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Exhibit 2.3
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AGREEMENT AND PLAN OF MERGER
AMONG
CORECOMM LIMITED,
CORECOMM GROUP SUB I, INC.
AND
XXXXXXX.XXX, INC.
Dated as of March 12, 2000
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TABLE OF CONTENTS
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ARTICLE I THE MERGER ........................................................................ 2
1.1 The Merger .................................................................. 2
1.2 Effective Time .............................................................. 2
1.3 Closing ..................................................................... 3
1.4 Tax Consequences ............................................................ 3
ARTICLE II DIRECTORS AND OFFICERS
OF ThE SURVIVING CORPORATION .................................................... 3
2.1 Directors of die Surviving Corporation ...................................... 3
2.2 Officers of the Surviving Corporation ....................................... 4
ARTICLE III EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS ................................................. 4
3.1 Effect on Capital Stock ..................................................... 4
3.2 Company Stock Options and Related Matters ................................... 7
ARTICLE IV PAYMENT OF SHARES ................................................................ 8
4.1 Payment for Shares of Company Common Stock .................................. 8
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY. .................................... 11
5.1 Existence; Good Standing; Authority; Compliance With Law .................... 11
5.2 Authorization, Validity and Effect of Agreements ............................ 13
5.3 Capitalization .............................................................. 14
5.4 Subsidiaries ................................................................ 15
5.5 Other Interests ............................................................. 15
5.6 No Violation; Consents ...................................................... 15
5.7 SEC Documents ............................................................... 16
5.8 Litigation .................................................................. 17
5.9 Absence of Certain Changes .................................................. 17
5.10 Taxes ....................................................................... 19
5.11 Real Property Leases; Properties. ........................................... 20
5.12 Intellectual Property ....................................................... 22
5.13 Environmental Matters ....................................................... 24
5.14 Employee Benefit Plans ...................................................... 25
5.15 Labor Matters ............................................................... 27
5.16 No Brokers .................................................................. 28
5.17 Opinion of Financial Advisor . .............................................. 28
5.18 Non-Competition Agreements .................................................. 28
5.19 Material Contracts .......................................................... 28
5.20 Certain Agreements .......................................................... 29
5.21 Subscribers ................................................................. 30
5.22 Information ................................................................. 30
5.23 Vote Required ............................................................... 30
(i)
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5.24 Definition of the Companys Knowledge ....................................... 30
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PARENT ......................................... 31
6.1 Existence; Good Standing; Authority; Compliance With Law .................... 31
6.2 Authorization, Validity and Effect of Agreement ............................. 32
6.3 Capitalization .............................................................. 32
6.4 Subsidiaries ................................................................ 33
6.5 Other Interests ............................................................. 33
6.6 No Violation; Consents ...................................................... 34
6.7 SEC Documents ............................................................... 34
6.8 Litigation .................................................................. 35
6.9 Absence of Certain Changes .................................................. 35
6.10 Intellectual Property ....................................................... 36
6.11 No Brokers .................................................................. 36
6.12 Opinion of Financial Advisor ................................................ 36
6.13 Taxes ....................................................................... 36
6.14 Employee Benefit Plans ...................................................... 37
6.15 Definition of Parents Knowledge ............................................. 37
ARTICLE VII COVENANTS ...................................................................... 37
7.1 No Solicitations ............................................................ 37
7.2 Conduct of Businesses ....................................................... 39
7.3 Tax-Free Treatment .......................................................... 42
ARTICLE VIII ADDITIONAL AGREEMENTS ......................................................... 43
8.1 Meetings of Stockholders .................................................... 43
8.2 HSR and Other Filings ....................................................... 43
8.3 Proxy Statement; Registration Statement ..................................... 45
8.4 Listing Application ......................................................... 46
8.5 Affiliates of the Company ................................................... 46
8.6 Expenses .................................................................... 47
8.7 Officers and Directors Indemnification ...................................... 47
8.8 Access to Information; Confidentiality ...................................... 49
8.9 Publicity ................................................................... 49
8.10 Employee Benefits ........................................................... 50
8.11 Reincorporation and Acquisition ............................................. 50
8.12 Other Actions ............................................................... 51
8.13 Notification of Certain Matters ............................................. 51
8.14 Notification of Parent Transactions ......................................... 52
ARTICLE IX CONDITIONS TO THE MERGER ......................................................... 52
9.1 Conditions to the Obligations of Each Party ................................. 52
9.2 Conditions to Obligations of the Company .................................... 53
9.3 Conditions to Obligations of Parent ......................................... 54
(ii)
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9.4 Parent Transactions ........................................................ 55
ARTICLE X TERMINATION, AMENDMENT AND WAIVER ................................................ 55
10.1 Termination ................................................................ 55
10.2 Effect of Termination ...................................................... 58
10.3 Amendment .................................................................. 58
ARTICLE XI GENERAL PROVISIONS .............................................................. 59
11.1 Notices .................................................................... 59
11.2 Certain Definitions ........................................................ 60
11.3 Non-Survival of Representations, Warranties, Covenants and Agreement ...... 60
11.4 Miscellaneous .............................................................. 60
11.5 Assignment ................................................................. 61
11.6 Severability ............................................................... 61
11.7 Choice of Law/Consent to Jurisdiction ...................................... 61
11.8 Incorporation .............................................................. 62
11.9 The Headings ............................................................... 62
11.10 No Agreement Until Executed ................................................ 62
11.11 Obligations of Parent and of the Company ................................... 62
Exhibits
Exhibit A Affiliate Letter
Exhibit B Registration Rights Agreement
Exhibit C Stockholders Agreement
(iii)
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Company Disclosure Schedule
Section Title
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5.1(b) Organizational and Good Standing
5.1 Organizational Documents
5.1(f) Communications Permits
5.1(g) Violations of Communications Permits
5.3 Capitalization
5.4 Subsidiaries
5.5 Other Interests
5.6(a) No Violations
5.6(b) Consents
5.8 Litigation
5.9 Absence of Certain Changes
5.10 Taxes
5.11 Real Property Leases; Properties
5.12(a) Intellectual Property
5.12(b) Intellectual Property Licenses
5.12(c) Intellectual Property Enforcement Actions
5.13 Environmental Matters
5.14(a) Company Benefit Plans
5.14(b) Employee Matters
5.14(c) Employee Compensation
5.15 Labor Matters
5.18 Non-Competition Agreements
5.19(a) Material Contracts
5.19(b) Other Contracts
5.19(c) Circuit Schedule
5.20 Certain Agreements
7.2(a) Conduct by the Company
8.12 Pricing Policies
Parent Disclosure Schedule
Section Title
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6.1 Organizational and Good Standing
6.3 Capitalization
6.4 Subsidiaries
6.5 Other Interests
6.6(a) No Violations
6.6(b) Consents
6.8 Litigation
6.9 Absence of Certain Changes
(iv)
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6.10 Intellectual Property
6.13 Taxes
7.3(b) Conduct by Parent
(v)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of March 12,
2000, by and among CoreComm Limited, a Bermuda corporation ("Parent"), CoreComm
Group Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of
Parent ("MergerCo"), and Xxxxxxx.xxx, Inc., a Delaware corporation (the
"Company").
