EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
By and Among
AMERICAN TOWER CORPORATION,
AMERICAN TOWERS, INC.
and
OMNIAMERICA, INC.
Dated as of
November 16, 1998
TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINED TERMS; TARGET DISCLOSURE SCHEDULE............................. -1-
ARTICLE 2
THE MERGER............................................................ -2-
2.1 The Merger.................................................... -2-
2.2 Closing....................................................... -2-
2.3 Effective Time................................................ -2-
2.4 Effect of the Merger.......................................... -2-
2.5 Certificate of Incorporation.................................. -2-
2.6 Bylaws........................................................ -2-
2.7 Directors and Officers........................................ -2-
ARTICLE 3
CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES........................ -2-
3.1 Conversion of Capital Stock................................... -2-
3.2 Exchange of Certificates...................................... -4-
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF TARGET.............................. -5-
4.1 Organization and Business; Power and Authority; Effect of
Transaction.................................................. -5-
4.2 Financial and Other Information............................... -7-
4.3 Material Statements and Omissions; Absence of Events.......... -7-
4.4 Title to Properties; Leases................................... -8-
4.5 Compliance with Private Authorizations........................ -9-
4.6 Compliance with Governmental Authorizations and
Applicable Law............................................... -10-
4.7 Year 2000 Compliant........................................... -10-
4.9 Insurance..................................................... -11-
4.10 Tax Matters................................................... -11-
4.11 ERISA Matters................................................. -12-
4.13 Bank Accounts, Etc............................................ -13-
4.14 Employment and Consulting Arrangements........................ -14-
4.15 Material Agreements........................................... -14-
4.16 Ordinary Course of Business................................... -15-
4.17 Broker or Finder.............................................. -16-
4.18 Environmental Matters......................................... -16-
4.19 Capital Stock................................................. -17-
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF ATC AND ATI......................... -17-
5.1 Organization and Business; Power and Authority; Effect of
Transaction.................................................. -17-
5.2 Financial and Other Information............................... -18-
5.3 Material Statements and Omissions; Absence of Events.......... -18-
5.4 Broker or Finder.............................................. -19-
5.5 Capital Stock................................................. -19-
5.6 Tax Matters................................................... -20-
5.7 Compliance with Governmental Authorizations and
Applicable Law............................................... -20-
5.8 Year 2000 Compliant........................................... -21-
5.9 Compliance with Private Authorizations........................ -21-
5.10 Title to Properties; Leases................................... -21-
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5.11 Related Transactions.......................................... -22-
5.12 Insurance..................................................... -23-
5.13 ERISA Matters................................................. -23-
5.14 Product Liability............................................. -24-
5.15 Ordinary Course of Business................................... -24-
5.16 Environmental Matters......................................... -25-
5.18 Material Agreements........................................... -26-
ARTICLE 6
COVENANTS............................................................. -27-
6.1 Access to Information; Confidentiality........................ -27-
6.2 Agreement to Cooperate; Certain Other Covenants............... -28-
6.3 Public Announcements.......................................... -28-
6.4 Notification of Certain Matters............................... -29-
6.5 Other Offers; No Solicitation................................. -29-
6.6 Conduct of Business by Target Pending the Merger.............. -30-
6.7 Additional Tax Matters........................................ -32-
6.8 Certificates of Non-Foreign Status............................ -32-
6.9 Target Stock Options.......................................... -33-
6.10 Stockholder Approval.......................................... -33-
6.11 Registration Statement and Proxy/Information Statement........ -34-
6.12 Directors', Officers' and Employees' Indemnification.......... -34-
6.13 Solicitation of Employees..................................... -36-
6.14 Registration Rights Agreement................................. -36-
ARTICLE 7
CLOSING CONDITIONS.................................................... -36-
7.1 Conditions to Obligations of Each Party....................... -36-
7.2 Conditions to Obligations of ATC and ATI...................... -37-
7.3 Conditions to Obligations of Target........................... -38-
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER..................................... -39-
8.1 Termination................................................... -39-
8.2 Effect of Termination......................................... -40-
ARTICLE 9
GENERAL PROVISIONS.................................................... -40-
9.1 Waivers; Amendments........................................... -41-
9.2 Fees and Expenses............................................. -41-
9.3 Notices....................................................... -41-
9.4 Specific Performance; Other Rights and Remedies............... -42-
9.5 Severability.................................................. -42-
9.6 Counterparts.................................................. -43-
9.7 Section Headings.............................................. -43-
9.8 Governing Law................................................. -43-
9.9 Entire Agreement.............................................. -43-
9.10 Assignment.................................................... -43-
9.11 Parties in Interest........................................... -44-
9.12 Non-Survival of Representations, Warranties, Covenants
and Agreements............................................... -44-
APPENDIX A: Definitions
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EXHIBITS:
EXHIBIT A: Registration Rights Agreement (Section 7.2(f)).
EXHIBIT B: Target Investment Letter (Section 7.2(g)).
EXHIBIT C: Target Tax Certificate (Section 7.2(h)).
EXHIBIT D: ATC Tax Certificate (Section 7.3(e)).
EXHIBIT E: ATC Voting Agreement (Section 7.3(f)).
EXHIBIT F: Representation Letter to Target's Auditors (Section 6.10(e)).
EXHIBIT G: Target Officer's Certificate (Section 7.2(a)).
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AGREEMENT AND PLAN OF MERGER
----------------------------
Agreement and Plan of Merger, dated as of November 16, 1998, by and among
American Tower Corporation, a Delaware corporation ("ATC"), American Towers,
Inc. a Delaware corporation ("ATI"), and OmniAmerica, Inc., a Delaware
corporation ("Target").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of ATC, ATI and Target have determined
that the merger (the "Merger") of Target into ATI on the terms and conditions
set forth in this Agreement and Plan of Merger (this "Agreement") is consistent
with and in furtherance of the long-term business strategy of each, and is fair
to, and in the best interests of, ATI and Target and the stockholders of each;
and
WHEREAS, this Agreement provides that Target shall be merged with and into
ATI, and ATI shall be the surviving corporation; and
WHEREAS, the Boards of Directors of ATI and Target have approved and
adopted this Agreement and have directed that this Agreement be submitted to the
stockholders of ATI and Target, respectively, for their adoption and approval;
and
WHEREAS, the Board of Directors of ATC has approved and adopted this
Agreement and approved the Merger on behalf of ATI as the sole stockholder of
ATI;
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained and other valuable
consideration, the receipt and adequacy whereof are hereby acknowledged, the
parties hereto hereby, intending to be legally bound, represent, warrant,
covenant and agree as follows:
ARTICLE 1
DEFINED TERMS; TARGET DISCLOSURE SCHEDULE
As used herein, unless the context otherwise requires, the terms defined in
Appendix A shall have the respective meanings set forth therein. References to
the term "Target" in such definitions shall include all of Target's
Subsidiaries, except as the context otherwise requires. Terms defined in the
singular shall have a comparable meaning when used in the plural, and vice
versa, and the reference to any gender shall be deemed to include all genders.
Unless otherwise defined or the context otherwise clearly requires, terms for
which meanings are provided in this Agreement shall have such meanings when used
in the Target Disclosure Schedule, and each Collateral Document executed or
required to be executed pursuant hereto or thereto or otherwise delivered, from
time to time, pursuant hereto or thereto. References to "hereof," "herein" or
similar terms are intended to refer to the Agreement as a whole and not a
particular section, and references to "this Section" or "this Article" are
intended to refer to the entire section or article and not a particular
subsection thereof. The term "either party" shall, unless the context otherwise
requires, refer to ATC and ATI, on the one hand, and Target, on the other hand.
All matters set forth in or otherwise disclosed in the Target SEC Documents are
hereby incorporated by reference into the Target Disclosure Schedule.
ARTICLE 2
THE MERGER
2.1 The Merger. Upon the terms and subject to the conditions set forth in
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this Agreement, and in accordance with the Delaware General Corporation Law (the
"DCL"), at the Effective Time, Target shall be merged with and into ATI. As a
result of the Merger, the separate corporate existence of Target shall cease and
ATI shall continue as the surviving corporation in the Merger (sometimes
referred to, as such, as the "Surviving Corporation").
2.2 Closing. Unless this Agreement shall have been terminated pursuant to
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Section 8.1 and subject to the satisfaction or, to the extent permitted by
Applicable Law, waiver of the conditions set forth in Article 7, the closing of
the Merger (the "Closing") will take place, at 10:00 a.m., on the Closing Date,
at the offices of ▇▇▇▇▇▇▇▇ & Worcester LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on the business date that is the fifth (5th) business day
after the date on which all of the conditions set forth in Article 7 (other than
those which require delivery of opinions or documents at the Closing) shall have
been satisfied or waived, unless another date, time or place is agreed to in
writing by the parties. The date on which the Closing occurs is herein referred
to as the "Closing Date."
2.3 Effective Time. Subject to the provisions of this Agreement, as
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promptly as practicable after the Closing, the parties hereto shall cause the
Merger to be consummated by filing a Certificate of Merger and any related
filings required under the DCL with the Secretary of State of the State of
Delaware. The Merger shall become effective at such time as such documents are
duly filed as aforesaid, or at such later time as is specified in such documents
(the "Effective Time").
2.4 Effect of the Merger. The Merger shall have the effects provided for
--------------------
under the DCL.
2.5 Certificate of Incorporation. The Certificate of Incorporation of
----------------------------
ATI, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided therein and in accordance with Applicable Law.
2.6 Bylaws. The bylaws of ATI in effect at the Effective Time shall be
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the bylaws of the Surviving Corporation until amended in accordance with
Applicable Law and the Organic Documents of ATI.
2.7 Directors and Officers. From and after the Effective Time, until
----------------------
their successors are duly elected or appointed and qualified, or upon their
earlier resignation or removal, in accordance with Applicable Law and the
Organic Documents of ATI, (a) the directors of ATI at the Effective Time shall
be the directors of the Surviving Corporation, and (b) the officers of ATI at
the Effective Time shall be the officers of the Surviving Corporation.
ARTICLE 3
CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
3.1 Conversion of Capital Stock. At the Effective Time, by virtue of the
---------------------------
Merger and without any action on the part of ATC, ATI or Target or their
respective stockholders:
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(a) Each share of Common Stock, par value $.01 per share, of ATI
issued and outstanding immediately prior to the Effective Time shall remain
outstanding;
(b) Each share of Common Stock, par value $.01 per share
(collectively, the "Target Common Stock") issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into the
right to receive one and one-tenth (1.1) shares (the "Exchange Ratio") of
Class A Common Stock, par value $.01 per share, of ATC (the "ATC Common
Stock") (the "Merger Consideration"); and
(c) Each share of Target Common Stock owned by Target immediately
prior to the Effective Time shall automatically be canceled and
extinguished without any conversion thereof and no payment shall be made
with respect thereto.
If, prior to Closing, ATC
(i) pays a dividend or makes a distribution on the ATC Common
Stock in shares of ATC Common Stock;
(ii) subdivides its outstanding shares of ATC Common Stock into a
greater number of shares;
(iii) combines its outstanding shares of ATC Common Stock into a
smaller number of shares;
(iv) pays a dividend or makes a distribution on ATC Common Stock
in shares of its capital stock or other securities other than ATC
Common Stock; or
(v) issues by reclassification of ATC Common Stock any shares of
its capital stock or other securities;
then the Merger Consideration and the Exchange Ratio in effect immediately prior
to such action shall be proportionately adjusted so that each holder of shares
of Target Common Stock thereafter shall receive the aggregate number and kind of
shares of ATC capital stock or other securities that it would have owned
immediately following such action if such shares of Target Common Stock had been
converted to ATC Common Stock immediately prior to such action. The adjustment
provided for in this Section shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
At the Effective Time, all shares of Target Common Stock shall no longer
be outstanding and shall automatically be canceled and retired and shall cease
to exist, and certificates previously evidencing any such shares of Target
Common Stock (each, a "Certificate") shall thereafter represent the right to
receive, upon the surrender of such Certificate in accordance with the
provisions of Section 3.2, the Merger Consideration multiplied by the number of
shares of Target Common Stock represented by such Certificate, and a holder of
more than one Certificate shall have the right to receive the Merger
Consideration multiplied by the number of shares of Target Common Stock
represented by all such Certificates. In lieu of issuing fractional shares, ATC
shall convert the holder's right to receive ATC Common Stock pursuant to the
provisions of this Section into a right to receive (i) the highest whole number
of shares of ATC Common Stock to which the holder is entitled plus (ii) cash
equal to the fraction of a share of ATC Common Stock to which the holder would
otherwise be entitled multiplied by the Fair Market Value of one share of ATC
Common Stock as of
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the Effective Time. The holders of such Certificates previously evidencing
shares of Target Common Stock outstanding immediately prior to the Effective
Time shall cease to have any rights with respect to such shares of Target Common
Stock, except as otherwise provided herein or by Applicable Law.
3.2 Exchange of Certificates.
------------------------
(a) Pursuant to an agreement reasonably satisfactory to ATC and Target (the
"Exchange Agent Agreement") to be entered into at or prior to the Closing Date
between ATC and the transfer agent for the ATC Common Stock (the "Exchange
Agent"), at or from time to time following the Effective Time, ATC shall deposit
or cause to be deposited in trust for the benefit of the Target stockholders an
aggregate number of shares of ATC Common Stock representing the aggregate Merger
Consideration and an amount of cash necessary to cash out fractional shares to
which holders of Target Common Stock shall be entitled at the Effective Time
pursuant to the provisions of this Article. The Exchange Agent shall invest any
cash held by it in such manner as ATC directs. Any net profit from, or interest
or income produced by, such invest ments shall be payable to ATC as and when
requested by ATC. ATC shall be required to replace any cash lost as a result of
any investment.
(b) As soon as practicable, but within five (5) business days subsequent to
the Effective Time, the Exchange Agent shall mail to each holder of record of a
Certificate or Certificates (i) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon actual delivery of the Certificates to the Exchange Agent)
and (ii) instructions for use in effecting the surrender of the Certificates in
exchange for cash and certificates representing shares of ATC Common Stock.
Upon surrender of Certificates for cancellation to the Exchange Agent, together
with a duly executed letter of transmittal and such other documents as the
Exchange Agent shall reasonably require, the holder of such Certificates shall
be entitled to receive in exchange therefor cash and a certificate representing
that number of whole shares of ATC Common Stock into which the shares of Target
Common Stock, theretofore represented by the Certificates so surrendered, shall
have been converted pursuant to the provisions of Section 3.1, and the
Certificates so surrendered shall be canceled. Notwithstanding the foregoing,
neither the Exchange Agent nor any party hereto shall be liable to a holder of
shares of Target Common Stock for any shares of ATC Common Stock or dividends or
distributions thereon delivered to a public official pursuant to applicable
abandoned property, escheat or similar Laws. Certificates surrendered for
exchange by any Person constituting an "affiliate", as that term is used in
paragraphs (c) and (d) of Rule 145 under the Securities Act, of Target shall not
be exchanged until ATC has received a written agreement from such Person as
provided in Section 7.2(g).
(c) Promptly following the date which is six (6) months after the Closing
Date, the Exchange Agent shall deliver to ATC all cash, certificates (including
any ATC Common Stock) and other documents in its possession relating to the
transactions described in this Agreement, and the Exchange Agent's duties shall
terminate. Thereafter, each holder of a Certificate may surrender such
Certificate to ATC and (subject to applicable abandoned property, escheat and
similar Laws) receive in exchange therefor the Merger Consideration to which
such holder is entitled, without any interest thereon. Notwithstanding the
foregoing, neither the Exchange Agent nor any party hereto shall be liable to a
holder of Target Common Stock for any ATC Common Stock delivered to a public
official pursuant to applicable abandoned property, escheat or similar Laws.
(d) If the Merger Consideration (or any portion thereof) is to be paid to a
Person other than the Person in whose name the Certificate surrendered in
exchange therefor is registered, it shall be a condition to the payment of the
Merger Consideration that the Certificate so surrendered shall be properly
endorsed or accompanied by appropriate stock powers (with signatures guaranteed
in accordance with the transmittal
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form) and otherwise in proper form for transfer, that such transfer otherwise be
proper and that the Person requesting such transfer pay to the Exchange Agent
any transfer or other Taxes payable by reason of the foregoing or establish to
the satisfaction of the Exchange Agent that such Taxes have been paid or are not
required to be paid.
(e) In the event any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the Person claiming such
Certificate to be lost, stolen or destroyed and subject to such other reasonable
conditions as the Board of Directors of ATC may impose, ATC shall issue in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration
deliverable in respect thereof as determined in accordance with this Article.
When authorizing such issue of the Merger Consideration in exchange therefor,
the Board of Directors of ATC may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed Certificate to give ATC a bond or other surety in such sum as it may
reasonably direct as indemnity against any Claim that may be made against ATC or
the transfer agent for the ATC Common Stock with respect to the Certificate
alleged to have been lost, stolen or destroyed.
(f) Notwithstanding any other provisions of this Agreement, no dividends or
other distributions declared after the Effective Time on ATC Common Stock shall
be paid with respect to any whole shares of ATC Common Stock represented by a
Certificate until such Certificate is surrendered for exchange as provided
herein. Subject to the effect of Applicable Laws, following surrender of any
such Certificate, there shall be paid to the holder of the shares of ATC Common
Stock issued in exchange therefor, without interest, (i) at the time of such
surrender, the amount of dividends or other distributions with a record date
after the Effective Time theretofore payable with respect to such whole shares
of ATC Common Stock and not paid, less the amount of any withholding taxes which
may be required thereon, and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective Time but
prior to surrender and a payment date subsequent to surrender payable with
respect to such whole shares of ATC Common Stock, less the amount of any
withholding taxes which may be required thereon.
(g) ATC shall be entitled to, or shall be entitled to cause the Exchange
Agent to, deduct and withhold from the consideration otherwise payable pursuant
to this Agreement to any holder of shares of Target Common Stock such amounts as
are required to be deducted and withheld with respect to the making of such
payment under the Code, or any provision of state, local or foreign tax law. To
the extent that amounts are so withheld by ATC or the Exchange Agent, as the
case may be, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the shares of Target Common Stock
in respect of which such deduction and withholding was made by ATC or the
Exchange Agent.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF TARGET
Target hereby represents and warrants to ATC and ATI as follows:
4.1 Organization and Business; Power and Authority; Effect of Transaction.
---------------------------------------------------------------------
(a) Target is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, has all requisite
power and authority (corporate and other) to own or hold under lease its
properties and to conduct its business as now conducted and is duly qualified
and in good
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standing as a foreign corporation in each other jurisdiction (as shown on
Section 4.1(a) of the Target Disclosure Schedule) in which the character of the
property owned or leased by it or the nature of its business or operations
requires such qualification, except for such qualifications the failure of which
to obtain, individually or in the aggregate, would not have a Material Adverse
Effect on Target.
(b) Target has all requisite power and authority (corporate and other)
necessary to enable it to execute and deliver, and to perform its obligations
under, this Agreement and each Collateral Document executed or required to be
executed by it pursuant hereto or thereto and to consummate the Transactions;
and the execution, delivery and performance by Target of this Agreement and each
Collateral Document executed or required to be executed by it pursuant hereto or
thereto have been duly authorized by all requisite corporate or other action on
the part of Target, subject to the requisite approval of the stockholders of
Target. The affirmative vote of the holders of shares of Target Common Stock
representing a majority of the outstanding voting power of Target Common Stock
is the only vote necessary to approve and adopt this Agreement and the
transactions contemplated by this Agreement. This Agreement has been duly
executed and delivered by Target and constitutes, and each Collateral Document
executed or required to be executed by it pursuant hereto or thereto or to
consummate the Transactions when executed and delivered by Target will
constitute, legal, valid and binding obligations of Target, enforceable in
accordance with their respective terms, except as such enforceability may be
subject to bankruptcy, moratorium, insolvency, reorganization, arrangement,
voidable preference, fraudulent conveyance and other similar Laws relating to or
affecting the rights of creditors and except as the same may be subject to the
effect of general principles of equity. The provisions of Section 203 of the
DCL will not apply to ATC by reason of this Agreement or the Merger. The Board
of Directors of Target, at a meeting duly called and held at which a quorum was
present throughout, has approved the Merger and this Agreement, and has
recommended that the Target stockholders approve and adopt this Agreement and
the transactions contemplated hereby, including without limitation the Merger
and the acquisition by ATC of the "beneficial" ownership contemplated thereby.
