries
with, and all consents, registrations, approvals, permits, clearances and
authorizations required to be obtained prior to the Effective Time by the
Company or Parent or any of their respective Subsidiaries from, any Governmental
Entity in connection with the execution and delivery of this Agreement and
the
consummation of the Merger and the other transactions contemplated
hereby.
61
(h) “Knowledge”
means
(i) with respect to Parent, the actual knowledge after due inquiry of the
individuals listed on Section 8.15(h)(i) of the Parent Disclosure Letter and
(ii) with respect to the Company, the actual knowledge after due inquiry of
the individuals listed on Section 8.15(h)(ii) of the Company Disclosure
Letter.
(i) “orders”
means
any orders, judgments, injunctions, awards, decrees, writs or other legally
enforceable requirement handed down, adopted or imposed by, including any
consent decree, settlement agreement or similar written agreement with, any
Governmental Entity.
(j) “Parent
Material Adverse Effect”
means
any fact, condition, circumstance, event, change effect or occurrence that,
individually or in the aggregate, prevents or materially delays or materially
impairs the ability of Parent and Merger Sub to consummate the Merger prior
to
the End Date, or would reasonably be expected to do so.
(k) “person”
or
“Person”
shall
mean an individual, a corporation, a partnership, a limited liability company,
an association, a trust or any other entity, group (as such term is used in
Section 13 of the Exchange Act) or organization, including, without
limitation, a Governmental Entity, and any permitted successors and assigns
of
such person.
(l) “Subsidiaries”
of
any
party shall mean any corporation, partnership, association, trust or other
form
of legal entity of which (i) more than 50% of the outstanding voting
securities (or other voting interests or, if there are no voting interests,
equity interests) are directly or indirectly owned by such party, or
(ii) such party or any Subsidiary of such party is a general partner
(excluding partnerships in which such party or any Subsidiary of such party
does
not have a majority of the voting interests in such partnership).
(m) Each
of
the following terms is defined on the page set forth opposite such
term:
|
Action
|
Section
5.8(b)
|
|
Affiliate
Transaction
|
Section
3.10
|
|
Affiliates
|
Section
8.15(a)
|
|
Agreement
|
Preamble
|
|
Alternative
Proposal
|
Section
5.2(g)
|
|
Authorized
Preferred Stock
|
Section
3.2(a)
|
|
Book-Entry
Shares
|
Section
2.2(b)(i)
|
|
Business
Day
|
Section
8.15(b)
|
|
By-laws
|
Section
5.3(b)
|
|
Cancelled
Shares
|
Section
2.1(b)
|
|
Certificate
of Merger
|
Section
1.3
|
|
Certificates
|
Section
2.2(b)(i)
|
|
Change
of Recommendation
|
Section
5.2(d)
|
|
Closing
Date
|
Section
1.2
|
|
Closing
|
Section
1.2
|
|
Code
|
Section
2.2(b)(iii)
|
|
Common
Share
|
Section
2.1(a)(i)
|
62
|
Common
Stock Merger Consideration
|
Section
2.1(a)(i)
|
|
Company
|
Preamble
|
|
Company
Approvals
|
Section
3.4(b)
|
|
Company
Benefit Plan
|
Section
3.9(a)
|
|
Company
Charter
|
Section
1.5(a)
|
|
Company
Common Stock
|
Section
2.1(a)
|
|
Company
Disclosure Letter
|
Article
III
|
|
Company
Employees
|
Section
5.4(a)
|
|
Company
Licenses
|
Section
3.7(b)
|
|
Company
Material Adverse Effect
|
Section
3.1(c)
|
|
Company
Meeting
|
Section
5.3(b)
|
|
Company
Preferred Stock
|
Section
2.1(a)(ii)
|
|
Company
Restricted Shares
|
Section
2.3(b)
|
|
Company
SEC Documents
|
Section
3.5(a)
|
|
Company
Series C Preferred Stock
|
Section
2.1(a)(ii)
|
|
Company
Series D Preferred Stock
|
Section
2.1(a)(iii)
|
|
Company
Shareholder Approval
|
Section
3.18
|
|
Company
Stock Option
|
Section
2.3(a)
|
|
Company
Stock Plans
|
Section
8.15(c)
|
|
Confidentiality
Agreement
|
Section
8.15(d)
|
|
Contracts
|
Section
8.15(e)
|
|
control
|
Section
8.15(a)
|
|
Debt
Commitment Letters
|
Section
4.4
|
|
Debt
Financing
|
Section
4.4
|
|
Debt
Offers
|
Section
5.16(a)
|
|
DGCL
|
Section
1.1
|
|
Dissenting
