EXHIBIT 10.1
AGREEMENT AND PLAN OF MERGER
DATED AS OF OCTOBER 5, 1999
AMONG
ACC ACQUISITION LLC,
a Delaware limited liability company
ACC ACQUISITION CO.,
a Delaware corporation
AND
AMERICAN CELLULAR CORPORATION,
a Delaware corporation
TABLE OF CONTENTS
Page
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ARTICLE I. THE MERGER..................................................................................... 1
1.1 The Merger.......................................................................................... 1
1.2 Closing............................................................................................. 2
1.3 Effective Time...................................................................................... 2
1.4 Effects of the Merger............................................................................... 2
1.5 Certificate of Incorporation........................................................................ 2
1.6 Bylaws.............................................................................................. 2
1.7 Directors and Officers.............................................................................. 2
1.8 Effect on Capital Stock............................................................................. 3
1.9 Surrender and Payment; Dissenting Shares............................................................ 4
ARTICLE II. REPRESENTATIONS AND WARRANTIES................................................................ 7
2.1 Representations and Warranties of the Company....................................................... 7
2.2 Representations and Warranties of Buyer............................................................. 19
2.3 Representations and Warranties of Buyer and Merger Sub.............................................. 22
ARTICLE III. COVENANTS RELATING TO CONDUCT OF BUSINESS.................................................... 22
3.1 Covenants of the Company............................................................................ 22
3.2 Covenants of Buyer and Merger Sub................................................................... 25
3.3 Advice of Changes................................................................................... 26
3.4 Control of Other Party's Business................................................................... 26
ARTICLE IV. ADDITIONAL AGREEMENTS......................................................................... 26
4.1 Company Stockholders Meeting........................................................................ 26
4.2 Access to Information............................................................................... 27
4.3 Cooperation; Filings and Approvals.................................................................. 27
4.4 No Shopping......................................................................................... 29
4.5 Employee Benefits................................................................................... 30
4.6 Fees and Expenses................................................................................... 30
4.7 Indemnification; Directors' and Officers' Insurance................................................. 31
4.8 Public Announcements................................................................................ 32
4.9 FCC Application..................................................................................... 32
4.10 Financing........................................................................................... 33
4.11 Termination of Equity Documents..................................................................... 34
4.12 Further Assurances.................................................................................. 34
ARTICLE V. CONDITIONS PRECEDENT........................................................................... 34
5.1 Conditions to Each Party's Obligation to Effect the Merger.......................................... 34
5.2 Conditions to the Obligations of Buyer and Merger Sub to Effect the Merger.......................... 35
5.3 Conditions to the Obligations of the Company to Effect the Merger................................... 37
ARTICLE VI. TERMINATION AND AMENDMENT..................................................................... 37
6.1 Termination......................................................................................... 37
6.2 Effect of Termination............................................................................... 39
6.3 Amendment........................................................................................... 40
6.4 Extension; Waiver................................................................................... 40
ARTICLE VII. GENERAL PROVISIONS........................................................................... 41
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7.1 Non-Survival of Representations, Warranties and Agreements; No Other Representations and Warranties.. 41
7.2 Notices.............................................................................................. 41
7.3 Interpretation....................................................................................... 43
7.4 Counterparts......................................................................................... 43
7.5 Entire Agreement; No Third Party Beneficiaries....................................................... 43
7.6 Governing Law; Jurisdiction; Waiver of Jury Trial.................................................... 44
7.7 Severability......................................................................................... 44
7.8 Assignment........................................................................................... 45
7.9 Enforcement.......................................................................................... 45
7.10 Definitions.......................................................................................... 45
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GLOSSARY OF DEFINED TERMS
Location of
Definition Defined Term
Acquisition Proposal.....................................................................Section 4.4
Action................................................................................Section 5.2(e)
Agreement...................................................................................Preamble
Bank.................................................................................Section 4.10(a)
Bank Commitment Letter.............................................................Section 2.2(g)(i)
Bank Credit Facility.................................................................Section 4.10(a)
Bank Financing Failure...................................................................Section 6.2
Board of Directors...................................................................Section 7.10(a)
Business Day.........................................................................Section 7.10(b)
Buyer.......................................................................................Preamble
Buyer Disclosure Schedule................................................................Section 2.2
Buyer SEC Reports.....................................................................Section 2.2(c)
Certificate of Merger....................................................................Section 1.3
CMRS.............................................................................Section 2.1(e)(iii)
Class A Common Stock..................................................................Section 1.8(c)
Class B Common Stock..................................................................Section 1.8(d)
Closing..................................................................................Section 1.2
Closing Date.............................................................................Section 1.2
Code..................................................................................Section 1.9(h)
Commitment Letter....................................................................Section 4.10(a)
Common Stock Purchase Price...........................................................Section 1.8(c)
Communications Act...............................................................Section 2.1(c)(iii)
Company.....................................................................................Preamble
Company 10-K.......................................................................Section 2.1(d)(i)
Company Benefit Plans..............................................................Section 2.1(k)(i)
Company Board...............................................................................Recitals
Company Common Stock..................................................................Section 1.8(d)
Company Disclosure Schedule..............................................................Section 2.1
Company Permits.......................................................................Section 2.1(l)
Company SEC Reports................................................................Section 2.1(d)(i)
Company Stockholders Meeting..........................................................Section 4.1(a)
Company Voting Debt..............................................................Section 2.1(b)(iii)
Confidentiality Agreement................................................................Section 4.2
Definitive Financing Agreements......................................................Section 4.10(b)
Delaware Secretary of State..............................................................Section 1.3
DGCL........................................................................................Recitals
Direct Preferred Stock Purchase.......................................................Section 1.8(e)
Dissenting Shares.....................................................................Section 1.9(i)
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Effective Time...........................................................................Section 1.3
ERISA..............................................................................Section 2.1(k)(i)
Exchange Act.......................................................................Section 2.1(d)(i)
Exchange Agent........................................................................Section 1.9(a)
Executive Agreements..............................................................Section 2.1(b)(iv)
Expenses.................................................................................Section 4.6
Extension Conditions..................................................................Section 6.1(b)
FAA................................................................................Section 2.1(f)(i)
FCC......................................................................................Section 1.1
FCC Application.......................................................................Section 4.9(a)
FCC Licenses.......................................................................Section 2.1(e)(i)
FCC Transfer Approvals................................................................Section 5.1(d)
Final Order...........................................................................Section 5.2(c)
Financing............................................................................Section 4.10(a)
GAAP..............................................................................Section 2.1(d)(ii)
Governmental Entity..............................................................Section 2.1(c)(iii)
Grant Agreements......................................................................Section 1.8(d)
HSR Act..........................................................................Section 2.1(c)(iii)
Indemnified Party.....................................................................Section 4.7(a)
Intellectual Property................................................................Section 7.10(c)
Investment Agreement..............................................................Section 2.1(c)(ii)
Laredo Joint Venture..................................................................Section 2.1(r)
Liens.............................................................................Section 2.1(b)(ii)
Liquidated Damages Amount................................................................Section 6.2
Majority Holders............................................................................Recitals
Material Adverse Effect..............................................................Section 7.10(d)
Material Contracts....................................................................Section 2.1(j)
Merger......................................................................................Recitals
Merger Consideration..................................................................Section 1.8(e)
Merger Sub..................................................................................Preamble
Xxxxxxx Xxxxx.........................................................................Section 2.1(n)
Organizational Documents.............................................................Section 7.10(e)
Outside Date..........................................................................Section 6.1(b)
Outstanding Indebtedness...........................................................Section 2.1(b)(v)
Payment Fund..........................................................................Section 1.9(a)
Pending Acquisitions..................................................................Section 2.1(r)
Pending Dispositions..................................................................Section 2.1(r)
Pending Transaction Documents.........................................................Section 2.1(r)
Person...............................................................................Section 7.10(f)
Preferred Stock Liquidation Preference................................................Section 1.8(e)
Proxy Statement.......................................................................Section 4.1(b)
Real Property.........................................................................Section 2.1(s)
Repurchase Option.....................................................................Section 1.8(d)
Required Company Vote.................................................................Section 2.1(m)
Required Regulatory Approvals.........................................................Section 5.1(c)
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SEC................................................................................Section 2.1(d)(i)
Securities Act.....................................................................Section 2.1(d)(i)
Senior Notes.........................................................................Section 4.10(a)
Series A Preferred Stock..............................................................Section 1.8(e)
Stay Bonuses.....................................................................Section 2.1(b)(vii)
Subsidiary...........................................................................Section 7.10(g)
Superior Proposal.....................................................................Section 4.4(b)
Surviving Corporation....................................................................Section 1.1
Surviving Corporation Common Stock....................................................Section 1.8(a)
Tax..................................................................................Section 7.10(h)
Taxable..............................................................................Section 7.10(h)
Taxes................................................................................Section 7.10(h)
Tax Return...........................................................................Section 7.10(h)
Terminating Buyer Breach..............................................................Section 6.1(f)
Terminating Company Breach............................................................Section 6.1(e)
Transaction Fees and Expenses....................................................Section 2.1(b)(vii)
Unrestricted Equity Agreement.....................................................Section 2.2(g)(ii)
Violation.........................................................................Section 2.1(c)(ii)
Voting Agreement............................................................................Recitals
WARN..................................................................................Section 3.3(f)
Written Consent of Shareholders.......................................................Section 2.1(m)
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THIS AGREEMENT AND PLAN OF MERGER, dated as of October 5, 1999 (this
"Agreement"), is among ACC Acquisition LLC, a Delaware limited liability company
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("Buyer"), ACC Acquisition Co., a Delaware corporation and a wholly owned
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subsidiary of Buyer ("Merger Sub"), and American Cellular Corporation, a
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Delaware corporation (the "Company").
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WHEREAS, the Board of Managers of Buyer, the Board of Directors of
Merger Sub and the Board of Directors of the Company (the "Company Board") have
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each approved the acquisition of the Company by Buyer upon the terms and subject
to the conditions of this Agreement pursuant to which, among other things,
Merger Sub will merge with and into the Company (the "Merger") in accordance
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with the General Corporation Law of the State of Delaware (the "DGCL"), and have
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each unanimously declared this Agreement and the transactions contemplated
hereby, including the Merger, to be advisable and in the best interests of the
members of Buyer and the stockholders of each of Merger Sub and the Company;
WHEREAS, Buyer, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger as set forth in
this Agreement; and
WHEREAS, concurrently with the execution of this Agreement and as an
inducement to Buyer and Merger Sub to enter into this Agreement, certain
stockholders of the Company owning a majority of the Company's Class A Common
Stock ("Majority Holders") have entered into a Stockholder Voting Agreement,
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dated as of the date hereof, with Buyer and Merger Sub (the "Voting Agreement")
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pursuant to which, among other things, the Majority Holders have agreed to vote
their shares of the Company's Class A Common Stock in favor of this Agreement,
the Merger and the other transactions contemplated by this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I.
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions set forth in
this Agreement (including the approval of the Federal Communications Commission
(the "FCC")), at the Effective Time (defined below), Merger Sub shall be merged
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with and into the Company in accordance with the DGCL. Following the Merger, the
separate corporate existence of Merger Sub shall cease, and the Company shall
continue as the surviving corporation and as a wholly owned subsidiary of Buyer
(the "Surviving Corporation").
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1.2 Closing. The closing of the Merger (the "Closing") shall take place
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as soon as practicable but not later than the second business day, after
satisfaction or waiver (as permitted by this Agreement and applicable law) of
the conditions (excluding conditions that, by their terms, cannot be satisfied
until the Closing Date) set forth in Article V (the "Closing Date"), unless
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another time or date is agreed to in writing by the parties hereto. The Closing
shall be held at the offices of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxxxx 0000,
Xxx Xxxx, Xxx Xxxx 00000-0000, unless another place is agreed to in writing by
the parties hereto.
1.3 Effective Time. Upon the Closing, the parties shall file with the
Secretary of State of the State of Delaware (the "Delaware Secretary of State")
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a certificate of merger (the "Certificate of Merger"), in form and substance
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satisfactory to the Company and Buyer executed in accordance with the relevant
provisions of the DGCL and shall make all other filings, recordings or
publications required under the DGCL in connection with the Merger. The Merger
shall become effective at such time as the Certificate of Merger is duly filed
with the Delaware Secretary of State, or at such other time as the parties may
agree and specify in the Certificate of Merger (the time the Merger becomes
effective being herein referred to as the "Effective Time").
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1.4 Effects of the Merger. At and after the Effective Time, the Merger
will have the effects set forth in Section 259 of the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time all the
rights, privileges, powers and franchises of the Company and Merger Sub shall be
vested in the Surviving Corporation, and the Surviving Corporation shall become
subject to all of the restrictions, disabilities and duties of the Company and
Merger Sub.
1.5 Certificate of Incorporation. At the Effective Time and without any
further action on the part of the Company or Merger Sub, the certificate of
incorporation of the Company shall be amended in its entirety to read as the
certificate of incorporation of Merger Sub reads as in effect immediately prior
to the Effective Time and, as so amended, shall be the certificate of
incorporation of the Surviving Corporation until thereafter amended as provided
therein or by applicable law, provided that provisions therein relating to the
indemnification and exculpation of officers and directors shall be no less
favorable than those set forth in the Company's certificate of incorporation as
in effect immediately prior to the Effective Time.
1.6 Bylaws. The bylaws of Merger Sub in effect immediately prior to the
Effective Time shall be the bylaws of the Surviving Corporation until thereafter
amended as provided therein or by applicable law, provided that provisions
therein relating to the indemnification and exculpation of officers and
directors shall be no less favorable than those set forth in the Company's
bylaws as in effect immediately prior to the Effective Time.
1.7 Directors and Officers. The directors of Merger Sub immediately prior
to the Effective Time shall be the directors of the Surviving Corporation from
and after the Effective Time, until the earlier of their resignation or removal
or otherwise ceasing to be a director or until their respective successors are
duly elected and qualified, as the case may be. The officers of Merger Sub
immediately prior to the Effective Time shall be the officers of the Surviving
Corporation from and after the Effective Time, until the earlier of their
resignation or removal or
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otherwise ceasing to be an officer or until their respective successors are duly
elected and qualified, as the case may be.
1.8 Effect on Capital Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of Buyer, Merger Sub, the Company or
the holder of any shares of capital stock of Buyer, Merger Sub or the Company:
(a) Conversion of Capital Stock of Merger Sub. Each share of capital
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stock of Merger Sub outstanding immediately prior to the Effective Time shall be
converted into and become one fully paid and nonassessable share of common
stock, par value $.01 per share, of the Surviving Corporation ("Surviving
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Corporation Common Stock"). Each certificate that, prior to the Effective Time,
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represented one or more shares of capital stock of Merger Sub shall thereafter
represent that number of shares of Surviving Corporation Common Stock into which
the shares of capital stock of Merger Sub shall have been converted pursuant to
this Section 1.8(a). Each record holder of a certificate that, prior to the
Effective Time, represented one or more shares of capital stock of Merger Sub
shall receive, upon surrender of such certificate, a new certificate or
certificates evidencing and representing the number of shares of Surviving
Corporation Common Stock to which such record holder shall be entitled pursuant
to this Section 1.8(a).
(b) Cancellation of Treasury Stock and Buyer-Owned Stock. Each share
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of capital stock of the Company that is held by the Company in its treasury or
that is owned by Buyer or any Subsidiary of Buyer immediately prior to the
Effective Time shall automatically be retired and shall cease to exist, and no
Merger Consideration shall be delivered in exchange therefor.