(c) Except to the extent necessary under the Target Credit Agreements or as
set forth in Section 4.1(c) of the Target Disclosure Schedule, neither the
execution and delivery by Target of this Agreement or any Collateral Document
executed or required to be executed by it pursuant hereto or thereto, nor the
consummation of the Transactions, nor compliance with the terms, conditions and
provisions hereof or thereof by Target:
(i) will conflict with, or result in a breach or violation of, or
constitute a default under, any Organic Document of Target or any material
Applicable Law, or will conflict with, or result in a breach or violation
of, or constitute a default under, or permit the acceleration of any
obligation or liability in, or but for any requirement of giving of notice
or passage of time or both would constitute such a conflict with, breach or
violation of, or default under, or permit any such acceleration in, any
Material Agreement of Target; or
(ii) will require Target to make or obtain any Governmental
Authorization, Governmental Filing or Private Authorization, except (A)
filings under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, (B) for FCC approvals, (C) the
filing with the SEC of (I) the Target Proxy Statement and (II) such reports
under Section 13(a) or 15(d) of the Exchange Act as may be required in
connection with this Agreement and the transactions contemplated hereby,
(D) the filing of the Certificate of Merger with the Delaware Secretary of
State and appropriate documents with the relevant authorities of other
states in which Target is qualified to do business, and (E) such other
Governmental Authorizations, Governmental Filings and Private
Authorizations the failure of which to be made or obtained would not,
individually or in the aggregate, have a Material Adverse Effect on
Target.
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(d) Except as set forth in Section 4.1(d) of the Target Disclosure
Schedule, Target does not have any Subsidiaries, each of which, unless noted
otherwise in Section 4.1(d) of the Target Disclosure Schedule, is (i) wholly-
owned, (ii) a corporation duly organized, validly existing and in good standing
under the laws of the respective state of incorporation set forth opposite its
name on Section 4.1(d) of the Target Disclosure Schedule, and (iii) duly
qualified and in good standing as a foreign corporation in each other
jurisdiction (as shown on Section 4.1(d) of the Target Disclosure Schedule) in
which the character of the property owned or leased by it or the nature of its
business or operations requires such qualification, with full power and
authority (corporate and other) to carry on the business in which it is engaged,
except for such qualifications the failure of which to obtain, individually or
in the aggregate, would not have a Material Adverse Effect on Target. Target
owns, directly or indirectly, all of the outstanding capital stock and equity
interests (as shown in Section 4.1(d) of the Target Disclosure Schedule) of each
Subsidiary, free and clear of all Liens (except under the Target Credit
Agreements and as described in the notes to the Target Financial Statements),
and all such stock or other equity interests have been duly authorized and
validly issued and are fully paid and nonassessable. There are no outstanding
Option Securities or Convertible Securities, or agreements or understandings of
any nature whatsoever, relating to the authorized and unissued or outstanding
capital stock or equity interests of any Subsidiary of Target. Except as the
context otherwise requires, the representations and warranties of Target set
forth in this Article shall apply to each of such Subsidiaries with the same
force and effect as though each of them were named in each Section of this
Article.
4.2 Financial and Other Information. Target has heretofore made available
-------------------------------
to ATC its Annual Report on Form 10-KSB for its fiscal year ended June 30, 1998,
its Information Statement on Schedule 14C filed on August 24, 1998, its Proxy
Statement on Schedule 14A filed on November 9, 1998, and all Current Reports
filed on Form 8-K since May 1, 1998 (collectively, the "Target SEC Documents").
As of the respective dates thereof, the Target SEC Documents were prepared in
all material respects in accordance with the Exchange Act and did not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. Target
has timely filed all forms, reports and documents with the SEC required to be
filed by it pursuant to the Securities Act and the Exchange Act which complied
as to form, at the time such form, document or report was filed, in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act. The consolidated financial statements of Target included in the Target SEC
Documents (the "Target Financial Statements"), including in each case the notes
thereto, have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods covered thereby, except as otherwise noted therein,
are true, accurate and complete in all material respects, and fairly present the
consolidated financial condition and the consolidated results of operations and
cash flow of Target, on the bases therein stated, as of the respective dates
thereof, and for the respective periods covered thereby subject, in the case of
unaudited financial statements, to normal nonmaterial year-end audit adjustments
and accruals.
4.3 Material Statements and Omissions; Absence of Events.
----------------------------------------------------
(a) Neither any representation or warranty made by Target contained in this
Agreement or in the certificate to be delivered pursuant to Section 7.2 (a) nor
the Target Disclosure Schedule contains or will contain any untrue statement of
a material fact or omits or will omit to state any material fact required to
make any statement contained herein or therein, in light of the circumstances
under which they were made, not misleading. Without limiting the generality of
the foregoing, (i) the Target Proxy Statement will not, at the date it is first
mailed to the holders of Target Common Stock and at the time of the Target
Stockholders Meeting, and (ii) the information with respect to Target furnished
to ATC for inclusion in the ATC
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Registration Statement and the ATC Transaction Prospectus will not, at the time
such Registration Statement becomes effective under the Securities Act, and the
ATC Transaction Prospectus, at the date it is first mailed to the holders of
Target Common Stock and at the time of the Target Stockholders Meeting, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. For purposes of the foregoing, the truth of any information or the
existence of any omissions at the time of the Target Stockholders Meeting shall
be determined with reference to the Target Proxy Statement and the ATC
Transaction Prospectus, each as then amended or supplemented. The Target Proxy
Statement will comply as to form in all material respects with the requirements
of the Exchange Act and the rules and regulations thereunder. Notwithstanding
the foregoing, no representation or warranty is made by Target with respect to
statements made or incorporated by reference therein based on information
specifically supplied by ATC for inclusion or incorporation by reference in the
Target Proxy Statement.
(b) Since the date of the most recent financial statements constituting a
part of the Target Financial Statements, except to the extent specifically
described in Section 4.3(b) of the Target Disclosure Schedule, there has been no
material adverse change in Target from that reflected in the most recent Target
Financial Statements. There is no Event known to Target which has had, or will
have, a Material Adverse Effect on Target, except to the extent specifically
described in Section 4.3(b) of the Target Disclosure Schedule and except for
matters affecting the tower rental, ownership and construction industry
generally, and except for any Event arising out of the execution or public
announcement of this Agreement. Target is not aware of any impending or
contemplated Event that would cause any of the representations and warranties
made by it in this Article not to be true, correct and complete on the date of
such Event as if made on that date.
4.4 Title to Properties; Leases.
---------------------------
(a) Section 4.4(a) of the Target Disclosure Schedule sets forth a list of
all Real Property owned by Target. Target has good indefeasible, marketable and
insurable title to all such real property (other than easement and leasehold
real property) and good indefeasible and marketable title to all of its other
owned property and assets, tangible and intangible (collectively, the "Target
Assets"); all of the Target Assets are so owned, in each case, free and clear of
all Liens, except (i) Permitted Liens, and (ii) Liens set forth on Section
4.4(a) of the Target Disclosure Schedule. Except as disclosed in Section 4.4(a)
of the Target Disclosure Schedule, all improvements on the real property owned
or leased by Target are in compliance with applicable zoning, wetlands and land
use laws, ordinances and regulations and applicable title covenants, conditions,
restrictions and reservations in all respects necessary to conduct the Target
Business as presently conducted or proposed to be conducted on or prior to the
Closing Date, except for any instances of non-compliance which, individually or
in the aggregate, have not had and will not have a Material Adverse Effect on
Target. Except as disclosed in Section 4.4(a) of the Target Disclosure
Statement, all such improvements comply with all Applicable Laws, Governmental
Authorizations and Private Authorizations, except for any instances of non-
compliance which, individually or in the aggregate, have not had and will not
have a Material Adverse Effect on Target. Except as disclosed in Section
4.4(a) of the Target Disclosure Statement, all of the transmitting towers,
ground radials, guy anchors, transmitting buildings and related improvements, if
any, located on the real property owned or leased by Target are located entirely
on such real property except for any instances of non-compliance which,
individually or in the aggregate, have not had and will not have a Material
Adverse Effect on Target. Except as set forth in Section 4.4(a) of the Target
Disclosure Schedule, such transmitting towers, ground radials, guy anchors,
transmitting buildings and related improvements and other material items of
personal property, including equipment, are, in Target's reasonable business
judgment, in a state of good repair and maintenance and sound operating
condition, normal wear and tear excepted, have been maintained in a manner
consistent with generally
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accepted standards of sound engineering practice, and currently permit the
Target Business to be operated in accordance with the terms and conditions of
all Applicable Laws, Governmental Authorizations and Private Authorizations,
except where the failure to be in such repair or condition or to be so usable,
individually or in the aggregate, has not had and will not have a Material
Adverse Effect on Target. Except for such exceptions as would not, individually
or in the aggregate, have a Material Adverse Effect on Target, all inventory
reflected in the most recent balance sheet constituting a part of the Target
Financial Statements or manufactured, purchased or acquired since such time is
up to normal commercial standards and is sale able, in the case of finished
goods inventory in the ordinary course of business within a reasonable period of
time; no material amount of inventory so reflected is obsolete, and all
inventory so reflected or subsequently manufactured, purchased or acquired is in
amounts and categories substantially consistent with prior practice.
(b) Section 4.4(b) of the Target Disclosure Schedule contains a list of all
Leases under which any real property used in the business of Target (the "Target
Business") is leased to Target by any Person. Except as otherwise set forth in
Section 4.4(b) of the Target Disclosure Schedule, each Lease under which Target
holds real property constituting a part of the Target Assets is in full force
and effect, has been duly authorized, executed and delivered by Target and, to
its knowledge, each of the other parties thereto, and is a legal, valid and
binding obligation of Target, and, to its knowledge, each of the other parties
thereto, enforceable in accordance with its terms, except as such enforceability
may be limited by bankruptcy, moratorium, insolvency and similar Laws affecting
the rights and remedies of creditors and obligations of debtors generally and by
general principles of equity except, in each case, for such exceptions which
individually or in the aggregate, have not had and will not have a Material
Adverse Effect on Target. Target has a valid leasehold interest in and enjoys
peaceful and undisturbed possession under all Leases pursuant to which it holds
any such real property, subject to the terms of each Lease and Applicable Law
and except for Permitted Liens and such other Liens as, individually or in the
aggregate, have not had and will not have a Material Adverse Effect on Target.
Neither Target nor, to Target's knowledge, any other party thereto, has failed
to duly comply with all of the material terms and conditions of each such Lease
or has done or performed, or failed to do or perform (and no Claim is pending
or, to the knowledge of Target, threatened to the effect that Target has not so
complied, done and performed or failed to do and perform) any act which would
invalidate or provide grounds for the other party thereto to terminate (with or
without notice, passage of time or both) such Leases or impair the rights or
benefits, or increase the costs, of Target under any of such Leases in any
material respect except, in each case, for such exceptions which individually or
in the aggregate, have not had and will not have a Material Adverse Effect on
Target.
4.5 Compliance with Private Authorizations. Section 4.5 of the Target
--------------------------------------
Disclosure Schedule sets forth a true, accurate and complete list and
description of each Private Authorization which individually is material to
Target. Target has obtained all Private Authorizations that are necessary for
the ownership or operation of the Target Assets or the conduct of the Target
Business, as currently conducted or proposed to be conducted on or prior to the
Closing Date, which, if not obtained and maintained, individually or in the
aggregate, have not and will not have a Material Adverse Effect on Target. All
of such Private Authorizations are valid and in good standing and are in full
force and effect, except for such exceptions as, individually or in the
aggregate, have not had and will not have a Material Adverse Effect on Target.
Target is not in breach or violation of, or in default in the performance,
observance or fulfillment of, any such Private Authorization, and, to Target's
knowledge, no Event exists or has occurred which constitutes, or but for any
requirement of giving of notice or passage of time or both would constitute,
such a breach, violation or default, under any such Private Authorization,
except for such breaches, violations or defaults as, individually or in the
aggregate, have not had and will not have a Material Adverse Effect on Target.
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4.6 Compliance with Governmental Authorizations and Applicable Law.
--------------------------------------------------------------
(a) Section 4.6(a) of the Target Disclosure Schedule contains a true,
complete and accurate description of each Governmental Authorization required
under Applicable Law (i) to own and operate the Target Assets and conduct the
Target Business, as currently conducted or proposed to be conducted on or prior
to the Closing Date, which, individually or in the aggregate, is material to
Target. Target has obtained all Governmental Authorizations that are necessary
for the ownership or operation of the Target Assets or the conduct of the Target
Business as now conducted and which, if not obtained and maintained, would,
individually or in the aggregate, have a Material Adverse Effect on Target, all
of which are valid and in good standing and in full force and effect, with such
exceptions as, individually or in the aggregate, have not had and will not have
a Material Adverse Effect on Target. None of the Governmental Authorizations
listed in Section 4.6(a) of the Target Disclosure Schedule is subject to any
restriction or condition that would limit in any material respect the ownership
or operations of the Target Assets or the conduct of the Target Business as
currently conducted, except for restrictions and conditions generally applicable
to Governmental Authorizations of such type and such exceptions as, individually
or in the aggregate, have not had and will not have a Material Adverse Effect
on Target. The conduct of the Target Business is in accordance with the
Governmental Authorizations, except for such noncompliances as, individually or
in the aggregate, have not had and will not have a Material Adverse Effect on
Target. No such Governmental Authorization is the subject of any pending or, to
Target's knowledge, threatened challenge or proceeding to revoke or terminate
any such Governmental Authorization.
(b) Except as otherwise specifically set forth in Section 4.6(b) of the
Target Disclosure Schedule, Target has conducted its business and owned and
operated its property and assets in accordance with all Applicable Laws and
Governmental Authorizations, except for such breaches, violations and defaults
as, individually or in the aggregate, have not had and will not have a Material
Adverse Effect on Target. Except as otherwise specifically described in Section
4.6(b) of the Target Disclosure Schedule, Target is not in and is not charged by
any Authority with, and, to Target's knowledge, is not threatened or under
investigation by any Authority with respect to, any breach or violation of, or
default in the performance, observance or fulfillment of, any Applicable Law
relating to the ownership and operation of the Target Assets or the conduct of
the Target Business which, individually or in the aggregate, has had or will
have a Material Adverse Effect on Target. Except as otherwise specifically
described in Section 4.6(b) of the Target Disclosure Schedule, to Target's
knowledge, no Event exists or has occurred, as of the date of this Agreement,
which constitutes, or but for any requirement of giving of notice or passage of
time or both would constitute, such a breach, violation or default, under any
Governmental Authorization or any Applicable Law, except for such breaches,
violations or defaults as, individually or in the aggregate, have not had and
will not have a Material Adverse Effect on Target. With respect to matters, if
any, of a nature referred to in Section 4.6(b) of the Target Disclosure
Schedule, except as otherwise specifically described in Section 4.6(b) of the
Target Disclosure Schedule, all such information and matters set forth in the
Target Disclosure Schedule, if adversely determined against Target, individually
or in the aggregate, will not have a Material Adverse Effect on Target.
(c) As of the date of this Agreement, there are no Legal Actions of any
kind pending or, to the knowledge of Target, threatened at law, in equity or
before any Authority against Target or any of its officers or directors relating
to the ownership or operation of the Target Assets or the conduct of the Target
Business, which if determined adversely to Target, individually or in the
aggregate, will have a Material Adverse Effect on Target.
4.7 Year 2000 Compliant. Target has reviewed the areas within its
-------------------
business and operations which Target believes could be adversely affected by the
"Year 2000 Problem" (that is, the risk that
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computer applications used by Target may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any date
on or after December 31, 1999), and is making related inquiry of material
suppliers, vendors and customers. Based on such reviews, Target believes that
the "Year 2000 Problem" will not have a Material Adverse Effect on Target.
Except as set forth in Section 4.7 of the Target Disclosure Schedule, to
Target's knowledge, each hardware, software and firmware product (collectively
"Software") used by Target in its business is Year 2000 compliant, except for
such noncompliances that, individually or in the aggregate, have not and will
not have a Material Adverse Effect on Target. The current status, projected cost
and prognosis of any Year 2000 remedial efforts with respect to non-compliant
Software and with respect to any identified Year 2000 issues with any material
supplier, vendor or customer are listed in Section 4.7 of the Target Disclosure
Schedule.
4.8 Related Transactions. Target is not a party or subject to any
--------------------
Contractual Obligation relating to the ownership or operation of the Target
Assets or the conduct of the Target Business between Target and any of its
officers or directors or, to the knowledge of Target, any member of the
Immediate Family of any thereof or any Affiliate of any of the foregoing,
including without limitation any Contractual Obligation providing for the
furnishing of services to or by, providing for rental of property, real,
personal or mixed, to or from, or providing for the lending or borrowing of
money to or from or otherwise requiring payments to or from, any such Person,
other than (a) Employment Arrangements listed or described in Section 4.14 of
the Target Disclosure Schedule or not required to be disclosed thereon because
of the amount involved in such Employment Arrangement, (b) Contractual
Obligations between Target and any of the foregoing, that will be terminated, at
no cost or expense to Target, prior to the Closing, or (c) as specifically set
forth in Section 4.8 of the Target Disclosure Schedule.
4.9 Insurance. Target maintains, with respect to the Target Assets and
---------
the Target Business, policies of fire and extended coverage and casualty,
liability and other forms of insurance in such amounts and against such risks
and losses as are customary in Target's business.
4.1 Tax Matters. Except where all failures to do so will not in the
-----------
aggregate have a Material Adverse Effect on Target, Target has in accordance
with all Applicable Laws filed all Tax Returns which are required to be filed,
and has paid, or made adequate provision for the payment of, all Taxes which
have or may become due and payable pursuant to said Tax Returns and all other
governmental charges and assessments received to date other than those Taxes
being contested in good faith for which adequate provision has been made on the
most recent balance sheet forming part of the Target Financial Statements. The
Tax Returns of Target have been prepared in all material respects in accordance
with all Applicable Laws. Except where all failures to do so will not in the
aggregate have a Material Adverse Effect on Target, all Taxes which Target is
required by Law to withhold and collect have been duly withheld and collected,
and have been paid over, in a timely manner, to the proper Authorities to the
extent due and payable. Except as set forth in Section 4.10 of the Target
Disclosure Schedule, Target has not executed any waiver to extend, or otherwise
taken or failed to take any action that would have the effect of extending, the
applicable statute of limitations in respect of any Tax liabilities of Target
for the fiscal years prior to and including the most recent fiscal year.
Adequate provision has been made on the most recent balance sheet forming part
of Target Financial Statements for all Taxes accrued through the date of such
balance sheet of any kind, including interest and penalties in respect thereof,
whether disputed or not, and whether past, current or deferred, accrued or
unaccrued, fixed, contingent, absolute or other, and there are, to Target's
knowledge, no past transactions or matters which, individually or in the
aggregate, could result in additional Taxes which would, if imposed, have a
Material Adverse Effect on Target for which an adequate reserve has not been
provided on such balance sheet. Target is not a "consenting corporation" within
the meaning of Section 341(f) of the Code. Target has at all times been taxable
as a Subchapter C corporation under the Code, and has never been a member of any
consolidated group for Tax purposes, except as otherwise set forth in
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Section 4.10 of the Target Disclosure Schedule. To the best of Target's
knowledge, Target does not have any material income or gain that has been and
continues to be deferred under Regulations Section 1.1502-13 or Regulations
Section 1.1502-13T (or under Regulations Sections 1.1502-13, 1.1502-13T, 1.1502-
14, or 1.1502-14T, all as in effect prior to Treasury Decision 8597) and Target
does not have any material excess loss account in a Subsidiary under Regulations
Section 1.1502-19. Except as disclosed in Section 4.10 of the Target Disclosure
Schedule, Target is not a party to any tax sharing agreement or arrangement.
Target is not currently, has not been within the past five years, and does
not anticipate becoming prior to the Effective Time, a "United States real
property holding corporation" within the meaning of Section 897(c) of the Code.
To Target's knowledge, no Person has beneficially owned more than five percent
(5%) of the then outstanding Target Common Stock at any time during the part
five (5) years, other than Persons who are "United States persons" within the
meaning of Section 7701(a)(30) of the Code and other than Persons who have
individually or as part of a group filed a Schedule 13D or a Schedule 13G
relating to such holdings under the Exchange Act.
4.1 ERISA Matters
-------------
(a) Target (which for purposes of this Section shall include any ERISA
Affiliate of Target) currently sponsors, maintains and contributes only to the
Plans and Employment Arrangements set forth in Section 4.11(a) and Section 4.14,
respectively, of the Target Disclosure Schedule. Target does not contribute to
or have an obligation to contribute to, and has not at any time contributed to
or had an obligation to contribute to, and no Plan listed in Section 4.11(a) of
the Target Disclosure Schedule is, (i) an employee pension benefit plan within
the meaning of Section 3(2) of ERISA, (ii) a Multiemployer Plan, or (iii) a Plan
subject to Section 412 of the Code, Section 302 of ERISA or Title IV of ERISA.