RECITALS
WHEREAS, the respective Boards of Directors of Parent, MergerCo and the
Company have approved the merger of MergerCo with and into the Company (the
"Merger") in accordance with the Delaware General Corporation Law (the "DGCL")
and, upon the terms and subject to the conditions set forth in this Agreement,
holders of shares of common stock, par value $.0001 per share, of the Company
(the "Company Common Stock") issued and outstanding immediately prior to the
Effective Time (as hereinafter defined) will be entitled, subject to the terms
and conditions hereof, to the right to receive shares of common stock, par value
$.01 per share, of Parent (the "Parent Common Stock") and cash, without any
interest thereon, subject to certain adjustments;
WHEREAS, the Board of Directors of the Company (the "Company Board")
has, in light of and subject to the terms and conditions set forth herein, (i)
determined that (A) the consideration to be paid for each share of Company
Common Stock in the Merger is fair to the stockholders of the Company, and (B)
the Merger is in the best interests of the Company and its stockholders, and
(ii) resolved to approve and adopt this Agreement and the transactions
contemplated or required by this Agreement, including the Merger (collectively,
the "Transactions"), and to recommend approval and adoption by the stockholders
of the Company of this Agreement and the Transactions;
WHEREAS, as a condition to the willingness of Parent and MergerCo to
enter into this Agreement, Media/Communications Partners II Limited Partnership,
Media/Communications Investors Limited Partnership Xxxxx X. Xxxxxxx and
Xxxxxxxxxxx X. Xxxxx and certain of their affiliates (collectively, the
"Principal Stockholders") have entered into a Voting Agreement, dated as of the
date hereof, with Parent and MergerCo (the "Voting Agreement"), pursuant to
which each Principal Stockholder has agreed, among other things, to vote such
Principal Stockholder's shares of Company Common Stock in favor of the approval
of the Transactions, upon the terms and subject to the conditions set forth in
the Voting Agreement;
WHEREAS, Parent, MergerCo and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Transactions, and also to prescribe various conditions to the Transactions;
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WHEREAS, the parties intend, by executing this Agreement, to either or
both (i) adopt a plan of reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code") and to cause the
Merger to qualify as a reorganization under the provisions of Section 368(a) of
the Code or (ii) agree to a transaction that qualifies as an exchange under the
provisions of Section 351 of the Code; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, Parent, MergerCo and the Company hereby agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time, the Company and MergerCo shall consummate the
Merger pursuant to which (a) MergerCo shall be merged with and into the Company
and the separate corporate existence of MergerCo shall thereupon cease, (b) the
Company shall be the successor or surviving corporation in the Merger (sometimes
hereinafter referred to as the "Surviving Corporation") and shall continue to be
governed by the laws of the State of Delaware and the DGCL, and (c) the separate
corporate existence of the Company with all its rights, privileges, immunities,
powers and franchises shall continue unaffected by the Merger. Without limiting
the generality of the foregoing, and subject thereto, at the Effective Time, all
the properties, rights, privileges, powers and franchises of the Company and
MergerCo shall vest in the Surviving Corporation, and all debts, liabilities and
duties of the Company and MergerCo shall become the debts, liabilities and
duties of the Surviving Corporation. The Company shall take such steps as are
permitted under the DGCL to (i) amend the Certificate of Incorporation of the
Company (the "Company Certificate") so that the Certificate of Incorporation of
MergerCo, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by law and such Certificate of Incorporation, and (ii) amend
the Bylaws of the Company (the "Company Bylaws") so that the Bylaws of MergerCo,
as in effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Corporation until thereafter amended as provided by law, by the
Certificate of Incorporation of the Surviving Corporation and by such Bylaws.
Notwithstanding the foregoing, the name of the Surviving Corporation shall be
"CoreComm-Voyager, Inc." and the Certificate of Incorporation and Bylaws of the
Surviving Corporation shall so provide. The Merger shall have the effects
specified in the DGCL, including Section 259 of the DGCL.
1.2 Effective Time. As promptly as practicable after all of the
conditions set forth in Article IX shall have been satisfied or, if permissible,
waived by the party entitled to the benefit of the same, MergerCo and the
Company shall duly execute and file a certificate of merger (the "Certificate of
Merger") with the Secretary of State of the State of Delaware in accordance with
the DGCL. The Merger shall become effective as of the time of the Certificate of
Merger has been duly filed or such other subsequent date or time as shall be
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agreed upon by the parties and set forth in the Certificate of Merger and in
accordance with the DGCL (the "Effective Time").
1.3 Closing. The closing of the Merger (the "Closing") shall take
place at such time and on a date to be specified by the parties, which shall be
no later than the second business day after satisfaction or waiver of all of the
conditions set forth in Article IX hereof (the "Closing Date"), at the offices
of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, XX 00000, unless another date or place is agreed to by the parties hereto.
1.4 Tax Consequences. It is intended by all of the parties hereto
that the Merger will qualify both or either (i) as a reorganization within the
meaning of Section 368(a) of the Code or (ii) a transaction that, together with
the Reincorporation (as defined herein) qualifies as an exchange under the
provisions of Section 351 of the Code and which is treated for U.S. federal
income tax purposes as a transfer of Company Common Stock by the shareholders of
the Company to Parent in exchange for the Merger Consideration. All of the
parties to this Agreement agree to report the Merger, for all purposes, in a
manner which is consistent with the preceding sentence and no party shall take
any action, or fail to take any action which action or failure to take such
action would cause the Merger to fail to qualify (i) as a reorganization within
the meaning of Section 368(a) of the Code or (ii) a transaction that, together
with the Reincorporation (as defined herein) qualifies as an exchange under the
provisions of Section 351 of the Code and which is treated for U.S. federal
income tax purposes as a transfer of Company Common Stock by the shareholders of
the Company to Parent in exchange for the Merger Consideration. However, it is
further intended by all of the parties hereto that if the transactions with ATX
Communications Services, Inc. ("ATX") described in Section 8.11 occur, and this
Agreement is assigned as provided in Section 11.5, then the incorporation of
ATX, the transactions with ATX described in Section 8.11, and the transactions
described in this Agreement will be treated for U.S. federal income tax purposes
as one integrated transaction qualifying as an exchange under the provisions of
Section 351 of the Code in which the shareholders of the Company transfer
Company Common Stock in exchange for ATX stock.
ARTICLE II
DIRECTORS AND OFFICERS
OF THE SURVIVING CORPORATION
2.1 Directors of the Surviving Corporation. The directors of
MergerCo immediately prior to the Effective Time shall be the directors of the
Surviving Corporation immediately after the Effective Time until their
successors shall have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the Certificate
of Incorporation and Bylaws of the Surviving Corporation. The Company will use
reasonable efforts to cause any director who is a designee of the Company on the
Board of Directors of any Company Subsidiary to resign as of the Effective Time.
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2.2 Officers of the Surviving Corporation. The officers of the
Company immediately prior to the Effective Time shall be the officers of the
Surviving Corporation immediately after the Effective Time until their
successors shall have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the Certificate
of Incorporation and Bylaws of the Surviving Corporation.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
3.1 Effect on Capital Stock. As of the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any shares of
Company Common Stock or any shares of capital stock of MergerCo:
(a) Each issued and outstanding share of Company Common
Stock held by the Company as a treasury share or held by any direct or indirect
Company Subsidiary and each issued and outstanding share of Company Common Stock
owned by Parent, MergerCo or any other direct or indirect Parent Subsidiary
immediately prior to the Effective Time, shall be canceled and retired and cease
to exist without any conversion thereof and no payment or distribution shall be
made with respect thereto.
(b) Each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time, other than those shares
referred to in Section 3.1(a), shall be canceled and shall be converted
automatically into and represent the right to receive: (i) an amount equal to
$3.00, net to the holder in cash, without any interest thereon (plus any cash in
lieu of fractional shares as described in Section 4.1(e), the "Cash
Consideration") and (ii) that number of fully paid and nonassessable shares of
Parent Common Stock equal to $14.00 divided by the Base Stock Price (as defined
below) (the "Exchange Ratio") (rounded to the nearest thousandth and subject to
adjustment, as provided below, and subject to cash in lieu of fractional shares
of Parent Common Stock, if any, pursuant to Section 4.1(e), the "Stock
Consideration" and together with the Cash Consideration, the "Merger
Consideration").