(c) Conversion of Class A Common Stock. Subject to Section 1.9(i),
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each share of Class A Common Stock, par value $.01 per share, of the Company
(the "Class A Common Stock") (other than shares of Class A Common Stock to be
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canceled in accordance with Section 1.8(b), but including shares of Class B
Common Stock converted to Class A Common Stock in accordance with Section
1.8(d)) issued and outstanding immediately prior to the Effective Time shall be
converted into the right to receive an amount equal to $3,244.24 per share in
cash as adjusted pursuant to the last sentence of this Section 1.8(c), plus
interest thereon for the period commencing on January 1, 2000 through and
including the Closing Date at a rate of eight percent (8%) per annum (compounded
daily calculated on the basis of a 365-day year for the actual number of days
elapsed) (the "Common Stock Purchase Price"). As of the Effective Time, all such
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shares of Class A Common Stock shall no longer be outstanding and shall
automatically be retired and shall cease to exist, and each holder of a
certificate representing any such shares of Class A Common Stock shall cease to
have any rights with respect thereto, except the right to receive, upon the
surrender of such certificates, the Common Stock Purchase Price. If any shares
of Company Common Stock are repurchased pursuant to stock repurchase rights, the
Common Stock Purchase Price shall be the amount determined pursuant to the
following formula: (A) $873,956,081 minus the amount paid to repurchase shares
of Company Common Stock, plus interest on such difference for the period
commencing on January 1, 2000 through and including the Closing Date at a rate
of eight percent (8%) per annum (compounded daily
3
calculated on the basis of a 365-day year for the actual number of days
elapsed), divided by (B) the number of shares of Company Common Stock
outstanding after such repurchase.
(d) Conversion of Class B Common Stock. Subject to the terms of the
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Executive Agreements or the subscription agreement with respect thereto, as they
may be amended from time to time, identified in Section 2.1(b)(iv)(3), (4) and
(5) of the Company Disclosure Schedule (collectively, the "Grant Agreements"),
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each share of Class B Common Stock, par value $.01 per share, of the Company
(the "Class B Common Stock" and, together with the Class A Common Stock, the
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"Company Common Stock") (other than shares of Class B Common Stock to be
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canceled in accordance with Section 1.8(b)) issued and outstanding immediately
prior to the Effective Time, whether or not then vested or subject to a
repurchase option in favor of the Company (a "Repurchase Option"), shall become
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fully vested and the Repurchase Option, if any, with respect thereto shall lapse
and each such share shall automatically be converted, without any action on the
part of any holder thereof, into one share of Class A Common Stock pursuant to
and in accordance with the terms of the Grant Agreements, and shall thereupon be
subject to conversion into the right to receive the Common Stock Purchase Price
in accordance with the provisions of Section 1.8(c), less any applicable
withholding.
(e) Treatment of Series A Preferred Stock. Each share of Series A
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Preferred Stock, par value $.01 per share, of the Company (the "Series A
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Preferred Stock") (other than shares of Series A Preferred Stock to be canceled
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in accordance with Section 1.8(b)) issued and outstanding immediately prior to
the Effective Time shall be converted into the right to receive $100 per share
in cash plus an additional amount in cash equal to and representing all accrued
or accumulated but unpaid dividends thereon to and including the Effective Time
(the "Preferred Stock Liquidation Preference" and, together with the Common
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Stock Purchase Price, the "Merger Consideration"). As of the Effective Time,
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all such shares of Series A Preferred Stock shall no longer be outstanding and
shall automatically be retired and shall cease to exist, and each holder of a
certificate representing any such shares of Series A Preferred Stock shall cease
to have any rights with respect thereto, except the right to receive upon the
surrender of such certificates, the Preferred Stock Liquidation Preference.
Notwithstanding the foregoing, at the election of Buyer given on or before
October 30, 1999, the Company shall use commercially reasonable efforts (which
shall not require the Company to make any payment) to cause the holders of
Series A Preferred Stock to sell their shares of Series A Preferred Stock
directly to Buyer or its designee simultaneously with the Closing at the
Preferred Stock Liquidation Preference (the "Direct Preferred Stock Purchase").
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The agreement with respect to the Direct Preferred Stock Purchase shall provide
representations and warranties only as to title, authority to sell such shares
and absence of liens thereon and shall also provide that such sale be without
recourse (other than with respect to such representations and warranties given),
and that all representations and warranties shall be several and not joint.
1.9 Surrender and Payment; Dissenting Shares
(a) Exchange Agent. Prior to the Effective Time, Buyer shall designate
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a bank or trust company reasonably acceptable to the Company to act as agent
(the "Exchange
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Agent") for the holders of shares of Company Common Stock and Series A Preferred
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Stock in connection with the exchange of certificates representing shares of
Company Common Stock or Series A Preferred Stock in the Merger for the payment
of the Merger Consideration to which holders of shares of Company Common Stock
and Series A Preferred Stock shall become entitled pursuant to Section 1.8.
Prior to the Effective Time, Buyer or Merger Sub shall deposit with the Exchange
Agent cash in an aggregate amount equal to the sum of (i) the product of (A) the
number of shares of Company Common Stock issued and outstanding (other than
shares to be canceled pursuant to Section 1.8(b) and Dissenting Shares)
immediately prior to the Effective Time (assuming for purposes of this clause
(A) the conversion of all shares of Class B Common Stock to shares of Class A
Common Stock in accordance with Section 1.8(d)), multiplied by (B) the Common
Stock Purchase Price, plus (ii) the product of (A) the number of shares of
Series A Preferred Stock issued and outstanding (and not to be canceled pursuant
to Section 1.8(b)) immediately prior to the Effective Time, multiplied by (B)
the Preferred Stock Liquidation Preference. The deposit made by Buyer or Merger
Sub pursuant to the preceding sentence is hereinafter referred to as the
"Payment Fund." The Exchange Agent shall cause the Payment Fund to be held for
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the benefit of the holders of Company Common Stock and Series A Preferred Stock
and to be promptly applied to the payment of the Merger Consideration to such
holders. The Payment Fund shall not be used for any purpose that is not provided
for herein.
(b) Exchange Procedures. As soon as reasonably practicable after the
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Effective Time, Buyer shall, or shall cause the Exchange Agent to, provide to
each holder of record of a certificate or certificates or other instrument or
instruments which immediately prior to the Effective Time represented issued and
outstanding shares of Company Common Stock or Series A Preferred Stock, (i) a
letter of transmittal (which shall be upon customary terms and shall specify
that delivery shall be effected, and risk of loss and title to the certificate
shall pass, only upon proper delivery of such certificate to the Exchange Agent)
and (ii) instructions for use in effecting the surrender of certificates in
exchange for the Merger Consideration. Upon surrender of a certificate for
cancellation to the Exchange Agent in accordance with this Section 1.9(b),
together with such letter of transmittal, duly executed in accordance with the
instructions thereto, and such other documents as may reasonably be required by
the Exchange Agent, the Exchange Agent shall pay the surrendering holder the
Merger Consideration to which such holder may be entitled pursuant to Section
1.8 and the certificate so surrendered shall forthwith be canceled. If any
portion of such payment is to be made to a Person other than the registered
holder of the shares of Company Common Stock or Series A Preferred Stock, as the
case may be, represented by the certificate surrendered in exchange therefor, it
shall be a condition to such payment that the certificate so surrendered shall
be properly endorsed or otherwise be in proper form for transfer and that the
Person requesting such payment shall pay to the Exchange Agent any transfer or
other Taxes required as a result of such payment to a Person other than the
registered holder of such shares or establish to the satisfaction of the
Exchange Agent that such Taxes have been paid or that none are payable. Until
surrendered as contemplated by this Section 1.9(b), (i) each certificate
representing shares of Company Common Stock (other than certificates
representing Dissenting Shares or shares retired pursuant to Section 1.8(b))
shall be deemed at any time after the Effective Time to represent only the right
to receive the Common Stock Purchase Price upon such surrender, and (ii) each
certificate representing shares of Series A Preferred Stock (other than shares
retired pursuant to Section 1.8(b)) shall be deemed at any
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time after the Effective Time to represent only the right to receive the
Preferred Stock Liquidation Preference upon such surrender.
(c) No Further Ownership Rights. All Merger Consideration paid upon
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the surrender for exchange of certificates representing shares of Company Common
Stock or Series A Preferred Stock, as the case may be, in accordance with the
terms of this Article I shall be deemed to have been paid in full satisfaction
of all rights pertaining to such shares of Company Common Stock or Series A
Preferred Stock theretofore represented by such certificates. As of and after
the Effective Time, there shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of shares of Company Common
Stock or Series A Preferred Stock. If, after the Effective Time, certificates
are presented to the Surviving Corporation or the Exchange Agent for any reason,
they shall be canceled and exchanged as provided in this Article I.
(d) Termination of Payment Fund; Unclaimed Funds. Any portion of the
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Payment Fund made available to the Exchange Agent pursuant to Section 1.9(a)
that remains unclaimed by holders of shares of Company Common Stock or Series A
Preferred Stock for twelve (12) months after the Effective Time shall be
delivered to the Surviving Corporation, upon demand, and any holders of
Certificates who have not theretofore complied with this Article I shall
thereafter look only to the Surviving Corporation for the payment of the Merger
Consideration to which such Person is entitled pursuant to Section 1.8 and only
as general creditors thereof for payment of their claim for the Merger
Consideration.
(e) No Liability. None of Buyer, Merger Sub, the Company or the
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Exchange Agent shall be liable to any Person in respect of any payments
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
(f) Investment of Funds. The Payment Fund shall be invested by the
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Exchange Agent in obligations of, or guaranteed by, the United States of
America, in commercial paper obligations rated A-1 or P-1 or better by Xxxxx'x
Investor Services, Inc. or Standard & Poor's Ratings Services, respectively, in
each case with maturities not exceeding seven (7) days. All interest and
earnings thereon shall inure to the benefit of the Surviving Corporation.
(g) Lost Certificates. In the event that any certificate representing
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shares of Company Common Stock or Series A Preferred Stock shall have been lost,
stolen or destroyed before the Company has notice that the certificate has been
acquired by a protected purchaser (as such term is defined in Section 8-303 of
the Delaware Uniform Commercial Code), upon the making of an affidavit of that
fact by the Person claiming such certificate to be lost, stolen or destroyed
and, if required by Buyer, the execution of an agreement by such Person
indemnifying Buyer against any claim that may be made against it with respect to
such certificate or any payment with respect thereto indemnifying the Surviving
Corporation against any loss or expense related thereto, the Exchange Agent will
issue in exchange for such lost, stolen or destroyed certificate the payment of
the Merger Consideration to which such Person is entitled pursuant to Section
1.8.
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(h) Withholding Rights. The Exchange Agent shall be entitled to deduct
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and withhold from the consideration otherwise payable pursuant to this Agreement
to any holder of shares of Company Common Stock or Series A Preferred Stock such
amounts as are required to be deducted and withheld with respect to the making
of such payment under the terms of the Internal Revenue Code of 1986, as amended
(the "Code"), or any provision of state, local or foreign tax law. To the extent
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that amounts are so withheld, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
Company Common Stock or Series A Preferred Stock, as the case may be, in respect
of which such deduction and withholding was made by such party.
(i) Dissenting Shares. Notwithstanding anything in this Agreement to
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the contrary, shares of Company Common Stock outstanding immediately prior to
the Effective Time and held by a holder who has not voted in favor of the Merger
or consented thereto in writing and who has demanded appraisal for such shares
in accordance with Section 262 of the DGCL (the "Dissenting Shares") shall not
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be converted into the right to receive the Common Stock Purchase Price, unless
such holder fails to perfect or withdraws or otherwise loses its right to
appraisal. If after the Effective Time such holder fails to perfect or withdraws
or loses its right to appraisal, such Dissenting Shares shall be treated as if
they had been converted as of the Effective Time into a right to receive the
Common Stock Purchase Price to which such holder is entitled. The Company shall
give Buyer prompt notice of any demands received by the Company for appraisal of
shares of Company Common Stock and Buyer shall have the right to participate in
all negotiations and proceedings with respect to such demands. The Company shall
not, except with the prior written consent of Buyer which consent shall not be
unreasonably withheld or delayed, make any payment with respect to, or settle or
offer to settle, any such demands.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Company. Except as specifically
set forth or cross referenced in the corresponding section of the disclosure
schedule delivered by the Company to Buyer at or prior to the execution of this
Agreement (the "Company Disclosure Schedule"), the Company represents and
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warrants to Buyer and Merger Sub as follows:
(a) Organization, Standing and Power. Except as set forth in Section
--------------------------------
2.1(a) of the Company Disclosure Schedule, each of the Company and its
Subsidiaries has been duly organized and is validly existing and in good
standing under the laws of its jurisdiction of organization and has requisite
power and authority to carry on its business as presently conducted. Each of
the Company and its Subsidiaries is duly qualified and in good standing or
otherwise authorized to do business in each jurisdiction in which the nature of
its business or the ownership or leasing of its properties makes such
qualification necessary, except where the failure to so qualify would not
individually or in the aggregate have a Material Adverse Effect on the Company.
Copies of the Organizational Documents of the Company and each Subsidiary of the
Company have been previously furnished to Buyer and are true, complete and
correct copies of such documents as in effect on the date of this Agreement.
7
(b) Capital Structure
-----------------
(i) As of the date of this Agreement, the authorized
capital stock of the Company consists of (A) 475,000 shares of Class A
Common Stock, of which 254,671.75 shares are outstanding, (B) 25,000 shares
of Class B Common Stock, of which 15,315.25 shares are outstanding
(including 600 shares held by the Company in its treasury), and (C)
5,000,000 shares of preferred stock, par value $.01 per share, of which
3,250,000 shares of Series A Preferred Stock are outstanding. All issued
and outstanding shares of capital stock of the Company are duly authorized,
validly issued, fully paid and nonassessable, and at the Closing no class
of capital stock will be entitled to preemptive rights. As of the date of
this Agreement, there are no outstanding options, warrants or other rights
to acquire capital stock from the Company, except with respect to the
issuance of Class A Common Stock in connection with the conversion and
vesting of shares of Class B Common Stock outstanding as of the date
hereof.
(ii) Except as set forth in Section 2.1(b)(ii) of the
Company Disclosure Schedule, all of the issued and outstanding capital
stock (or other ownership interests) of each of the Company's Subsidiaries
is owned, directly or indirectly, by the Company or one of its wholly-owned
Subsidiaries and are duly authorized, validly issued, fully paid and
nonassessable and are owned by the Company or one of its wholly-owned
Subsidiaries free and clear of any liens, claims, encumbrances, mortgages,
security interests, rights of first refusal, rights of first offer, puts,
calls, obligations to buy or sell assets or equity interests, restrictions
or any other claims of any third party ("Liens").
-----
(iii) As of the date of this Agreement, no bonds,
debentures, notes or other indebtedness of the Company or any of its
Subsidiaries which are issued or outstanding provide to the holder of such
debt the right to vote prior to default on any matters on which
stockholders may vote ("Company Voting Debt").
-------------------
(iv) Except as otherwise set forth in this Section 2.1(b),
as of the date of this Agreement, there are no securities, options,
warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind to which the Company or its Subsidiaries is a
party or by which any of them is bound obligating the Company or any of its
Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or other voting securities of the
Company or any such Subsidiary or obligating the Company or such Subsidiary
to issue, grant, extend or enter into any such security, option, warrant,
call, right, commitment, agreement, arrangement or undertaking. As of the
date of this Agreement, except pursuant to the terms of the Series A
Preferred Stock as set forth in the Company's Organizational Documents and
rights under those certain Executive Agreements, each dated June 22, 1998
(together the "Executive Agreements"), between the Company and Xxxx Xxxxx
--------------------
and Xxxxx XxXxxxxx, respectively, there are no outstanding obligations of
the Company or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any shares of capital stock of the Company or such Subsidiary.
8
(v) As of the date of this Agreement, the only
outstanding indebtedness for borrowed money of the Company and its
Subsidiaries is (a) indebtedness under the Bank Credit Facility in an
amount not exceeding $915.0 million, (b) indebtedness under the Senior
Notes in principal amount not exceeding $285.0 million (plus interest
thereon) and (c) other indebtedness for borrowed money (including capital
leases and for the deferred purchase price for goods and services and
excluding accounts payable) not exceeding $10.0 million in the aggregate
(all such indebtedness referred to in clauses (a) - (c) being referred to
as the "Outstanding Indebtedness").
------------------------
(vi) As of the date of this Agreement, the aggregate
Preferred Stock Liquidation Preference does not exceed $379.0 million.