Target has no actual or potential liability under Title IV of ERISA. Target
does not maintain any Plan that provides for post-retirement medical or life
insurance benefits, and Target does not have any obligation or liability with
respect to any such Plan previously maintained by Target, except as the
provisions of COBRA may apply to any former employees of Target. Except as set
forth in Section 4.11(a) of the Target Disclosure Schedule, as to all Plans and
Employment Arrangements listed in Section 4.11(a) or Section 4.14 of the Target
Disclosure Schedule:
(i) all such Plans and Employment Arrangements comply and have been
administered in form and in operation, in all material respects, in
accordance with their respective terms and with all Applicable Laws except
for such noncompliance that will not, individually or in the aggregate,
have a Material Adverse Effect on Target and Target has not received any
notice from any Authority disputing or investigating such compliance;
(ii) none of the assets of any such Plan are invested in employer
securities or employer real property;
(iii) there are no Claims (other than routine Claims for benefits or
actions seeking quali fied domestic relations orders) pending or, to
Target's knowledge, threatened involving such Plans or the assets of such
Plans, and, to Target's knowledge, no facts exist which are reasonably
likely to give rise to any such Claims (other than routine Claims for
benefits or actions seeking qualified domestic relations orders) except, in
each case, as will not, individually or in the aggregate, have a Material
Adverse Effect on Target;
(iv) all material contributions to, and material payments from, the
Plans and Employment Arrangements that may have been required to be made in
accordance with the terms
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of the Plans and Employment Arrangements, and any applicable collective
bargaining agreement, have been made other than contributions and payments
which will not, individually or in the aggregate, have a Material Adverse
Effect on Target. All such contributions to, and payments from, the Plans
and Employment Arrangements, except those payments to be made from a trust
qualified under Section 401(a) of the Code, for any period ending before
the Closing Date that are not yet, but will be, required to be made, will
be properly accrued and reflected on the financial books and records of
Target;
(v) to Target's knowledge, no Event has occurred which would result in
imposition on Target of (A) any breach of fiduciary duty liability damages
under Section 409 of ERISA, (B) a civil penalty assessed pursuant to
subsections (c), (i) or (l) of Section 502 of ERISA or (C) a tax imposed
pursuant to Chapter 43 of Subtitle D of the Code;
(vi) Target has not incurred any material liability to a Plan (other
than for contributions not yet due) which liability has not been fully paid
or accrued for payment as of the date hereof;
(vii) except as otherwise set forth in Section 4.11(a) of the Target
Disclosure Schedule, no current or former employee of Target will be
entitled to any additional benefits or any acceleration of the time of
payment or vesting of any benefits under any Plan or Employment Arrangement
as a result of the transactions contemplated by this Agreement;
(vii) no compensation payable by Target to any of its employees under
any existing Plan or Employment Arrangement (including by reason of the
transactions contemplated hereby) will be subject to disallowance under
Section 162(m) of the Code; and
(ix) any amount that could be received (whether in cash or property or
by virtue of the vesting of property) as a result of any of the
transactions contemplated by this Agreement by any employee, officer,
director or independent contractor of Target who is a "disqualified
individual" (as such term is defined in proposed Regulation Section 1.280G-
1) under any employment arrangement would not be characterized as an
"excess parachute payment" (as such term is defined in Section 280G(b)(1)
of the Code), except for any amount that is approved by the stockholders of
Target on or before the Closing Date in the manner provided in Section
280G(b)(5) of the Code.
(b) The execution, delivery and performance by Target of this Agreement and
the Collateral Documents executed or required to be executed by Target pursuant
hereto and thereto will not involve any prohibited transaction within the
meaning of ERISA or Section 4975 of the Code with respect to any Plan listed in
Section 4.11(a) of the Target Disclosure Schedule.
4.12 Product Liability. Except as expressly set forth in Section 4.12 of
-----------------
the Target Disclosure Schedule, there is not now pending or, to the knowledge of
Target, threatened any Claim (or any basis for any such Claim) relating to, any
damages to or losses of any third party for injuries to Persons or damage to
property, or for breach of warranty, arising out of any alleged defect in the
quality or condition of any of Target's products or services or property or
assets, which, in the case of pending or threatened Claims, if determined
adversely to Target, individually or in the aggregate (taking into account
unasserted Claims of a similar nature), will have a Material Adverse Effect on
Target.
4.13 Bank Accounts, Etc. Section 4.13 of the Target Disclosure Schedule
------------------
contains a true, accurate and complete list as of the date hereof of all banks,
trust companies, savings and loan associations and brokerage firms in which
Target has an account or a safe deposit box and the names of all Persons
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authorized to draw thereon, to have access thereto, or to authorize transactions
therein, the names of all Persons, if any, holding valid and subsisting powers
of attorney from Target and a summary statement as to the terms thereof. Target
will not make or permit to be made any change affecting its account or safe
deposit box with any bank, trust company, savings and loan association or
brokerage firm, in the names of the Persons authorized to draw thereon, to have
access thereto or to authorize transactions therein or in such powers of
attorney, or open any additional accounts or boxes or grant any additional
powers of attorney, without in each case first notifying ATC in writing.
4.14 Employment and Consulting Arrangements. Section 4.14 of the Target
--------------------------------------
Disclosure Schedule contains a true, accurate and complete list of all Target
employees and consultants whose annual compensation is in excess of $100,000
(the "Target Employees"), together with each such Person's title or the capacity
in which he or she is employed or retained and each such Person's annual
compensation. Target has no obligation or liability, contingent or other, under
any Employment Arrangement with any Target Employee, other than (i) those listed
or described in Section 4.14 of the Target Disclosure Schedule, (ii) those
incurred in the ordinary and usual course of business, or (iii) such obligations
or liabilities as do not and will not have, in the aggregate, any Material
Adverse Effect on Target. Except as described in Section 4.14 of the Target
Disclosure Schedule, (a) none of the employees of Target is now represented by
any labor union or other employee collective bargaining organization, and Target
is not a party to any labor or other collective bargaining agreement with
respect to any of employees of Target, (b) there are no pending grievances,
disputes or controversies with any union or any other employee or collective
bargaining organization of such employees, or threats of strikes, work stoppages
or slowdowns or any pending demands for collective bargaining by any such union
or other organization, (c) neither Target nor any of such employees is now
subject to or involved in or, to Target's knowledge, threatened with, any union
elections, petitions therefor or other organizational or recruiting activities,
in each case with respect to the employees of Target, and (d) as of the date
hereof, none of the Target Employees has notified Target that he or she does not
intend to continue employment with Target until the Closing or with ATC
following the Closing. Target has performed in all material respects all
obligations required to be performed under all Employment Arrangements with
Target Employees and is not in material breach or violation of or in material
default or arrears under any of the terms, provisions or conditions thereof.
4.15 Material Agreements. Listed on Section 4.15 of the Target Disclosure
-------------------
Schedule are all Material Agreements (other than Leases of Real Property to
Target) relating to the ownership or operation of the Target Assets or the
conduct of the Target Business or to which Target is a party or to which it is
bound or which any of the Target Assets is subject. True, accurate and complete
copies of each of such Material Agreements have been made available by Target to
ATC. All of such Material Agreements are valid, binding and legally enforceable
obligations of Target and, to its knowledge, all other parties thereto, except
as such enforceability may be limited by bankruptcy, moratorium, insolvency and
similar Laws affecting the rights and remedies of creditors and obligations of
debtors generally and by general principles of equity except in each case, for
such exceptions which individually or in the aggregate, have not had and will
not have a Material Adverse Effect on Target. Neither Target nor, to its
knowledge, any other party thereto, has failed to duly comply with all of the
material terms and conditions of each such Material Agreement or has done or
performed, or failed to do or perform (and no Claim is pending or, to the
knowledge of Target, threatened in writing to the effect that Target has not so
complied, done and performed or failed to do and perform) any act which would
invalidate or provide grounds for the other party thereto to terminate (with or
without notice, passage of time or both) such Material Agreement or impair the
rights or benefits, or increase the costs, of Target under any such Material
Agreement except, in each case, for such exceptions which individually or in the
aggregate, have not had and will not have a Material Adverse Effect on Target.
All Contracts for the construction by Target of towers for other Persons can be
performed, in the aggregate for all such Contracts, without any loss to Target.
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4.16 Ordinary Course of Business. Target, from the date of the most recent
---------------------------
Target Financial Statements to the date hereof, except (i) as may be described
on Section 4.16 of the Target Disclosure Schedule, (ii) as may be required or
expressly contemplated by the terms of this Agreement, or (iii) as may be
described in the Target Financial Statements, including the notes thereto:
(a) has operated its business in all material respects in the normal,
usual and customary manner in the ordinary and regular course of business,
consistent with prior practice;
(b) except in each case in the ordinary course of business, consistent
with prior practice:
(i) has not incurred any obligation or liability (fixed,
contingent or other) individually having a value in excess of
$100,000;
(ii) has not sold or otherwise disposed of or contracted to sell
or otherwise dispose of any of its properties or assets having a value
in excess of $100,000;
(iii) has not entered into any individual commitment having a
value in excess of $100,000; and
(iv) has not canceled any debts or claims having a value in
excess of $100,000;
(c) has not created or permitted to be created any Lien on any of the
Target Assets, except for Permitted Liens;
(d) has not made or committed to make any additions to its property or
any purchases of equipment in excess of $100,000, except in the ordinary
course of business consistent with past practice or for normal maintenance
and replacements;
(e) has not increased the compensation payable or to become payable to
any of the Target Employees other than nonmaterial increases in the
ordinary course of business, or otherwise materially altered, modified or
changed the terms of their employment;
(f) has not suffered any material damage, destruction or loss (whether
or not covered by insurance) or any acquisition or taking of property by
any Authority;
(g) has not waived any rights of material value without fair and
adequate consideration;
(h) has not experienced any work stoppage;
(i) except in the ordinary course of business, has not entered into,
amended or terminated any Lease, Governmental Authorization, Private
Authorization, Material Agreement or Employment Arrangement, or any
transaction, agreement or arrangement with any Affiliate of Target;
(j) has not made, paid or declared any Distribution; and
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(k) has not entered into any transactions or series of related
transactions which individually or in the aggregate is material to the
Target Assets or the Target Business and which is not otherwise disclosed
in the Target Disclosure Schedule.
4.17 Broker or Finder. No Person assisted in or brought about the
----------------
negotiation of this Agreement or the Merger in the capacity of broker, agent or
finder or in any similar capacity on behalf of Target, other than ▇▇ ▇▇▇▇▇▇▇▇▇▇
whose fees and expenses will be paid by Target.
4.18 Environmental Matters. Except as set forth in Section 4.18 of the
---------------------
Target Disclosure Schedule, and except for exceptions that, individually or in
the aggregate, have not had and would not have a Material Adverse Effect on
Target, Target:
(a) has not been notified in writing that it is potentially liable
under, has not received any written request for information or other
correspondence concerning its potential liability with respect to any site
or facility under, and, to Target's knowledge, is not a "potentially
responsible party" under, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, the Resource
Conservation Recovery Act, as amended, or any similar state Law;
(b) is not a party to any outstanding consent decree, compliance order
or administrative order or other judgment, order, writ, injunction or
decree creating on-going obligations issued pursuant to any Environmental
Law;
(c) has, to its knowledge, obtained all material Environmental Permits
required under Environmental Laws, and, to its knowledge, has filed all
applications, notices and other material documents required to be filed
prior to the date of this Agreement to effect the timely renewal or
issuance of all Environmental Permits necessary for the continued ownership
or operation of the Target Assets or conduct of the Target Business in the
manner currently owned, operated and conducted and proposed to be owned,
operated and conducted on or prior to the Closing Date;
(d) is in compliance with all Environmental Laws, and is not the
subject of or, to Target's knowledge, threatened with any Legal Action
involving a demand for damages or other potential liability, including any
Lien, with respect to violations or breaches of any Environmental Law;
(e) has not knowingly installed or used any above ground or
underground storage tanks, friable asbestos, polychlorinated biphenyls or
urea formaldehyde foam insulation on any property currently owned, leased
or operated by Target and, to its knowledge, there are no above ground or
underground storage tanks containing Hazardous Materials, friable asbestos,
polychlorinated biphenyls or urea formaldehyde foam insulation on any
property currently owned, leased or operated by Target, the installation,
use or presence of which is not in compliance with Environmental Laws; and
(f) has no knowledge of any past or present Event related to Target's
properties, operations or business, which Event, individually or in the
aggregate, could reasonably be expected to interfere with or prevent
continued compliance in all material respects with all Environmental Laws
applicable to the ownership or operation of the Target Assets or the
conduct of the Target Business substantially in the manner now conducted or
proposed to be conducted on or prior to the Closing Date, or which,
individually or in the aggregate, may form the basis of any material Claim
for or arising out of the release or threatened release into the
environment of any Hazardous Material.
-16-
Section 4.18 of the Target Disclosure Schedule sets forth a true, correct and
complete list of all existing Phase I environmental site assessment reports (an
"Environmental Report") on each parcel of Real Property owned or leased by
Target for which an Environmental Report has previously been prepared for Target
(true, correct and complete copies of which, in each case, have heretofore been
delivered by Target to ATC).
4.19 Capital Stock. The authorized and outstanding capital stock of
-------------
Target, on a fully-diluted basis, is as set forth in Section 4.19 of the Target
Disclosure Schedule. All of such outstanding capital stock has been duly
authorized and validly issued, is fully paid and nonassessable and is not
subject to any statutory preemptive or similar rights. As of the date hereof,
there is no owner of record or, to Target's knowledge, beneficially of more than
five percent (5%) of the Target Common Stock, except as shown in Section 4.19 of
the Target Disclosure Schedule. Target has not granted or issued, nor has
Target agreed to grant or issue, any shares of its capital stock or any Option
Security or Convertible Security, and Target is not a party to or bound by any
agreement, put or commitment pursuant to which it is obligated to purchase,
redeem or otherwise acquire any shares of capital stock or any Option Security
or Convertible Security, except in each case as set forth in the most recent
Target Financial Statements or Section 4.19 of the Target Disclosure Schedule.
4.20 Materiality. The representations and warranties set forth in this
-----------
Article are true and correct as of the date hereof without the materiality
exceptions or qualifications contained therein, except to the extent that the
failure of such representations and warranties to be so true and correct,
individually or in the aggregate, will not have a Material Adverse Effect on
Target.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF ATC AND ATI
Each of ATC and ATI, jointly and severally, hereby represents and warrants
to Target as follows:
5.1 Organization and Business; Power and Authority; Effect of Transaction.
---------------------------------------------------------------------
(a) Each of ATC and ATI is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization, has all
requisite power and authority (corporate and other) to own or hold under lease
its properties and to conduct its business as now conducted and is duly
qualified and in good standing as a foreign corporation in each other
jurisdiction in which the character of the property owned or leased by it or the
nature of its business or operations requires such qualification, except for
such qualifications the failure of which to obtain, individually or in the
aggregate, would not have a Material Adverse Effect on ATC.
(b) Each of ATC and ATI has all requisite power and authority (corporate
and other) necessary to enable it to execute and deliver, and to perform its
obligations under, this Agreement and each Collateral Document executed or
required to be executed by it pursuant hereto or thereto and to consummate the
Transactions; and the execution, delivery and performance by ATC and ATI of this
Agreement and each Collateral Document executed or required to be executed by it
pursuant hereto or thereto have been duly authorized by all requisite corporate
or other action on the part of ATC and ATI. This Agreement has been duly
executed and delivered by ATC and ATI and constitutes, and each Collateral
Document executed or
-17-
required to be executed by each of them pursuant hereto or thereto or to
consummate the Transactions when executed and delivered by ATC and ATI will
constitute, legal, valid and binding obligations of each of ATC and ATI,
enforceable in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, moratorium, insolvency and similar
Laws affecting the rights and remedies of creditors and obligations of debtors
generally and by general principles of equity.
(c) Except to the extent necessary under their credit facilities, neither
the execution and delivery by ATC and ATI of this Agreement or any Collateral
Document executed or required to be executed by each of them pursuant hereto or
thereto, nor the consummation of the Transactions, nor compliance with the
terms, conditions and provisions hereof or thereof by ATC and ATI:
(i) will conflict with, or result in a breach or violation of, or
constitute a default under, any Organic Document of ATC or ATI or any
material Applicable Law, or will conflict with, or result in a breach or
violation of, or constitute a default under, or permit the acceleration of
any obligation or liability in, or but for any requirement of giving of
notice or passage of time or both would constitute such a conflict with,
breach or violation of, or default under, or permit any such acceleration
in, any material agreement of ATC or ATI; or
(ii) will require ATC or ATI to make or obtain any Governmental
Authorization, Governmental Filing or Private Authorization, except (A)
filings contemplated by the Registration Rights Agreement, (B) filings
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, (C) for FCC approvals, (D) the filing with
the SEC of (I) the ATC Registration Statement and (II) such reports under
Section 13(a) or 15(d) of the Exchange Act as may be required in connection
with this Agreement and the transactions contemplated by this Agreement,
(E) the filing of the Certificate of Merger with the Delaware Secretary of
State and appropriate documents with the relevant authorities of other
states in which ATI is qualified to do business, (F) the filing of a
Supplemental Listing Application with the New York Stock Exchange, and (G)
such other Governmental Authorizations, Governmental Filings and Private
Authorizations the failure of which to be made or obtained would not,
individually or in the aggregate, have a Material Adverse Effect on ATC.
5.2 Financial and Other Information. ATC has heretofore made available to
-------------------------------
Target its Annual Report on Form 10-K for its fiscal year ended December 31,
1997, its Prospectus, dated July 1, 1998, and all Current Reports filed on Form
8-K since July 1, 1998 (collectively, the "ATC SEC Documents"). As of the
respective dates thereof, the ATC SEC Documents were prepared in all material
respects in accordance with the Securities Act and the Exchange Act and did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. ATC
has timely filed all forms, reports and documents with the SEC required to be
filed by it pursuant to the Securities Act and the Exchange Act which complied
as to form, at the time such form, document or report was filed, in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act. The consolidated financial statements of ATC included in the ATC SEC
Documents (the "ATC Financial Statements"), including in each case the notes
thereto, have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods covered thereby, except as otherwise noted therein,
are true, accurate and complete in all material respects, and fairly present the
consolidated financial condition and the consolidated results of operations and
cash flow of ATC, on the bases therein stated, as of the respective dates
thereof, and for the respective periods covered thereby subject, in the case of
unaudited financial statements, to normal nonmaterial year-end audit adjustments
and accruals.
-18-
5.3 Material Statements and Omissions; Absence of Events.
----------------------------------------------------
(a) Neither any representation or warranty made by ATC or ATI contained in
this Agreement or in the certificate to be delivered pursuant to Section 7.3(a)
nor the ATC SEC Documents contains or will contain any untrue statement of a
material fact or omits or will omit to state any material fact required to make
any statement contained herein or therein, in light of the circumstances under
which they were made, not misleading. Without limiting the generality of the
foregoing, (i) the ATC Registration Statement will not, at the time such
Registration Statement becomes effective under the Securities Act, and the ATC
Transaction Prospectus, at the date it is first mailed to the holders of Target
Common Stock and at the time of the Target Stockholders Meeting, and (ii) the
information with respect to ATC furnished to Target for inclusion in the Target
Proxy Statement will not, at the date it is first mailed to the holders of
Target Common Stock and at the time of the Target Stockholders Meeting, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. For purposes of the foregoing, the truth of any information or the
existence of any omissions at the time of the Target Stockholders Meeting shall
be determined with reference to the ATC Transaction Prospectus and the Target
Proxy Statement, each as then amended or supplemented. The ATC Registration
Statement and the ATC Transaction Prospectus will comply as to form in all
material respects with the requirements of the Securities Act and the rules and
regulations thereunder. Notwithstanding the foregoing, no representation or
warranty is made by ATC with respect to statements made or incorporated by
reference therein based on information specifically supplied by Target for
inclusion or incorporation by reference in the ATC Registration Statement or the
ATC Transaction Prospectus.
(b) Since the date of the most recent financial statements constituting a
part of the ATC Financial Statements, except to the extent specifically
described in the ATC SEC Documents, there has been no material adverse change in
ATC or any of its Subsidiaries from that reflected in the most recent ATC
Financial Statements. There is no Event known to ATC which has had a Material
Adverse Effect on ATC, except to the extent specifically described in the ATC
SEC Documents and except for matters affecting the tower rental, ownership and
construction industry generally, and except for any Event arising out of the
execution or public announcement of this Agreement. ATC is not aware of any
impending or contemplated Event that would cause any of the representations and
warranties made by it in this Article not to be true, correct and complete on
the date of such Event as if made on that date.