(c) The Exchange Ratio shall be adjusted as follows:
(i) if the Average Parent Common Stock Price is
greater than the Collar Percentage multiplied by the Base Stock Price
(such product being the "Ceiling Stock Price"), then the Exchange Ratio
shall be adjusted such that the aggregate value (based on the Average
Parent Common Stock Price) of the Stock Consideration will be equal to
the value the Stock Consideration would represent if the Average Parent
Common Stock Price were equal to the Ceiling Stock Price and there were
no adjustments to the Exchange Ratio as contemplated in this Section
3.1. The Collar Percentage shall be equal to 119%, subject to the
following adjustments: If (1) the Closing has not occurred on or prior
to July 15, 2000, (2) subsequent to the date of
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this Agreement, Parent has engaged in a transaction (other than
transactions contemplated by this Agreement or any transaction which
would result in a Base Adjustment (as defined below)) (a "Parent
Transaction") that would (x) require the approval of the stockholders of
Parent or, (y) require Parent to include the information relating to
such transaction in the pro forma financial statements (the "Pro
Formas") that are required to be contained in the Registration Statement
or (z) require Parent to amend or restate the Pro Formas in any material
manner, and (3) all conditions to Closing have been satisfied (or waived
by the party entitled to waive such condition) or are capable of being
satisfied on such date with reasonable best efforts, other than the
conditions set forth in Sections 9.1(a) and 9.1(d) and the failure of
either such condition to be satisfied is the result of a Parent
Transaction, then, commencing on the later to occur of (i) July 16, 2000
and (ii) the first business day after which the circumstances set forth
in clause (3) are present (such later date being the "Trigger Day") the
Collar Percentage shall be increased as follows: 2.5 percentage points
on the Trigger Day, and an additional five percentage points per each 31
day period (a "Monthly Period") (on a pro rata basis, based on the
actual number of elapsed days in such Monthly Period at the Closing
Date) beginning on the sixteenth calendar day following the Trigger Day;
(ii) if the Average Parent Common Stock Price is
equal to or greater than 69% of the Base Stock Price and less than 86%
of the Base Stock Price (86% of the Base Stock Price being the "Floor
Stock Price"), then the Exchange Ratio shall be adjusted such that the
aggregate value (based on the Average Parent Common Stock Price) of the
Stock Consideration will be equal to the value the Stock Consideration
would represent if the Average Parent Common Stock Price were equal to
the Floor Stock Price and there were no adjustments to the Exchange
Ratio as contemplated in this Section 3.1; and
(iii) subject to the provisions of Section 10.1(i), if
the Average Parent Common Stock Price is less than 69% of the Base Stock
Price, then the Exchange Ratio will equal that number that it would be
set to in clause (ii) above if the Average Parent Common Stock Price
were equal to 69% of the Base Stock Price.
For purposes of this Agreement, the "Average Parent Common Stock Price"
means the volume weighted average trading price of Parent Common Stock for ten
randomly selected trading days out of the twenty (20) consecutive trading days
ending with the last trading day prior to the Closing Date. The "Base Stock
Price" shall be equal to $47.875, subject to the following "Base Adjustments":
(i) if, after the date of this Agreement and on or prior to the Closing Date the
outstanding shares of Parent Common Stock shall be changed into a different
number of shares by reason of any reclassification, recapitalization, stock
split, reverse stock split, combination or exchange of shares, or any dividend
payable in Parent Common Stock shall be declared thereon with a record date
within such period, or any similar event shall occur, the Base Stock Price shall
be adjusted accordingly to provide to the shareholders of the Company the same
economic effect as contemplated by this Agreement absent such reclassification,
recapitalization, stock split, reverse stock split, combination, exchange,
dividend or similar event; and (ii) if, after the date of this
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Agreement and on or prior to the Closing Date, Parent shall distribute to all
holders of Parent Common Stock shares of capital stock of Parent other than
Parent Common Stock, evidences of indebtedness or other assets (other than cash
dividends out of current or retained earnings), or shall distribute to
substantially all holders of Common Stock rights or warrants to subscribe for
securities (other than those referred to in subsection (i) above), then in each
such case the Base Stock Price shall be multiplied by a fraction of which the
numerator shall be the Current Market Price (as defined below) of the Parent
Common Stock on the record date less the then fair market value (as determined
in good faith by the Board of Directors of Parent (the "Parent Board"), whose
determination shall be conclusive evidence of such fair market value (absent
manifest error or bad faith) and described in a board resolution) of the portion
of the assets so distributed or of such subscription rights or warrants
applicable to one share of Parent Common Stock and of which the denominator
shall be the Current Market Price of the Parent Common Stock. The "Current
Market Price" shall mean the volume weighted average trading price of Parent
Common Stock for the ten randomly selected trading days out of the prior twenty
(20) consecutive trading days. Parent may only effect a distribution described
under (ii) above, if such distribution does not include operating assets that
are required to maintain the current operating businesses of CoreComm, Inc. (a
subsidiary of Parent) and the distribution of such operating assets would not
have a material adverse effect on the current operating businesses of CoreComm,
Inc., other than the LMDS licenses and related assets.
(d) If at any time prior to Closing, either the written
opinion of counsel required to be received by the Company pursuant to Section
9.2(e) or the written opinion required to be received by Parent pursuant to
Section 9.3(g) is not reasonably expected to be delivered in a form acceptable
to the Company and Parent because less than 80% of the value of the Merger
Consideration will be Stock Consideration (determined as of the Closing Date)
and all other conditions to Closing set forth in Article IX have been satisfied
(or waived by the party entitled to make such condition), then the Merger
Consideration shall be adjusted by increasing the Stock Consideration and
decreasing the Cash Consideration so that the Stock Consideration shall
constitute 80% of the value of the Merger Consideration (determined as of the
Closing Date) provided, that, after such adjustment, the Merger qualifies as a
reorganization under the provisions of Section 368(a)(2)(E) of the Code.
(e) Each share of common stock, par value $.01 per share, of
MergerCo (the "MergerCo Common Stock") issued and outstanding immediately prior
to the Effective Time shall be converted into one validly issued, fully paid and
non-assessable share of common stock, par value $.01 per share, of the Surviving
Corporation (the "Surviving Corporation Common Stock"), certificates for which
shall be issued to the stockholders of MergerCo on a pro rata basis in
accordance with their respective shares of MergerCo upon surrender to the
Surviving Corporation of such stockholders' certificates formerly representing
such shares of MergerCo Common Stock.
(f) All shares of Company Common Stock, when converted as
provided in Section 3.1(b), shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each
Certificate previously evidencing such shares shall thereafter represent only
the right to receive the Merger Consideration and cash in lieu of fractional
shares of Parent Common Stock in accordance with Sections 3.1(b) and 4.1(e) and
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any distribution or dividend under Section 4.1(c). The holders of Certificates
previously evidencing shares of Company Common Stock outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to the
Company Common Stock except as otherwise provided herein or by law and, upon the
surrender of Certificates in accordance with the provisions of Article III
hereof, shall only represent the right to receive for their shares of Company
Common Stock the Merger Consideration and cash in lieu of fractional shares of
Parent Common Stock in accordance with Sections 3.1(b) and 4.1(e) and any
distribution or dividend under Section 4.1(c) in each case without interest.