(vii) The aggregate amounts payable (a) for "stay bonuses"
to be offered as a result of the transactions contemplated by this
Agreement (the "Stay Bonuses"), (b) fees and expenses including investment
------------
banking, legal and accounting fees and expenses for the transactions
contemplated hereby payable on behalf of the Company and (c) by the Company
to the employees, officers, directors and consultants of the Company and
its Subsidiaries and other Persons pursuant to any employment agreement,
consulting agreement, investment agreement, the Executive Agreements,
benefit plan, stock option agreement or any other plan, contract or
arrangement pursuant to or as a result of a change in control of the
Company (excluding (x) amounts payable under Article I of this Agreement at
the Effective Time to any such persons in their capacity as shareholders of
the Company and (y) amounts which are not paid or payable by the Company or
any Subsidiary of the Company but are deemed 280G payments under the Code),
will not exceed a total of $18.5 million (collectively, the "Transaction
-----------
Fees and Expenses").
-----------------
(viii) Immediately upon (and from and after) the Closing,
there will be no agreements or arrangements pursuant to which (a) the
Company or any Subsidiary is or could be required to register shares of its
capital stock or other securities under the Securities Act or (b) the
Company is a party and which restricts the voting or disposition of any
capital stock of the Company.
(c) Authority; No Conflicts. Except as set forth in Section 2.1(c) of
-----------------------
the Company Disclosure Schedule:
(i) The Company has all requisite corporate power and
authority to enter into this Agreement and, subject to the adoption of this
Agreement and approval of the Merger by the majority vote of the
stockholders of the Company, to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Company,
subject in the case of the consummation of the Merger to the adoption of
this Agreement by the requisite vote of the stockholders of the Company.
This Agreement has been duly executed and delivered by the Company and
constitutes a valid and binding
9
agreement of the Company, enforceable against it in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws relating to or
affecting creditors generally and by general equity principles (regardless
of whether such enforceability is considered in a proceeding in equity or
at law).
(ii) The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby do not and will not, conflict with, or
result in any breach or violation of, or constitute a default (with or
without notice or lapse of time, or both) under, or give rise to a right of
consent, termination, amendment, cancellation or acceleration of any
obligation or the loss of a material benefit under, the creation of a Lien
on any asset or the triggering of any change of control provision (any such
conflict, violation, default, right of consent, termination, amendment,
cancellation or acceleration, loss, creation or triggering, a "Violation")
---------
pursuant to (A) any provision of the Organizational Documents of the
Company or any of its Subsidiaries or any partnership agreement,
stockholders agreement, limited liability company agreement, organizational
document or similar agreement or arrangement to which the Company or any
such Subsidiary is a party which governs or defines the relationship by and
among the Company and its Subsidiaries, on the one hand, and other direct
or indirect equity owners of any direct or indirect Subsidiary of the
Company, on the other, including any such agreement or arrangement
providing for a Lien (each an "Investment Agreement") (assuming receipt of
--------------------
the approval of the Company's stockholders referred to in Section
2.1(c)(i)), or (B) any loan or credit agreement, note, mortgage, bond,
indenture, lease, benefit plan or other agreement, obligation, instrument,
permit, concession, franchise, license, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to the Company, the Company's
Subsidiaries or their respective properties or assets, except, with respect
to either clause (A) or (B), as would not have or be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect on the
Company or Buyer and subject to obtaining or making the consents,
approvals, orders, authorizations, registrations, declarations and filings
referred to in Section 2.1(c)(iii) or otherwise contemplated in this
Agreement.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any supranational, national,
state, municipal or local government, any instrumentality, subdivision,
court, administrative agency or commission or other authority thereof, or
any quasi-governmental or private body exercising any regulatory, taxing,
or other governmental or quasi-governmental authority (a "Governmental
------------
Entity"), is required by or with respect to the Company or any of its
------
Subsidiaries in connection with the execution, delivery and performance by
the Company of this Agreement or the consummation by the Company of the
transactions contemplated hereby, except for (A) those required under or in
relation to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), or any antitrust or other competition laws of
-------
other jurisdictions; (B) compliance with any applicable requirements of the
Communications Act of 1934, as amended, and the rules and regulations
promulgated thereunder (collectively, the "Communications Act") and the
------------------
10
decisions of the FCC, and any applicable requirements of any public service
or utility commissions or similar entities; (C) the filing and recordation
of appropriate merger or other documents pursuant to and in accordance with
the DGCL; and (D) such consents, approvals, orders, authorizations,
registrations, declarations and filings the failure of which to make or
obtain could not be reasonably expected to have a Material Adverse Effect
on the Company or would not materially impair or delay the ability of the
Company to consummate the transactions contemplated hereby.
(d) Certain Reports and Financial Statements; No Undisclosed
--------------------------------------------------------
Liabilities.
-----------
(i) The Company has filed with the Securities and Exchange
Commission (the "SEC") (A) the Company's Annual Report on Form 10-K for the
---
period from February 26, 1998 (date of formation) to December 31, 1998 (the
"Company 10-K"), (B) the Company's Quarterly Report on Form 10-Q for the
------------
quarterly period ended March 31, 1999, (C) the Company's Quarterly Report
on Form 10-Q for the quarterly period ended June 30, 1999, and (D) all
registration statements, forms and except where the omissions to file would
not individually or in the aggregate have a Material Adverse Effect on the
Company, all other material documents required by the Securities Act or the
Exchange Act to be filed by the Company with the SEC since December 31,
1998 (the documents identified in clauses (A), (B), (C) and (D), including
all exhibits thereto, are collectively referred to herein as the "Company
-------
SEC Reports"). No Subsidiary of the Company is required to separately file
-----------
any form, report or other document with the SEC. None of the Company SEC
Reports, as of their respective dates (and, if amended or supplemented by a
filing prior to the date of this Agreement or as of the Closing Date, then
on the date of such filing), contained any untrue statement of a material
fact or omitted to state any material fact necessary to make the statements
made therein, in the light of the circumstances under which they were made,
not misleading. The Company SEC Reports, as of their respective dates (and
as of the date of any amendment thereto, as applicable), complied as to
form in all material respects with the applicable requirements of the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the "Securities Act") and the Securities Exchange
--------------
Act of 1934, as amended, and the rules and regulations promulgated
thereunder (the "Exchange Act"), as the case may be.
------------
(ii) Except as set forth in Section 2.1(d) of the Company
Disclosure Schedule, each of the financial statements (including the
related notes) included in the Company SEC Reports presents fairly, in all
material respects, the consolidated financial position and consolidated
results of operations and cash flows of the Company and its Subsidiaries as
of the respective dates or for the respective periods set forth therein,
all in conformity with U.S. generally accepted accounting principles
("GAAP") consistently applied during the periods involved except as
----
otherwise indicated in the notes thereto or, in the case of unaudited
interim financial statements, as permitted by Form 10-Q, and subject
further, in the case of the unaudited interim financial statements, to
normal year-end adjustments that have not been and are not expected to be
material in amount.
11
(iii) None of the information supplied or to be supplied by
the Company for inclusion or incorporation by reference in the Proxy
Statement will, either at the date such Proxy Statement is first mailed to
the Company's shareholders or at the time of the Company Stockholder
Meeting, including by reason of amendment, 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, and the Proxy
Statement will comply as to form in all material respects with the
requirements of the Exchange Act, except that in each case no
representation is made by the Company with respect to statements made or
incorporated by reference therein based upon information supplied in
writing by Merger Sub or Buyer specifically for inclusion therein.
(e) FCC Matters
-----------
(i) The Company or its Subsidiaries hold all licenses,
permits and other authorizations issued by the FCC to the Company or its
Subsidiaries set forth in Section 2.1(e)(i) of the Company Disclosure
Schedule (the "FCC Licenses"), except where the failure to so hold such FCC
------------
Licenses individually or in the aggregate has not had and would not
reasonably be expected to have a Material Adverse Effect on the Company.
The FCC Licenses constitute all of the licenses, permits, franchises,
consents and authorizations from the FCC that are necessary or appropriate
for the operations and businesses of the Company and its Subsidiaries as
they are now operated, except where the failure to have all such licenses,
permits, franchises, consents and authorizations has not had and would not
reasonably be expected to have a Material Adverse Effect on the Company.
(ii) Except where the failure to so list such applications
or provide such information would be reasonably expected to have a Material
Adverse Effect on Buyer, Section 2.1(e)(ii) of the Company Disclosure
Schedule sets forth each application that the Company and its Subsidiaries
have pending before the FCC and sets forth the expiration date for each of
the cellular FCC Licenses. The Company has provided a copy, except where
the FCC has not issued a written microwave authorization, to Buyer of each
of the FCC Licenses and the applications listed in Section 2.1(e)(ii) of
the Company Disclosure Schedule.
(iii) The FCC Licenses are valid and in full force and
effect, unimpaired by any condition or restriction or any act or omission
by the Company or any of its Subsidiaries which individually or in the
aggregate has had or would reasonably be expected to have a Material
Adverse Effect on the Company. There are no modifications, amendments,
applications, revocations or other proceedings, or complaints, pending or,
to the knowledge of the Company, threatened, with respect to the FCC
Licenses (other than proceedings that apply to the cellular or commercial
mobile radio service ("CMRS") industry generally) which individually or in
----
the aggregate has had or would reasonably be expected to have a Material
Adverse Effect on the Company or Buyer, and, except as set forth in Section
2.1(e) of the Company Disclosure Schedule, all fees due and payable to
12
the FCC have been paid and no event has occurred which, with or without the
giving of notice or lapse of time or both, would constitute grounds for
revocation of FCC Licenses which individually or in the aggregate has had
or would reasonably be expected to have a Material Adverse Effect on the
Company or Buyer.
(iv) Except where a lack of compliance would not
individually or in the aggregate be reasonably expected to have a Material
Adverse Effect, since June 25, 1998 all reports required by the
Communications Act or required to be filed with the FCC or any other
Governmental Entity by the Company or its Subsidiaries have been filed and
are accurate and complete in all material respects.
(v) Except where a lack of compliance would not
individually or in the aggregate be reasonably expected to have a Material
Adverse Effect, the Company and its Subsidiaries have operated their
cellular systems in compliance with the Communications Act and the rules,
regulations, policies and orders of the relevant state public utilities
commissions and the Federal Aviation Administration. The Company and its
Subsidiaries have not received any written notice (or otherwise been
advised in writing) to the effect that they are in violation of any of such
statutes, rules, regulations, policies or orders.
(vi) Without limiting the generality of the foregoing,
except where any action would individually or in the aggregate not
reasonably be expected to have a Material Adverse Effect on the Company or
Buyer, no adverse finding has been made, no consent decree entered, no
adverse action has been approved or taken by the FCC or any court or other
administrative body, and to the knowledge of the Company, no admission of
liability has been made with respect to the Company or any of its
Subsidiaries or any of the Company's stockholders or any management
employee of the Company or its Subsidiaries concerning any civil or
criminal suit, action or proceeding brought under the provision of any
federal, state, territorial or local law relating to any of the following:
any felony; unlawful restraint of trade or monopoly; unlawful combination,
contract or agreement in restraint of trade; the use of unfair methods of
competition; fraud; unfair labor practice; or discrimination.
Notwithstanding the foregoing, to the actual knowledge of Messrs. Fujii and
XxXxxxxx and Xx. Xxxxxxx X. Xxxxxx, none of the Company or any management
employee is the subject of any criminal suit or any action or proceeding
involving a felony or fraud.
(f) Compliance with Applicable Laws; Regulatory Matters. The
---------------------------------------------------
Company and its Subsidiaries hold all permits, licenses, certificates,
franchises, registrations, consents, variances, exemptions, orders and approvals
of all Governmental Entities (other than the FCC Licenses) (the "Company
-------
Permits") necessary for the conduct by the Company and its Subsidiaries of their
-------
respective operations as now being conducted, except for those as to which the
failure to so hold such Company Permits individually or in the aggregate would
not be reasonably expected to have a Material Adverse Effect on the Company.
Except as set forth in Section 2.1(f) of the Company Disclosure Schedule, the
Company and its Subsidiaries are in compliance with the terms of the Company
Permits, except where the failure so to comply
13
individually or in the aggregate would not be reasonably expected to have a
Material Adverse Effect on the Company. Except as set forth in Section 2.1(f) of
the Company Disclosure Schedule, the businesses of the Company and its
Subsidiaries are not being and have not been conducted in violation of any law,
ordinance, regulation, judgment, decree, injunction, rule or order of any
Governmental Entity, except for violations which individually or in the
aggregate would not be reasonably expected to have a Material Adverse Effect on
the Company. Except as set forth in Section 2.1(f) of the Company Disclosure
Schedule, as of the date of this Agreement, no investigation by any Governmental
Entity with respect to the Company or any Subsidiary is pending or, to the
knowledge of the Company, threatened, other than investigations which
individually or in the aggregate would not be reasonably expected to have a
Material Adverse Effect on the Company.
(g) Litigation. Except as set forth in Section 2.1(g) of the Company
----------
Disclosure Schedule, there is no litigation, arbitration, claim, suit, action,
investigation or proceeding pending or, to the knowledge of the Company,
threatened, against or affecting the Company or any Subsidiary which, if
determined or resolved adversely to the Company or such Subsidiary in accordance
with the plaintiff's demands, would individually or in the aggregate be
reasonably expected to have a Material Adverse Effect on the Company, nor is
there any judgment, award, decree, injunction, rule or order of any Governmental
Entity or arbitrator outstanding against the Company or any Subsidiary which
would be reasonably be expected to have a Material Adverse Effect on the
Company.
(h) Taxes. Except as set forth on Section 2.1(h) of the Company
-----
Disclosure Schedule (i) the Company and its Subsidiaries have duly and timely
filed (taking into account any extension of time within which to file) all Tax
Returns required to be filed by any of them and all such filed Tax Returns are
complete and accurate in all material respects, except where such failure to
timely file such Tax Returns would not have a Material Adverse Effect on the
Company; (ii) the Company and its Subsidiaries have paid all Taxes required to
be paid prior to the date of this Agreement that are shown as due on such filed
Tax Returns or that the Company or any Subsidiary is obligated to withhold from
amounts owing to any employee, creditor or third party, except with respect to
matters contested in good faith and for such amounts that would not have a
Material Adverse Effect on the Company; (iii) as of the date of this Agreement,
there are no pending or, to the knowledge of the Company, threatened in writing
audits, examinations, investigations or other proceedings in respect of Taxes or
Tax matters relating to the Company or any Subsidiary which, if determined
adversely to the Company or such Subsidiary, would have a Material Adverse
Effect on the Company; (iv) there are no deficiencies or claims for any Taxes
that have been proposed, asserted or assessed against the Company or any
Subsidiary which, if such deficiencies or claims were finally resolved against
the Company or such Subsidiary, would have a Material Adverse Effect on the
Company; (v) there are no Liens for Taxes upon the assets of the Company or any
Subsidiary, other than Liens for current Taxes not yet due and payable, and
Liens for Taxes that are being contested in good faith by appropriate
proceedings and for which adequate reserves have been made on the balance sheet
of the Company at June 30, 1999; (vi) neither the Company nor any Subsidiary has
made an election under Section 341(f) of the Code and (vii) except as would not
have a Material Adverse Effect on the Company, none of the Company or any
Subsidiary is a party to any agreement or
14
arrangement that could reasonably be expected to result, individually or in the
aggregate, in the actual or deemed payment by the Company or a Subsidiary of any
"excess parachute payments" within the meaning of Section 280G of the Code or
for which a deduction would be disallowed under Section 162(m) of the Code.