5.4 Broker or Finder. No Person assisted in or brought about the
----------------
negotiation of this Agreement or the Transactions in the capacity of broker,
agent or finder or in any similar capacity on behalf of ATC or ATI, other than
Credit Suisse First Boston Corporation whose fees and expenses will be paid by
ATC.
5.5 Capital Stock. The authorized and outstanding capital stock of ATC,
-------------
as of September 30, 1998, is as set forth in the most recent ATC SEC Documents.
Between September 30, 1998 and the date of this Agreement, ATC has not issued or
agreed to issue any shares of ATC Common Stock, other capital stock, Convertible
Securities or Option Securities, other than pursuant to (a) the exercise of
Option Securities theretofore granted pursuant to the 1997 Stock Option Plan, as
amended and restated, of ATC (the "ATC Option Plan"), (b) acquisitions or
mergers referred to in the ATC SEC Documents, (c) conversions of Class B Common
Stock, par value $.01 per share, of ATC into ATC Common Stock, (d) the ATC
Option Plan and (e) the issuance of 1,430,879 shares of ATC Common Stock in a
recently consummated acquisition. All of such outstanding capital stock has
been, and, when issued in accordance with the terms of this Agreement, the ATC
Common Stock to be issued upon consummation of the Merger will be, duly
authorized and validly issued, fully paid and nonassessable and not subject to
any statutory preemptive or similar rights.
-19-
5.6 Tax Matters. Except where all failures to do so will not in the
-----------
aggregate have a Material Adverse Effect on ATC, ATC and each of its
Subsidiaries has (a) in accordance with all Applicable Laws filed all Tax
Returns which are required to be filed, and (b) paid, or made adequate provision
for the payment of, all Taxes which have or may become due and payable pursuant
to said Tax Returns and all other governmental charges and assessments received
to date other than those Taxes being contested in good faith for which adequate
provision has been made on the most recent balance sheet forming part of the ATC
Financial Statements. The Tax Returns of ATC and each of its Subsidiaries have
been prepared in all material respects in accordance with all Applicable Laws.
Except where all failures to do so will not in the aggregate have a Material
Adverse Effect on ATC, all Taxes which ATC and each of its Subsidiaries is
required by Law to withhold and collect have been duly withheld and collected,
and have been paid over, in a timely manner, to the proper Authorities to the
extent due and payable. Adequate provision has been made on the most recent
balance sheet forming part of the ATC Financial Statements for all Taxes accrued
through the date of such balance sheet of any kind, including interest and
penalties in respect thereof, whether disputed or not, and whether past, current
or deferred, accrued or unaccrued, fixed, contingent, absolute or other, and
there are, to ATC's knowledge, no past transactions or matters which,
individually or in the aggregate, could result in additional Taxes which would,
if imposed, have a Material Adverse Effect on ATC for which an adequate reserve
has not been provided on such balance sheet. Neither ATC nor any of its
Subsidiaries is a "consenting corporation" within the meaning of Section 341(f)
of the Code. ATC, and each of its corporate Subsidiaries at all times since
owned directly or indirectly by ATC, has been taxable as a Subchapter C
corporation under the Code, and has never been a member of any consolidated
group for Tax purposes, except (i) during the period it was included in the tax
reports of American Radio Systems Corporation, as described in the ATC SEC
Documents, and (ii) any consolidated group with one or more of ATC and its
Subsidiaries. Neither ATC nor any of its Subsidiaries is a party to any tax
sharing agreement or arrangement, except (i) the ARS-ATS Separation Agreement,
as described in the ATC SEC Documents, and (ii) any agreement among one or more
of ATC and ATC's Subsidiaries.
5.7 Compliance with Governmental Authorizations and Applicable Law.
--------------------------------------------------------------
(a) ATC and its Subsidiaries have conducted their respective businesses and
owned and operated their respective property and assets in accordance with all
Applicable Laws and Governmental Authorizations, except for such breaches,
violations and defaults as, individually or in the aggregate, have not had and
will not have a Material Adverse Effect on ATC. Neither ATC nor any of its
Subsidiaries is in, or is charged by any Authority with, or, to ATC's knowledge,
is threatened or under investigation by any Authority with respect to, any
breach or violation of, or default in the performance, observance or fulfillment
of, any Applicable Law relating to the ownership and operation of their
respective assets or the conduct of their respective businesses which,
individually or in the aggregate, has had or will have a Material Adverse Effect
on ATC. No Event exists or has occurred which constitutes, or but for any
requirement of giving of notice or passage of time or both would constitute,
such a breach, violation or default, under any Governmental Authorization or any
Applicable Law, except for such breaches, violations or defaults as,
individually or in the aggregate, have not had and will not have a Material
Adverse Effect on ATC.
(b) ATC or one of its Subsidiaries has obtained all Governmental
Authorizations that are necessary for the ownership or operation of the assets
of ATC and its Subsidiaries or the conduct of the business of ATC and its
Subsidiaries as now conducted and which, if not obtained and maintained, would,
individually or in the aggregate, have a Material Adverse Effect on ATC, all of
which are valid and in good standing and in full force and effect, with such
exceptions as, individually or in the aggregate, have not had and will not have
a Material Adverse Effect on ATC. None of such Governmental Authorizations is
subject to any restriction or condition that would limit in any material respect
the ownership or operations of the assets of ATC and its Subsidiaries or the
conduct of the business of ATC and its Subsidiaries as currently
-20-
conducted, except for restrictions and conditions generally applicable to
Governmental Authorizations of such type and such exceptions as, individually or
in the aggregate, have not had and will not have a Material Adverse Effect on
ATC. The conduct of the business of ATC and its Subsidiaries is in accordance
with the Governmental Authorizations, except for such noncompliances as,
individually or in the aggregate, have not had and will not have a Material
Adverse Effect on ATC. No such Governmental Authorization is the subject of any
pending or, to ATC's knowledge, threatened challenge or proceeding to revoke or
terminate any such Governmental Authorization.
(c) There are no Legal Actions of any kind pending or, to the knowledge of
ATC, threatened at law, in equity or before any Authority against ATC or any of
its Subsidiaries or the officers or directors of any thereof relating to the
ownership or operation of their respective assets or the conduct of their
respective businesses which, if determined adversely to ATC or its Subsidiaries,
individually or in the aggregate, will have a Material Adverse Effect on ATC.
5.8 Year 2000 Compliant. ATC has reviewed the areas within its and its
-------------------
Subsidiaries' businesses and operations which ATC believes could be adversely
affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by ATC may be unable to recognize and perform properly date-
sensitive functions involving certain dates prior to and any date on or after
December 31, 1999), and is making related inquiry of material suppliers, vendors
and customers. Based on such reviews, ATC believes that the "Year 2000 Problem"
will not have a Material Adverse Effect on ATC. To ATC's knowledge, each
hardware, software and firmware product (collectively "Software") used by ATC in
its business is Year 2000 compliant, except for such noncompliances that,
individually or in the aggregate, have not had and will not have a Material
Adverse Effect on ATC.
5.9 Compliance with Private Authorizations. ATC and its Subsidiaries have
--------------------------------------
obtained all Private Authorizations that are necessary for the ownership or
operation by ATC and its Subsidiaries of their respective assets or the conduct
of their respective businesses, as currently conducted or proposed to be
conducted on or prior to the Closing Date, which, if not obtained and
maintained, individually or in the aggregate, have not had and will not have a
Material Adverse Effect on ATC and its Subsidiaries taken as a whole. All of
such Private Authorizations are valid and in good standing and are in full force
and effect, except for such exceptions as, individually or in the aggregate,
have not had and will not have a Material Adverse Effect on ATC and its
Subsidiaries taken as a whole. Neither ATC nor any of its Subsidiaries is in
breach or violation of, or in default in the performance, observance or
fulfillment of, any such Private Authorization, and no Event exists or has
occurred which constitutes, or but for any requirement of giving of notice or
passage of time or both would constitute, such a breach, violation or default,
under any such Private Authorization, except for such breaches, violations or
defaults as, individually or in the aggregate, have not had and will not have a
Material Adverse Effect on ATC and its Subsidiaries taken as a whole.
5.10 Title to Properties; Leases.
---------------------------
(a) Each of ATC and its Subsidiaries has good indefeasible, marketable and
insurable title to all of its real property (other than easement and leasehold
real property) and good indefeasible and marketable title to all of its other
owned property and assets, tangible and intangible; all of such property and
assets are so owned, in each case, free and clear of all Liens, except (i)
Permitted Liens, and (ii) Liens set forth in the ATC Financial Statements. All
improvements on the real property owned or leased by ATC or any of its
Subsidiaries are in compliance with applicable zoning, wetlands and land use
laws, ordinances and regulations and applicable title covenants, conditions,
restrictions and reservations in all respects necessary to conduct the business
as presently conducted or proposed to be conducted on or prior to the Closing
Date by ATC and its Subsidiaries, except for any instances of non-compliance
which, individually or in the
-21-
aggregate, have not had and will not have a Material Adverse Effect on ATC. All
such improvements comply with all Applicable Laws, Governmental Authorizations
and Private Authorizations, except for any instances of non-compliance which,
individually or in the aggregate, have not had and will not have a Material
Adverse Effect on ATC. All of the transmitting towers, ground radials, guy
anchors, transmitting buildings and related improvements, if any, located on the
real property owned or leased by ATC or any of its Subsidiaries are located
entirely on such real property except for any instances of non-compliance,
individually or in the aggregate, have not had and could not reasonably be
expected to have a Material Adverse Effect on ATC. Such transmitting towers,
ground radials, guy anchors, transmitting buildings and related improvements and
other material items of personal property, including equipment, are, in ATC's
reasonable business judgment, in a state of good repair and maintenance and
sound operating condition, normal wear and tear excepted, have been maintained
in a manner consistent with generally accepted standards of sound engineering
practice, and currently permit the business of ATC and its Subsidiaries to be
operated in accordance with the terms and conditions of all Applicable Laws,
Governmental Authorizations and Private Authorizations, except where the failure
to be in such repair or condition or to be so usable, individually or in the
aggregate, has not had and will not have a Material Adverse Effect on ATC.
(b) Each Lease under which ATC or any of its Subsidiaries holds real
property is in full force and effect, has been duly authorized, executed and
delivered by ATC and, to its knowledge, each of the other parties thereto, and
is a legal, valid and binding obligation of ATC or one of its Subsidiaries, and,
to its knowledge, each of the other parties thereto, enforceable in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
moratorium, insolvency and similar Laws affecting the rights and remedies of
creditors and obligations of debtors generally and by general principles of
equity except, in each case, for exceptions which individually or in the
aggregate, have not had and will not have a Material Adverse Effect on ATC.
ATC or one of its Subsidiaries has a valid leasehold interest in and enjoys
peaceful and undisturbed possession under all Leases pursuant to which it holds
any such real property, subject to the terms of each Lease and Applicable Law
and except for Permitted Liens and such other Liens as, individually or in the
aggregate, have not had and will not have a Material Adverse Effect on ATC.
Neither ATC nor any of its Subsidiaries nor, to ATC's knowledge, any other party
thereto, has failed to duly comply with all of the material terms and conditions
of each Lease or has done or performed, or failed to do or perform (and no Claim
is pending or, to the knowledge of ATC, threatened to the effect that ATC has
not so complied, done and performed or failed to do and perform) any act which
would invalidate or provide grounds for the other party thereto to terminate
(with or without notice, passage of time or both) such Leases or impair the
rights or benefits, or increase the costs, of ATC under any Lease in any
material respect except, in each case, for exceptions which individually or in
the aggregate, have not had and will not have a Material Adverse Effect on ATC.
5.11 Related Transactions. Neither ATC nor any of its Subsidiaries is a
--------------------
party or subject to any Contractual Obligation relating to the ownership or
operation of the assets of ATC and its Subsidiaries or the conduct of its or any
of their businesses between ATC or any of its Subsidiaries, on the one hand, and
any of its officers or directors, on the other hand, or, to the knowledge of
ATC, any member of the Immediate Family of any thereof or any Affiliate of any
of the foregoing, including without limitation any Contractual Obligation
providing for the furnishing of services to or by, providing for rental of
property, real, personal or mixed, to or from, or providing for the lending or
borrowing of money to or from or otherwise requiring payments to or from, any
such Person, other than (a) as described in the ATC SEC Documents, (b)
employment agreements with certain of the officers, and (c) other Contractual
Obligations that are, in the reasonable business judgment of ATC, on terms no
less favorable to ATC or the applicable Subsidiary than would exist with a
nonaffiliated Person.
-22-
5.12 Insurance. ATC or one of its Subsidiaries maintains, with respect to
---------
the assets of ATC and its Subsidiaries and the business of ATC and its
Subsidiaries , policies of fire and extended coverage and casualty, liability
and other forms of insurance in such amounts and against such risks and losses
as are customary in ATC's and its Subsidiaries' businesses.
5.13 ERISA Matters
-------------
(a) Except as described in the ATC SEC Documents, neither ATC nor any of
its Subsidiaries contributes to or has an obligation to contribute to, and has
not at any time contributed to or had an obligation to contribute to, (i) an
employee pension benefit plan within the meaning of Section 3(2) of ERISA, (ii)
a Multiemployer Plan, or (iii) a Plan subject to Section 412 of the Code,
Section 302 of ERISA or Title IV of ERISA. Neither ATC nor any of its
Subsidiaries has any actual or potential liability under Title IV of ERISA.
Neither ATC nor any of its Subsidiaries maintains any Plan that provides for
post-retirement medical or life insurance benefits, and neither ATC nor any of
its Subsidiaries has any obligation or liability with respect to any such Plan
previously maintained by ATC or any of its Subsidiaries, except as the
provisions of COBRA may apply to any former employees of ATC or any of its
Subsidiaries. As to all Plans and Employment Arrangements of ATC and its
Subsidiaries:
(i) all such Plans and Employment Arrangements comply and have been
administered in form and in operation, in all material respects, in
accordance with their respective terms and with all Applicable Laws, except
for such noncompliance that will not, individually or in the aggregate,
have a Material Adverse Effect on ATC, and neither ATC nor any of its
Subsidiaries has received any notice from any Authority disputing or
investigating such compliance;
(ii) there are no Claims (other than routine Claims for benefits or
actions seeking quali fied domestic relations orders) pending or, to ATC's
knowledge, threatened involving such Plans or the assets of such Plans,
and, to ATC's knowledge, no facts exist which are reasonably likely to give
rise to any such Claims (other than routine Claims for benefits or actions
seeking qualified domestic relations orders) except, in each case, as will
not, individually or in the aggregate, have a Material Adverse Effect on
ATC;
(iii) all material contributions to, and material payments from, the
Plans and Employment Arrangements that may have been required to be made in
accordance with the terms of the Plans and Employment Arrangements, and any
applicable collective bargaining agreement, have been made other than
contributions and payments which will not, individually or in the
aggregate, have a Material Adverse Effect on ATC. All such contributions
to, and payments from, the Plans and Employment Arrangements, except those
payments to be made from a trust qualified under Section 401(a) of the
Code, for any period ending before the Closing Date that are not yet, but
will be, required to be made, will be properly accrued and reflected on the
financial books and records of ATC;
(iv) to ATC's knowledge, no Event has occurred which would result in
imposition on ATC or any of its Subsidiaries of (A) any breach of fiduciary
duty liability damages under Section 409 of ERISA, (B) a civil penalty
assessed pursuant to subsections (c), (i) or (l) of Section 502 of ERISA or
(C) a tax imposed pursuant to Chapter 43 of Subtitle D of the Code;
(v) neither ATC nor any of its Subsidiaries has incurred any material
liability to a Plan (other than for contributions not yet due) which
liability has not been fully paid or accrued for payment as of the date
hereof;
-23-
(vi) no current or former employee of ATC or any of its Subsidiaries
will be entitled to any additional benefits or any acceleration of the time
of payment or vesting of any benefits under any Plan or Employment
Arrangement as a result of the transactions contemplated by this Agreement;
and
(vii) no compensation payable by ATC or any of its Subsidiaries to any
of its employees under any existing Plan or Employment Arrangement
(including by reason of the transactions contemplated hereby) will be
subject to disallowance under Section 162(m) of the Code.
(b) The execution, delivery and performance by ATC of this Agreement and
the Collateral Documents executed or required to be executed by ATC pursuant
hereto and thereto will not involve any prohibited transaction within the
meaning of ERISA or Section 4975 of the Code with respect to any Plan maintained
by ATC or any of its Subsidiaries.
5.14 Product Liability. There is not now pending or, to the knowledge of
-----------------
ATC, threatened any Claim (or any basis for any such Claim) relating to, any
damages to or losses of any third party for injuries to Persons or damage to
property, or for breach of warranty, arising out of any alleged defect in the
quality or condition of any of ATC's products or services or property or assets,
which, in the case of pending or threatened Claims, if determined adversely to
ATC, individually or in the aggregate (taking into account unasserted Claims of
a similar nature), will have a Material Adverse Effect on ATC.
5.15 Ordinary Course of Business. From the date of the most recent ATC
---------------------------
Financial Statements to the date hereof, except (i) as may be required or
expressly contemplated by the terms of this Agreement, (ii) for the merger
agreement with TeleCom Towers, L.L.C., or (iii) as may be described in or
contemplated by the ATC SEC Documents, each of ATC and its Subsidiaries:
(a) has operated its business in all material respects in the normal,
usual and customary manner in the ordinary and regular course of business
(which includes, without limitation, the construction and acquisition of
towers), consistent with prior practice;
(b) except in each case in the ordinary course of business (which
includes, without limitation, the construction and acquisition of towers),
consistent with prior practice:
(i) has not incurred any obligation or liability (fixed,
contingent or other) individually having a value in excess of
$500,000;
(ii) has not sold or otherwise disposed of or contracted to sell
or otherwise dispose of any of its properties or assets having a value
in excess of $500,000;
(iii) has not canceled any debts or claims having a value in
excess of $100,000;
(iv) has not entered into any individual commitment having a
value in excess of $500,000; and
(c) has not created or permitted to be created any Lien on any of the
assets of ATC and its Subsidiaries, except for Permitted Liens;
-24-
(d) has not made or committed to make any additions to its property or
any purchases of equipment in excess of $500,000, except in the ordinary
course of business consistent with past practice or for normal maintenance
and replacements;
(e) has not increased the compensation payable or to become payable to
any of the ATC Employees other than increases in the ordinary course of
business that are not material to ATC, or otherwise altered, modified or
changed, in a manner material to ATC, the terms of their employment;
(f) has not suffered any material damage, destruction or loss (whether
or not covered by insurance) or any acquisition or taking of property by
any Authority;
(g) has not waived any rights of material value without fair and
adequate consideration;
(h) has not experienced any work stoppage;
(i) except in the ordinary course of business (which includes the
construction and acquisition of towers), has not entered into, amended or
terminated any Lease, Governmental Authorization, Private Authorization,
Material Agreement or Employment Arrangement, or any transaction, agreement
or arrangement with any Affiliate of ATC;
(j) has not made, paid or declared any Distribution; and
(k) has not entered into any transactions or series of related
transactions which individually or in the aggregate is material to the
assets of ATC and its Subsidiaries taken as a whole or the business of ATC
and its Subsidiaries taken as a whole.