3.2 Company Stock Options and Related Matters.
(a) Each option (collectively, the "Company Options")
granted under the Company's Amended and Restated 1998 Stock Option and Incentive
Plan (the "Company Stock Option Plan"), which is outstanding (whether or not
then exercisable) as of immediately prior to the Effective Time and which has
not been exercised or canceled prior thereto, shall, at the Effective Time, be
assumed by Parent, subject to the provisions of this Section 3.2 (the "Assumed
Options"). The Assumed Options shall not terminate in connection with the Merger
and shall continue to have, and be subject to, the same terms and conditions as
set forth in the Company Stock Option Plan and agreements (as in effect
immediately prior to the Effective Time) pursuant to which the Company Options
were granted, provided that (i) all references to the Company shall be deemed to
be references to Parent and all references to shares of Company Common Stock
shall be deemed to be references to shares of Parent Common Stock, (ii) each
Company Option shall be exercisable for that number of whole shares of Parent
Common Stock equal to the product of the number of shares of Company Common
Stock covered by such Company Option immediately prior to the Effective Time
multiplied by the Option Exchange Ratio (as defined below) and rounded to the
nearest whole number of shares of Parent Common Stock and (iii) the exercise
price per share of Company Common Stock under such Company Option shall be equal
to the exercise price per share of Company Common Stock under the Company Option
divided by the Option Exchange Ratio and rounded to the nearest cent. Parent
shall (A) reserve for issuance the number of shares of Parent Common Stock that
will become issuable upon the exercise of such Assumed Options pursuant to this
Section 3.2, (B) promptly after the Effective Time issue to each holder of a
Company Option a document evidencing the assumption by Parent of the Company's
obligations with respect thereto under this Section 3.2, and (C) promptly after
the Effective Time, cause to be filed a registration statement on an appropriate
form under the Securities Act of 1933, as amended (the "Securities Act"),
relating to the Company Stock Option Plans then in effect and covering the
shares of Parent Common Stock issuable upon exercise of the Assumed Options. As
used in this Section 3.2, "Option Exchange Ratio" means the sum of (i) the
Exchange Ratio (as it may be adjusted) and (ii) the quotient obtained by
dividing the per share Cash Consideration by the Average Parent Common Stock
Price.
(b) The adjustments provided in this Section 3.2 with
respect to any Company Options that are "incentive stock options" as defined in
Section 422 of the Code, shall be and are intended to be effected in a manner
which is consistent with Section 424(a) of the Code.
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(c) The parties to this Agreement shall take all reasonable
action required to exempt under SEC Rule 16(b)-3 the treatment of options
contemplated hereby, including, if necessary or appropriate, obtaining
approvals, by each party's Board of Directors, of the type described in a
pertinent SEC no-action letter dated January 12, 1999.
ARTICLE IV
PAYMENT OF SHARES
4.1 Payment for Shares of Company Common Stock.
(a) From and after the Effective Time, such bank or trust
company designated by Parent, and reasonably acceptable to the Company, shall
act as exchange agent (the "Exchange Agent"). At or prior to the Effective Time,
MergerCo shall deposit, or MergerCo shall otherwise take all steps necessary to
cause to be deposited, with the Exchange Agent the aggregate Merger
Consideration and the cash in lieu of fractional shares of Parent Common Stock
(such aggregate Merger Consideration and cash in lieu of shares of Parent Common
Stock together with any dividends or distributions with respect thereto to which
the holders of Certificates may be entitled pursuant to Section 4.1(c) being
hereinafter referred to as the "Exchange Fund") to which holders of shares of
Company Common Stock shall be entitled pursuant to Section 3.1.
(b) Promptly after the Effective Time, Parent shall cause
the Exchange Agent to mail to each holder of record of a Certificate or
Certificates other than the Company, Parent, MergerCo or any Parent Subsidiary
(i) a letter of transmittal which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon delivery of
the Certificates to the Exchange Agent and shall be in such form and have such
other provisions as Parent may reasonably specify and (ii) instructions for use
in effecting the surrender of the Certificates in exchange for the Merger
Consideration and cash in lieu of fractional shares of Parent Common Stock. Upon
surrender of a Certificate for cancellation to the Exchange Agent together with
such letter of transmittal, duly executed and completed in accordance with the
instructions thereto, the holder of such Certificate shall be entitled to
receive in exchange therefor (x) a certificate representing the number of whole
shares of Parent Common Stock representing the Stock Consideration to which such
holder shall be entitled, (y) a check representing the amount of the Cash
Consideration to which such holder shall be entitled and (z) a check
representing the amount of cash in lieu of fractional shares of Parent Common
Stock, if any, plus the amount of any dividends (other than stock dividends), or
distributions, if any, pursuant to paragraph (c) below, in the case of (y) and
(z), after giving effect to any required withholding tax, and the Certificate so
surrendered shall forthwith be canceled. No interest will be paid or accrued on
the Cash Consideration or on cash payable in lieu of fractional shares or on the
dividend or distribution, if any, payable to holders of Certificates pursuant to
this Section 4.1. In the event of a transfer of ownership of Company Common
Stock which is not registered in the transfer records of the Company, a
Certificate representing the proper number of shares of Parent Common Stock,
together with checks for the Cash Consideration to which such holder shall be
entitled and for any cash to be paid in lieu of fractional shares of Parent
Common
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Stock plus, to the extent applicable, the amount of any dividend or
distribution, if any, payable pursuant to paragraph (c) below, may be issued and
paid to such a transferee if the Certificate representing shares of such Company
Common Stock is presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid. If any certificate for shares of
Parent Common Stock is to be issued in a name other than that in which the
surrendered Certificate is registered, it shall be a condition of such exchange
that the person requesting such exchange shall pay any transfer or other taxes
required by reason of the issuance of certificates for shares of Parent Common
Stock in a name other than that of the registered holder of the surrendered
Certificate, or shall establish to the satisfaction of Parent or the Exchange
Agent that such tax has been paid or is not applicable.
(c) Notwithstanding any other provisions of this Agreement,
no dividends or other distributions on Parent Common Stock shall be paid with
respect to any shares of Company Common Stock represented by a Certificate until
such Certificate is surrendered for exchange as provided herein; provided,
however, that subject to the effect of applicable laws, following surrender of
any such Certificate, there shall be paid to the holder of the certificates
representing whole shares of Parent Common Stock issued in exchange therefor,
without interest, (i) at the time of such surrender, the amount of dividends or
other distributions with a record date after the Effective Time theretofore
payable with respect to such whole shares of Parent Common Stock and not paid,
less the amount of any withholding taxes which may be required thereon, and (ii)
at the appropriate payment date, the amount of dividends or other distributions
with a record date after the Effective Time but prior to surrender and a payment
date subsequent to surrender payable with respect to such whole shares of Parent
Common Stock, less the amount of any withholding taxes which may be required
thereon.
(d) At and after the Effective Time, there shall be no
transfers on the stock transfer books of the Company of the shares of Company
Common Stock which were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation, they shall be canceled and exchanged for the Merger Consideration
and cash in lieu of fractional shares, if any, in accordance with this Section
4.1 (plus dividends and distributions to the extent set forth in Section 4.1(c),
if any).
(e) No certificates or scrip representing fractional shares
of Parent Common Stock shall be issued upon the surrender for exchange of
Certificates, and such fractional share interest will not entitle its owner to
vote, to receive dividends or to any other rights of a stockholder of Parent. In
lieu of the issuance of any fractional shares of Parent Common Stock pursuant to
Section 3.1(b), the Exchange Agent shall pay to each holder of shares of Company
Common Stock exchanged pursuant to the Merger who are entitled to receive a
fraction of a share of Parent Common Stock (after taking into account all
Certificates delivered by such holder) in accordance with the provisions of this
Article IV, an amount in cash equal to the product obtained by multiplying (A)
the fractional shares of Parent Common Stock to which such holder is entitled
(after taking into account all shares of Company Common Stock held at the
Effective Time) by (B) the closing price for a share of
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Parent Common Stock on NASDAQ on the first business day immediately following
the Effective Time.