(i) Absence of Certain Changes or Events. Since June 30, 1999
------------------------------------
through the date of this Agreement, the Company and its Subsidiaries have
conducted their respective businesses in the ordinary course and have not
incurred any material liability, except in the ordinary course of their
respective businesses and except as set forth in Section 2.1(i) of the Company
Disclosure Schedule, and there has not been (A) any change in the business,
assets financial condition or results of operations of the Company or its
Subsidiaries that individually or in the aggregate has had or would be
reasonably likely to have a Material Adverse Effect on the Company; (B) any
declaration, setting aside or payment of any dividend or other distribution with
respect to any capital stock of the Company, or any issuance, award, grant,
sale, repurchase, redemption or other acquisition by the Company or any
Subsidiary of any outstanding shares of capital stock or other securities of, or
ownership interests in, the Company or any Subsidiary (other than repurchases of
200 shares of Company Common Stock from employees leaving the Company); (C) any
amendment of any material term of any outstanding security of the Company or any
Subsidiary, or any reorganization, recapitalization, split, consolidation or
reclassification with respect to any capital stock of the Company or any
Subsidiary; (D) any material change in any method of accounting or accounting
practice by the Company or any Subsidiary, except for any such change required
by reason of a change in GAAP; or (E) other than in the ordinary course of
business, any (x) entry by the Company or its Subsidiaries into any employment
agreement, severance agreement or termination agreement with any officer of the
Company, (y) except for regular increases in the ordinary course of business
consistent with past practices, increase in benefits payable under existing
employment, severance or termination agreements or pay policies (with the
exception of the Stay Bonuses), or (z) except for regular increases in the
ordinary course of business consistent with past practices, increase in
compensation, bonus or other benefits payable to the executive officers of the
Company or any Subsidiary.
(j) Certain Agreements. All contracts listed as exhibits to the
------------------
Company SEC Reports under the rules and regulations of the SEC relating to the
business of the Company and its Subsidiaries and any contract involving the
receipt or payment of more than $250,000 per year on an annualized basis (the
"Material Contracts") have been or, if entered into after the date of the
------------------
Agreement, will be promptly provided to Buyer and are valid and in full force
and effect except to the extent they have previously expired or been terminated
in accordance with their terms, and neither the Company nor any of its
Subsidiaries has violated any provision of any Material Contract to which it is
a party, or committed or failed to perform any act thereunder which, with or
without notice, lapse of time, or both, would constitute a default under the
provisions of, any such Material Contract, except for defaults which
individually or in the aggregate have not had and would not be reasonably
expected to have a Material Adverse Effect on the Company. To the knowledge of
the Company, no counterparty to any such Material Contract has violated any
provision of, or committed or failed to perform any act which, with or without
notice, lapse of time, or both, would constitute a default or other breach under
the provisions of, such Material Contract, except for defaults or breaches which
individually or in the
15
aggregate have not had and would not be reasonably expected to have a Material
Adverse Effect on the Company. Except for contour extension agreements or
agreements of similar import entered into in the ordinary course of business,
neither the Company nor any Subsidiary has entered into or will enter into any
agreement or arrangement limiting or otherwise restricting the Company or any of
its Subsidiaries from engaging in or competing in any line of business or in any
geographic area which materially impacts or will materially impact any of the
following lines of business of the Company, Xxxxxx Communications Corporation or
AT&T Corp.: telecommunications (including, without limitation, local, long
distance, internet and wireless), cable and video entertainment, data access,
communications consulting and systems integration and network management.
(k) Employee Benefit Plans; Labor Matters
-------------------------------------
(i) The Company has made available to Buyer a true and
complete copy of each employee benefit plan as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
-----
and each other material employee benefit plan, program, arrangement and
contract (including any bonus, deferred compensation, stock bonus, profit
sharing, stock purchase, restricted stock, stock option, stock appreciation
rights, post-retirement benefits or other forms of incentive compensation
or benefits, consulting, employment, termination, change in control and
severance plan, program, arrangement and contract), to which the Company or
any Subsidiary is a party or which is maintained or contributed to by the
Company or any Subsidiary (the "Company Benefit Plans"). Section 2.1(k) of
---------------------
the Company Disclosure Schedule contains a list of all Company Benefit
Plans.
(ii) Each of the Company Benefit Plans that is an
"employee pension benefit plan" within the meaning of Section 3(2) of ERISA
and that is intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter from the United States Internal
Revenue Service which determination letter includes any new or modified
provisions required by Section 401(a) of the Code for which the remedial
amendment period under Section 401(b) of the Code has expired as of the
Closing Date, and which determination letter includes the determination
that the corresponding trust created under any such Company Benefit Plan is
exempt from tax under Section 501(a) of the Code and the Company is not
aware of any circumstances which would reasonably be expected to result in
the revocation of any such favorable determination letter that would have a
Material Adverse Effect on the Company.
(iii) None of the Company Benefit Plans is subject to (i)
Title IV of ERISA or (ii) the minimum funding requirements of Title I of
ERISA or Section 412 of the Code. None of the Company Benefit Plans is a
"multiemployer plan" as defined in Section 3(37) of ERISA and neither the
Company nor any Subsidiary has ever contributed to or had an obligation to
contribute to any multiemployer plan.
(iv) There are no investigations by any governmental
authority, termination proceedings or other claims (except claims for
benefits payable in the normal
16
operation of the Company Benefit Plans), suits or proceedings pending of
which the Company has written notice or, to the knowledge of the Company,
threatened or anticipated, against or involving any Company Benefit Plan or
asserting any rights or claims to benefits under any Company Benefit Plan
that could give rise to any material liability on the part of Company or
any Subsidiary.
(v) With respect to the Company Benefit Plans, no event
has occurred and, to the knowledge of the Company, there exists no
condition or set of circumstances, in connection with which the Company or
any Subsidiary could be subject to any liability under the terms of such
Company Benefit Plans, ERISA, the Code or any other applicable law which
would have a Material Adverse Effect on the Company.
(vi) Neither of the Company nor any Subsidiary is a party
to any collective bargaining or other labor union contracts and no
collective bargaining agreement is being negotiated by the Company or any
Subsidiary. There is no pending labor dispute, strike or work stoppage
against the Company or any Subsidiary which may interfere with the
respective business activities of the Company or any Subsidiary, except
where such dispute, strike or work stoppage would not have a Material
Adverse Effect on the Company. There is no pending charge or complaint
against the Company or any Subsidiary by the National Labor Relations Board
or any comparable state agency, except where such unfair labor practice,
charge or complaint would not have a Material Adverse Effect on the
Company.
(l) Intellectual Property. Except as set forth in Section 2.1(l) of
---------------------
the Company Disclosure Schedule, the Company and its Subsidiaries own or have
the right to use, the Intellectual Property used in their respective businesses,
except where the failure to own or have the right to use such Intellectual
Property, individually or in the aggregate, does not have and would not
reasonably be expected to have a Material Adverse Effect on the Company. Except
as would not have a Material Adverse Effect on the Company, to the knowledge of
the Company (i) no claims are pending or threatened that the Company or any
Subsidiary is infringing on or otherwise violating the rights of any person with
regard to any Intellectual Property and (ii) no person is infringing on or
otherwise violating any right of the Company or any Subsidiary with respect to
any Intellectual Property owned by and/or licensed to the Company or any
Subsidiary.
(m) Vote Required. The affirmative vote of the holders of a majority
-------------
of the outstanding shares of Class A Common Stock (the "Required Company Vote")
---------------------
is the only vote of the holders of any class or series of capital stock of the
Company necessary to approve and adopt this Agreement, the Merger and the
transactions contemplated hereby and such vote may be validly taken pursuant to
a written consent in lieu of a shareholders meeting executed by the holders of a
majority of the outstanding Class A Common Stock (a "Written Consent of
------------------
Shareholders").
------------
(n) Brokers or Finders. No agent, broker, investment banker,
------------------
financial advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement
17
based upon arrangements made by or on behalf of the Company, except Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"), whose fees and
-------------
expenses will be paid by the Company in accordance with the Company's letter
agreement with such firm dated July 14, 1999 and shall not exceed the amount set
forth in such letter. A true and complete copy of such agreement has been
delivered to Buyer prior to the date hereof. Upon payment of such fees and
expenses, there shall be no additional financial or other obligations of the
Surviving Corporation to Xxxxxxx Xxxxx under such letter agreement.
(o) Takeover Statute. The Company has taken all the necessary steps
----------------
to prevent the application of any state takeover statute (including the
provisions of Section 203 of the DGCL or similar statute or regulation of the
State of Delaware or the states in which the Company is conducting business) to
this Agreement or any of the transactions contemplated herein, including the
Merger.
(p) Opinion of Financial Advisor. The Company has received the
----------------------------
opinion of Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, dated the date of
this Agreement, to the effect that, as of such date, the Common Stock Purchase
Price is fair, from a financial point of view, to the holders of Company Common
Stock.
(q) Assets. All tangible assets of the Company and its Subsidiaries
------
are in good operating condition and sufficient for their respective use thereof,
normal wear and tear excepted, except where such failure to be in good operating
condition could not reasonably be expected to result in a Material Adverse
Effect on the Company. The Company and its Subsidiaries own or have the right to
use all assets necessary for the conduct of their business and operations and
reflected on the balance sheet included in the most recent Form 10-Q filed by
the Company with the SEC, except where the lack of such ownership or usage
rights would not be expected, individually or in the aggregate, to have a
Material Adverse Effect on the Company.
(r) Acquisitions and Dispositions. Except with respect to the sale of
-----------------------------
the Company's interest in the Texas/Illinois Cellular Limited Partnership (the
"Laredo Joint Venture"), Section 2.1(r) of the Company Disclosure Schedule
--------------------
describes the material terms (including the buyer, purchase price, assets or
equity interests to be sold, escrow provisions and any other material terms) of
each proposed or pending disposition of assets or equity interests owned by the
Company or any Subsidiary (the "Pending Dispositions") involving in the
--------------------
aggregate a sales price in excess of $25.0 million. Section 2.1(r) of the
Company Disclosure Schedule describes the material terms (including the seller,
purchase price, assets or equity interests to be acquired, escrow provisions and
any other material terms) of each proposed or pending acquisition of assets or
equity interests by the Company or any Subsidiary (the "Pending Acquisitions")
--------------------
involving in the aggregate a sales price in excess of $25.0 million. The
Company has delivered to Buyer true and complete copies of the executed
contracts, agreements and other documents relating to each Pending Acquisition
and Pending Disposition or, where definitive documentation has not been executed
as of the date of this Agreement, the most current drafts thereof (such
contracts, agreements, drafts and other documents referred to as the "Pending
-------
Transaction Documents").
---------------------
18
(s) Real Property - Owned. Except as set forth in Section 2.1(s) of
---------------------
the Company Disclosure Schedule, the Company or a Subsidiary has good and
marketable or insurable title to all of the real property ("Real Property")
-------------
reflected as owned on the consolidated balance sheet of the Company at June 30,
1999 free and clear of all Liens, except for Liens that would not materially
interfere with the continued use of the property as it is currently being used.
Section 2.1(s) of the Company Disclosure Schedule correctly identifies each
parcel of Real Property owned by the Company and its Subsidiaries except where
the failure to so identify a parcel of Real Property would not result in or
would not be reasonably likely to result in a Material Adverse Effect on the
Buyer.
(t) Real and Personal Property - Leased. Except as set forth in
-----------------------------------
Section 2.1(s) of the Company Disclosure Schedule, set forth on Section
2.1(t)(A) (in the case of real property) and Section 2.1(t)(B) (in the case of
personal property) of the Company Disclosure Schedule are true and accurate
listings of all real and personal property leases to which the Company or a
Subsidiary is a party (other than personal property leases with individual
annual payment of less than $100,000) setting forth (i) the name of the lessor
and lessee, (ii) the property subject to the lease and the use thereof (cell
site, retail, office, etc.), (iii) the expiration date of the lease, (iv) the
annual rent and (v) with respect to the real property leases, a description of
the property leased. Except as set forth on Section 2.1(t)(A) (in the case of
leased real property) and Section 2.1(t)(B) (in case of leased personal
property) of the Company Disclosure Schedule, (i) all of the leases set forth on
such Schedules are in full force and effect and are valid, binding and
enforceable in accordance with their respective terms, (ii) all accrued
currently payable rents and other payments required by such leases have been
paid, (iii) each of the Company and its Subsidiaries and, to their knowledge,
each other party thereto have complied with all respective covenants and
provisions of such leases, (iv) neither the Company or a Subsidiary nor, to
their knowledge, any other party is in default in any respect under any such
leases, (v) no party has asserted any defense, set off, or counter claim
thereunder, and (vi) no waiver, indulgence or postponement of any obligations
thereunder has been granted by any party. The representations in this Section
2.1(t) read without giving effect to the parenthetical immediately before
subclause (i) in the first sentence will not be breaches of this Agreement
unless in the aggregate they are inaccurate so as to result in or be reasonably
likely to result in a Material Adverse Effect on the Company or Buyer.
Notwithstanding any provision of this Agreement or any item set forth in Section
2.1(t) of the Company Disclosure Schedule, the parties acknowledge that the
Company has no obligation to identify or disclose the existence of any "change
in control" or similar provision in any agreement with respect to the leased
real or personal property set forth on Sections 2.1(t)(A) and 2.1(t)(B) of the
Company Disclosure Schedule.
2.2 Representations and Warranties of Buyer. Except as specifically set
forth or cross-referenced in the corresponding section of the disclosure
schedule delivered by Buyer to the Company at or prior to the execution of this
Agreement (the "Buyer Disclosure Schedule"), Buyer represents and warrants to
-------------------------
the Company as follows:
(a) Organization, Standing and Power. Buyer has been duly organized
--------------------------------
as a limited liability company and is validly existing and in good standing
under the laws of its jurisdiction of organization and has requisite limited
liability company power and authority to
19
carry on its business as presently conducted. Buyer is duly qualified and in
good standing or otherwise authorized to do business in each jurisdiction in
which the nature of its business or the ownership or leasing of its properties
makes such qualification necessary, except where the failure so to qualify would
not have a Material Adverse Effect on Buyer. Copies of the Organizational
Documents as in effect on the date of this Agreement of Buyer have been
previously furnished or made available to the Company and are true, complete and
correct copies of such documents as in effect on the date of this Agreement.
(b) Authority; No Conflicts
-----------------------
(i) Buyer has all requisite limited liability company
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary limited liability company
action on the part of Buyer. This Agreement has been duly executed and
delivered by Buyer and constitutes a valid and binding agreement of Buyer,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors
generally, or by general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(ii) The execution, delivery and performance of this
Agreement by Buyer and the consummation by Buyer of the transactions
contemplated hereby do not and will not, conflict with or result in any
breach of or other Violation pursuant to (A) any provision of the
Organizational Documents of Buyer or any of its Subsidiaries, or (B) except
as would not have a Material Adverse Effect on Buyer and subject to
obtaining or making the consents, approvals, orders, authorizations,
registrations, declarations and filings referred to in Section 2.2(b)(iii)
below, any loan or credit agreement, note, mortgage, bond, indenture,
lease, benefit plan or other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Buyer, any of its Subsidiaries
or their respective properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is
required by or with respect to Buyer or any of its Subsidiaries in
connection with the execution, delivery and performance by Buyer of this
Agreement or the consummation by Buyer of the transactions contemplated
hereby, except for (A) the consents, approvals, orders, authorizations,
registrations, declarations and filings required under or in relation to
Section 2.1(c)(iii)(A), (B) and (C), and (B) such consents, approvals,
orders, authorizations, registrations, declarations and filings the failure
of which to make or obtain would not have a Material Adverse Effect on
Buyer or would not materially impair or delay the ability of Buyer to
consummate the transactions contemplated hereby.
20
(c) No Vote Required. No vote of the members of Buyer is necessary
----------------
to approve this Agreement or any of the transactions contemplated hereby other
than those which have already been obtained.
(d) Brokers or Finders. No agent, broker, investment banker,
------------------
financial advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Buyer or Merger Sub, except fees payable by Buyer to Xxxxxx
Brothers Inc. and Toronto Dominion Securities Inc.
(e) Ownership of Company Capital Stock. As of the date of this
----------------------------------
Agreement, neither Buyer nor any of its Subsidiaries or, to its knowledge, any
of its affiliates or associates (as such terms are defined under the Exchange
Act) (i) beneficially owns, directly or indirectly or (ii) is party to any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of, in case of either clause (i) or (ii), shares of capital
stock of the Company.