5.16 Environmental Matters. Except for exceptions that, individually or in
---------------------
the aggregate, have not had and would not have a Material Adverse Effect on
ATC, neither ATC nor any of its Subsidiaries:
(a) has been notified in writing that it is potentially liable under,
has received any written request for information or other correspondence
concerning its potential liability with respect to any site or facility
under, or, to ATC's knowledge, is a "potentially responsible party" under,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, the Resource Conservation Recovery Act, as amended, or
any similar state Law;
(b) is a party to any outstanding consent decree, compliance order or
administrative order or other judgment, order, writ, injunction or decree
creating on-going obligations issued pursuant to any Environmental Law;
(c) has, to its knowledge, failed to obtain all material Environmental
Permits required under Environmental Laws, or, to its knowledge, failed to
file all applications, notices and other material documents required to be
filed prior to the date of this Agreement to effect the timely renewal or
issuance of all Environmental Permits necessary for the continued ownership
or operation of the assets of ATC and its Subsidiaries taken as a whole or
conduct of the business of ATC and its Subsidiaries taken as a whole in the
manner currently owned, operated and conducted and proposed to be owned,
operated and conducted on or prior to the Closing Date;
-25-
(d) is not in compliance with all Environmental Laws, or is the
subject of or, to ATC's knowledge, threatened with any Legal Action
involving a demand for damages or other potential liability, including any
Lien, with respect to violations or breaches of any Environmental Law;
(e) has knowingly installed or used any above ground or underground
storage tanks, friable asbestos, polychlorinated biphenyls or urea
formaldehyde foam insulation on any property currently owned, leased or
operated by ATC or any of its Subsidiaries and, to ATC's knowledge, there
are no above ground or underground storage tanks containing Hazardous
Materials, friable asbestos, polychlorinated biphenyls or urea formaldehyde
foam insulation on any property currently owned, leased or operated by ATC
or any of its Subsidiaries, the installation, use or presence of which is
not in compliance with Environmental Laws; and
(f) has any knowledge of any past or present Event related to ATC's or
any of its Subsidiaries' properties, operations or business, which Event,
individually or in the aggregate, could reasonably be expected to interfere
with or prevent continued compliance in all material respects with all
Environmental Laws applicable to the ownership or operation of the assets
of ATC and its Subsidiaries taken as a whole or the business of ATC and its
Subsidiaries taken as a whole substantially in the manner now conducted or
proposed to be conducted on or prior to the Closing Date, or which,
individually or in the aggregate, may form the basis of any material Claim
for or arising out of the release or threatened release into the
environment of any Hazardous Material.
5.17 Materiality. The representations and warranties set forth in this
-----------
Article are true and correct as of the date hereof without the materiality
exceptions or qualifications contained therein, except to the extent that the
failure of such representations and warranties to be so true and correct,
individually or in the aggregate, will not have a Material Adverse Effect on
ATC.
5.18 Material Agreements. All of the agreements filed in the ATC SEC
-------------------
Documents under exhibit 10 pursuant to Regulation S-K are valid, binding and
legally enforceable obligations of ATC or its Subsidiaries, as the case may be,
and, to ATC's knowledge, all other parties thereto, except as such
enforceability may be limited by bankruptcy, moratorium, insolvency and similar
Laws affecting the rights and remedies of creditors and obligations of debtors
generally and by general principles of equity except, in each case, for
exceptions which individually or in the aggregate, have not had and will not
have a Material Adverse Effect on ATC. Except as set forth in the ATC SEC
Documents, neither ATC (or its Subsidiaries, as the case may be) nor, to its
knowledge, any other party thereto, has failed to duly comply with all of the
material terms and conditions of each such material agreement or has done or
performed, or failed to do or perform (and no Claim, other than ATC's Notice of
Disagreement with CBS Corporation, described in ATC's Form 10-Q for the fiscal
quarter ended September 30, 1998, is pending or, to the knowledge of ATC,
threatened in writing to the effect that ATC has not so complied, done and
performed or failed to do and perform) any act which would invalidate or provide
grounds for the other party thereto to terminate (with or without notice,
passage of time or both) such material agreement or impair the rights or
benefits, or increase the costs, of ATC (or its Subsidiaries, as the case may
be) under any such material agreement, except, in each case, for exceptions
which individually or in the aggregate, have not had and will not have a
Material Adverse Effect on ATC. All Contracts for the construction by ATC (or
its Subsidiaries) of towers for other Persons can be performed, in the aggregate
for all such Contracts, without any loss to ATC (or its Subsidiaries).
-26-
ARTICLE 6
COVENANTS
6.1 Access to Information; Confidentiality.
--------------------------------------
(a) Each party shall afford to the other party and its accountants,
counsel, financial advisors and other representatives (the "Representatives")
full access during normal business hours and upon reasonable notice throughout
the period prior to the Closing Date to all of its (and its Subsidiaries')
properties, books, contracts, insurance policies, studies and reports,
environmental studies and reports, commitments and records (including without
limitation Tax Returns) and, during such period, shall furnish promptly upon
written request (i) a copy of each report, schedule and other document filed or
received by any party pursuant to the requirements of any Applicable Law or
filed by it with any Authority in connection with the Merger or any other
report, schedule or documents which may have a material effect on the
businesses, operations, properties, prospects, personnel, condition (financial
or other), or results of operations of their respective businesses, and (ii)
such other information concerning any of the foregoing as ATC or Target shall
reasonably request. All Confidential Information furnished pursuant to the
provisions of this Agreement, including without limitation this Section, or
developed based upon disclosures pursuant to this Agreement or otherwise will be
kept confidential and shall not, without the prior written consent of the party
disclosing such Confidential Information, be disclosed by the other party in any
manner whatsoever, in whole or in part, and, except as required by Applicable
Law (including without limitation in connection with any registration, proxy or
information statement or similar document filed pursuant to any federal or state
securities Law in connection with the Merger) shall not be used for any
purposes, other than in connection with the Merger. Except as otherwise herein
provided, each party agrees to reveal such Confidential Information only to
those of its Representatives or other Persons whom it believes need to know such
Confidential Information for the purpose of evaluating and consummating the
Merger. For purposes of this Agreement, "Confidential Information" shall mean
any and all information related to the business or businesses of ATC, ATI and
their respective Affiliates or Target and its Affiliates, including any of their
respective successors and assigns, other than information that (i) has been or
is obtained from a source independent of the disclosing party that, to the
receiving party's knowledge, is not subject to any confidentiality restriction,
(ii) is or becomes generally available to the public other than as a result of
unauthorized disclosure by the receiving party, or (iii) is independently
developed by the receiving party without reliance in any way on information
provided by the disclosing party or a third party independent of the disclosing
party that, to the receiving party's knowledge, is subject to any
confidentiality restriction.
(b) Notwithstanding the provisions of Section 6.1(a), (i) in connection
with the Merger, each party may disclose such information as it may reasonably
determine to be necessary in connection with seeking all Governmental and
Private Authorizations or that is required by Applicable Law to be disclosed,
including without limitation in any registration, proxy or information statement
or other document required to be filed under any federal or state securities
Law, and (ii) each party may, with the prior written consent of the other party,
which consent shall not be unreasonably withheld, delayed or conditioned,
disclose the subject matters of this Agreement to Persons with whom the other
party has a business or contractual relationship in connection with the due
diligence investigation of the other party and its attorneys, financial advisors
and accountants in connection with the transactions contemplated hereunder. In
the event that this Agreement is terminated in accordance with its terms, each
party shall promptly redeliver all written Confidential Information provided
pursuant to this Section or any other provision of this Agreement or otherwise
in connection with the Merger or developed based on such information and shall
not retain any copies, extracts or other reproductions in whole or in part of
such written material, other than, unless mutual releases are exchanged by the
parties, one copy thereof which shall be delivered to independent counsel for
such party which shall be bound by the provisions of Section 6.1(a).
-27-
(c) Anything in this Section or elsewhere in this Agreement to the contrary
notwithstanding, either party may disclose information received or retained by
it in accordance with the provisions of this Agreement if it can demonstrate (i)
such information is generally available to or known by the public from a source
other than the party seeking to disclose such information or (ii) was obtained
by the party seeking to disclose such information from a source other than the
other party, provided that such source was not, to the knowledge of the
disclosing party, bound by a duty of confidentiality to the other party or
another party with respect to such information.
(d) No investigation pursuant to this Section or otherwise shall affect any
representation or warranty in this Agreement of any party or any condition to
the obligations of the parties hereto.
(e) The provisions of this Section shall apply to all Subsidiaries of ATC
and Target.
6.2 Agreement to Cooperate; Certain Other Covenants.
-----------------------------------------------
(a) Each of the parties hereto shall use reasonable business efforts (x) to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under Applicable Law to consummate the
Merger and the other Transactions, and (y) to refrain from taking, or cause to
be refrained from taking, any action and to refrain from doing or causing to be
done, anything which could impede or impair the consummation of the Merger or
the consummation of the other Transactions, including, in all cases, without
limitation using its reasonable business efforts (i) to prepare and file with
the applicable Authorities as promptly as practicable after the execution of
this Agreement all requisite applications and amendments thereto, together with
related information, data and exhibits, necessary to request issuance of orders
approving the Merger by all such applicable Authorities, (ii) to obtain all
necessary or appropriate waivers, consents and approvals, (iii) to effect all
necessary registrations, filings and submissions (including without limitation
filings within ten (10) business days of the date of this Agreement under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act and all filings necessary for ATI to own and operate the
Target Assets and the Target Business), (iv) to lift any injunction or other
legal bar to the Merger (and, in such case, to proceed with the Merger as
expeditiously as possible), (v) to obtain the satisfaction of the conditions
specified in Article 7, and (vi) to cure any breach or untruth of such party
upon receipt of notice as provided in Section 8.1(c) or (d) or upon otherwise
becoming aware of such breach or untruth.
(b) The parties shall cooperate with one another in the preparation of all
Tax Returns, questionnaires, applications or other documents regarding any Taxes
or transfer, recording, registration or other fees which become payable in
connection with the Merger that are required to be filed on or before the
Closing Date.
(c) The provisions of this Section shall apply to all Subsidiaries of ATC
and Target.
6.3 Public Announcements. Until the Closing or the termination of this
--------------------
Agreement, each party shall consult with the other before issuing any press
release or otherwise making any public statements with respect to this Agreement
or the Merger and shall not issue any such press release or make any such public
statement without the prior written approval of the other. Notwithstanding the
foregoing, the parties acknowledge and agree that they may, without each other's
prior consent, issue such press releases or make such public statements as may
be required by Applicable Law, in which case the issuing party shall use all
reasonable efforts to consult with the other party and agree upon the nature,
content and form of such press release or public statement. The provisions of
this Section shall apply to all Subsidiaries of ATC and Target.
-28-
6.4 Notification of Certain Matters. Each party shall give prompt notice
-------------------------------
to the other of the occurrence or non-occurrence of any Event the occurrence or
non-occurrence of which would be reasonably likely to cause (a) any
representation or warranty made by it contained in this Agreement to be untrue
or inaccurate in any material respect or (b) any failure by it to comply with or
satisfy, or be able to comply with or satisfy, in any material respect, any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement in any material respect, such that, in any such case, one or more
of the conditions of Closing would not be satisfied; provided, however, that the
delivery of any notice pursuant to this Section shall not limit or otherwise
affect the rights and remedies available hereunder to the party receiving such
notice or the obligations of the party delivering such notice and shall not, in
any event, affect the representations, warranties, covenants and agreements of
the parties or the conditions to their respective obligations under this
Agreement.
6.5 Other Offers; No Solicitation.
-----------------------------
(a) Target shall not, nor shall Target knowingly permit any of its
Subsidiaries or any of its or any of its Subsidiaries' officers, directors,
investment bankers, brokers, financial advisors, finders, attorneys, accountants
or other agents or representatives to, directly or indirectly, (i) solicit,
initiate or encourage (including by way of furnishing non-public information),
or take any other action to facilitate, any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, an
Alternative Transaction or (ii) participate in any discussions or negotiations
or otherwise cooperate regarding an Alternative Transaction; provided, however,
that if the Board of Directors of Target determines in good faith, based on the
advice of outside counsel, that failure to do so would constitute a breach of
its fiduciary duties to Target's stockholders under Applicable Law, Target, in
response to a written Alternative Transaction that (I) was unsolicited or that
did otherwise result from a breach of this Section, and (II) is reasonably
likely to lead to a Superior Proposal, may (x) furnish non-public information
with respect to Target to the Person who made such Alternative Transaction
pursuant to a customary confidentiality agreement and (y) participate in
discussions and negotiations regarding such Alternative Transaction. Without
limiting the foregoing, it is understood that any violation of the restrictions
set forth in the preceding sentence by any director or officer of Target or any
of its Subsidiaries, whether or not acting on behalf of Target or any of its
Subsidiaries, shall be deemed to be a breach of this Section by Target.
(b) The Board of Directors of Target shall not (i) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to ATC, its approval or
recommendation of this Agreement or the Merger, (ii) approve or recommend, or
propose to approve or recommend, an Alternative Transaction, or (iii) cause
Target to enter into any letter of intent, agreement in principle, acquisition
agreement or merger or other similar agreement with respect to an Alternative
Transaction, unless (x) the Board of Directors of Target shall have determined
in good faith, based on the advice of independent counsel, that (A) failure to
do so would be inconsistent with its fiduciary duties to Target's stockholders
under Applicable Law, and (B) based upon the advice of Target's financial
advisors, such Alternative Transaction is a Superior Proposal, and (y) Target
shall have terminated this Agreement pursuant to the provisions of paragraph (f)
of Section 8.1.
(c) Nothing contained in this Section shall prohibit Target from at any
time (i) taking and disclosing to its stockholders a position contemplated by
Rule 14e-2(a) promulgated under the Exchange Act; provided, however, that
neither Target nor its Board of Directors shall, except as permitted by Section
6.5(b), propose to approve or recommend an Alternative Transaction or (ii)
making a "stop-look-and-listen" communication with respect to an Alternative
Transaction of the nature contemplated by, and in compliance with, Rule 14d-9
under the Exchange Act as a result of receiving an Acquisition Proposal.
-29-
(d) If Target decides to terminate this Agreement under paragraph (f) of
Section 8.1 because of a Superior Proposal, it shall give ATC written notice of
such termination no later than five (5) days prior to any such termination. At
such time, Target will cause its financial advisor to supply ATC with such
information as such financial advisor deems necessary to maximize value to the
Target's stockholders. Target shall be obligated to consider any revised offer
communicated to Target by ATC in connection with its decision to terminate this
Agreement.
(e) If Target shall receive a firm, bona fide written proposal or proposals
from any Person relating to any Alternative Transaction, and Target's Board of
Directors shall determine in good faith, based upon the advice of independent
counsel, and after receiving advice from Target's independent financial
advisors, that (i) such Alternative Transaction is a Superior Proposal and (ii)
the failure to terminate this Agreement would be inconsistent with the
director's fiduciary obligations under Applicable Law, then Target shall
terminate this Agreement.
(f) If Target terminates this Agreement pursuant to Section 6.5(e), Target
shall pay ATC the amounts set forth in Section 8.2 hereof in accordance with the
terms thereof.
6.6 Conduct of Business by Target Pending the Merger. Except as set forth
------------------------------------------------
in Section 6.6 of the Target Disclosure Schedule, otherwise contemplated by this
Agreement or as provided in Target's business plan previously provided to ATC
(the "Business Plan"), after the date hereof and prior to the Closing Date or
earlier termination of this Agreement, unless ATC shall otherwise consent in
writing, which consent shall not be unreasonably withheld, Target shall, and
shall cause each of its Subsidiaries to:
(a) conduct its business in the ordinary and usual course of business
and consistent with past practice;
(b) not (i) amend or propose to amend its Organic Documents, (ii)
split, combine or reclassify (whether by stock dividend or otherwise) its
outstanding capital stock or issue or authorize the issue of any other
securities in respect of, in lieu of, or in substitution for, shares of its
capital stock, or (iii) declare, set aside, pay or make, or agree to
declare, set aside, pay or make, any Distribution, whether in cash, stock,
property or otherwise; other than distributions to Target or its
Subsidiaries by one of Target's Subsidiaries;
(c) not issue, sell, pledge or dispose of, or agree to issue, sell,
pledge or dispose of, any shares of Target Common Stock, other shares of
capital stock, Convertible Securities or Option Securities, except pursuant
to the exercise of options outstanding on the date hereof;
(d) not (i) incur or become contingently liable with respect to any
Indebtedness for Money Borrowed, other than (x) borrowings, not to exceed
the sum of (I) the principal amount of borrowings presently outstanding and
(II) the Indebtedness set forth in the Business Plan, (ii) redeem,
purchase, acquire or offer or agree to redeem, purchase or acquire any
shares of its capital stock, Convertible Securities or Option Securities,
(iii) sell, lease, license, pledge, dispose of or encumber any properties
or assets or sell any businesses other than (x) inventory in the ordinary
course of business, (y) Liens arising in accordance with the provisions of
indebtedness in effect on the date hereof and in accordance with their
present terms, and (z) leases of towers and shelter space to third-party
customers, or (iv) make any loans, advances or capital contributions to, or
investments in, any other Person, except to officers and employees of
Target for travel, business or relocation expenses in the ordinary course
of business;
-30-
(e) not enter into or agree to enter into (other than agreements which
are binding on Target as of the date hereof) any Restricted Transaction (or
group of related Restricted Transactions), whether for its own account or
for any other Person, if (i) the aggregate amount reasonably expected to be
expended by Target or any of its Subsidiaries in connection with such
individual Restricted Transaction (together with any group of related
Restricted Transactions) exceeds $10.0 million, or (ii) the aggregate
amount to be expended in connection with all Restricted Transactions
(together with any group of related Restricted Transactions) exceeds $100.0
million; provided, however, that the foregoing restriction shall not apply
to any Restricted Transaction pursuant to agreements which are described in
Section 6.6(e) of the Target Disclosure Schedule;
(f) use reasonable business efforts to preserve intact its business
organization and goodwill, keep available the services of its present
officers and key employees, and preserve the goodwill and business
relationships with customers and others having business relationships with
them and not engage in any action, directly or indirectly, with the intent
to adversely impact the transactions contemplated by this Agreement;
(g) confer on a regular and frequent basis with one or more
representatives of ATC to report material operational matters and the
general status of ongoing operations;
(h) not adopt, enter into, amend or terminate any employment,
severance, special pay arrangement with respect to termination of
employment or other similar arrangements or agreements with any directors,
officers or key employees;
(i) maintain with financially responsible insurance companies
insurance on the Target Assets and the Target Business in such amounts and
against such risks and losses as are consistent with past practice;
(j) not make any Tax election that could reasonably be likely to have
a Material Adverse Effect on Target or settle or compromise any material
Tax liability;
(k) except in the ordinary course of business or except as would not
be reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Target, not modify, amend or terminate any Material
Agreement to which Target is a party or by which any of the Target Assets
may be bound or to which any of them may be subject or waive, release or
assign any material rights or claims thereunder;
(l) not make any material change to its accounting methods, principles
or practices, except as may be required by GAAP;
(m) except in the ordinary course of business and in accordance with
past practices and policies, not enter into any Lease or other agreement
with respect to any antennae site on any of its towers, whether presently
owned or hereafter acquired by Target;
(n) except as set forth in Section 4.14 of the Target Disclosure
Schedules, (i) not grant to any executive officer or other key employee of
Target any increase in compensation, except for normal increases in the
ordinary course of business consistent with past practice or as required
under
-31-
Employment Arrangements set forth in Section 4.14 of the Target Disclosure
Schedule, (ii) not grant to any such executive officer any increase in
severance or termination pay, except as was required under any Employment
Arrangements set forth in Section 4.14 of the Target Disclosure Schedule,
(iii) not adopt or amend any Plan or Employment Arrangement (including
change any actuarial or other assumption used to calculate funding
obligations with respect to any Plan, or change the manner in which
contributions to any Plan are made or the basis on which such contributions
are determined) and (iv) except in the ordinary course, not enter into,
amend in any material respect or terminate any material Governmental
Authorization, material Private Authorization or Material Agreement;
(o) not voluntarily take or permit to be taken any action which if
taken between the end of its most recent fiscal quarter and prior to the
date of this Agreement would have been required to be noted as an exception
on Section 4.16 of the Target Disclosure Schedule, other than pursuant to
the conduct of its business in the ordinary and usual course of business
and consistent with past practice; and
(p) not authorize or enter into any agreement that would violate any
of the foregoing.
In the event that Target or any of its Subsidiaries desires to take any of the
actions prohibited by the provisions of this Section, Target shall give prompt
written notice to ATC, referring to the provisions of this Section. As stated
above, Target's ability to take such action shall be subject to the written
consent of ATC, which consent shall not be unreasonably withheld; provided,
however, that if ATC does not object to the taking of such action within five
(5) business days of receipt of such notice and all material information
requested by ATC with respect thereto, Target or such Subsidiary shall have the
right to take such action. ATC's failure to object to the taking of any such
action shall not, in any event, relieve Target from the obligation to comply
with the provisions of this Agreement (other than, to the extent provided, in
paragraph (d) of this Section) and shall not be deemed to be a waiver of any
condition of ATC's obligations to consummate the Merger set forth in Section
7.2. The parties also agree that, regardless of whether or not ATC's consent is
required by this Section 6.6, Target shall communicate with the Chief Operating
Officer and the Chief Financial Officer of ATC on a reasonably regular basis
with respect to the Business Plan and the ongoing operations of Target.