(f) Any portion of the Exchange Fund (including the proceeds
of any investments thereof and any shares of Parent Common Stock) that remains
unclaimed by the former stockholders of the Company one year after the Effective
Time shall be delivered to the Surviving Corporation. Any former stockholders of
the Company who have not theretofore complied with this Article IV shall
thereafter look only to the Surviving Corporation for payment of their Merger
Consideration and cash in lieu of fractional shares (plus dividends and
distributions to the extent set forth in Section 4.1(c), if any), as determined
pursuant to this Agreement, without any interest thereon. None of Parent,
MergerCo, the Company, the Exchange Agent or any other person shall be liable to
any former holder of shares of Company Common Stock for any amount properly
delivered to a public official pursuant to applicable abandoned property,
escheat or similar laws. If any Certificates shall not have been surrendered
prior to five years after the Effective Time (or immediately prior to such
earlier date on which any Merger Consideration in respect of such Certificate
would otherwise escheat to or become the property of any Governmental Entity (as
defined herein)), any amounts payable in respect of such Certificate shall, to
the extent permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interests of any person previously
entitled to those amounts. In the event any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such Certificate, the
Exchange Agent or the Surviving Corporation will issue and pay in exchange for
such lost, stolen or destroyed Certificate the Merger Consideration and cash in
lieu of fractional shares (plus, to the extent applicable, dividends and
distributions payable pursuant to Section 4.1(c)) in each case without interest.
(g) Each of the Surviving Corporation and Parent shall be
entitled to deduct and withhold from any amounts otherwise payable pursuant to
this Agreement to any holder of a Certificate such amounts as it is required to
deduct and withhold with respect to the making of such payment under the Code,
or any provisions of Law. To the extent that amounts are so withheld by the
Surviving Corporation or Parent, as the case may be, such withheld amounts shall
be treated for purposes of this Agreement as having been paid to the holder of a
Certificate in respect to which such deduction and withholding was made by the
Surviving Corporation or Parent, as the case may be.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure letter delivered at or prior to
the execution hereof to Parent, which shall refer to the relevant Sections of
this Agreement (the "Company Disclosure Schedule"), the Company represents and
warrants to Parent and MergerCo as follows:
5.1 Existence; Good Standing; Authority; Compliance With Law.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Except as
set forth in Section 5.1 of the Company Disclosure Schedule, the Company is duly
licensed or qualified to do business as a foreign corporation and is in good
standing under the laws of any other state of the United States in which the
character of the properties owned, leased or operated by it therein or in which
the transaction of its business makes such qualification or licensing necessary,
except where the failure to be so licensed or qualified would not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on
the business, assets, properties, results of operations or financial condition
of the Company and the Company Subsidiaries (as defined herein) taken as a whole
(a "Company Material Adverse Effect"). The Company has all requisite corporate
power and authority to own, operate, lease and encumber its properties and carry
on its business as now conducted.
(b) Each of the Company Subsidiaries is a corporation,
partnership or limited liability company (or similar entity or association in
the case of those Company Subsidiaries organized and existing other than under
the laws of a state of the United States) duly incorporated or organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, has the corporate or other power and authority to
own its properties and to carry on its business as it is now being conducted,
and is duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the character of the properties owned, leased or operated
by it therein or in which the transaction of its business makes such
qualification or licensing necessary, except as set forth in Section 5.1(b) of
the Company Disclosure Schedule and except for jurisdictions in which such
failures to be so qualified or to be in good standing would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.
(c) Neither the Company nor any of the Company Subsidiaries
is in violation of any order of any court, Governmental Entity or arbitration
board or tribunal, or any domestic law, statute, order, judgment, decree,
ordinance, rule or regulation ("Law"), applicable to the Company or any Company
Subsidiary or by which any of their respective properties or assets is bound or
affected, which violations would, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect.
(d) The Company and the Company Subsidiaries have obtained
all franchises, grants, authorizations, licenses, permits, easements, variances,
exceptions,
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consents, waivers, rights, certificates, approvals and orders of, and
registrations required to be made with, any United States (federal, state or
local) government, or governmental, regulatory or administrative authority,
agency or commission, court or arbitrator of competent jurisdiction or stock
exchange (each of the foregoing, a "Governmental Entity") that are material to
its business as it is now being or is intended to be conducted (the "Company
Permits"), except where failure to obtain any such Company Permit would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. The Company or one or more of the Company Subsidiaries
is in possession of all of the Company Permits, no material violations are or
have been recorded in respect of any of the Company Permits and no suspension or
cancellation of any of the Company Permits is pending or, to the knowledge of
the Company, threatened that has resulted or would be, individually or in the
aggregate, reasonably expected to result in a Company Material Adverse Effect.
Except for such defaults or violations that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, all
of the Company Permits are in full force and effect and neither the Company nor
any of its Subsidiaries is, or has received notice alleging that it is, in
conflict with, or in default or violation of, or, with the giving of notice or
lapse of time or both, would be in conflict with, or in default or violation of,
(i) any Law applicable to the Company or any of its Subsidiaries or by which any
property or asset of the Company or any of its Subsidiaries is bound or affected
by or (ii) any of the Company Permits.
(e) The copies of the Company certificate of incorporation
and by-laws, each as amended through the date of this Agreement that are
incorporated by reference in, as exhibits to the Company's registration
statement on Form S-8 dated August 12, 1999 and all comparable corporate
organizational documents of the Company Subsidiaries made available to Parent by
the Company are complete and correct copies of those documents. All such
corporate organizational documents of the Company and the Company Subsidiaries
are listed on Section 5.1(e) of the Company Disclosure Schedule. Such
certificate of incorporation and by-laws and all comparable organizational
documents of the Company Subsidiaries are in full force and effect. The Company
is not in violation of any of the provisions of such certificate of
incorporation or by-laws.
(f) All Company Permits issued by a state public utilities
commission or a similar state regulatory body ("PUC") or the Federal
Communications Commission ("FCC"), or a municipal authority used in conjunction
with Company's provision of telecommunications services (collectively, the
"Communications Permits") are listed in Section 5.1(f) of the Company Disclosure
Schedule. Each of the Communications Permits was duly issued and is valid and in
full force and effect and has not been modified, canceled, revoked, or
conditioned in any adverse manner except for such modifications, cancellations,
revocations or conditions that would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. None of the
Communications Permits has been sold, conveyed, pledged, assigned or transferred
to any other party, and no other party has any present or future right to
acquire use of them that would in either case, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
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(g) Except as disclosed in Section 5.1(g) the Company
Disclosure Schedule, the Company has complied with and is in compliance with all
regulations and laws applicable to its operations under the Communications
Permits, except where any such failure would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect. The
Company is in compliance with, and its businesses have operated in compliance
with, the Communications Act of 1934, as amended, FCC regulations, or any
applicable state laws or regulations, and has filed all tariffs, registrations
and reports and paid all required fees, including any renewal applications,
required by the Communications Act of 1934, as amended, or any applicable state
regulations and has complied with the terms of each such tariff or regulation,
except where any such failure would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. There is no
action, suit, investigation or other proceeding pending or, to the Company's
knowledge, threatened against the Company which might adversely affect the
Communications Permits, or the assignment of the Communications Permits to
Parent or MergerCo that would, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect. No event has occurred with
respect to the Communications Permits which permits or, after notice or lapse of
time, or both, would permit revocation or termination thereof, or would result
in any impairment of the rights of the holder of the Communications Permits or
the imposition of a forfeiture against the Company or any subsequent holder of
the Communications Permits with respect to the operation of the facilities
authorized thereby that would, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
(h) The Company has delivered to Parent correct and complete
copies of (a) the Company's Communications Permits and the applications related
thereto together with any pending applications filed by the Company for new or
modified facilities related to the purchased business, and (b) all other Permits
and any tariffs filed by the Company relating to the purchased business, and any
applications for additional or modified Permits to the purchased business,
except for those Communications Permits or other Permits that would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
5.2 Authorization, Validity and Effect of Agreements. The Company
has the requisite power and authority to enter into the transactions and to
execute and deliver this Agreement. The Company Board has unanimously approved
this Agreement, the Merger and the other Transactions and has resolved to
recommend that the holders of Company Common Stock adopt and approve this
Agreement at the stockholders' meeting of the Company to be held in accordance
with the provisions of Section 8.1. In connection with the foregoing, the
Company Board has taken such actions and votes as are necessary on its part to
render the provisions of Section 203 of the DGCL and all other applicable
takeover statutes inapplicable to this Agreement, the Merger, the other
Transactions and the Voting Agreement. Subject only to the approval of this
Agreement by the holders of a majority of the outstanding shares of Company
Common Stock (the "Requisite Company Vote"), the execution by the Company of
this Agreement and the consummation of the Transactions have been duly
authorized by all requisite corporate action on the part of the Company and no
other corporate proceedings on the part of the Company are necessary to
authorize this
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Agreement or to consummate the Transactions. As of the date hereof, all of the
directors and executive officers of the Company have indicated that they
presently intend to vote all shares of the Company Common Stock which they own
to approve this Agreement and the Transactions at the stockholders' meeting of
the Company to be held in accordance with the provisions of Section 8.1. This
Agreement, assuming due and valid authorization, execution and delivery thereof
by Parent, constitutes a valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights and general principles of equity.