(f) FCC Qualification. Buyer and Merger Sub are and at the
-----------------
Effective Time will be legally, technically and otherwise qualified under the
Communications Act and all rules, regulations and policies of the FCC to
acquire, own or control and operate the assets and business of the Company and
its Subsidiaries. There are no facts or proceedings known or with reasonable due
diligence should be known to Buyer which would disqualify Buyer or Merger Sub
under the Communications Act or otherwise from acquiring or operating any of the
assets and business of the Company and its Subsidiaries or would cause the FCC
not to approve the FCC Application. Buyer has no knowledge of any fact or
circumstance relating to Buyer, Merger Sub or any other affiliate of Buyer that
would (i) cause the filing of any objection to the FCC Application or (ii) lead
to a delay in the processing by the FCC of the FCC Application. As of the date
hereof, no waiver of any FCC rule or policy is necessary to be obtained for the
approval of the FCC Application, and no processing pursuant to any exception or
rule of general applicability will be requested or required in connection with
the consummation of the transactions contemplated by this Agreement.
(g) Financing
---------
(i) Buyer's members have received a commitment letter
dated October 4, 1999 (the "Bank Commitment Letter") from Bank of America,
----------------------
N.A. and Banc of America Securities LLC pursuant to which such parties have
agreed to provide, subject to the terms and conditions set forth therein,
$1.75 billion of financing to Buyer for the purpose of funding a portion of
Buyer's financing for the acquisition of the Company. A true copy of the
Bank Commitment Letter has been delivered to the Company, is in effect on
the date hereof, has not been amended or modified and there is no breach or
default by Buyer or Merger Sub existing, or which with notice or the
passage of time may exist, thereunder as of the date hereof.
(ii) AT&T Wireless Services, Inc., AT&T Wireless Services
JV Co., a Delaware corporation, and Buyer have entered into an Unrestricted
Equity
21
Agreement dated as of the date hereof (the "Unrestricted Equity Agreement")
-----------------------------
of which the Company is a third-party beneficiary thereof. A true copy of
the Unrestricted Equity Agreement has been delivered to the Company, is in
full force and effect and has not been amended or modified.
2.3 Representations and Warranties of Buyer and Merger Sub. Buyer and
Merger Sub represent and warrant to the Company as follows:
(a) Organization, Standing and Power. Merger Sub is a wholly owned
--------------------------------
Subsidiary of Buyer and is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware. Copies of the
Organizational Documents of Merger Sub have been previously furnished or made
available to the Company and are true, complete and correct copies of such
documents.
(b) Authority; No Conflicts
-----------------------
(i) Merger Sub has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Merger Sub
of this Agreement and the consummation by Merger Sub of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action on the part of Merger Sub. This Agreement has been duly executed and
delivered by Merger Sub and constitutes a valid and binding agreement of
Merger Sub, enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors generally, or by general equity principles (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
(ii) The execution, delivery and performance by Merger Sub
of this Agreement and the consummation by Merger Sub of the transactions
contemplated hereby do not and will not contravene or conflict with the
Organizational Documents of Merger Sub.
(c) No Business Activities. Merger Sub is not a party to any
----------------------
material agreements (other than this Agreement and any agreement contemplated
hereby) and, since the date of its incorporation, has not conducted any
activities other than in connection with or as contemplated by this Agreement
and the arranging of the Financing. Merger Sub has no Subsidiaries.
ARTICLE III.
COVENANTS RELATING TO CONDUCT OF BUSINESS
3.1 Covenants of the Company. During the period from the date of this
Agreement and continuing until the Effective Time (except as expressly permitted
by this Agreement or identified in the Company Disclosure Schedule or to the
extent that Buyer shall otherwise consent in writing, which consent shall not be
unreasonably withheld or delayed with respect to
22
Section 3.1(d), (e), (j) or (k)) the provisions set forth in paragraphs (a) to
(l) of this Section 3.1 shall apply. For purposes of this Section 3.1, wherever
any action on the part of the Company or its Subsidiaries requires the consent
of Buyer, Buyer shall be deemed to have consented in writing if Xx. Xxxxxxx
Xxxxxx or another designee of Buyer of which the Company has prior written
notice has received a written request (delivered to Xx. Xxxxxx by a nationally
recognized overnight mail or courier service with signature required upon
receipt with a copy to Xxxxxxx & Xxxxxx, LLP and Xxxxxxxx Xxxxxx & Xxxxxx LLP at
the addresses and to the attention of the persons set forth in Section 7.2) to
consent to an action to be taken by the Company and 7 business days have lapsed
since the date of such written request and Xx. Xxxxxx or such other designee has
not responded in writing to such request.
(a) Ordinary Course. The Company shall, and shall cause its
---------------
to, carry on their respective businesses in the usual, regular and ordinary
course in all material respects, and shall use reasonable commercial efforts to
preserve intact their present business organizations, maintain their rights and
franchises, and preserve their relationships with customers, suppliers and
others having business dealings with them. Without limiting the generality of
the foregoing, except as otherwise specifically permitted by this Agreement, the
Company and its Subsidiaries shall operate their respective businesses
substantially in accordance with the budget for advertising, promotion and
capital expenditures previously delivered to Buyer and as set forth in Section
3.1(a) of the Company Disclosure Schedule.
(b) Dividends; Changes in Share Capital. The Company shall not,
-----------------------------------
and shall not propose to, (i) declare or pay any dividends on or make other
distributions in respect of any of its capital stock, (ii) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for, shares of its capital stock, or (iii) repurchase, redeem or otherwise
acquire any shares of its capital stock or any securities convertible into or
exercisable or exchangeable for any shares of its capital stock except (A) as
permitted under Xxxx Xxxxx'x and Xxxxx XxXxxxxx'x Executive Agreements and as
may be required under existing management compensation agreements identified in
Section 3.1(b) of the Company Disclosure Schedule, (B) with respect to Series A
Preferred Stock, as may be required under the Company's Organizational
Documents, or (C) with respect to the exchange of shares of Class B Common Stock
on a one for one basis for shares of Class A Common Stock (which shares are
included in the Company's outstanding common stock represented in Section
2.1(b)).
(c) Issuance of Securities. The Company shall not, and shall cause
----------------------
its Subsidiaries not to, issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any shares of its capital stock of any class, any
Company Voting Debt or any securities convertible into or exercisable for, or
any rights, warrants or options to acquire, any such shares or Company Voting
Debt, or enter into any agreement with respect to any of the foregoing, other
than the issuance of Class A Common Stock in exchange for Class B Common Stock
(which shares are included in the Company's outstanding common stock represented
in Section 2.1(b)) on a one for one basis, in accordance with the terms,
including the vesting schedule, set forth in the instruments governing the grant
thereof of the Class B Common Stock.
23
(d) Organizational Documents. Except to the extent required to
------------------------
comply with their respective obligations hereunder or required by law, the
Company and its Subsidiaries shall not amend or propose to amend their
respective Organizational Documents.
(e) Indebtedness. The Company shall not, and shall not permit any
------------
Subsidiary to, (i) incur or permit to exist any indebtedness for borrowed money
or guarantee any such indebtedness or issue or sell any debt securities or
warrants or rights to acquire any debt securities of the Company or any
Subsidiary or guarantee any debt securities of other Persons (other than
indebtedness of the Company or its Subsidiaries to the Company or its
Subsidiaries), except (A) under the Bank Credit Facility, (B) the Senior Notes
and (C) other indebtedness not exceeding $10.0 million in the aggregate, (ii)
make any loans, advances or capital contributions to, or investments in, any
other Person, other than by the Company or its Subsidiaries to or in the Company
or its Subsidiaries or (iii) pay, discharge or satisfy any claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than in the case of clauses (ii) and (iii) above, loans,
advances, capital contributions, investments, payments, discharges or
satisfactions incurred or committed to in the ordinary course of business
consistent with past practice.
(f) Employee Compensation; Benefit Plans. The Company shall not,
------------------------------------
and shall not permit its Subsidiaries to, (i) increase the compensation payable
or to become payable to any of its officers, (ii) except as contemplated by
Section 3.1(l) or as noted in Section 2.1(b)(iv)(3), (4) and (5) of the Company
Disclosure Schedule, adopt or amend (except as may be required or prudent under
law) any Company Benefit Plans, or take any action with respect to the grant of
any severance or termination pay, or stay bonus or other incentive arrangement
(other than pursuant to Company Benefit Plans and policies in effect on the date
of this Agreement, the Stay Bonuses and other items identified in Section 2.1(k)
of the Company Disclosure Schedule), except any such increases or grants to non-
executive officers made in the ordinary course of business reasonably consistent
with past practices or as provided in Section 4.5 or (iii) effectuate a "plant
closing" or "mass layoff" as those terms are defined in the Worker Adjustment
and Retraining Notification Act of 1988 ("WARN"), affecting in whole or in part
----
any site of employment, facility, operating unit or employee of the Company or
any Subsidiary other than in compliance with the provisions thereof.
(g) Other Actions. The Company shall not, and shall not permit its
-------------
Subsidiaries to, take any action that would result in (i) any of the
representations or warranties of the Company set forth in this Agreement that
are qualified as to materiality becoming untrue or inaccurate, (ii) any of such
representations and warranties that are not so qualified becoming untrue or
inaccurate in any material respect or (iii) except as otherwise permitted by
Section 4.1(a) or 4.4, any of the conditions to the Merger set forth in Article
V not being satisfied.
(h) Accounting Methods; Income Tax Elections. Except as disclosed
----------------------------------------
in the Company SEC Reports filed prior to the date of this Agreement, as set
forth in Section 2.1(d) of the Company Disclosure Schedule, or as required by a
Governmental Entity, the Company shall not change its methods of accounting in
effect at December 31, 1998, except as required by
24
changes in GAAP as concurred in by the Company's independent auditors. The
Company shall not (i) change its fiscal year, (ii) make any Tax election which
would have a Material Adverse Effect on the Company or (iii) settle or
compromise any material Federal, State, local or foreign Tax liability.
(i) Cooperation with Respect to HSR and FCC Filings. The Company
-----------------------------------------------
shall cooperate with Buyer (including if necessary in Buyer's reasonable
judgment or in the opinion of Buyer's HSR and FCC counsel, modification of
Buyer's existing HSR and FCC filings) to modify or amend any HSR and FCC filings
with respect to the Pending Acquisitions and Pending Dispositions.
(j) Acquisitions and Dispositions. Except with respect to the
-----------------------------
Laredo Joint Venture, none of the Company or its Subsidiaries shall enter into
any agreement or commitment to merge or consolidate with any Person or acquire
or dispose of any assets (including asset swaps) or equity interests (i) having
a value in excess of (A) $25.0 million in the case of all such dispositions
taken collectively or (B) $25.0 million in the case of all such mergers,
consolidations and acquisitions taken collectively or (ii) if in the judgment of
FCC counsel approved by both parties in their written opinion it would have a
Material Adverse Effect on the FCC's approval of the transfer of the FCC
Licenses to Buyer or Buyer's ability to operate the business of the Company and
its Subsidiaries substantially as now conducted or have a Material Adverse
Effect on the FCC's approval process.
(k) Settlement of Claims and Litigation. The Company shall not,
-----------------------------------
and shall cause its Subsidiaries not to, compromise or settle any claim by or
against the Company or any Subsidiary, or any litigation, arbitration or other
proceeding in which the Company or a Subsidiary is the claiming or defending
party, except in the ordinary course of business consistent with past practice
and which, in the aggregate, do no involve the payment or receipt of payments
(or other consideration) in excess of $5.0 million.
(l) 401(k) Plan. The Company shall complete self-correction of its
-----------
401(k) plan for those operational compliance matters identified on Section
2.1(d) of the Company Disclosure Schedule prior to Closing but failure to
complete such self-correction shall not constitute a breach unless the
reasonably estimated payments and costs to complete compliance would exceed $1
million.
3.2 Covenants of Buyer and Merger Sub. During the period from the date of
this Agreement and continuing until the Effective Time (except as expressly
contemplated or permitted by this Agreement or to the extent that the Company
shall otherwise consent in writing):
(a) Ordinary Course. Buyer shall carry on its business in the usual,
---------------
regular and ordinary course in all material respects, and shall not, and shall
not permit any of its Subsidiaries to, take any action that would result in (i)
any of the representations or warranties of the Buyer or Merger Sub set forth in
this Agreement that are qualified as to materiality becoming untrue or
inaccurate, (ii) any of such representations and warranties that are not so
qualified becoming untrue or inaccurate in any material respect, (iii) any of
the conditions to the Merger
25
set forth in Article V not being satisfied, or (iv) other than as contemplated
in Section 4.10, any amendment to the Bank Commitment Letter, unless such
amendment would not adversely affect the Company or the consummation of the
transactions contemplated hereby. In addition, Buyer shall not incur any debt or
obligations other than its obligations hereunder or which are related to, or
intended to facilitate the financing or consummation of the transactions
contemplated by, this Agreement.
(b) Obligations of Merger Sub. Buyer hereby agrees to cause Merger
-------------------------
Sub to comply with and perform its obligations under this Agreement and to cause
Merger Sub to consummate the Merger as contemplated and on the terms and
conditions set forth herein. Whenever this Agreement requires Merger Sub to take
any action, such requirement shall be deemed to include an undertaking of Buyer
to cause Merger Sub to take such action.
3.3 Advice of Changes. Each party shall: (i) confer on a regular and
frequent basis with the other; (ii) promptly notify the other orally and in
writing of any representation or warranty made by it contained in this Agreement
that is qualified as to materiality becoming untrue or inaccurate or any such
representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect and (iii) promptly notify the other orally or
in writing of the failure by such party (A) to comply with or satisfy in any
respect any covenant, condition or agreement required to be complied with or
satisfied by it under this Agreement that is qualified as to materiality or (B)
to comply with or satisfy in any material respect any covenant, condition or
agreement required to be complied with or satisfied by it under this Agreement
that is not so qualified as to materiality; provided, however, that, in any
-------- -------
case, no such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations of
the parties under this Agreement.
3.4 Control of Other Party's Business. Nothing contained in this Agreement
shall give the Company, on the one hand or Buyer or Merger Sub, on the other
hand, the right, directly or indirectly, to control or direct the other party's
operations or business prior to the Effective Time. Prior to the Effective Time,
each of the Company and Buyer shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision over its
respective operations and business.
ARTICLE IV.
ADDITIONAL AGREEMENTS
4.1 Company Stockholders Meeting
(a) If required by law or requested by the Company's Board of
Directors, the Company shall cause a meeting of its stockholders (the "Company
-------
Stockholders Meeting") to be duly called and held as soon as reasonably
--------------------
practicable for the purpose of obtaining the Required Company Vote, and the
Company shall, through the Company Board, recommend to its stockholders that
they vote in favor of the approval of the Merger and the adoption of this
Agreement and Buyer shall vote or cause to be voted all the shares of Company
Common Stock owned of record by Buyer, Merger Sub or any of Buyer's other
Subsidiaries in favor of the approval of the Merger and adoption of this
Agreement. After the date hereof, Buyer shall not
26
purchase, offer to purchase, or enter into any contract, agreement or
understanding regarding the purchase of shares of Company Common Stock, except
pursuant to the terms of the Merger and the Voting Agreement.
(b) If required by law or requested by the Company's Board of
Directors, the Company shall prepare a proxy or information statement for
distribution to its stockholders for purposes of the Company Stockholders
Meeting (the "Proxy Statement"). If applicable, the Company shall use
---------------
reasonable efforts to cause the Proxy Statement and all other proxy materials
for the Company Stockholders Meeting to be mailed to the Company's stockholders
as promptly as practicable.