6.7 Additional Tax Matters. Each party hereto shall use all reasonable
----------------------
business efforts to cause the Merger to qualify, and shall not take, and shall
use all reasonable business efforts to prevent any Affiliate of such party from
taking, any action that could reasonably be expected to prevent the Merger from
qualifying as a reorganization under the provisions of Section 368(a) of the
Code.
6.8 Certificates of Non-Foreign Status. Prior to the Closing Date, Target
----------------------------------
and ATC shall in respect of the conversion of Target Common Stock pursuant to
the Merger use their reasonable business efforts to obtain on behalf of
themselves, from each Person who owned of record or, to Target's knowledge,
beneficially, five percent (5%) or more of the Target Common Stock at any time
during the five-year period preceding the Effective Time and who will continue
to own any Target Common Stock immediately prior to the Effective Time, a
certificate of non-foreign status of such stockholder that meets the
requirements of Section 1445 of the Code and Section 1.1445-2(b) of the
Regulations, it being understood that the failure to obtain any such certificate
shall not be deemed to be a breach of this Section. Target shall furnish to ATC
on the Closing Date a copy of any such certificates of non-foreign status
obtained by Target.
-32-
6.9 Target Stock Options. Prior to the Effective Time, ATC and Target
--------------------
shall take such action as may be necessary to cause each unexpired and
unexercised option to purchase Target Common Stock from Target or any of its
Subsidiaries that is outstanding immediately prior to the Merger and that will
not expire if not exercised prior thereto, a true, correct and complete list of
which, as of the date of this Agreement, is set forth in Section 6.9 of the
Target Disclosure Schedule (each, a "Target Option" and collectively, the
"Target Options") to be automatically converted at the Effective Time into an
option (each, an "ATC Option" and collectively, the "ATC Options") to purchase a
number of shares of ATC Common Stock equal to the product of the number of
shares of Target Common Stock which the holder is entitled to purchase under the
Target Option multiplied by the Exchange Ratio, at a price per share equal to
the quotient obtained by dividing (a) the per share option exercise price
determined pursuant to the Target Option, by (b) the Exchange Ratio. Each ATC
Option will otherwise have the same terms and conditions as the Target Option
exchanged therefor, including acceleration and period of exercise, and, with
respect to Target Options that are "incentive stock options" under the Code at
the Effective Time, will contain such terms as are necessary to preserve such
status following the conversion described herein. At the Effective Time, ATC
will execute and deliver to each holder of an ATC Option a document evidencing
ATC's assumptions of Target's obligations under the Target Option and all
references in the stock option agreements to Target shall be deemed to refer to
ATC. As of the Effective Time, ATC shall assume all of Target's obligations
with respect to the Target Options as so amended and shall, from and after the
Effective Time, have reserved for issuance upon exercise of the ATC Options all
shares of ATC Common Stock covered thereby and shall file a Registration
Statement on Form S-8 to register under the Securities Act the shares of ATC
Common Stock subject to the ATC Options granted in replacement of Target
Options. ATC shall take all actions reasonably necessary to maintain the
effectiveness of such Registration Statement (and maintain the current status of
the prospectus or prospectuses contained therein) for so long as such ATC
Options remain outstanding. ATC shall also use its reasonable business efforts
to list, subject to official notice of issuance, all shares of ATC Common Stock
subject to the ATC Options on The New York Stock Exchange and/or such other
exchanges or trading markets on which the ATC Common Stock is then listed or
traded. No fractional shares of ATC Common Stock will be issued upon the
exercise of any ATC Option, and instead the exercising holder of such ATC Option
shall receive cash for any fractional share amounts, based on the fair market
value of the ATC Common Stock at the time of exercise. To the extent that any
former holder of Target Options is terminated by ATC or its Subsidiaries other
than for cause subsequent to the Effective Time, ATC shall provide such holder
with the opportunity to effect a broker-assisted cashless exercise, to the
extent exercisable at the time of such termination, of the ATC Options then held
by such holder prior to the expiration of such options. The foregoing provision
is intended to be for the benefit of, and shall be enforced by, the holders of
Target Options and subject to the provisions of the plans governing the Target
Options, their heirs and personal representatives and shall be binding upon ATC
and its successors and assigns.
6.10 Stockholder Approval. Target will, as soon as practicable following
--------------------
the date hereof, establish a record date for, and, after the Registration
Statement has become effective, duly call, give notice of, convene and hold a
meeting of its stockholders (the "Target Stockholders Meeting") for the purpose
of obtaining the approval and adoption of this Agreement and the approval of the
Merger by the Target stockholders (the "Target Stockholder Approval"). Such
notice shall comply with the provisions of Applicable Law. Target will, through
its Board of Directors, recommend to its stockholders approval and adoption of
this Agreement and approval of the Merger, subject to the fiduciary duties of
the Target Board of Directors under Applicable Law.
6.11 Registration Statement and Proxy/Information Statement.
------------------------------------------------------
(a) ATC shall prepare and file with the SEC as soon as is reasonably
practicable after the date hereof a Registration Statement under the Securities
Act (the "ATC Registration Statement") on Form S-4 in connection with the Merger
for the purpose of registering all of the shares of ATC Common Stock to be
issued in the Merger. ATC shall also take any action required under Applicable
Law in connection with
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causing the ATC Registration Statement to be declared effective by the SEC as
promptly as practicable, including without limitation making all filings under
applicable state blue sky or securities Laws in connection with the issuance of
shares of ATC Common Stock in the Merger.
(b) Target shall prepare and file with the SEC as soon as is reasonably
practicable after the date hereof a proxy statement in connection with the
Target Stockholders Meeting (the "Target Proxy Statement"), complying with
applicable rules and regulations of the SEC and the DCL.
(c) ATC and Target shall promptly furnish to the other all information, and
take such other actions, as may reasonably be requested in connection with any
action taken to comply with the provisions of this Section including, in the
case of ATC, the preparation of the final prospectus (the "ATC Transaction
Prospectus") contained in the ATC Registration Statement and, in the case of
Target, the preparation of the Target Proxy Statement. Target and ATC shall
correct promptly any information provided by it to be used specifically in the
Target Proxy Statement or the ATC Registration Statement that shall have become
false or misleading in any material respect and shall take all steps necessary
to file with the SEC and have cleared by the SEC any amendment or supplement to
the Target Proxy Statement or the ATC Registration Statement so as to correct
the Target Proxy Statement or the ATC Registration Statement and cause it to be
disseminated to the stockholders of Target, to the extent required by Applicable
Law. Without limiting the generality of the foregoing, each party shall notify
the other promptly of the receipt of the comments of the SEC and of any request
by the SEC for amendments or supplements to the Target Proxy Statement or the
ATC Registration Statement, as the case may be, or for additional information,
and shall supply the other with copies of all correspondence between it or its
representatives, on the one hand, and the SEC or members of its staff, on the
other hand, with respect to the Target Proxy Statement or the ATC Registration
Statement. Whenever any Event occurs which should be described in an amendment
or a supplement to the Target Proxy Statement or the ATC Registration Statement,
Target and ATC shall, upon learning of such Event, promptly prepare, file and
clear with the SEC and, if prior to the Effective Time, mail to the holders of
shares of Target Common Stock such amendment or supplement; provided, however,
that, prior to such mailing, (i) Target and ATC shall consult with each other
with respect to such amendment or supplement, (ii) shall afford to the other
reasonable opportunity to comment thereon, and (iii) each such amendment or
supplement shall be reasonably satisfactory to the other.
(d) In the event Target shall not be required to call the Target
Stockholders Meeting pursuant to Section 6.10, all references to the Target
Proxy Statement in this Agreement shall be deemed to be references to the Target
Information Statement.
(e) Target shall use its reasonable business efforts to cause to be
delivered to ATC and its directors a letter of independent auditors, dated (i)
the date of the ATC Registration Statement, and (ii) the Closing Date, and
addressed to ATC and its directors, in form, scope and substance customary for
letters delivered by independent public accountants in connection with
registrations statements similar to the ATC Registration Statement; provided
that ATC shall have delivered a representation letter to Target's auditors in
the form attached hereto as Exhibit F.
6.12 Directors', Officers' and Employees' Indemnification
----------------------------------------------------
(a) The Organic Documents of ATC shall contain provisions no less favorable
with respect to indemnification than are set forth in the Organic Documents of
Target, as in effect on the date hereof, which provisions shall not be amended,
repealed or otherwise modified for a period of six (6) years from the Effective
Time in any manner that would adversely affect the rights thereunder of
individuals who at any time prior to the Effective Time were officers or
directors of Target, unless such modification shall be required by Applicable
Law.
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(b) From and after the Effective Time, ATC shall indemnify, defend and hold
harmless the present and former officers and directors, in their capacities as
such, of Target (collectively, the "Indemnified Parties") against all losses,
expenses, claims, damages, liabilities or amounts that are paid in settlement
of, or otherwise in connection with any claim, action, suit, proceeding or
investigation (as used in this Section, a "claim"), based in whole or in part on
the fact that the Indemnified Party (or the Person controlled by the Indemnified
Party) is or was an officer or director of Target and arising out of actions or
omissions occurring at or prior to the Effective Time (including without
limitation in connection with this Agreement, the Merger and the Transactions),
whether asserted or claimed prior to, at or after the Effective Time, in each
case to the fullest extent permitted under Applicable Law (and shall pay any
expenses, as incurred, in advance of the final disposition of any such action or
proceeding to each Indemnified Party to the fullest extent permitted under
Applicable Law). Without limiting the foregoing, in the event any such claim is
brought against any of the Indemnified Parties, (i) such Indemnified Parties may
retain counsel (including local counsel) which shall be reasonably satisfactory
to ATC, and ATC shall pay all reasonable fees and expenses of such counsel for
such Indemnified Parties; (ii) ATC shall have the right, but not the obligation,
to assume the defense of any such claim with counsel (including local counsel)
which shall be reasonably satisfactory to the Indemnified Parties (after which
time ATC shall not be liable for any fees and expenses of counsel retained by
the Indemnified Parties); and (iii) ATC shall use its reasonable business
efforts to assist in the defense of any such claim; provided, however, that ATC
shall not be liable for any settlement effected without its written consent,
which consent shall not be unreasonably withheld, delayed or conditioned.
(c) ATC will cause to be maintained for a period of not less than six (6)
years from the Effective Time Target's current directors' and officers'
insurance and indemnification policies to the extent that they provide coverage
for events occurring prior to the Effective Time (the "D&O Insurance") for all
persons who are directors and executive officers of Target on the date of this
Agreement, so long as the annual premium therefor would not be in excess of two
hundred fifty percent (250%) of the current premium. If any then existing D&O
Insurance expires, is terminated or canceled during such six-year period, ATC
will use its best efforts to cause to be obtained as much D&O Insurance as can
be obtained for the remainder of such period for an annualized premium not in
excess of two hundred fifty percent (250%), on terms and conditions no less
advantageous to the covered Persons than the then existing D&O Insurance.
Notwithstanding the foregoing, ATC or its Subsidiaries may, in lieu of
maintaining such existing D&O Insurance as provided above, cause coverage to be
provided under any policy maintained for the benefit of ATC and its Subsidiaries
so long as the terms thereof are not materially less advantageous to the
beneficiaries thereof than the existing D&O Insurance.
(c) In the event ATC 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 of such consolidation or merger or
(ii) transfers all or substantially all of its properties and assets to any
Person, then and in each such case, proper provisions shall be made so that the
successors and assigns of ATC shall assume the obligations set forth in this
Section.
(d) This Section is intended to be for the benefit of, and shall be
enforceable by, the Indemnified Parties, their heirs and personal
representatives and shall be binding on ATC and its successors and assigns.
6.13 Solicitation of Employees. If this Agreement is terminated, each of
--------------------------
ATC and Target agrees that neither it nor any of its Affiliates will, for a
period of twelve (12) months from the date of such termination, solicit or
actively seek to hire any individual who during such period is employed by ATC
or
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any of its Affiliates or Target or any of its Affiliates, as the case may be,
whether or not such individual would commit breach of such individual's
employment agreement in leaving such employment; provided, however, that the
foregoing shall not prevent ATC or Target (or any of their respective
Affiliates) from soliciting or actively seeking to hire any such key employee
who (i) initiates employment discussions with it, (ii) is not employed by ATC or
Target, as the case may be, on the date Target or ATC (or any of their
respective Affiliates), as the case may be, first solicits such key employee, or
(iii) soliciting through general advertisement, including without limitation on
the Internet.
6.14 Registration Rights Agreement. ATC agrees that, from time to time
------------------------------
after the Closing, ATC shall add or shall cause to be added as a party to the
Registration Rights Agreement each Person who is an affiliate of Hicks, Muse,
▇▇▇▇ & ▇▇▇▇▇ Incorporated and who receives shares of ATC Common Stock as a
direct or indirect distributee or transferee of HMTF/Omni Partners LP. The
foregoing provision is intended to be for the benefit of, and shall be enforced
by, such distributees or transferee and shall be binding upon ATC and its
successors and assigns.
ARTICLE 7
CLOSING CONDITIONS
7.1 Conditions to Obligations of Each Party. The respective obligations
---------------------------------------
of each party to consummate the Merger shall, except as hereinafter provided in
this Section, be subject to the satisfaction at or prior to the Closing Date of
the following conditions, any or all of which may be waived, in whole or in
part, to the extent permitted by Applicable Law:
(a) No temporary restraining order, preliminary or permanent
injunction or other order issued by any Authority of competent jurisdiction
or other legal restraint or prohibition preventing the consummation of the
Merger shall be in effect; provided, however, that the party invoking this
condition shall use its reasonable business efforts to have such order,
injunction, restraint or prohibition vacated or lifted.
(b) Any waiting period (and any extension thereof) applicable to the
consummation of the Merger under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act shall have
expired or been terminated;
(c) Except with respect to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act (which is
addressed in Section 7.1(b)), all authorizations, consents, waivers, orders
or approvals required to be obtained from all Authorities, and all filings
(other than the Certificate of Merger), submissions, registrations, notices
or declarations required to be made by any of the parties with any
Authority which would prevent the consummation of the Merger or result in a
Material Adverse Effect on Target if not obtained or made shall have been
obtained from, and made with, all such Authorities;
(d) The ATC Common Stock to be issued as part of the Merger
Consideration shall have been listed for trading on The New York Stock
Exchange, subject to official notice of issuance;
(e) The ATC Registration Statement shall have become effective under
the Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order; and
(f) The Target Stockholder Approval shall have been obtained.
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7.2 Conditions to Obligations of ATC and ATI. The obligation of ATC to
----------------------------------------
cause ATI to, and of ATI to, consummate the Merger shall be subject to the
satisfaction of the following conditions, any or all of which may be waived, in
whole or in part, by ATC and ATI to the extent permitted by Applicable Law:
(a) (i) The representations and warranties of Target contained in this
Agreement (other than in Section 4.19) shall be true and correct at and as
of the Closing Date with the same force and effect as though made on and as
of such date, except (x) to the extent such representations and warranties
expressly speak as of an earlier date (in which case such representations
and warranties shall be true and correct as of such earlier date) and (y)
to the extent that the failure of such representations and warranties to be
true and correct, individually or in the aggregate, will not have a
Material Adverse Effect on Target; provided, however, that for the purpose
of this clause (y), representations and warranties that are qualified as to
materiality (including by reference to "Material Adverse Effect ") shall
not be deemed to be so qualified; (ii) the representations and warranties
of Target set forth in Section 4.19 of this Agreement shall be true and
correct; provided, however, that any untruth shall be disregarded for
purposes of this Section 7.2(c) if, by mutually agreed upon adjustment of
the Exchange Ratio and the Merger Consideration at Closing, the untruth is
rendered harmless and such adjustment either does not require the approval
of the Target stockholders, or such approval has been obtained, in
accordance with the DCL; (iii) each and all of the agreements and covenants
to be performed or satisfied by Target or any of the Target stockholders
hereunder at or prior to the Closing Date shall have been duly performed or
satisfied in all material respects; and (iv) Target shall have furnished
ATC with an officer's certificate in the form attached hereto as Exhibit G
evidencing the truth of such representations, warranties, covenants and
agreements and the performance of such agreements or conditions;
(b) Other than those which, individually or in the aggregate, the
failure of which to obtain will not have a Material Adverse Effect on
Target, all authorizations, consents, waivers, orders or approvals required
by the provisions of this Agreement to be obtained from all Persons (other
than Authorities) prior to the consummation of the Merger, including
without limitation those required in order for ATI to continue to own all
of the Target Assets and continue to operate the Target Business
substantially as conducted immediately prior to the Closing shall have been
obtained, without the imposition, individually or in the aggregate, of any
condition or requirement which will have a Material Adverse Effect on
Target;
(c) Between the date of this Agreement and the Closing Date, there
shall not have occurred and be continuing any material adverse change in
Target from that reflected in the most recent Target Financial Statements;
(d) As of the Closing Date, no Legal Action shall be pending before
any Authority which, individually or in the aggregate, will have a Material
Adverse Effect on Target, it being understood and agreed that a written
request by any Authority for information with respect to the Merger, which
information could be used in connection with such Legal Action, shall not
be deemed to be a Legal Action pending before any such Authority and no
Legal Action by any Target stockholder in respect of the transactions
contemplated herein will be deemed to create a Material Adverse Effect;
(e) All Convertible Securities and Option Securities (other than the
Target Options which shall be exchanged for ATC Options in accordance with
the provisions of Section 6.9) of Target, if any, outstanding immediately
prior to the Closing shall be canceled and, from and after the Closing,
shall no longer be of any force or effect;
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(f) Each of the Target stockholders listed therein shall have executed
and delivered to ATC an agreement substantially in the form attached hereto
as Exhibit A and made a part hereof (the "Registration Rights Agreement");
(g) Each executive officer, director and other Person who, in the
opinion of ATC based on the advice of counsel, may be an "affiliate," as
that term is used in paragraphs (c) and (d) of Rule 145 under the
Securities Act, of Target shall have executed and delivered to ATC an
investment letter substantially in the form of Exhibit B attached hereto
and made a part hereof (the "Target Investment Letters");
(h) ATC shall have received from its tax counsel, ▇▇▇▇▇▇▇▇ & Worcester
LLP, a favorable opinion, dated as of the Closing Date, to the effect that
the Merger constitutes a reorganization within the meaning of Section 368
of the Code and that, as a consequence, none of ATC, ATI or Target will
recognize any gain or loss for federal income tax purposes as a result of
consummation of the Merger, and, in connection with such opinion, Target
shall have executed and delivered to ATC and such counsel a certificate
substantially in the form attached hereto as Exhibit C and made a part
hereof;
(i) All instruments evidencing Indebtedness for Money Borrowed of
Target represented by all bank credit agreements (the "Target Credit
Agreements") shall permit the repayment thereof by ATC without premium or
penalty; and
(j) Each of the agreements listed in Section 7.2(j) of the Target
Disclosure Schedule shall have been terminated by Target, or amended on the
terms and conditions set forth in such Section, and the fees and expenses
payable by Target with respect to the Merger pursuant to the Financial
Advisory Agreement listed therein shall have been waived, in each case, at
no cost or expense to Target; provided, however, that this provision shall
not prevent the payment in full of accrued fees and expenses under the
Monitoring and Oversight Agreement incurred in the ordinary course.