5.3 Capitalization.
(a) The authorized capital stock of the Company consists of
50,000,000 shares of Company Common Stock and 5,000,000 shares of preferred
stock, par value $.01 per share, of the Company (the "Company Preferred Stock").
As of the date of this Agreement, (i) 31,650,108 shares of Company Common Stock
were issued and outstanding, (ii) 9,775,688 shares of Company Common Stock have
been authorized and reserved for issuance and are available for grant pursuant
to the Company Stock Option Plan, subject to adjustment on the terms set forth
in the Company Stock Option Plan, (iii) 3,493,467 options were outstanding under
the Company Stock Option Plan, (iv) no shares of Company Preferred Stock were
issued and outstanding, and (v) no shares of Company Common Stock and no shares
of Company Preferred Stock were held in the treasury of the Company. All such
issued and outstanding shares of capital stock of the Company are duly
authorized, validly issued, fully paid, nonassessable and free of preemptive
rights. As of the date of this Agreement, no shares of capital stock or voting
securities of the Company were issued, outstanding or reserved for issuance by
the Company or outstanding other than as described above and, since such date,
no shares of capital stock or other voting securities or options in respect
thereof have been issued except upon the exercise of the Company Options
outstanding on such date. The Company has no outstanding bonds, debentures,
notes or other obligations the holders of which have the right to vote (or which
are convertible into or exercisable for securities having the right to vote)
with the stockholders of the Company on any matter. Except for the Company
Options (all of which have been issued under the Company Stock Option Plan),
there are no existing options, warrants, calls, subscriptions, convertible
securities, redemption rights, or other rights, agreements or commitments to
which the Company is a party or by which the Company is bound relating to the
issued or unissued capital stock of, other equity interests in, or securities
exchangeable for or convertible into capital stock or other equity interests in,
the Company or any Company Subsidiary or any Company Subsidiary which obligate
the Company to issue, transfer or sell any shares of capital stock of the
Company.
(b) Section 5.3 of the Company Disclosure Schedule sets
forth a full list of the Company Options, including the name of the person to
whom such Company Options have been granted, the number of shares subject to
each Company Option, the per share exercise price for each Company Option and
the vesting schedule for each Company Option. Except as set forth in Section 5.3
of the Company Disclosure Schedule, there are no agreements or understandings to
which the Company or any Company Subsidiary is a party
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with respect to the voting of any shares of capital stock of the Company or
which restrict the transfer of any such shares, nor does the Company have
knowledge of any third party agreements or understandings with respect to the
voting of any such shares or which restrict the transfer of any such shares.
Except as set forth in Section 5.3 of the Company Disclosure Schedule, there are
no outstanding contractual obligations of the Company or any Company Subsidiary
to repurchase, redeem or otherwise acquire any shares of capital stock,
partnership interests or any other securities of the Company or any Company
Subsidiary. Except as set forth in Section 5.3 of the Company Disclosure
Schedule, neither the Company nor any Company Subsidiary is under any
obligation, contingent or otherwise, by reason of any agreement to register the
offer and sale or resale of any of their securities under the Securities Act.
5.4 Subsidiaries. The Company owns directly or indirectly each of
the outstanding shares of capital stock or other equity interest of each of the
Company Subsidiaries. Each of the outstanding shares of capital stock of each of
the Company Subsidiaries having corporate form is duly authorized, validly
issued, fully paid and nonassessable. Except as set forth in Section 5.4 of the
Company Disclosure Schedule, each of the outstanding shares of capital stock or
other equity interest of each of the Company Subsidiaries is owned, directly or
indirectly, by the Company free and clear of all liens, pledges, security
interests, claims, options, rights of first refusal, agreements, limitations on
the Company or such other Company's voting rights, charges or other encumbrances
(collectively, "Liens"). Section 5.4 of the Company Disclosure Schedule sets
forth: (i) name and jurisdiction of incorporation or organization of each
subsidiary of the Company (the "Company Subsidiaries"); (ii) the authorized
capital stock, share capital or other equity interest, to the extent applicable
of each Company Subsidiary; and (iii) the name of each stockholder or equity
interest holder and the number of issued and outstanding shares of capital
stock, share capital or other equity interest held by it with respect to each
Subsidiary.
5.5 Other Interests. Except as set forth in Section 5.5 of the
Company Disclosure Schedule, neither the Company nor any Company Subsidiary owns
directly or indirectly any interest or investment (whether equity or debt) in
any corporation, partnership, limited liability company, joint venture,
business, trust or other entity (other than investments in short-term investment
securities), other than in any Company Subsidiary.
5.6 No Violation; Consents.
(a) Except as set forth in Section 5.6(a) of the Company
Disclosure Schedule, neither the execution and delivery by the Company of this
Agreement nor consummation by the Company of the Transactions in accordance with
the terms hereof, will conflict with or result in a breach of any provisions of
the Company Certificate or the Company Bylaws or any comparable organizational
documents of any Company Subsidiary. Except as set forth in Section 5.6(a) of
the Company Disclosure Schedule, the execution and delivery by the Company of
this Agreement and consummation by the Company of the Transactions in accordance
with the terms hereof will not violate, or conflict with, or result in (x) a
violation of any Law applicable to the Company or any Company Subsidiary or by
which any property or asset of the Company or any Company Subsidiary is bound or
affected
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or (y) any provision of, or constitute a default (or an event which, with notice
or lapse of time or both, would constitute a default) under, or result in the
termination or in a right of termination or cancellation of, or accelerate the
performance required by, or result in the creation of any Lien, upon any of the
properties or assets of the Company or the Company Subsidiaries under, or result
in being declared void, voidable or without further binding effect, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, deed of
trust, license, franchise, permit, lease, contract, agreement or other
instrument, commitment or obligation (collectively, "Contracts") to which the
Company or any of the Company Subsidiaries is a party, or by which the Company
or any of the Company Subsidiaries or any of their properties is bound, except
in each such case as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect. Other than the filings
provided for in Article I of this Agreement, the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx"), the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), the Securities Act or applicable state
securities and "Blue Sky" laws, the Communications Act of 1934, as amended, and
any regulations promulgated thereunder (the "Communications Act"), the rules and
regulations of local, state, or foreign PUCs (the "PUC Regulations"), and the
applicable local, state, or foreign laws regulating the telecommunications
industry (the "Utility Laws") (collectively, the "Regulatory Filings") the
execution and delivery of this Agreement by the Company does not, and the
performance of this Agreement by the Company and consummation of the
Transactions does not, require any consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Entity, except where
the failure to obtain any such consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.
(b) Section 5.6(b) of the Company Disclosure Letter sets
forth a correct and complete list of all material Contracts to which the Company
or any Company Subsidiaries are a party or by which they or their assets or
properties is bound or affected under which consents or waivers are required
prior to consummation of the transactions contemplated by this Agreement and the
Transactions.