4.2 Access to Information. From the date hereof until the earlier of the
Effective Time or the termination of this Agreement, upon reasonable notice, the
Company shall afford to the officers, employees, accountants, counsel, financial
advisors and other representatives of Buyer reasonable access during normal
business hours, to the Company's and its Subsidiaries' properties, books,
contracts, commitments and records located at its corporate headquarters in
Schaumburg, Illinois and its corporate-level officers, management employees,
accountants and representatives and, during such period, the Company shall
furnish promptly to Buyer, consistent with its legal obligations (and subject to
existing confidentiality and similar non-disclosure obligations and the
preservation of attorney client and work product privileges), all information
concerning its business, properties and personnel as Buyer may reasonably
request; provided, however, the Company may restrict any such access to the
-------- -------
extent that (i) a Governmental Entity expressly requires the Company or any of
its Subsidiaries to restrict access to any properties or information reasonably
related to any such contract on the basis of applicable laws and regulations,
(ii) any law, treaty, rule or regulation of any Governmental Entity applicable
to the Company or any of its Subsidiaries requires the Company or any of its
Subsidiaries to restrict access to any properties or information, or (iii) such
access would unreasonably disrupt or interfere with the operations or business
of the Company; and provided further that the Company shall use its reasonable
-------- -------
efforts to obtain the consent or release of the parties to confidentiality and
non-disclosure agreements which authorize the delivery of the confidential or
non-disclosable information to Buyer. Buyer acknowledges that any such
information received by Buyer or its representatives from or on behalf of the
Company pursuant to this Section 4.2 shall be deemed received pursuant to, and
shall be held in confidence by Buyer and its representatives to the extent
required by, and in accordance with, the provisions of that certain letter
agreement, dated August 3, 1999 (as amended, the "Confidentiality Agreement"),
-------------------------
between the Company and Buyer, which Confidentiality Agreement shall,
notwithstanding language in such Confidentiality Agreement to the contrary,
remain in full force and effect and shall be incorporated herein by reference
with the same effect as if fully set forth herein; provided Buyer may use any
such information for the purposes referred to in Section 4.3(d).
4.3 Cooperation; Filings and Approvals
(a) Subject to the terms and conditions of this Agreement, each of
the Company, Buyer and Merger Sub shall cooperate with each other and shall use
(and shall cause their respective Subsidiaries to use) its commercially
reasonable best efforts to take or cause to
27
be taken all actions, and do or cause to be done all things, necessary, proper
or advisable on their part under this Agreement and applicable laws to
consummate and make effective the Merger and the other transactions contemplated
by this Agreement as soon as practicable, including, without limitation, (i)
preparing and filing as promptly as practicable all documentation to effect all
necessary applications, notices, petitions, filings, tax ruling requests and
other documents and to obtain as promptly as practicable all consents, waivers,
licenses, orders, registrations, approvals, permits, tax rulings and
authorizations necessary or advisable to be obtained from any third party and/or
any Governmental Entity in order to consummate the Merger or any of the other
transactions contemplated by this Agreement (including the consent of the FCC),
and (ii) taking all steps as may be necessary to obtain all such consents,
waivers, licenses, registrations, permits, authorizations, tax rulings, orders
and approvals; provided that the Company shall not be required to incur any
significant expense or liability or agree to any significant modification to any
contractual arrangement or Company Permit to obtain any of the foregoing.
(b) The Company and its Subsidiaries and Buyer shall file all reports
required to be filed by each of them with any Governmental Entity between the
date of this Agreement and the Effective Time and shall (to the extent permitted
by law or regulation or any applicable confidentiality agreement) deliver to the
other party copies of all such reports promptly after the same are filed.
Subject to applicable laws relating to the exchange of information, each of the
Company and Buyer shall have the right to review in advance, and to the extent
practicable each will consult with the other, with respect to all the
information relating to the other party and each of their respective
Subsidiaries, which appears in any filings, announcements or publications made
with, or written materials submitted to, any Governmental Entity in connection
with the transactions contemplated by this Agreement. In exercising the
foregoing right, each of the parties hereto agrees to act reasonably and as
promptly as practicable. Notwithstanding the foregoing, the Company will not be
obligated to deliver any tax returns on a regular basis pursuant to this Section
4.3(b) unless reasonably requested by Buyer.
(c) Each of the Company and Buyer agrees to make all necessary
filings in connection with the Required Regulatory Approvals as promptly as
practicable after the date of this Agreement, and to use its reasonable best
efforts to furnish or cause to be furnished, as promptly as practicable, all
information and documents required with respect to such Required Regulatory
Approvals and shall otherwise cooperate with the applicable Governmental Entity
in order to obtain any Required Regulatory Approvals in as expeditious a manner
as possible. Each party agrees that, to the extent practicable, it will consult
with the other party with respect to the obtaining of all permits, consents,
approvals and authorizations of all third Persons (including lessors) and
Governmental Entities necessary or advisable to consummate the transactions
contemplated by this Agreement and Seller agrees to cooperate with Buyer and
Buyer's representatives seeking to comply with any material leases or other
material agreements which would be violated as a result of the consummation of
the transactions contemplated hereby and each party will keep the other party
apprised of the status of matters relating to completion of the transactions
contemplated hereby. Without limiting the generality of the foregoing, Buyer and
Merger Sub agree to take all actions necessary to comply with the HSR Act so as
to consummate the Merger as promptly as practicable, including, without
limitation, (i) filing, no later than
28
twenty (20) business days following the date hereof, with the Federal Trade
Commission and the United States Department of Justice all documents required to
be filed pursuant to the HSR Act, and (ii) causing the expiration of the notice
and waiting periods under the HSR Act with respect to the transactions
contemplated by this Agreement as promptly as possible after the date of this
Agreement. Each of the Company and Buyer shall take all commercially reasonable
action necessary to resolve such objections, if any, as may be asserted by any
Governmental Entity with respect to this Agreement and the transactions
contemplated hereby in connection with the Required Regulatory Approvals. If any
administrative or judicial suit, action or proceeding is instituted (or
threatened to be instituted) by a Person or Governmental Entity challenging this
Agreement and the transactions contemplated hereby as violative of applicable
antitrust or competition laws, each of the Company and Buyer shall cooperate and
shall contest and resist, except insofar as the Company and Buyer shall
otherwise agree, any such suit, action or proceeding, including any suit, action
or proceeding that seeks a temporary restraining order or preliminary injunction
that would prohibit, prevent or restrict consummation of the Merger or any other
transaction contemplated by this Agreement.
(d) The Company and Buyer each shall, upon request by the other,
furnish the other with all information concerning itself, its Subsidiaries,
directors, officers and stockholders and such other matters as may reasonably be
necessary or advisable in connection with the Proxy Statement, the Financing or
alternative financing for the transactions contemplated by this Agreement
(including a public debt and/or equity financing by Buyer and/or its affiliates)
or any other statement, filing, tax ruling request, notice or application made
by or on behalf of the Company, Buyer or any of their respective Subsidiaries to
any third party and/or any Governmental Entity in connection with the
transactions contemplated by this Agreement. Without limiting the generality of
the foregoing, the Company shall, and shall use commercially reasonably efforts,
to cause its accountants and other representatives, to cooperate with Buyer and
its Affiliates in connection with the Financing (or any alternative financing
for the Merger proposed by Buyer), including (i) authorization to include the
Company's financial statements and other relevant information in any filing with
the SEC or other Governmental Entity and obtaining comfort letters customary in
public financing, (ii) incurring borrowings under its existing credit facilities
contemporaneously with the Closing, but not in excess of the maximum amount
permitted under such facilities, and (iii) cause Ernst & Young LLP to prepare
the Company's year-end audit in the ordinary course.
4.4 No Shopping. Unless and until this Agreement shall have been
terminated by either party pursuant to Article VI, the Company shall not, and
shall not authorize any of its officers, directors, agents, representatives or
advisors to, directly or indirectly, solicit, initiate, negotiate with or
knowingly encourage any Person (other than Buyer, Merger Sub or their respective
designees) to make or submit an offer, indication of interest or proposal to
acquire all or a majority of the Company's consolidated business or more than a
total of 9.9% of any class of the Company's capital stock, whether by merger,
consolidation or other business combination, purchase of assets, tender or
exchange offer or otherwise (other than the transactions contemplated by this
Agreement) (each of the foregoing, an "Acquisition Proposal") or provide any
--------------------
Person any non-public information concerning the Company or its Subsidiaries
which the Company has reason to believe will be used in connection with an
Acquisition Proposal.
29
4.5 Employee Benefits
(a) For a period of 12 months immediately following the Closing Date,
the Surviving Corporation shall (i) provide aggregate compensation (including
base salary, bonus opportunities (other than the Stay Bonus provision and one-
time payments made as a result of a change in control in connection with the
transactions contemplated by this Agreement) and benefits) to each employee
(other than Messrs. Fujii and XxXxxxxx) of the Company and its Subsidiaries as
of the Closing Date for so long as such employee is employed by the Surviving
Corporation which is no less favorable than that provided to each such employee
prior to the Closing Date, and (ii) maintain in effect employee benefit plans
and arrangements (including severance, change of control and termination
benefits) which provide benefits for such employees which in the aggregate have
a value which is at least comparable to the benefits provided by the Company
Benefit Plans.
(b) For purposes of determining eligibility to participate, waiting
periods, vesting and accrual or entitlement to benefits where length of service
is relevant under any employee benefit plan or arrangement of Buyer, the
Surviving Corporation or any of their respective Subsidiaries, if employees of
the Company or any of its Subsidiaries are eligible to participate therein,
employees of the Company and its Subsidiaries as of the Effective Time shall
receive service credit for service with the Company and its Subsidiaries to the
same extent such service credit was granted under the Company Benefit Plans,
subject to offsets for previously accrued benefits and no duplication of
benefits. If employees of the Company or any of its Subsidiaries are eligible to
participate in any medical, dental or health plan maintained or established by
the Surviving Corporation (other than the plan or plans which such employees
participated in immediately prior to the Effective Time), such plan or plans
shall not include pre-existing condition exclusions, except to the extent such
exclusions were applicable under the plans in which such employees participated
immediately prior to the Effective Time, and shall provide credit for any
deductibles and co-payments applied or made with respect to each such employee
in the calendar year of the change in plan.
(c) Buyer shall cause the Surviving Corporation to assume and honor
in accordance with their terms all written employment, severance and termination
plans, policies and agreements (including change in control provisions) of
employees of the Company and its Subsidiaries as in effect on the date of this
Agreement and the Stay Bonus program, each of which plans, policies, agreements
and programs are listed in Section 4.5 of the Company Disclosure Schedule and
are subject to Section 4.5(a). The Company agrees to consult with Buyer
regarding the aggregate amount and allocation of such aggregate amount payable
under the Stay Bonus program.
4.6 Fees and Expenses. Whether or not the transactions contemplated
hereby are consummated, all Expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such Expenses, except if the Merger is consummated, the Surviving Corporation
shall pay, or cause to be paid, any and all property or transfer taxes imposed
on the Company or its Subsidiaries and any real property transfer tax imposed on
any holder of shares of capital stock of the Company resulting from the Merger.
As
30
used in this Agreement, "Expenses" includes all out-of-pocket expenses
--------
(including, without limitation, all fees and expenses of counsel, accountants,
investment bankers, experts and consultants to a party hereto and its
affiliates) incurred by a party or on its behalf in connection with or related
to the authorization, preparation, negotiation, execution and performance of
this Agreement and the transactions contemplated hereby, including the
Financing.
4.7 Indemnification; Directors' and Officers' Insurance
(a) Buyer and the Surviving Corporation shall cause to be maintained
in effect for a period of six (6) years after the Effective Time the current
provisions regarding indemnification of current or former officers and directors
(each an "Indemnified Party") contained in the Organizational Documents of the
-----------------
Company or its Subsidiaries and in any agreements between an Indemnified Party
and the Company or its Subsidiaries (which provisions, unless required by
applicable law, shall not be amended, repealed or otherwise modified for such
six-year period in any manner that would adversely affect the rights thereunder
of any Indemnified Party), provided that in the event any claim or claims are
asserted or made within such six-year period, all rights to indemnification in
respect of any claim or claims shall continue until final disposition of any and
all such claims, and
(b) either (i) Buyer and the Surviving Corporation shall cause to be
maintained in effect for a period of six (6) years after the Effective Time the
current policies of directors' and officers' liability insurance and fiduciary
liability insurance maintained by the Company provided that Buyer or the
Surviving Corporation may substitute therefor policies of at least the same
coverage and amounts containing terms and conditions which are, in the
aggregate, no less advantageous to the insured and provided further that such
substitution shall not result in any gaps or lapses in coverage with respect to
matters occurring on or prior to the Effective Time; and provided further, that
the annual premium therefor is not in excess of two hundred percent (200%) of
the last annual premium paid by the Company prior to the date hereof (or if such
premium is in excess of such amount, such policies of directors' and officers'
liability insurance and fiduciary liability insurance providing for as much
coverage as can be obtained for such amount) with respect to claims arising from
facts or events that occurred on or before the Effective Time or (ii) at the
Company's election and so long as the Company advises Buyer of such election not
less than 60 days prior to Closing Buyer shall purchase a tail policy to be in
effect until the sixth anniversary of Closing for directors' and officers'
liability insurance and fiduciary liability insurance at a one time premium cost
not to exceed $100,000. This covenant is intended to be for the benefit of, and
shall be enforceable by, each of the Indemnified Parties and their respective
heirs and legal representatives. For a period of six (6) years after the
Effective Time (provided that in the event any claim or claims are asserted or
made within such six-year period, all rights to indemnification in respect of
any claim or claims shall continue until final disposition of any and all such
claims), Buyer shall indemnify the Indemnified Parties to the same extent as
such Indemnified are entitled to indemnification under the Organizational
Documents pursuant to Section 4.7(a). Without limitation of the foregoing, in
the event after the Effective Time any such Indemnified Party is or becomes
involved in any action, proceeding or investigation in connection with any
matter occurring prior to or on the Effective Time, including the transactions
contemplated hereby, and a conflict of interest exists which would prohibit
31
counsel for the Company or counsel for one or more other Persons from
representing such Indemnified Party, then the Surviving Corporation will pay as
incurred such Indemnified Party's reasonable fees and expenses of counsel
selected by the Surviving Corporation (including the cost of any investigation
and preparation and the cost of any appeal) incurred in connection therewith.
This covenant shall survive the closing of the transactions contemplated hereby
and is intended to be for the benefit of, and shall be enforceable by, each of
the Indemnified Parties and their respective heirs and legal representatives.
Buyer hereby guarantees the compliance by the Surviving Corporation with the
provisions of, and the performance of the obligations of the Surviving
Corporation under, this Section 4.7.
4.8 Public Announcements. So long as this Agreement is in effect, the
Company and Buyer shall use all reasonable efforts to develop a joint
communications plan and each party shall use all reasonable efforts (i) to
ensure that all press releases and other public statements with respect to the
transactions contemplated hereby shall be consistent with such joint
communications plan and (ii) unless otherwise required by applicable law or by
obligations pursuant to any listing agreement with or rules of any securities
exchange, to consult with each other before issuing any press release or
otherwise making any public statement with respect to this Agreement or the
transactions contemplated hereby.
4.9 FCC Application
(a) As promptly as practicable after the execution and delivery of
this Agreement, Buyer, Merger Sub and the Company shall prepare all appropriate
applications for FCC consent, and such other documents as may be required, with
respect to the transfer of control of the Company to Buyer (collectively, the
"FCC Application"). Not later than the twentieth Business Day following the
----------------
date of this Agreement, Buyer and Merger Sub shall deliver to the Company their
respective completed portions of the FCC Application, and not later than the
thirtieth Business Day following the date of this Agreement, the Company shall
file or cause to be filed the FCC Application. The Company and Buyer shall
prosecute the FCC Application in good faith and with due diligence in order to
obtain such FCC consent as expeditiously as practicable. If the Closing shall
not have occurred for any reason within the initial effective period of the
granting of approval by the FCC of the FCC Application, and neither the Company
nor Buyer shall have terminated this Agreement pursuant to Section 6.1, the
Company and Buyer shall jointly request one or more extensions of the effective
period of such grant. No party hereto shall knowingly take or fail to take any
action the intent or reasonably anticipated consequence of which action or
failure to act would be to cause the FCC not to grant approval of the FCC
Application or delay either such approval or the consummation of the transfer of
control of the Company pursuant to this Agreement.
(b) The Company shall pay any fees that may be payable in connection
with the filing or granting of approval of the FCC Application. Buyer and the
Company shall each oppose any objection or petition against the FCC Application,
and shall oppose any request for reconsideration or judicial review of the
granting of the FCC Application. The Company shall pay any costs incurred in
connection with complying with the FCC notice and advertisement
32
requirements in connection with the transfer of control of the Company pursuant
to this Agreement.