7.3 Conditions to Obligations of Target. The obligation of Target to
-----------------------------------
consummate the Merger shall be subject to the satisfaction of the following
conditions, any or all of which may be waived, in whole or in part, by Target to
the extent permitted by Applicable Law:
(a) The representations and warranties of ATC and ATI contained in
this Agreement (other than in Section 5.5) shall be true and correct in all
material respects at and as of the Closing Date with the same force and
effect as though made on and as of such date, except (x) to the extent such
representations and warranties expressly speak as of an earlier date (in
which case such representations and warranties shall be true and correct as
of such earlier date) and (y) to the extent that the failure of such
representations and warranties to be true and correct, individually or in
the aggregate, will not have a Material Adverse Effect on ATC; provided,
however, that for the purpose of this clause (y), representations and
warranties that are qualified as to materiality (including by reference to
"Material Adverse Effect ") shall not be deemed to be so qualified; (ii)
the representations and warranties of ATC set forth in Section 5.5 of this
Agreement shall be true and correct; provided, however, that any untruth
shall be disregarded for purposes of this Section 7.3(c) if, by mutually
agreed upon adjustment of the Exchange Ratio and the Merger Consideration
at Closing, the untruth is rendered harmless and such adjustment either
does not require the approval of the ATC or ATI stockholders, or such
approval has been obtained, in accordance with the DCL; (iii) each and all
of the agreements and covenants to be performed or satisfied by ATC or ATI
hereunder at or prior to the Closing Date shall have been duly performed or
satisfied in all material
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respects; and (iv) ATC and ATI shall have furnished Target with an
officer's certificate in the form of Exhibit G hereto evidencing the truth
of such representations, warranties, covenants and agreements and the
performance of such agreements or conditions;
(b) Between the date of this Agreement and the Closing Date, there
shall not have occurred and be continuing any material adverse change in
ATC from that reflected in the most recent ATC Financial Statements;
(c) As of the Closing Date, no Legal Action shall be pending before
any Authority which, individually or in the aggregate, will have a Material
Adverse Effect on ATC, it being understood and agreed that a written
request by any Authority for information with respect to the Merger, which
information could be used in connection with such Legal Action, shall not
be deemed to be a Legal Action pending before any such Authority and no
Legal Action by any Target stockholder in respect of the transactions
contemplated herein will be deemed to create a Material Adverse Effect;
(d) ATC shall have executed and delivered the Registration Rights
Agreement;
(e) Target shall have received from its tax counsel, Weil, Gotshal &
▇▇▇▇▇▇ LLP a favorable opinion, dated as of the Closing Date, to the effect
that the Merger constitutes a reorganization within the meaning of Section
368 of the Code and that, as a consequence, the Target stockholders will
not recognize gain or loss for federal income tax purposes as a result of
consummation of the Merger, except to the extent of the cash, property
(other than the ATC Common Stock) or other nonstock Merger Consideration
received pursuant to the consummation of the Merger, and, in connection
with such opinion, ATC shall have executed and delivered to Target and such
counsel a certificate substantially in the form attached hereto as Exhibit
D and made a part hereof; and
(f) ATC shall have delivered to Target an agreement substantially in
the form of Exhibit E attached hereto and made a part hereof (the "ATC
Voting Agreement") executed by the Persons named therein and any individual
nominated pursuant thereto shall have been elected a director of ATC.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time prior to
-----------
the Effective Time only pursuant to the following provisions:
(a) by mutual consent of Target and ATC; or
(b) by ATC or Target if any permanent injunction, decree or judgment
of any Authority preventing consummation of the Merger shall have become
final and nonappealable; or
(c) by Target in the event (i) it is not in material breach of its
covenants and agreements under this Agreement and none of its
representations or warranties shall have become and continue to be untrue
in any manner that would cause the condition set forth in Section 7.2(c)
not to be satisfied, and (ii) either (A) the Termination Date has occurred
without the consummation of the Merger, or (B) ATC or ATI is in material
breach of its covenants and agreements under this
-39-
Agreement or any of its representations or warranties shall have been or
become and continue to be untrue in any manner that would cause the
conditions set forth in Section 7.3(c) not to be satisfied, and such a
breach or untruth is not cured prior to the earlier of thirty (30) days
after delivery of notice thereof to ATC by Target or the Termination Date;
or
(d) by ATC in the event (i) neither ATC nor ATI is in material breach
of its covenants and agreements under this Agreement and none of its
representations or warranties shall have become and continue to be untrue
in any manner that would cause the condition set forth in Section 7.3(c)
not to be satisfied, and (ii) either (A) the Termination Date has occurred
without the consummation of the Merger, or (B) Target is in material breach
of its covenants and agreements under this Agreement or any of Target's
representations or warranties shall have been or become and continue to be
untrue in any manner that would cause the conditions set forth in Section
7.2(c) not to be satisfied, and such a breach or untruth is not cured prior
to the earlier of thirty (30) days after delivery of notice thereof to
Target by ATC or the Termination Date; or
(e) by ATC or Target in the event that prior to the Termination Date
the Target Stockholder Approval has not been obtained, so long as the
terminating party is not in material breach of its covenants and agreements
under this Agreement and none of its representations and warranties shall
have been or become and continue to be untrue in any manner that would
cause the conditions set forth in Section 7.2(c) or 7.3(c), as the case may
be, not to be satisfied; or
(f) by Target pursuant to and in compliance with the provisions of
Section 6.5.
The term "Termination Date" shall mean April 30, 1999; provided, however,
that if FCC approval has not been obtained and/or the expiration or earlier
termination of the waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act has not
occurred by that date, ATC may elect in its sole discretion to extend such date
to September 30, 1999, subject to the following conditions: (i) all conditions
to closing set forth in Sections 7.1, 7.2 and 7.3, other than obtaining
regulatory approval under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act or applicable FCC rules and
regulations, shall have been fulfilled (or waived by the party whom the
condition(s) benefit) and certificates to such effect in the form of Exhibit G
shall have been delivered as of April 30, 1999 by Target and ATC, respectively,
(ii) the provisions of paragraph (c) of Section 7.1 (other than those regarding
approvals from the FCC) shall be terminated after April 30, 1999, (ii)
paragraphs (a), (b), (c) and (d) of Section 7.2 shall be terminated after April
30, 1999, and (iii) paragraphs (a), (b), and (c) of Section 7.3 shall be
terminated after April 30, 1999. If ATC elects to extend the Termination Date
to September 30, 1999, it shall give Target written notice of such extension by
no later than the close of business on April 30, 1999. If such notice has not
been so received, this Agreement shall automatically terminate with the effect
set forth in Section 8.2. In the event that ATC elects to extend the
Termination Date to September 30, 1999, this Agreement may thereafter only be
terminated prior to the Effective Time pursuant to paragraphs (a), (b) and (f)
of Section 8.1 or in the event of failure of Target Stockholder Approval to have
been obtained.
The right of ATC or Target to terminate this Agreement pursuant to this
Section shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any party, any Person controlling any such
party or any of their respective Representatives whether prior to or after the
execution of this Agreement.
8.2 Effect of Termination. Except as provided in Sections 6.1 (with
---------------------
respect to confidentiality), 6.3, 6.13 and 9.2 and this Section, in the event of
the termination of this Agreement pursuant to Section 8.1, this Agreement shall
forthwith become void, there shall be no liability on the part of any party, or
any of their respective stockholders, officers or directors, to the other and
all rights and obligations of any party shall cease; provided, however, that
such termination shall not relieve any party from liability for any willful or
intentional misrepresentation or breach of any of its warranties, covenants or
agreements set forth in this
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Agreement. In the event that this Agreement is terminated by either party
pursuant to Section 8.1(e) or by Target pursuant to Section 8.1(f), Target shall
promptly, but in no event later than two (2) days after the date of such
termination, pay ATC a fee equal to $12,000,000 in immediately available funds.
ATC and Target agree in advance that actual damages would be difficult to
ascertain and that $12,000,000 is a fair and equitable reimbursement to ATC for
damages sustained due to Target's failure to consummate the Merger for the
reasons specified in this Section. Notwithstanding the foregoing, each party
shall have the right to seek specific performance of this Agreement pursuant to
the provisions of Section 9.4. If, however, such termination relates to the
provisions of Section 6.5, ATC's sole rights shall be those set forth in that
Section.
ARTICLE 9
GENERAL PROVISIONS
9.1 Waivers; Amendments. Changes in or additions to this Agreement may be
-------------------
made, or compli ance with any term, covenant, agreement, condition or provision
set forth herein may be omitted or waived (either generally or in a particular
instance and either retroactively or prospectively) with, but only with, the
consent in writing of the parties hereto. No delay on the part of either party
at any time or times in the exercise of any right or remedy shall operate as a
waiver thereof. Any consent may be given subject to satisfaction of conditions
stated therein. The failure to insist upon the strict provisions of any
covenant, term, condition or other provision of this Agreement or to exercise
any right or remedy hereunder shall not constitute a waiver of any such
covenant, term, condition or other provision hereof or default in connection
therewith. The waiver of any covenant, term, condition or other provision
hereof or default hereunder shall not affect or alter this Agreement in any
other respect, and each and every covenant, term, condition or other provision
of this Agreement shall, in such event, continue in full force and effect,
except as so waived, and shall be operative with respect to any other then
existing or subsequent default in connection herewith.
9.2 Fees and Expenses. All costs and expenses incurred in connection with
-----------------
any transfer Taxes, sales Taxes, recording or documentary Taxes, stamps or other
charges levied by any Authority in connection with this Agreement and the
consummation of the Merger shall be borne equally by Target and ATC, all ▇▇▇▇-
▇▇▇▇▇-▇▇▇▇▇▇ filing fees and expenses, if any, shall be borne by the party
making such filing, and all other costs and expenses incurred in connection with
this Agreement and the consummation of the Merger, including without limitation
fees and disbursements of counsel, financial advisors and accountants incurred
by the parties hereto, shall, unless otherwise provided herein, be borne solely
and entirely by the party which has incurred such costs and expenses.
9.3 Notices. All notices and other communications which by any provision
-------
of this Agreement are required or permitted to be given shall be given in
writing and shall be deemed to have been delivered (a) three (3) business days
after being mailed by first-class or express mail, postage prepaid, (b) the next
day when sent overnight by recognized courier service, (c) upon confirmation
when sent by telex, telegram, telecopy or other form of rapid transmission,
confirmed by mailing (by first class or express mail, postage prepaid, or by
recognized courier service) written confirmation at substantially the same time
as such rapid transmission, or (d) upon delivery when personally delivered to
the receiving party (which if other than an individual shall be an officer or
other responsible party of the receiving party). All such notices and
communications shall be mailed, sent or delivered as follows:
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(a) If to ATC or ATI:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Chief Financial Officer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (which shall not constitute notice to ATC or ATI):
▇▇▇▇▇▇▇▇ & Worcester LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Target:
OmniAmerica, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (which shall not constitute notice to Target):
Weil, Gotshal & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other person(s), telex or facsimile number(s) or address(es) as the
party to receive any such communication or notice may have designated by written
notice to the other party.
9.4 Specific Performance; Other Rights and Remedies. Each party
-----------------------------------------------
recognizes and agrees that in the event the other party should refuse to perform
any of its obligations under this Agreement or any Collateral Document, the
remedy at law would be inadequate and agrees that for breach of such provisions,
each party shall, in addition to such other remedies as may be available to it
at law or in equity, be entitled to injunctive relief and to enforce its rights
by an action for specific performance to the extent permitted by Applicable Law.
Each party hereby waives any requirement for security or the posting of any bond
or other surety in connection with any temporary or permanent award of
injunctive, mandatory or other equitable relief. Nothing herein contained shall
be construed as prohibiting any party from pursuing any other remedies available
to it pursuant to the provisions of this Agreement or Applicable Law for such
breach or threatened breach, including without limitation the recovery of
damages; provided, however, that none of the parties shall pursue, and each
party hereby waives, any punitive, incidental and consequential damages arising
out of this Agreement (including without limitation damages for diminution in
value and loss of anticipated profits).
9.5 Severability. If any term or provision of this Agreement shall be
------------
held or deemed to be, or shall in fact be, invalid, inoperative, illegal or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the
conflicting of any provision
-42-
with any constitution or statute or rule of public policy or for any other
reason, such circumstance shall not have the effect of rendering the provision
or provisions in question invalid, inoperative, illegal or unenforceable in any
other jurisdiction or in any other case or circumstance or of rendering any
other provision or provisions herein contained invalid, inoperative, illegal or
unenforceable to the extent that such other provisions are not themselves
actually in conflict with such constitution, statute or rule of public policy,
but this Agreement shall be reformed and construed in any such jurisdiction or
case as if such invalid, inoperative, illegal or unenforceable provision had
never been contained herein and such provision reformed so that it would be
valid, operative and enforceable to the maximum extent permitted in such
jurisdiction or in such case. Notwithstanding the foregoing, in the event of any
such determination the effect of which is to affect materially and adversely any
party, the parties shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible to the
fullest extent permitted by Applicable Law in an acceptable manner to the end
that the Transactions are fulfilled and consummated to the maximum extent
possible.
9.6 Counterparts. This Agreement may be executed in several counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument, binding upon all of the parties. In
pleading or proving any provision of this Agreement, it shall not be necessary
to produce more than one set of such counterparts.
9.7 Section Headings. The headings contained in this Agreement are for
----------------
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
9.8 Governing Law. The validity, interpretation, construction and
-------------
performance of this Agreement shall be governed by, and construed in accordance
with, the applicable laws of the United States of America and the laws of State
of New York applicable to contracts made and performed in such State and, in any
event, without giving effect to any choice or conflict of laws provision or rule
that would cause the application of domestic substantive laws of any other
jurisdiction, except to the extent the DCL applies to the Merger. Anything in
this Agreement to the contrary notwithstanding, in the event of any dispute
between the parties which results in a Legal Action, the prevailing party shall
be entitled to receive from the non-prevailing party reimbursement for
reasonable legal fees and expenses incurred by such prevailing party in such
Legal Action.
9.9 Entire Agreement. This Agreement (together with the Target Disclosure
----------------
Schedule, the Exhibits hereto and the other documents delivered or to be
delivered in connection herewith) constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior
agreements, arrangements, covenants, promises, conditions, undertakings,
inducements, representations, warranties and negotiations, expressed or implied,
oral or written, between the parties, with respect to the subject matter hereof,
including without limitation any previously executed confidentiality agreement.
Each of the parties is a sophisticated Entity that was advised by experienced
counsel and, to the extent it deemed necessary, other advisors in connection
with this Agreement. Each of the parties hereby acknowledges that (a) none of
the parties has relied or will rely in respect of this Agreement or the
transactions contemplated hereby upon any document or written or oral
information previously furnished to or discovered by it or its representatives,
other than this Agreement (or such of the foregoing as are delivered at the
Closing), (b) there are no covenants or agreements by or on behalf of any party
or any of its respective Affiliates or representatives other than those
expressly set forth in this Agreement and the Collateral Documents, and (c) the
parties' respective rights and obligations with respect to this Agreement and
the events giving rise thereto will be solely as set forth in this Agreement and
the Collateral Documents. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THIS AGREEMENT AND ANY COLLATERAL DOCUMENT, NONE OF THE PARTIES
MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY DISCLAIMS ANY
OTHER REPRESENTATIONS OR
-43-
WARRANTIES MADE BY ITSELF OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
FINANCIAL AND LEGAL ADVISORS OR OTHER REPRESENTATIVES, WITH RESPECT TO THE
EXECUTION AND DELIVERY OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR THE OTHER'S
REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY
ONE OR MORE OF THE FOREGOING.
9.10 Assignment. This Agreement shall not be assignable by any party and
----------
any such assignment shall be null and void, except that it shall inure to the
benefit of and be binding upon any successor to any party by operation of law,
including by way of merger, consolidation or sale of all or substantially all of
its assets, and ATC and ATI may assign its rights and remedies hereunder to any
bank or other financial institution which has loaned funds or otherwise extended
credit to it.
9.11 Parties in Interest. This Agreement shall be binding upon and inure
-------------------
solely to the benefit of each party, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any Person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement, except as
otherwise provided in Sections 6.9, 6.12, 6.14 and 9.10.
9.12 Non-Survival of Representations, Warranties, Covenants and Agreements.
---------------------------------------------------------------------
None of the representations, warranties, covenants and agreements in this
Agreement shall survive the Merger, and after effectiveness of the Merger
neither party nor any of its respective officers, directors or stockholders
shall have any further obligation with respect thereto. This Section shall not
limit any covenant or agreement of the parties which by its terms contemplates
performance after the Effective Time.
9.13 Mutual Drafting. This Agreement is the result of the joint efforts of
---------------
Target and ATC, and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of the parties and there shall be no
construction against any party based on any presumption of that party's
involvement in the drafting thereof.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
-44-
IN WITNESS WHEREOF, the parties have executed this Agreement or caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first written above.
American Tower Corporation
By:
---------------------------------
Name:
Title:
American Towers, Inc.
By:
---------------------------------
Name:
Title:
OMNIAMERICA, INC.
By:
---------------------------------
Name:
Title:
-45-
APPENDIX A
DEFINITIONS
AFFILIATE, AFFILIATED shall mean, with respect to any Person, (a) any other
Person at the time directly or indirectly controlling, controlled by or under
direct or indirect common control with such Person, (b) any other Person of
which such Person at the time owns, or has the right to acquire, directly or
indirectly, five percent (5%) or more of any class of the capital stock or
beneficial interest, (c) any other Person which at the time owns, or has the
right to acquire, directly or indirectly, five percent (5%) or more of any class
of the capital stock or beneficial interest of such Person, (d) any executive
officer or director of such Person, (e) with respect to any partnership, joint
venture or similar Entity, any general partner thereof, and (f) when used with
respect to an individual, shall include any member of such individual's
Immediate Family or a family trust.
AGREEMENT shall mean this Agreement as originally in effect, including,
unless the context otherwise specifically requires, this Appendix A, the Target
Disclosure Schedule, and all exhibits hereto, and as any of the same may from
time to time be supplemented, amended, modified or restated in the manner herein
or therein provided.
ALTERNATIVE TRANSACTION shall mean a transaction or series of related
transactions (other than the Transactions) resulting in or likely to result in
(a) any Change of Control of Target, (b) any merger, consolidation or other
business combination of Target, regardless of whether Target is the surviving
Entity unless the surviving Entity remains obligated under this Agreement to the
same extent as Target was, (c) any tender offer or exchange offer for, or any
acquisition of, any securities of Target, (d) any sale or other disposition of
all or any substantial part of the assets or business of Target, (e) any issue
or sale, or any agreement to issue or sell, any capital stock, Convertible
Securities or Option Securities of Target that could result in a Change of
Control of Target.
APPLICABLE LAW shall mean any Law of any Authority, whether domestic or
foreign, including without limitation the FCA and all federal and state
securities and Environmental Laws, to which a Person is subject or by which it
or any of its business or operations is subject or any of its property or assets
is bound.
ATC shall have the meaning given to it in the Preamble.
ATC COMMON STOCK shall have the meaning given to it in Section 3.1.
ATC FINANCIAL STATEMENTS shall have the meaning given to it in Section 5.2.
ATC OPTION PLAN shall have the meaning given to it in Section 5.5.
ATC OPTIONS shall have the meaning given to it in Section 6.9.
ATC REGISTRATION STATEMENT shall have the meaning given to it in Section
6.11(a).
ATC SEC DOCUMENTS shall have the meaning given to it in Section 5.2.
ATC TRANSACTION PROSPECTUS shall have the meaning given to it in Section
6.11(c).
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ATC VOTING AGREEMENT shall have the meaning given to it in Section 7.3(i).
ATC'S KNOWLEDGE (or words of similar import) shall mean the actual
knowledge of any director or executive officer of ATC or ATI, as such knowledge
exists on the date of this Agreement, after reasonable review of appropriate ATC
and ATI records and after reasonable inquiry of appropriate ATC and ATI
employees.
ATI shall have the meaning given to it in the Preamble.
AUTHORITY shall mean any governmental or quasi-governmental authority,
whether administrative, executive, judicial, legislative or other, or any
combination thereof, including without limitation any federal, state,
territorial, county, municipal or other government or governmental or quasi-
governmental agency, arbitrator, authority, board, body, branch, bureau, or
comparable agency or Entity, commission, corporation, court, department,
instrumentality, mediator, panel, system or other political unit or subdivision
or other Entity of any of the foregoing, whether domestic or foreign, including
without limitation the FCC.
BUSINESS PLAN shall have the meaning given to it in Section 6.6.
CERTIFICATE shall have the meaning given to it in Section 3.1.
CHANGE OF CONTROL shall mean the acquisition, directly or indirectly, by
any Person or group (as such term is used in Section 13(d)(3) of the Exchange
Act) of twenty percent (20%) or more of the Target Common Stock.
CLAIMS shall mean any and all debts, liabilities, obligations, losses,
damages, deficiencies, assessments and penalties, together with all Legal
Actions, pending or threatened, claims and judgments of whatever kind and nature
relating thereto, and all fees, costs, expenses and disbursements (including
without limitation reasonable attorneys' and other legal fees, costs and
expenses) relating to any of the foregoing.
CLOSING shall have the meaning given to it in Section 2.2.
CLOSING DATE shall have the meaning given to it in Section 2.2.
COBRA shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, as set forth in Section 4980B of the Code and Part 6 of
Subtitle B of Title I of ERISA.
CODE shall mean the Internal Revenue Code of 1986, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
Law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
COLLATERAL DOCUMENTS shall mean the Registration Rights Agreement, the
Target Investment Letters, the Certificate of Merger and the Voting Agreement.
CONFIDENTIAL INFORMATION shall have the meaning given to it in Section
6.1(a).
CONTRACT, CONTRACTUAL OBLIGATION shall mean any agreement, arrangement,
commitment, contract, covenant, indemnity, undertaking or other obligation or
liability to which Target is a party or to which it or any of the Target Assets
is subject.