5.7 SEC Documents.
(a) The Company has filed all required forms, reports,
exhibits, schedules, statements and other documents with the Securities and
Exchange Commission (the "SEC") since July 21, 1999 (collectively, and including
the Company's registration statement on Form S-1 dated July 20, 1999, the
"Company SEC Reports"), all of which were prepared in accordance with the
applicable requirements of the Exchange Act, the Securities Act and the rules
and regulations promulgated thereunder (the "Securities Laws"). All required
Company SEC Reports have been filed with the SEC and constitute all forms,
reports, exhibits, schedules, statements and other documents required to be
filed by the Company under the Securities Laws since July 21, 1999. As of their
respective dates, the Company SEC Reports, including any financial statements or
schedules included or incorporated therein by reference, (i) complied as to form
in all material respects with the applicable requirements of the Securities Laws
and (ii) did not contain any untrue statement of a
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material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. Each of the consolidated balance
sheets of the Company included in or incorporated by reference into the Company
SEC Reports (including the related notes and schedules) fairly presents the
consolidated results of operations and cash flow of the Company and the Company
Subsidiaries as of its date and each of the consolidated statements of income,
retained earnings and cash flows of the Company included in or incorporated by
reference into the Company SEC Reports (including any related notes and
schedules) fairly presents the results of operations, retained earnings or cash
flows, as the case may be, of the Company and the Company Subsidiaries for the
periods set forth therein (subject, in the case of unaudited statements, to
normal year-end audit adjustments which would not be material in amount or
effect), in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except as may be
noted therein and except, in the case of the unaudited statements, as permitted
by Form 10-Q pursuant to Section 13 or 15(d) of the Exchange Act. All of such
balance sheets and statements complied as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto. No Company Subsidiary is subject to the
periodic reporting requirements of the Exchange Act or is otherwise required to
file any documents with the SEC or any national securities exchange or quotation
service or comparable Governmental Entity.
(b) Except as and to the extent set forth on the
consolidated balance sheet of the Company and the consolidated Company
Subsidiaries as of September 30, 1999 including the related notes, neither the
Company nor any Company Subsidiary has any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) that would be
required to be reflected on a balance sheet or in the related notes prepared in
accordance with generally accepted accounting principles, except for liabilities
or obligations incurred in the ordinary course of business since September 30,
1999 that have not resulted and would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
5.8 Litigation. Except as set forth in Section 5.8 of the Company
Disclosure Schedule, there is no litigation, suit, claim, action or proceeding
pending or, to the knowledge of the Company, threatened against the Company or
any of the Company Subsidiaries, as to which there is a reasonable likelihood of
an adverse determination and which, if adversely determined, would, individually
or in the aggregate, reasonably be expected to have a Company Material Adverse
Effect. Neither the Company nor any Company Subsidiary is subject to any
outstanding order, writ, injunction or decree which has resulted or would,
individually or in the aggregate, reasonably be expected to result in a Company
Material Adverse Effect.
5.9 Absence of Certain Changes. Except as disclosed in the Company
SEC Reports filed with the SEC between September 30, 1999 and the date of this
Agreement or in Section 5.9 of the Company Disclosure Schedule, since September
30, 1999 the Company and the Company Subsidiaries have conducted their
businesses only in the ordinary course of business and there has not been:
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(a) any declaration, setting aside or payment of any
dividend or other distribution with respect to Company Common Stock or any
redemption, purchase or other acquisition of the Company's securities;
(b) any material commitment, contractual obligation
(including, without limitation, any management or franchise agreement, any lease
(capital or otherwise) or any binding letter of intent), borrowing, liability,
guaranty, capital expenditure or transaction (each, a "Commitment") entered into
by the Company or any of the Company Subsidiaries outside the ordinary course of
business except for Commitments for expenses of attorneys, accountants and
investment bankers incurred in connection with the Transactions;
(c) any material change in the Company's accounting
principles, practices or methods;
(d) any damage, destruction or other casualty loss with
respect to any asset or property owned, leased or otherwise used by it or any
Company Subsidiaries, whether or not covered by insurance, which damage,
destruction or loss, individually or in the aggregate, has resulted or would,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect;
(e) any increase in the compensation or benefits or
establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including, the granting of
stock options, stock appreciation rights, performance awards or restricted stock
awards), stock purchase or other employee benefit plan, or any other increase in
the compensation payable or to become payable to any executive officers of the
Company or any Company Subsidiary except in the ordinary course of business
consistent with past practice or except as required by applicable Law or
pursuant to agreements in effect as of September 30, 1999;
(f) (A) any material incurrence or assumption by the Company
or any Company Subsidiary of any indebtedness for borrowed money or (B) any
guarantee, endorsement or other incurrence or assumption of material liability
(whether directly, contingently or otherwise) by the Company or any Company
Subsidiary for the obligations of any other person (other than any wholly-owned
Company Subsidiary), other than in the ordinary course of business consistent
with past practice;
(g) any creation or assumption by the Company or any Company
Subsidiary of any Lien on any material asset of the Company or any Company
Subsidiary, other than in the ordinary course of business consistent with past
practice;
(h) any making of any loan, advance or capital contribution
to or investment in any person by the Company or any Company Subsidiary, other
than in the ordinary course of business consistent with past practice or in an
amount which are not in the aggregate in excess of $100,000;
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(i) (A) any Contract or agreement entered into by the
Company or any Company Subsidiary on or prior to the date hereof relating to any
material acquisition or disposition of any assets or business or (B) any
modification, amendment, assignment or termination of or relinquishment by the
Company or any Company Subsidiary of any rights under any other Contract
(including any insurance policy naming it as a beneficiary or a loss payable
payee) that has resulted or would, individually or in the aggregate, reasonably
be expected to result in a Company Material Adverse Effect other than
transactions, commitments, contracts or agreements in the ordinary course of
business consistent with past practice or those contemplated by this Agreement;
or
(j) the circuits identified in Section 5.19(c) of the
Company Disclosure Schedule have not been materially altered or otherwise
changed in any manner that would, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect.
5.10 Taxes.
(a) Except as set forth in Section 5.10 of the Company
Disclosure Schedule, each of the Company and the Company Subsidiaries (i) has
filed, or will have filed, all Tax Returns (as defined below) required to be
filed by it on or before the Closing Date (taking into account any applicable
extensions) and all such Tax Returns are true, correct and complete in all
material respects, and (ii) has paid, or will have paid, all Taxes (as defined
below) required to be paid by it on or before the Closing Date (whether or not
shown on any Tax Return), except, in each case, where the failure to file such
Tax Returns or pay such Taxes would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. Except as set
forth in Section 5.10 of the Company Disclosure Schedule, the most recent
audited financial statements contained in the Company's Quarterly Report on Form
10-Q for the quarter year ended September 30, 1999 reflect an adequate reserve
for all material Taxes payable by the Company and the Company Subsidiaries for
all taxable periods and portions thereof through the date of such financial
statements in accordance with United States generally accepted in accounting
principles ("GAAP"). To the knowledge of the Company, and except as set forth in
Section 5.10 of the Company Disclosure Schedule, no deficiencies for any Taxes
have been proposed, asserted or assessed against the Company or any of the
Company Subsidiaries, there are no Tax liens on any assets of the Company or of
any of the Company Subsidiaries (other than Liens for current Taxes not yet
due), and no requests for waivers of the time to assess any such Taxes are
pending. Section 5.10 of the Company Disclosure Schedule lists all (A) Tax
sharing allocation or indemnification agreements and (B) agreements for
exemptions with Governmental Entities to which the Company or any of the Company
Subsidiaries is a party.