4.10 Financing
(a) Buyer has delivered to the Company a true and complete copy of
the Bank Commitment Letter, which when combined with the equity to be
contributed to Buyer by its members will be sufficient to allow Buyer (i) to pay
in full all payments to be made in connection with the Merger (including the
purchase of the Series A Preferred Stock) and the other transactions
contemplated hereby, (ii) to refinance and retire all outstanding indebtedness
of the Company at the Effective Time under (A) the Credit Agreement, dated June
25, 1998, among American Cellular Wireless LLC, as borrower, certain guarantors,
arrangers and agents signatory thereto, the lenders party thereto and Toronto
Dominion (Texas), Inc., as administrative agent for the lenders (as amended,
supplemented or modified from time to time, the "Bank Credit Facility"), and (B)
--------------------
the 10 1/2% Senior Notes due 2008 issued by the Company pursuant to the
Indenture, dated as of May 13, 1998, between the Company and Chase Manhattan
Bank and Trust Company, National Association, as trustee (the "Senior Notes"),
------------
and (iii) to satisfy all Transaction Fees and Expenses and all other costs
arising in connection therewith. The financing to be provided under the Bank
Commitment Letter (or such other financing as Buyer may arrange with a bank or
institutional lender having capital and surplus in excess of $3.0 billion and a
Thomson Bank Watch Rating of "B" or better (any such bank or institutional
lender is referred to herein as the "Bank") that is on terms and conditions that
are no less favorable to Buyer than those contained in the Bank Commitment
----
Letter) is referred to in this Agreement as the "Financing."
---------
(b) Buyer agrees to use its commercially reasonable efforts to
promptly negotiate and obtain definitive agreements with respect to the
Financing upon the terms provided in the Bank Commitment Letter (or such
replacement commitment letter that has substantially similar terms as the Bank
Commitment Letter and is in any event no less favorable to Buyer than those set
forth in the Bank Commitment Letter) (the "Definitive Financing Agreements") and
-------------------------------
if such Definitive Financing Agreements are entered into, to consummate the
Financing upon satisfaction of (i) the conditions set forth in Article V and
(ii) the conditions precedent to any extension of credit under the Definitive
Financing Agreements (other than those conditions which are within Buyer's
control which conditions Buyer shall cause to be satisfied). Buyer shall use
reasonable commercial efforts to satisfy all requirements of the Bank Commitment
Letter (or such replacement commitment letter that has substantially similar
terms as the Bank Commitment Letter and is in any event no less favorable to
Buyer than those set forth in the Bank Commitment Letter) and of the Definitive
Financing Agreements which are conditions precedent to closing the transactions
constituting the Financing and to drawing the cash proceeds thereunder. The
Company shall provide such cooperation as is reasonably requested by the Buyer
in order to satisfy those conditions to closing the transactions constituting
the Financing which are applicable to the Company, provided that the Company
shall not be obligated to incur any Expense in order to comply with this
obligation.
33
4.11 Termination of Equity Documents. At or prior to the Effective
Time, the Company shall cause (i) the Stockholders Agreement, dated as of March
5, 1998, by and among the Company and each of the stockholders of the Company
signatory thereto, as amended, supplemented or modified from time to time, (ii)
the Stock Purchase Agreement, dated as of March 5, 1998, by and among the
Company and each of the stockholders of the Company signatory thereto, as
amended, supplemented or modified from time to time, and (iii) the Registration
Rights Agreement, dated as of March 5, 1998, by and among the Company and each
of the stockholders of the Company signatory thereto, as amended, supplemented
or modified from time to time, each to be terminated and of no further force and
effect (except for provisions thereof which by their terms survive any such
termination and do not adversely impact Buyer or the Surviving Corporation in a
material manner).
4.12 Further Assurances. If at any time after the Effective Time any
further action is reasonably necessary to carry out the purposes of this
Agreement, the proper officers of the Company, Buyer and Merger Sub shall take
any such further action and shall be authorized to execute and deliver, in the
name and on behalf of the Company, Buyer or Merger Sub, as the case may be, any
deeds, bills of sale, assignments or assurances and to take any other actions to
vest, perfect or confirm of record or otherwise in the Surviving Corporation any
and all right, title and interest in, to and under any of the rights, properties
or assets of the Company acquired or to be acquired by the Surviving Corporation
as a result of or in connection with the Merger.
ARTICLE V.
CONDITIONS PRECEDENT
5.1 Conditions to Each Party's Obligation to Effect the Merger. The
obligations of the Company, Buyer and Merger Sub to effect the Merger are
subject to the satisfaction or waiver on or prior to the Effective Time of the
following conditions:
(a) HSR Act. The waiting period (and any extension thereof)
-------
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired.
(b) No Injunctions or Restraints, Illegality. No temporary
----------------------------------------
restraining order, preliminary or permanent injunction or other order issued by
a court or other Governmental Entity of competent jurisdiction shall be in
effect and have the effect of making the Merger illegal or otherwise restraining
or prohibiting consummation of the Merger or any of the other transactions
contemplated by this Agreement; provided, however, that the provisions of this
-------- -------
Section 5.1(b) shall not be available to any party whose failure to fulfill its
obligations pursuant to Section 4.3 shall have been the cause of, or shall have
resulted in, such order or injunction.
(c) Required Regulatory Approvals. All consents, waivers,
-----------------------------
authorizations, permits, orders and approvals of, and declarations and filings
with, and all expirations of waiting periods imposed by, any Governmental Entity
(other than the FCC) which, if not obtained in connection with the execution,
delivery and performance by the parties of this Agreement and the consummation
of the transactions contemplated hereby, would have a Material Adverse Effect on
the Company or the Surviving Corporation, or materially impair the ability of
the Company, Buyer or Merger Sub to consummate the transactions contemplated
hereby (collectively,
34
"Required Regulatory Approvals"), shall have been obtained, waived, declared or
-----------------------------
filed or have occurred, as the case may be, and all such Required Regulatory
Approvals shall be in full force and effect.
(d) FCC Transfer Approvals. Except as set forth in Section 5.2(c),
----------------------
all consents, waivers, approvals and authorizations (the "FCC Transfer
------------
Approvals") required to be obtained from, and all filings or notices required to
---------
be made by Buyer and the Company prior to the consummation of the transactions
contemplated by this Agreement shall have been obtained from or made with, the
FCC.
5.2 Conditions to the Obligations of Buyer and Merger Sub to Effect the
Merger. In addition to the conditions set forth in Section 5.1, the obligations
of Buyer and Merger Sub to effect the Merger are further subject to the
satisfaction or waiver on or prior to the Effective Time of the following
conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of the Company set forth in this Agreement shall be true and correct
as of the date of this Agreement and as of the Closing Date as though made on
and as of the Closing Date, except to the extent (i) any inaccuracies in such
representations and warranties, individually or in the aggregate, would not have
a Material Adverse Effect on the Company (provided that, solely for purposes of
this Section 5.2(a), any representation or warranty of the Company that is
qualified by materiality (or words of similar import) or Material Adverse Effect
shall be read as if such language were not present), or (ii) such
representations and warranties speak as of an earlier date. Buyer shall have
received a certificate executed on behalf of the Company by its Chief Executive
Officer or Chief Financial Officer to such effect.
(b) Performance of Obligations and Covenants. The Company shall have
----------------------------------------
performed or complied in all material respects with all of its obligations and
covenants required to be performed by the Company under this Agreement at or
prior to the Closing Date. Buyer shall have received a certificate executed on
behalf of the Company by its Chief Executive Officer or Chief Financial Officer
to such effect.
(c) Final Order. Each of the FCC Transfer Approvals shall have become
-----------
a Final Order. For purposes of this Agreement, "Final Order" shall mean an
-----------
action by the FCC: (i) that is not reversed, stayed, enjoined, set aside,
annulled or suspended within the deadline, if any, provided by applicable
statute or regulation, (ii) with respect to which no request for stay, motion or
petition for reconsideration or rehearing, application or request for review, or
notice of appeal or other judicial petition for review that is filed within such
period is pending, and (iii) as to which the deadlines, if any, for filing any
such request, motion, petition, application, appeal or notice, and for the entry
of orders staying, reconsidering or reviewing on the FCC's own motion have
expired. Notwithstanding anything to the contrary contained in this Agreement,
(A) Buyer may, at its option by written notice to the Company, waive, on behalf
of all parties, the requirement that each of the FCC Transfer Approvals shall
have become a Final Order, and (B) in the case of the required FCC Transfer
Approvals regarding the transfer of the microwave and PCS licenses only, Buyer
shall, on behalf of all parties, deem either initial FCC approvals or
35
special temporary authority to transfer the microwave or PCS licences, as the
case may be, to satisfy this condition and in such case upon receipt of either
the intial FCC approvals or such special temporary authority, each party shall
be obligated hereunder as though a Final Order with respect thereto had been
received.
(d) Deliveries. Buyer shall have received (i) payoff letters in
----------
customary form with respect to the Bank Credit Facility and shall have received
a certificate from the Company's Chief Financial Officer with respect to the
amount of the Transaction Fees and Expenses and the amount of Outstanding
Indebtedness; (ii) resignations of all directors of the Company effective as of
the Effective Time; (iii) written statements contemplated by Section 5.2(d) of
the Company Disclosure Schedule from Messrs. Fujii and XxXxxxxx; and (iv)
agreements and instruments in form and substance reasonably satisfactory to
Buyer evidencing the termination of each of the agreements and instruments as
provided in Section 4.11 of this Agreement.
(e) No Litigation. Except as set forth on Section 2.1(g) of the
-------------
Company Disclosure Schedule, there shall not be pending any suit, action,
investigation (of which the Company has received written notice that it is a
target) or proceeding by any Governmental Entity (an "Action") (i) seeking to
------
restrain or prohibit the consummation of the Merger or any of the other
transactions contemplated by this Agreement or seeking to obtain damages from
the Company or Buyer or any of their respective Subsidiaries, which, if
determined adversely to the Company, would be reasonably likely to have a
Material Adverse Effect on the Company; (ii) seeking to prohibit or limit the
ownership or operation by the Company or any of its Subsidiaries or Buyer of any
material portion of the business or assets of the Company and its Subsidiaries;
(iii) seeking to require the Company or any of its Subsidiaries or Buyer to
dispose of or hold separate any material portion of the business or assets of
the Company and its Subsidiaries as a result of the Merger or any of the other
transactions contemplated by this Agreement; (iv) seeking to prohibit Buyer from
effectively controlling in any material respect the business or operations of
the Company and its Subsidiaries, including the exercise of any purported right
under a Lien with respect to any Subsidiary, or (v) seeking to impose
limitations on the ability of Buyer or Merger Sub to hold, or exercise full
rights of ownership of, any shares of Company Common Stock, including without
limitation, the right to vote shares of Company Common Stock on all matters
properly presented to the shareholders of the Company or which otherwise would
have a Material Adverse Effect on the Company.
(f) Material Adverse Change. Since the date of this Agreement, there
-----------------------
shall not have been a Material Adverse Effect on the Company.
(g) Dissenting Shares. The holders of not more than 5% of all
-----------------
outstanding Class A Common Stock shall have demanded (and not withdrawn)
appraisal for their shares in accordance with Section 262 of the DGCL.
(h) Debt Repayment. Messrs. Fujii and XxXxxxxx shall have repaid all
--------------
outstanding indebtedness owed by them to the Company and its Subsidiaries.
36
(i) Shareholder Approval. The Written Consent of Shareholders
--------------------
approving and adopting this Agreement and the transactions contemplated hereby,
including the Merger in accordance with the DGCL, shall be in full force and
effect as of the Closing Date.
5.3 Conditions to the Obligations of the Company to Effect the Merger. In
addition to the conditions set forth in Section 5.1, the obligations of the
Company to effect the Merger are further subject to the satisfaction or waiver
on or prior to the Effective Time of the following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Buyer and Merger Sub set forth in this Agreement shall be true and
correct as of the date of this Agreement and as of the Closing Date as though
made on and as of the Closing Date, except to the extent (i) any inaccuracies in
such representations and warranties, individually or in the aggregate, would not
have a Material Adverse Effect on Buyer or Merger Sub (provided that, solely for
purposes of this Section 5.2(a), any representation or warranty of Buyer or
Merger Sub that is qualified by materiality (or words of similar import) or
Material Adverse Effect shall be read as if such language were not present), or
(ii) such representations and warranties speak as of an earlier date. The
Company shall have received an officer's certificate executed on behalf of Buyer
and Merger Sub to such effect.
(b) Performance of Obligations and Covenants. Buyer and Merger Sub
----------------------------------------
shall have performed or complied with in all material respects all of their
respective obligations and covenants required to be performed by them under this
Agreement at or prior to the Closing Date and the Company shall have received an
officer's certificate executed on behalf of Buyer and Merger Sub to such effect.
ARTICLE VI.
TERMINATION AND AMENDMENT
6.1 Termination. This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, by action taken or authorized
by the Board of Directors of the terminating party or parties, whether before or
after approval of this Agreement and the transactions contemplated hereby by the
stockholders of the Company:
(a) By mutual written consent of Buyer and the Company, by action of
their respective Boards of Directors;
(b) By either the Company or Buyer if the Merger shall not have been
consummated by the date which is six (6) months from the date of this Agreement
(the "Outside Date"); provided, however, that such Outside Date shall be
------------ -------- -------
extended to the date which is twelve (12) months from the date of this Agreement
in the event all conditions to effect the Merger other than those set forth in
Sections 5.1(a), (b), (c) and (d) and 5.2(c) (the "Extension Conditions") have
--------------------
been or are, in the reasonable judgment of either Seller or Buyer, capable of
being satisfied (or if the party for whose benefit such condition runs is in
such party's discretion, waived) at the time of such extension and the Extension
Conditions have been or are reasonably capable of being satisfied on or prior to
such extended date; provided further that the right to terminate this
-------- -------
37
Agreement under this Section 6.1(b) shall not be available to any party whose
failure (or, if Buyer is the terminating party, the failure of Buyer or Merger
Sub) to fulfill any obligation under this Agreement has been the primary cause
of, or resulted in, the failure of the Merger to occur on or before such Outside
Date, as the same may be extended pursuant to this Section 6.1(b) (except that,
notwithstanding the provisions of this Section 6.1(b), if, at the Outside Date,
all conditions precedent to Buyer's obligation to consummate the Merger set
forth in Article V have been satisfied (or waived by Buyer) and the Merger has
not closed solely as a result of a Bank Financing Failure, Buyer shall have the
right to terminate this Agreement pursuant to this Section 6.1(b) upon payment
to the Company of the Liquidated Damages Amount);
(c) By either the Company or Buyer if there shall be any law or regulation
that makes consummation of the Merger illegal or otherwise prohibited or if any
Governmental Entity shall have issued an order, decree or ruling or taken any
other action (which order, decree, ruling or other action the terminating party
(including, if Buyer is the terminating party, Merger Sub) shall have used its
commercially reasonable efforts to resist, resolve or lift, as applicable,
subject to the provisions of Section 4.3) permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement, and such
order, decree, ruling or other action shall have become final and nonappealable;
(d) By Buyer if the approval by the stockholders of the Company required
for the consummation of the Merger or the other transactions contemplated hereby
shall not have been obtained by reason of the failure to obtain the required
vote at the Company Stockholders Meeting or at any adjournment thereof or
pursuant to a written consent in lieu of a shareholders meeting;
(e) By Buyer, upon a material breach of any covenant or agreement on the
part of the Company set forth in this Agreement, or if (i) any representation or
warranty of the Company that is qualified as to materiality shall have become
untrue or (ii) any representation or warranty of the Company that is not so
qualified shall have become untrue in any material respect (a "Terminating
-----------
Company Breach"); provided, however, Buyer shall promptly give the Company
-------------- -------- -------
written notice specifying such breach and if such Terminating Company Breach is
capable of being cured by the Company prior to the earlier of 30 days or the
tenth day prior to the Outside Date through the exercise of its reasonable
commercial efforts, so long as the Company continues to exercise its reasonable
commercial efforts to cure such Terminating Company Breach, Buyer may not
terminate this Agreement under this Section 6.1(e);
(f) By the Company, upon a material breach of any covenant or agreement on
the part of Buyer or Merger Sub set forth in this Agreement, or if (i) any
representation or warranty of Buyer or Merger Sub that is qualified as to
materiality shall have become untrue or (ii) any representation or warranty of
Buyer or Merger Sub that is not so qualified shall have become untrue in any
material respect ("Terminating Buyer Breach"); provided, however, the Company
------------------------ -------- -------
shall promptly give Buyer written notice specifying such breach and if such
Terminating Buyer Breach is capable of being cured by Buyer prior to the earlier
of 30 days or the tenth day prior to the Outside Date through the exercise of
reasonable commercial efforts, so long as Buyer and Merger Sub continue to
exercise their respective reasonable commercial
38
efforts to cure such Terminating Buyer Breach, the Company may not terminate
this Agreement under this Section 6.1(f);
(g) By Buyer upon any action by the parties to the Voting Agreement or
the Written Consent of Shareholders, the effect of which is that the approval or
consent of a majority of the Company's stockholders entitled to vote on the
Merger is no longer in effect.