Common Shares
|
Section
2.1(a)(i)
|
|
Dissenting
Common Stockholders
|
Section
2.1(a)(i)
|
|
Dissenting
Series C Preferred Shares
|
Section
2.1(a)(ii)
|
|
Dissenting
Series D Preferred Shares
|
Section
2.1(a)(iii)
|
|
Dissenting
Series C Preferred Stockholders
|
Section
2.1(a)(ii)
|
|
Dissenting
Series D Preferred Stockholders
|
Section
2.1(a)(iii)
|
|
Dissenting
Shares
|
Section
2.1(a)(iii)
|
|
Dissenting
Stockholders
|
Section
2.1(a)(iii)
|
|
Effective
Time
|
Section
1.3
|
|
End
Date
|
Section
7.1(b)(i)
|
|
Environmental
Law
|
Section
3.8(b)
|
|
Equity
Commitment Letter
|
Section
4.4
|
|
ERISA
|
Section
3.9(a)
|
|
ERISA
Affiliate
|
Section
3.9(c)
|
|
ESPP
|
Section
2.3(d)
|
|
Exchange
Act
|
Section
3.4(b)
|
|
Exchange
Fund
|
Section
2.2(a)
|
|
Expenses
|
Section
8.2
|
|
FAA
|
Section
3.7(b)
|
|
FCC
|
Section
3.4(b)
|
63
|
FCC
Licenses
|
Section
3.7(b)
|
|
Final
Date
|
Section
2.3(d)
|
|
Financing
|
Section
4.4
|
|
Financing
Commitments
|
Section
4.4
|
|
GAAP
|
Section
3.5(b)
|
|
Governmental
Consents
|
Section
8.15(f)
|
|
Governmental
Entity
|
Section
3.4(b)
|
|
Guarantee
|
Recitals
|
|
Guarantor
|
Recitals
|
|
Hazardous
Substance
|
Section
3.8(c)
|
|
HSR
Act
|
Section
3.4(b)
|
|
Indebtedness
|
Section
5.1(b)(vii)
|
|
Indemnified
Party
|
Section
5.8(b)
|
|
Intellectual
Property
|
Section
3.16
|
|
IRS
|
Section
3.9(b)
|
|
Knowledge
|
Section
8.15(g)
|
|
Laws
|
Section
3.7(a)
|
|
Licenses
|
Section
3.7(a)
|
|
Lien
|
Section
3.4(c)
|
|
Marketing
Period
|
Section
5.9(a)
|
|
Material
Contract
|
Section
3.19
|
|
Material
Licenses
|
Section
3.7(a)
|
|
Merger
|
Recitals
|
|
Merger
Consideration
|
Section
2.1(a)(iii)
|
|
Merger
Sub
|
Preamble
|
|
New
Financing Commitments
|
Section
5.9(a)
|
|
New
Plans
|
Section
5.4(b)
|
|
Notes
|
Section
5.16(a)
|
|
Offer
Documents
|
Section
5.16(a)
|
|
Old
Plans
|
Section
5.4(b)
|
|
orders
|
Section
8.15(h)
|
|
Original
Date
|
Section
5.3(c)
|
|
Parent
Approvals
|
Section
4.2(b)
|
|
Parent
|
Preamble
|
|
Parent
Disclosure Letter
|
Article
IV
|
|
Parent
Group
|
Section
4.13
|
|
Parent
Termination Fee
|
Section
7.2(b)(ii)
|
|
Parent
Group
|
Section
4.12
|
|
Parent
Material Adverse Effect
|
Section
8.15(i)
|
|
Paying
Agent
|
Section
2.2(a)
|
|
person
|
Section
8.15(j)
|
|
Person
|
Section
8.15(j)
|
|
Preferred
Share
|
Section
2.1(a)(ii)
|
|
Preferred
Stock Merger Consideration
|
Section
2.1(a)(ii)
|
|
Proxy
Statement
|
Section
3.13
|
|
Recommendation
|
Section
3.4(a)
|
64
|
Regulatory
Law
|
Section
5.5(e)
|
|
Remaining
Common Shares
|
Section
2.1(a)(i)
|
|
Remaining
Series C Preferred Shares
|
Section
2.1(a)(ii)
|
|
Remaining
Series D Preferred Shares
|
Section
2.1(a)(iii)
|
|
Remaining
Shares
|
Section
2.1(a)(iii)
|
|
Representatives
|
Section
5.2(a)
|
|
Required
Information
|
Section
5.9(b)
|
|
Retention
Plan
|
Section
5.4(a)
|
|
▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act
|
Section
3.5(a)
|
|
SEC
|
Section
3.5(a)
|
|
Securities
Act
|
Section
3.5(a)
|
|
Series
C Preferred Stock Merger Consideration
|
Section
2.1(a)(ii)
|
|
Series
D Preferred Stock Merger Consideration
|
Section
2.1(a)(iii)
|
|
Series
C Preferred Share
|
Section
2.1(a)(ii)
|
|
Series
D Preferred Share
|
Section
2.1(a)(iii)
|
|
Shares
|
Section
2.1(a)(iii)
|
|
Significant
Subsidiary
|
Section
3.3
|
|
State
Commissions
|
Section
3.4(b)
|
|
State
Licenses
|
Section
3.7(b)
|
|
Subsidiaries
|
Section
8.15(k)
|
|
Superior
Proposal
|
Section
5.2(h)
|
|
Surviving
Corporation
|
Section
1.1
|
|
Tax
|
Section
3.14(b)(i)
|
|
Tax
Return
|
Section
3.14(b)(ii)
|
|
Taxes
|
Section
3.14(b)(i)
|
|
Termination
Date
|
Section
5.1(a)
|
|
Termination
Fee
|
Section
7.2(a)(iii)
|
65
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date first above written.
ATLANTIS
HOLDINGS LLC
By:
/s/ ▇▇▇▇ ▇.
▇▇▇▇▇▇
▇▇▇▇
▇.
▇▇▇▇▇▇
Vice
President
ATLANTIS
MERGER SUB,
INC.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇▇
Co-President
ALLTEL CORPORATION
By:
/s/ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇
President
and Chief
Executive Officer