CONTROL (including the terms "controlled," "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction
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of the management or policies of a Person, or the disposition of such Person's
assets or properties, whether through the ownership of stock, equity or other
ownership, by contract, arrangement or understanding, or as trustee or executor,
by contract or credit arrangement or otherwise.
CONVERTIBLE SECURITIES shall mean any evidences of indebtedness, shares of
capital stock (other than common stock) or other securities directly or
indirectly convertible into or exchangeable for shares of common stock, whether
or not the right to convert or exchange thereunder is immediately exercisable or
is conditioned upon the passage of time, the occurrence or non-occurrence or
existence or non-existence of some other Event, or both.
DCL shall have the meaning given to it in Section 2.1.
DISTRIBUTION shall mean, with respect to any Person, (a) the declaration or
payment of any dividend (except dividends payable in common stock of such
Person) on or in respect of any shares of any class of capital stock of such
Person or any shares of capital stock of any Subsidiary owned by a Person other
than such Person or a Subsidiary of such Person, (b) the purchase, redemption or
other retirement of any shares of any class of capital stock of such Person or
any shares of capital stock of any Subsidiary of such Person owned by a Person
other than such Person or a Subsidiary of such Person, and (c) any other
distribution on or in respect of any shares of any class of capital stock of
such Person or any shares of capital stock of any Subsidiary of such Person
owned by a Person other than such Person or a Subsidiary of such Person.
D&O INSURANCE shall have the meaning given to it in Section 6.2(c).
EFFECTIVE TIME shall have the meaning given to it in Section 2.3.
EMPLOYMENT ARRANGEMENT shall mean any employment, consulting, retainer,
severance or similar contract, agreement, plan, or arrangement (exclusive of any
which is terminable within thirty (30) days without liability, penalty or
payment of any kind by Target or any of its Affiliates), or providing for
severance, termination payments, or for deferred compensation, profit-sharing,
bonuses, stock options, stock purchase or appreciation rights or other forms of
incentive compensation, or post-retirement insurance, compensation or benefits,
or any collective bargaining or other labor agreement, whether or not any of the
foregoing is subject to the provisions of ERISA, but only to the extent that it
covers or relates to any officer, employee or other Person involved in the
ownership or operation of the Target Assets or the conduct of the Target
Business or, as the case may be, the assets of ATC or the conduct of the
business of ATC.
ENCUMBER shall mean to suffer, accept, agree to or permit the imposition of
a Lien.
ENTITY shall mean any corporation, firm, unincorporated organization,
association, partnership, limited liability company, trust (inter vivos or
testamentary), estate of a deceased, insane or incompetent individual, business
trust, joint stock company, joint venture or other organization, entity or
business, whether acting in an individual, fiduciary or other capacity, or any
Authority.
ENVIRONMENTAL LAW shall mean any applicable Law relating to or otherwise
imposing liability or standards of conduct concerning pollution or protection of
the environment, including without limitation Laws relating to emissions,
discharges, releases or threatened releases of Hazardous Materials into the
environment (including, without limitation, ambient air, surface water, ground
water, mining or reclamation or mined land, land surface or subsurface strata)
or otherwise relating to the manufacture, processing, generation, distribution,
use, treatment, storage, disposal, cleanup, transport or handling of Hazardous
Materials. Environmental Laws shall include without limitation, to the extent
applicable, the Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. Section 6901 et seq.), the Hazardous Material Transportation Act
-- ---
(49 U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery Act (42
-- ---
A-3
U.S.C. Section 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
-- ---
Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the
-- --- -- ---
Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.),the Federal
-- ---
Insecticide Fungicide and Rodenticide Act (7 U.S.C. Section 136 et seq.), and
-- ---
the Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. Section 1201
et seq.), and any analogous and applicable federal, state, local or foreign
-- ---
Laws, and the rules and regulations promulgated thereunder and in effect on the
date hereof, and any reference to any statutory or regulatory provision shall be
deemed to be a reference to any successor statutory or regulatory provision.
ENVIRONMENTAL PERMIT shall mean any Governmental Authorization required by
or pursuant to any Environmental Law.
ENVIRONMENTAL REPORT shall have the meaning given to it in Section 4.18.
ERISA shall mean the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, all as from time to time in effect, or any
successor law, rules or regulations, and any reference to any statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
ERISA AFFILIATE shall mean any Person that is treated as a single employer
with Target under Sections 414(b), (c), (m) or (o) of the Code or Section
4001(b)(1) of ERISA.
EVENT shall mean the existence or occurrence of any act, action, activity,
circumstance, condition, event, fact, failure to act, omission, incident or
practice, or any set or combination of any of the foregoing.
EXCHANGE ACT shall mean the Securities Exchange Act of 1934, and the rules
and regulations thereunder, all as from time to time in effect, or any successor
Law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
EXCHANGE AGENT shall have the meaning given to it in Section 3.2(a).
EXCHANGE AGENT AGREEMENT shall have the meaning given to it in Section
3.2(a).
EXCHANGE RATIO shall have the meaning given to it in Section 3.1.
FAIR MARKET VALUE shall mean, with respect to the ATC Common Stock, (a) the
average of the high and low reported sales prices, regular way, or, in the event
that no sale takes place on any day, the average of the reported high and low
bid and asked prices, regular way, in either case as reported on the principal
stock exchange on which such stock is listed, or, if not so listed, on the
Nasdaq National Market System; or (b) if such stock is not so listed, (i) the
average of the high and low bid and high and low asked prices on such day in the
over-the-counter market as reported by Nasdaq, or (ii) if bid and asked prices
for such security on any day shall not have been reported through Nasdaq, the
average of the bid and asked prices for such day as furnished by any New York
Stock Exchange member firm regularly making a market in such security selected
for such purpose by ATC; or (c) if such security is not publicly traded, as
determined by an independent investment banking firm selected by ATC whose fees
and expenses shall be borne by ATC.
FCA shall mean the Communications Act of 1934, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
Law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
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FCC shall mean the Federal Communications Commission and shall include any
successor Authority.
GAAP shall mean generally accepted accounting principles applied on a
consistent basis, (i) as set forth in Opinions of the Accounting Principles
Board of the American Institute of Certified Public Accountants ("AICPA") and/or
in statements of the Financial Accounting Standards Board that are applicable in
the circumstances as of the date in question, (ii) when not inconsistent with
such opinions and statements, as set forth in other AICPA publications and
guidelines and/or (iii) that otherwise arise by custom for the particular
industry, all as the same shall exist on the date of this Agreement.
GOVERNMENTAL AUTHORIZATIONS shall mean all approvals, concessions,
consents, franchises, licenses, permits, plans, registrations and other
authorizations of all Authorities, including without limitation the FCA and the
Federal Aviation Administration, in connection with the ownership or operation
of the Target Assets or the conduct of the Target Business.
GOVERNMENTAL FILINGS shall mean all filings, including franchise and
similar Tax filings, and the payment of all fees, assessments, interest and
penalties associated with such filings, with all Authorities.
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ACT shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Improvement Act of
1976, as from time to time in effect, or any successor Law, and any reference to
any statutory provision shall be deemed to be a reference to any successor
statutory provision.
HAZARDOUS MATERIALS shall mean and include any substance, material, waste,
constituent, compound, chemical (in whatever state of matter): (a) the presence
of which requires investigation or remediation under any applicable
Environmental Law; or (b) that is defined as a "hazardous waste" or "hazardous
substance" under any applicable Environmental Law; or (c) that is toxic,
explosive, corrosive, etiologic, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is regulated with respect to
its impact on the environment by any applicable Authority or regulated by any
applicable Environmental Law; or (d) that contains gasoline, diesel fuel or
other petroleum hydrocarbons, or any by-products or fractions thereof, natural
gas, polychlorinated biphenyls ("PCBs") and PCB-containing equipment, radon or
other radioactive elements, lead, asbestos or asbestos-containing materials
("ACM"), or urea formaldehyde foam insulation.
IMMEDIATE FAMILY shall mean, with respect to any individual, his or her
spouses, past or present, children, parents and siblings, and any of the spouses
of the foregoing, past or present, in all cases whether related by blood, by
adoption or by marriage.
INDEBTEDNESS shall mean, with respect to any Person, (a) all items, except
items of capital stock or of surplus or of general contingency or deferred tax
reserves or any minority interest in any Subsidiary of such Person to the extent
such interest is treated as a liability with indeterminate term on the
consolidated balance sheet of such Person, which in accordance with GAAP would
be included in determining total liabilities as shown on the liability side of a
balance sheet of such Person, (b) all obligations secured by any Lien to which
any property or asset owned or held by such Person is subject, whether or not
the obligation secured thereby shall have been assumed, and (c) to the extent
not otherwise included, all Contractual Obligations of such Person constituting
capitalized leases and all obligations of such Person with respect to Leases
constituting part of a sale and leaseback arrangement.
INDEBTEDNESS FOR MONEY BORROWED shall mean, with respect to Target, money
borrowed and Indebtedness represented by notes payable and drafts accepted
representing extensions of credit, all obligations evidenced by bonds,
debentures, notes or other similar instruments, the maximum amount currently or
at any time thereafter available to be drawn under all outstanding letters of
credit issued for the
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account of such Person, all Indebtedness upon which interest charges are
customarily paid by such Person, and all Indebtedness (including capitalized
lease obligations) issued or assumed as full or partial payment for property or
services, whether or not any such notes, drafts, obligations or Indebtedness
represent Indebtedness for money borrowed, but shall not include (a) trade
payables, (b) expenses accrued in the ordinary course of business, (c) customer
advance payments and customer deposits received in the ordinary course of
business, or (d) conditional sales agreements not prohibited by the terms of
this Agreement.
LAW shall mean any (a) administrative, judicial, legislative or other
action, code, consent decree, constitution, decree, directive, enactment,
finding, law, injunction, interpretation, judgment, order, ordinance, policy
statement, proclamation, promulgation, regulation, requirement, rule, rule of
law, rule of public policy, settlement agreement, statute, or writ of any
Authority, domestic or foreign, as in effect on the date hereof; (b) the common
law, or other legal precedent; or (c) arbitrator's, mediator's or referee's
award, decision, finding or recommendation.
LEASE shall mean any lease of property, whether real, personal or mixed,
and all amendments thereto, and shall include without limitation all use or
occupancy agreements.
LEGAL ACTION shall mean, with respect to any Person, any and all litigation
or legal or other actions, arbitrations, counterclaims, investigations,
proceedings, requests for material information by or pursuant to the order of
any Authority or suits, at law or in arbitration, equity or admiralty, whether
or not purported to be brought on behalf of such Person, affecting such Person
or any of such Person's business, property or assets.
LIEN shall mean any of the following: mortgage; lien (statutory or other);
or other security agreement, arrangement or interest; hypothecation, pledge or
other deposit arrangement; assignment; charge; levy; executory seizure;
attachment; garnishment; encumbrance (including any easement, exception,
reservation or limitation, right of way, and the like); conditional sale, title
retention or other similar agreement, arrangement, device or restriction;
preemptive or similar right; any financing lease involving substantially the
same economic effect as any of the foregoing; the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction; restriction on sale, transfer, assignment, disposition or other
alienation; or any option, equity, claim or right of or obligation to, any other
Person, of whatever kind and character.
MATERIAL, MATERIALLY OR MATERIALITY for the purposes of this Agreement,
shall, unless specifically stated to the contrary, be determined without regard
to the fact that various provisions of this Agreement set forth specific dollar
amounts, but shall be determined with regard to the relevant party and its
Subsidiaries, taken as a whole.
MATERIAL ADVERSE EFFECT shall mean an Event that has an effect which is
materially adverse to the business or financial condition of ATC and its
Subsidiaries, taken as a whole, or Target and its Subsidiaries, taken as a
whole, as the case may be..
MATERIAL AGREEMENT shall mean, with respect to Target, any Contractual
Obligation which (a) was not entered into in the ordinary course of business,
(b) was entered into in the ordinary course of business which (i) involved the
purchase, sale or lease of goods or materials, or purchase of services,
aggregating more than $100,000 annually during any of the last three fiscal
years, or (ii) involves the leasing of space on any tower of Target, (c)
involves a capitalized lease obligation or Indebtedness for Money Borrowed, (d)
is or otherwise constitutes a written agency, broker, dealer, license,
distributorship, sales representative or similar written agreement involving
annual payments in excess of $100,000, (e) accounted for more than three percent
(3%) of the revenues of the Target Business in any of the last three fiscal
years or is likely to
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account for more than three percent (3%) of revenues of the Target Business
during the current fiscal year, or (f) involves the management by Target of any
communication tower of any other Person.
MERGER shall have the meaning given to it in the first Whereas paragraph.
MERGER CONSIDERATION shall have the meaning given to it in Section 3.1.
MULTIEMPLOYER PLAN shall mean a Plan which is a "multiemployer plan" within
the meaning of Section 4001(a)(3) of ERISA.
OPTION SECURITIES shall mean all stock appreciation rights, rights, options
and warrants, and calls or commitments evidencing the right, to subscribe for,
purchase or otherwise acquire shares of capital stock or Convertible Securities,
whether or not the right to subscribe for, purchase or otherwise acquire is
immediately exercisable or is conditioned upon the passage of time, the
occurrence or non-occurrence or the existence or non-existence of some other
Event.
ORGANIC DOCUMENT shall mean, with respect to a Person which is a
corporation, its charter, its by-laws and all shareholder agreements, voting
trusts and similar arrangements applicable to any of its capital stock and, with
respect to a Person which is a partnership, its agreement and certificate of
partnership, any agreements among partners, and any management and similar
agreements between the partnership and any general partners (or any Affiliate
thereof).
PBGC shall mean the Pension Benefit Guaranty Corporation and any Entity
succeeding to any or all of its functions under ERISA.
PERMITTED LIENS shall mean (a) Liens for current Taxes not yet due and
payable, (b) such imperfections of title, easements, encumbrances and mortgages
or other Liens, if any, as are not, individually or in the aggregate, material
in character, amount or extent and do not materially detract from the value, or
materially interfere with the present use, of the property subject thereto or
affected thereby, or otherwise materially impair the conduct of the Target
Business and (c) in the case of Target, any Liens pursuant to the Target Credit
Agreements, and, in the case of ATC, the credit facilities of ATC and its
Subsidiaries.
PERSON shall mean any natural individual or any Entity.
PERSONAL PROPERTY shall mean all of the machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant, inventory,
spare parts and other tangible personal property which are owned or leased by
Target and used or useful as of the date hereof in the conduct of the business
or operations of the Target Business, plus such additions thereto and deletions
therefrom arising in the ordinary course of business between the date hereof and
the Closing Date.
PLAN shall mean, with respect to any Person and at a particular time, any
employee benefit plan which is covered by ERISA and in respect of which such
Person or an ERISA Affiliate is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA, but only to the extent that it covers or relates to any
officer, employee or other Person involved in the ownership and operation of the
Target Assets or the conduct of the business of the Target Business.
PRIVATE AUTHORIZATIONS shall mean all approvals, concessions, consents,
franchises, licenses, permits, and other authorizations of all Persons (other
than Authorities) including without limitation those with respect to
intellectual property.
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REAL PROPERTY shall mean all of the fee estates and buildings and other
fixtures and improvements thereon, leasehold interests, easements, licenses,
rights to access, rights-of-way, and other real property interests which are
owned or used by Target as of the date hereof, in the operations of the Target
Business, plus such additions thereto and deletions therefrom arising in the
ordinary course of business between the date hereof and the Closing Date.
REGISTRATION RIGHTS AGREEMENT shall have the meaning given to it in Section
7.2(f).
REGULATIONS shall mean the federal income tax regulations promulgated under
the Code, as such Regulations may be amended from time to time. All references
herein to specific sections of the Regulations shall be deemed also to refer to
any corresponding provisions of succeeding Regulations, and all references to
temporary Regulations shall be deemed also to refer to any corresponding
provisions of final Regulations.
REPRESENTATIVES shall have the meaning given to it in Section 6.1(a).
RESTRICTED TRANSACTION shall mean any (i) acquisition or agreement to
acquire (x) by merging or consolidating with, or by purchasing a substantial
portion of the assets of, or by any other manner, any business or any Person or
other business organization or division thereof or (y) any assets (other than in
the ordinary course of business which for purposes of this definition does not
include the acquisition of communications sites and related assets and other
business involved in the communications sites industry or the construction of
communications towers and related assets), or (ii) any undertaking or agreement
to undertake the construction of one or more communications towers.
SEC shall mean the Securities and Exchange Commission and shall include any
successor Authority.
SECURITIES ACT shall mean the Securities Act of 1933, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
Law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
SUBSIDIARY shall mean, with respect to a Person, any Entity a majority of
the capital stock ordinarily entitled to vote for the election of directors of
which, or if no such voting stock is outstanding, a majority of the equity
interests of which, is owned directly or indirectly, legally or beneficially, by
such Person or any other Person controlled by such Person.
SUPERIOR PROPOSAL shall mean an Alternative Transaction that the Board of
Directors of Target determines in good faith, based on the advice of independent
counsel and Target's independent financial advisors, contains terms and
conditions, including likelihood of consummation, that are materially more
favorable to the Target stockholders that those set forth in this Agreement (as
ATC may have proposed to amend it pursuant to the provisions of Section 6.5(d)).
SURVIVING CORPORATION shall have the meaning given to it in Section 2.1.
TARGET shall have the meaning given to it in the Preamble.
TARGET ASSETS shall have the meaning given to it in Section 4.4(a), and
shall include as appropriate, the assets of Target's Subsidiaries, as
contemplated by Section 4.4(a) and the final sentence of Section 4.1(d).
TARGET BUSINESS shall have the meaning given to it in Section 4.4(b), and
shall include as appropriate, the businesses of Target's Subsidiaries, as
contemplated by Section 4.4(a) and the final sentence of Section 4.1(d).
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TARGET CREDIT AGREEMENTS shall have the meaning given to it in Section 7.2.
TARGET COMMON STOCK shall have the meaning given to it in Section 3.1.
TARGET DISCLOSURE SCHEDULE shall mean the Target Disclosure Schedule dated
as of the date hereof and heretofore delivered by Target to ATC.
TARGET EMPLOYEES shall have the meaning given to it in Section 4.14.
TARGET FINANCIAL STATEMENTS shall have the meaning given to it in Section
4.2.
TARGET INFORMATION STATEMENT shall mean the information statement to be
filed with the SEC by Target in the event Target does not solicit proxies under
the Exchange Act and is not, therefore, required to file the Target Proxy
Statement.
TARGET INVESTMENT LETTERS shall have the meaning given to it in Section
7.2(g).
TARGET OPTIONS shall have the meaning given to it in Section 6.9.
TARGET PROXY STATEMENT shall have the meaning given to it in Section
6.11(b).
TARGET SEC DOCUMENTS shall have the meaning given to it in Section 4.2.
TARGET STOCKHOLDER APPROVAL shall have the meaning given it in Section
6.10.
TARGET STOCKHOLDERS MEETING shall have the meaning given it in Section
6.10.
TARGET'S KNOWLEDGE (or words of similar import) shall mean the actual
knowledge of any Target director or officer, as such knowledge exists on the
date of this Agreement, after reasonable review of appropriate Target records
and after reasonable inquiry of appropriate Target employees.
TAX (and "Taxable", which shall mean subject to Tax), shall mean, with
respect to any Person, (a) all taxes (domestic or foreign), including without
limitation any income (net, gross or other including recapture of any tax items
such as investment tax credits), alternative or add-on minimum tax, gross
income, gross receipts, gains, sales, use, leasing, lease, user, ad valorem,
transfer, recording, franchise, profits, property (real or personal, tangible or
intangible), fuel, license, withholding on amounts paid to or by such Person,
payroll, employment, unemployment, social security, excise, severance, stamp,
occupation, premium, environmental or windfall profit tax, custom, duty or other
tax, or other like assessment or charge of any kind whatsoever, together with
any interest, levies, assessments, charges, penalties, additions to tax or
additional amount imposed by any Taxing Authority, (b) any joint or several
liability of such Person with any other Person for the payment of any amounts of
the type described in (a), and (c) any liability of such Person for the payment
of any amounts of the type described in (a) as a result of any express or
implied obligation to indemnify any other Person.
TAX RETURN OR RETURNS shall mean all returns, consolidated or otherwise
(including without limitation information returns), required to be filed with
any Authority with respect to Taxes.
TAXING AUTHORITY shall mean any Authority responsible for the imposition of
any Tax.
TERMINATION DATE shall have the meaning given to it in Section 8.1.
TRANSACTIONS shall mean the transactions contemplated to be consummated on
or prior to the Closing Date, including without limitation the Merger and the
execution, delivery and performance of the Collateral Documents.
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