The party desiring to terminate this Agreement pursuant to Section 6.1(b), (c),
(d), (e), (f) or (g) shall provide the other party notice of such termination in
accordance with Section 7.2.
6.2 Effect of Termination. In the event of termination of this Agreement
by either the Company or Buyer as provided in Section 6.1, this Agreement shall
forthwith become void and of no further force and effect and there shall be no
liability or obligation on the part of Buyer, Merger Sub or the Company or their
respective officers or directors except with respect to the Company, Buyer and
Merger Sub (i) as provided in the last sentence of Section 4.2, Section 4.6,
this Section 6.2 and Article VII, and (ii) for damages incurred by any party as
a result of a breach by the other party of any of its covenants,
representations, warranties or other agreements set forth in this Agreement,
including damages incurred as a result of any termination that results from such
a breach, and in the case of a breach by Buyer or Merger Sub, to the full extent
of such damages up to but not exceeding $500 million. Notwithstanding the
foregoing, in the event that the conditions precedent to Buyer's obligations to
consummate the Merger set forth in Article V have been satisfied (or waived by
Buyer) and the Merger fails to occur by the date on which such conditions have
been so satisfied (or waived by Buyer) solely because either (i) Buyer has
received written notice from Bank of America N.A. and Banc of America Securities
LLC that they will not fund the financing contemplated by the Bank Commitment
Letter (or, if Buyer has substituted a Bank pursuant to Section 4.10(a), a
similar written notice from such Bank) for any reason other than (x) a breach by
Buyer of its obligations to the banks under the Bank Commitment Letter or the
Definitive Financing Agreements (or, if Buyer has substituted a Bank pursuant to
Section 4.10(a), a breach by Buyer of its obligations to such Bank under any
commitment letter or other financing agreements with such Bank) or (y) the
failure of Buyer to satisfy a condition to the funding of such financing that is
within Buyer's control or (ii) Buyer and Bank of America N.A. and Banc of
America Securities LLC have been unable, despite good faith efforts, to
negotiate, execute and deliver the Definitive Financing Agreements (or, if Buyer
has substituted a Bank pursuant to Section 4.10(a), Buyer and Bank have been
unable, despite good faith efforts, to negotiate, execute and deliver definitive
financing agreements) (a Bank Financing Failure"), then in the event of
----------------------
termination of this Agreement by either party in accordance with the terms
hereof, Buyer shall pay the Company, as liquidated damages, the sum of $100
million without the necessity of proof by the Company of actual damages (the
"Liquidated Damages Amount"). The parties acknowledge that the Liquidated
-------------------------
Damages Amount is a fair and reasonable measure of the damages that the Company
and its stockholders would sustain as a result of the failure of Buyer to
consummate the Merger due to a Bank Financing Failure, and that the amount of
actual damages in the event of a Bank Financing Failure would be impossible to
ascertain. For the avoidance of doubt, the parties hereby acknowledge that a
Bank Financing Failure cannot occur if there is a breach (after giving effect to
any applicable cure period provided in this Agreement) by Buyer of its
obligations under this
39
Agreement, and in the event of such breach the Company shall be entitled to
pursue its remedies against Buyer to the full extent of such damages up to but
not exceeding $500 million as provided in Section 6.2(a)(ii); provided, however,
-------- -------
the Company covenants and agrees that in the event a court of competent
jurisdiction renders a final nonappealable order that Buyer did not breach its
obligations under this Agreement and that a Bank Financing Failure had occurred,
then upon the payment of the Liquidated Damages Amount, neither Buyer nor Merger
Sub (nor any affiliate thereof) will have any further liability to the Company,
and the Company shall not pursue any other action or claim against the Buyer or
any of its affiliates, arising out of or relating to this Agreement, the
Unrestricted Equity Agreement or any other related agreement or the transactions
contemplated hereby and thereby. Notwithstanding any other provision of this
Agreement, no party hereto may be liable for any punitive, consequential or
special damages in any action based on a breach by the other party of any of its
covenants, representations, warranties or other agreements set forth in this
Agreement. For the avoidance of doubt, in the event a Bank Financing Failure
occurs prior to the satisfaction (or waiver by Buyer) of all of the conditions
precedent to Buyer's obligations to consummate the Merger set forth in Article
V, Buyer's obligations to consummate the transactions contemplated by this
Agreement in accordance with the terms hereof shall remain in full force and
effect; provided, however, the Liquidated Damages Amount shall not be payable
-------- -------
prior to the satisfaction (or waiver by Buyer) of all of the conditions
precedent to Buyer's obligations to consummate the Merger set forth in Article
V. Nothing in this Section 6.2 or any other section of this Agreement shall be
construed in any manner to condition Buyer's obligation to consummate the
transactions contemplated by this Agreement upon Buyer's obtaining the Financing
or any substitute financing.
6.3 Amendment. This Agreement may be amended by all the parties hereto,
by action taken or authorized by their respective Boards of Directors, at any
time whether before or after approval of this Agreement and the transactions
contemplated hereby by the stockholders of the Company, but, after any such
approval, no amendment shall be made which by law requires further approval by
such stockholders without such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
6.4 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party. No delay on
the part of any party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of
any party hereto of any right, power or privilege hereunder operate as a waiver
of any other right, power or privilege hereunder, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege hereunder. Unless otherwise provided, the rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies which
the parties hereto may
40
otherwise have at law or in equity. The failure of any party to this Agreement
to assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of those rights.
ARTICLE VII.
GENERAL PROVISIONS
7.1 Non-Survival of Representations, Warranties and Agreements; No Other
Representations and Warranties. None of the representations, warranties,
covenants and other agreements in this Agreement or in any instrument delivered
pursuant to this Agreement, including any rights arising out of any breach of
such representations, warranties, covenants and other agreements, shall survive
the Effective Time, except for those covenants and agreements contained herein
and therein that by their terms apply or are to be performed in whole or in part
after the Effective Time and this Article VII. Each party hereto agrees that,
except for the representations and warranties contained in this Agreement the
Unrestricted Equity Agreement, none of the Company, Buyer or Merger Sub makes
any other representations or warranties, and each hereby disclaims any other
representations and 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, the documents and the
instruments referred to herein, or the transactions contemplated hereby or
thereby, notwithstanding the delivery or disclosure to the other party or the
other party's representatives of any documentation or other information with
respect to any one or more of the foregoing.
7.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed duly given (a) on the date of delivery if delivered
personally, (b) on the first Business Day following the date of dispatch if
delivered by a nationally recognized next-day courier service, (c) on the
earlier of the date of receipt or the tenth Business Day following the date of
mailing if delivered by registered or certified mail, return receipt requested,
postage prepaid or (d) if sent by facsimile transmission, when transmitted and
receipt is confirmed by telephone. All notices hereunder shall be delivered as
set forth below, or pursuant to such other instructions as may be designated in
writing by the party to receive such notice:
(a) if to Buyer or Merger Sub, to:
ACC Acquisition LLC
c/o Dobson Communication Corporation
00000 X. Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, President
Fax No.: 000-000-0000
with copies to:
Xxxxxx Communications Corporation
00000 X. Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
41
Attention: Xxxxxxx Xxxxxx, President
Fax No.: 000-000-0000
and:
AT&T Wireless Services, Inc.
0000 000/xx/ Xxxxxx, X.X.
Xxxxxxx , XX 00000
Attention: Xxxxxxx Xxxxx
Fax No.: 000-000-0000
Xxxxxxx and Xxxxxx, LLP
0000 XxxxXxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esquire
Fax No.: 000-000-0000
and:
Xxxxxxxx Xxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esquire
Fax No.: 000-000-0000
(b) if to Seller, to:
American Cellular Corporation
0000 X. Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 6017
Attention: Xxxx Xxxxx, Chief Executive Officer
with copies to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esquire
and:
American Cellular Corporation
0000 X Xxxxxx, X.X.
Xxxxx 000
00
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, General Counsel
Xxxxx Xxxxxx Xxxxxxxx LLP
0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxx
7.3 Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents, glossary of defined terms and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden or proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local or
foreign statue or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. It is understood
and agreed that neither the specifications of any dollar amount in this
Agreement nor the inclusion of any specific item in the Schedules or Exhibits is
intended to imply that such amounts or higher or lower amounts, or the items so
included or other items, are or are not material, and neither party shall use
the fact of setting of such amounts or the fact of the inclusion of such item in
the Schedules or Exhibits in any dispute or controversy between the parties as
to whether any obligation, item or matter is or is not material for purposes
hereof.
7.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that both
parties need not sign the same counterpart.
7.5 Entire Agreement; No Third Party Beneficiaries
(a) This Agreement (including the Schedules and Exhibits hereto)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, other than the Confidentiality Agreement, which
Confidentiality Agreement shall survive the execution and delivery of this
Agreement.
(b) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or implied,
is intended to or shall confer upon any other Person any right, benefit or
remedy of any nature whatsoever under or by
43
reason of this Agreement, other than Article I and Sections 4.7 and 6.2 (each of
which is intended to be for the benefit of the Persons covered thereby and may
be enforced by such Persons).
7.6 Governing Law; Jurisdiction; Waiver of Jury Trial
(a) This Agreement shall be governed and construed in accordance with
the laws of the State of Delaware, without regard to the laws that might be
applicable under conflicts of laws principles.
(b) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of any court
in the State of Delaware, or Federal court of the United States of America
sitting in Delaware, and any appellate court of such jurisdiction, in any action
or proceeding arising out of or relating to this Agreement or the agreements
delivered in connection herewith or the transactions contemplated hereby or
thereby or for recognition or enforcement of any judgment relating thereto, and
each of the parties hereby irrevocably and unconditionally (i) agrees not to
commence any such action or proceeding except in such courts, (ii) agrees that
any claim in respect of any such action or proceeding may be heard and
determined in such Delaware state court or, to the extent permitted by law, in
such Federal court, (iii) waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such action or proceeding in any such Delaware state or
Federal court, and (iv) waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such Delaware state or Federal court. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 7.2. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
(c) Each party acknowledges and agrees that any controversy which may
arise under this agreement is likely to involve complicated and difficult
issues, and therefore it hereby irrevocably and unconditionally waives any right
it may have to a trial by jury in respect of any litigation directly or
indirectly arising out of or relating to this agreement and any of the
agreements delivered in connection herewith or the transactions contemplated
hereby or thereby. Each party certifies and acknowledges that (i) no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce either of such waivers, (ii) it understands and has considered the
implications of such waivers, (iii) it makes such waivers voluntarily, and (iv)
it has been induced to enter into this agreement by, among other things, the
mutual waivers and certifications in this section 7.6(c).
7.7 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
44
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible. Any provision of this Agreement
held invalid or unenforceable only in part, degree or certain jurisdictions will
remain in full force and effect to the extent not held invalid or unenforceable.
To the extent permitted by applicable law, each party waives any provision of
law which renders any provision of this Agreement invalid, illegal or
unenforceable in any respect.
7.8 Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto, in
whole or in part (whether by operation of law or otherwise), without the prior
written consent of the other parties, and any attempt to make any such
assignment without such consent shall be null and void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective permitted successors and
assigns.
7.9 Enforcement. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms. It is accordingly agreed that except as
otherwise provided in Section 6.2 the parties shall be entitled to specific
performance of the terms hereof, this being in addition to any other remedy to
which they are entitled at law or in equity.
7.10 Definitions. As used in this Agreement:
(a) "Board of Directors" means the Board of Directors of any specified
------------------
Person and any properly serving and acting committees thereof.
(b) "Business Day" means any day on which banks are not required or
------------
authorized to close in the City of New York.
(c) "Intellectual Property" means patents, copyrights, trademarks
---------------------
(registered and unregistered), service marks, brand names, trade names, and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing.
(d) "Material Adverse Effect" means, with respect to any Person, any
-----------------------
change, circumstance, event or effect that, individually or in the aggregate
with all other changes, circumstances and effects has had or is reasonably
likely to have a material adverse effect on the business, operations, financial
condition or results of operations of such Person and its Subsidiaries taken as
a whole. As used in this Agreement, the term "Material Adverse Effect" (i)
shall include, without limitation, any change, circumstance, event or effect (A)
with respect to Buyer, that is materially adverse to Buyer's ability to pay the
Merger Consideration or otherwise perform its obligations under this Agreement
or that would otherwise materially impair the ability of Buyer to consummate the
transactions contemplated hereby, and (B) with respect to the Company, that
would materially impair the ability of the Company to consummate the
transactions contemplated hereby, and (ii) shall not include, with respect to
the Company, any change, circumstance, event or effect that relates to or
results primarily from changes in general
45
economic conditions, financial markets or conditions in the cellular or wireless
telephone or telecommunications industry or related industries.
(e) "Organizational Documents" means, with respect to any entity, the
------------------------
certificate of incorporation, bylaws, partnership agreement, limited liability
company agreement or other governing documents of such entity.
(f) "Person" means an individual, corporation, partnership, limited
------
liability company, association, trust, unincorporated organization, entity or
group (as defined in the Exchange Act).
(g) "Subsidiary" when used with respect to any Person means any other
----------
corporation or other organization, whether incorporated or unincorporated, (i)
of which such Person or any other Subsidiary of such Person is a general partner
(excluding partnerships in which the general partnership interests held by such
Person or any direct or indirect Subsidiary of such Person do not have a
majority of the voting or economic interests in such partnership), or (ii) of
which such Person or any other Subsidiary of such Person (or such Person and one
or more of its Subsidiaries) directly or indirectly owns or controls (by
ownership; contract or otherwise) securities or other interests having by their
terms ordinary voting power to elect a majority of the Board of Directors or
others performing similar functions with respect to such corporation or other
organization, or (iii) which is, or which in accordance with GAAP should be,
consolidated for purposes of the Company's financial reporting.
(h) "Tax" (including, with correlative meaning, the terms "Taxes" and
--- -----
"Taxable") means all federal, state, local and foreign income, profits,
-------
franchise, gross receipts, environmental, customs duty, capital stock,
severance, stamp, payroll, sales, employment, unemployment disability, use,
property, withholding, excise, production, value added, occupancy and other
taxes, duties or assessments of any nature whatsoever, together with all
interest, penalties, fines and additions to tax imposed with respect to such
amounts and any interest in respect of such penalties and additions to tax, and
"Tax Return" means all returns and reports (including elections, claims,
----------
declarations, disclosures, schedules, estimates, computations and information
returns) required to be supplied to a Tax authority in any jurisdiction relating
to Taxes.
(i) "the other party" means, with respect to the Company, Buyer and means,
---------------
with respect to Buyer, the Company.
[SIGNATURE PAGE FOLLOWS]
46
IN WITNESS WHEREOF, Buyer, Merger Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
ACC ACQUISITION LLC,
a Delaware limited liability company
By: Xxxxxx XX Company, Member
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------
Title: President
------------------------------
By: AT&T Wireless Services JV Co., Member
By: /s/ Xxx Xxxxx
---------------------------------
Name: Xxx Xxxxx
-------------------------------
Title: Vice President
------------------------------
ACC ACQUISITION CO.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
-------------------------------
Title: President
------------------------------
AMERICAN CELLULAR CORPORATION,
a Delaware corporation
By: /s/ Xxxx Xxxxx
---------------------------------
Name: Xxxx Xxxxx
-------------------------------
Title: Chief Executive Officer
------------------------------
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