(b) Except as set forth on Schedule 5.10 of the Company
Disclosure Schedule, neither the Company nor any of the Company Subsidiaries has
been a member of any "affiliated group" (as defined in section 1504(a) of the
Code) other than the affiliated group of which the Company is the "parent" and,
except with respect to any group of which only the Company and/or its
Subsidiaries are members, is not subject to Treas. Reg. Section 1.1502-6 (or any
similar provision under foreign, state or local law) for any period.
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Except as set forth on Schedule 5.10 of the Company Disclosure Schedule, neither
the Company nor any of the Company Subsidiaries has been required to include in
income any adjustment pursuant to Section 481 of the Code (or any similar
provision of state, local or foreign tax law) by reason of a voluntary change in
accounting method initiated by the Company or any of the Company Subsidiaries,
and to the knowledge of the Company the Internal Revenue Service has not
initiated or proposed any such adjustment or change in accounting method. Except
as set forth on Schedule 5.10 of the Company Disclosure Schedule, no closing
agreement that could affect the Taxes of the Company or any of the Company
Subsidiaries for periods ending after the Effective Time pursuant to Section
7121 of the Code (or any predecessor provision) or any similar provision of any
state, local or foreign law has been entered into by or with respect to the
Company or any of the Company Subsidiaries. Except as set forth on Schedule 5.10
of the Company Disclosure Schedule, there is no contract, agreement, plan or
arrangement covering any person that, individually or collectively, could give
rise to the payment of any amount that would not be deductible by the Company or
any of the Company Subsidiaries by reason of Section 162(m) or Section 280G of
the Code and neither the Company nor any of the Company Subsidiaries has made or
expects to make any such payments. Neither the Company nor any of the Company
Subsidiaries is, or has been, a United States real property holding corporation
(as defined in Section 897(c)(2) of the Code) during the applicable period
specified in Section 897(c)(1)(A)(ii) of the Code.
(c) For purposes of this Agreement, "Taxes" means all
federal, state, local and foreign income, property, sales, franchise,
employment, excise, use, franchise, capital stock, withholding, payroll, gross
receipts, value added, transfer and gains and other taxes, tariffs or
governmental charges of any nature whatsoever, together with any interest,
penalties or additions to Tax with respect thereto.
(d) For purposes of this Agreement, "Tax Returns" means all
reports, returns, declarations, statements or other information required to be
supplied to a domestic or foreign taxing authority in connection with Taxes.
5.11 Real Property Leases; Properties.
(a) Section 5.11 of the Company Disclosure Schedule is a
true and correct Schedule of all real property leased, subleased, licensed or
occupied or used by the Company or any Company Subsidiary under any agreements,
other than point-of-presence related agreements ("POP Agreements"),
(collectively, the "Leases") to or by the Company or any of the Company
Subsidiaries (collectively, the "Real Property") and lists the dates of and
parties to each such Lease, the dates and parties to each amendment,
modification, supplement to such Lease, the term of such Lease, any extension
and expansion options, and the rent payable thereunder. Neither the Company nor
any Company Subsidiary owns any real property. The Company has delivered to
Parent complete and accurate copies of the Leases (as amended to date).
(b) With respect to each of the Leases, except as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect:
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(i) each Lease is legal, valid, binding, enforceable
obligation of the Company;
(ii) each Lease will continue to be legal, valid,
binding, enforceable obligation of the Company immediately following the
Closing in accordance with the terms thereof as in effect immediately
prior to the Closing;
(iii) neither the Company nor, to the knowledge of the
Company, any other party, is in material breach or violation of, or
default under, any such Lease, and, to the knowledge of the Company, no
event has occurred, is pending or, is threatened, which, after the
giving of notice, with lapse of time, would constitute a material breach
or default by the Company or, to the knowledge of the Company, any other
party under such Lease nor has any termination event or on condition
occurred under the Leases;
(iv) the Company has not assigned, transferred,
conveyed, mortgaged, deeded in trust or encumbered any interest in the
leasehold or subleasehold;
(v) to the knowledge of the Company, there are no
Liens, easement, covenant or other restriction applicable to the Real
Property, except for recorded easements, covenants and other
restrictions which do not materially impair the current uses or the
occupancy by the Company of the property subject thereto;
(vi) neither the Company nor any Company Subsidiary
thereof has any ownership, financial or other interest in the landlord
under any Lease;
(vii) there are no Leases granting to any person or
entity other than the Company or any of the Company Subsidiaries any
right to the possession, use, occupancy or enjoyment of the Real
Property, or any portion thereof;
(viii) there is no underlying mortgage, deed of trust,
lease, grant of term or other estate in or interest affecting any Real
Property which is superior to the interest of the Company and the
Company Subsidiaries, as tenants under the applicable Lease; and
(ix) except for as disclosed in Section 5.11(c) of
the Company Disclosure Schedule or easements, rights-of-way and other
non-monetary encumbrances of a minor nature that do not individually or
in the aggregate (i) interfere in any material respect with, or
materially increase the cost of, the use, occupancy or operation of the
applicable parcel of Real Property as currently used, occupied and
operated or (ii) materially reduce the fair market value of the
applicable parcel of Real Property below the fair market value such
parcel would have had but for such encumbrances, the Real Property is
free and clear of all liens, pledges, mortgages, deeds of trust,
security interests, claims, leases, licenses, charges, options, rights
of first refusal, easements, servitudes, transfer restrictions,
encumbrances,
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restrictive covenants, encroachment or other survey defect or any other
restriction or limitation whatsoever and the Company or one of the
Company Subsidiaries holds the leasehold estate and interest in each
Lease free and clear of all liens, pledges, mortgages, deeds of trust,
security interests, claims, leases, licenses, charges, options, rights
of first refusals, easements, servitudes, transfer restrictions,
encumbrances or any other restriction or limitation whatsoever.
(c) All of the land, buildings, structures and other
improvements used by the Company and the Company Subsidiaries in the conduct of
their businesses are included in the Real Property, except for such land,
buildings, structures and other improvements that would not, in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
(d) Each of the POP Agreements of the Company and the
Company Subsidiaries constitute legal, valid, binding, enforceable obligation of
the Company and will continue to be legal, valid, binding, enforceable
obligation of the Company immediately following the Closing in accordance with
the terms thereof as in effect immediately prior to the Closing, except for
those the absence of which would not in the aggregate reasonably be expected to
have a Company Material Adverse Effect. Neither the Company nor any Company
Subsidiary, nor to the Company's knowledge, any other person, is in violation of
or in default under (nor does there exist any condition which with the passage
of time or the giving of notice would cause such a violation of or default
under) any POP Agreement to which the Company or a Company Subsidiary is a party
or by which it or any of its properties or assets is bound or affected, except
for violations or defaults that have not resulted and would not, in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
(e) Except as set forth in Section 5.11(f) of the Company
Disclosure Schedule, the Company and the Company Subsidiaries own good and
marketable title, free and clear of all Liens, to all of the property and assets
shown on the Company's balance sheet at September 30, 1999 as reflected in the
Company SEC Reports (the "Company Balance Sheet") or acquired after September
30, 1999, except for (A) assets which have been disposed of to nonaffiliated
third parties since September 30, 1999 in the ordinary course of business, (B)
Liens reflected in the Company Balance Sheet, (C) Liens or imperfections of
title which are not, individually or in the aggregate, material in character,
amount or extent and which do not materially detract from the value or
materially interfere with the present or presently contemplated use of the
assets subject thereto or affected thereby, and (D) Liens for current Taxes not
yet due and payable. All of the machinery, equipment and other tangible personal
property and assets owned or used by the Company and the Company Subsidiaries
are, to the Company's knowledge, in good condition and repair, except for
ordinary wear and tear not caused by neglect, and are useable in the ordinary
course of business.
5.12 Intellectual Property.
(a) Section 5.12(a) of the Company Disclosure Letter sets
forth all United States and foreign patents and patent applications, trademark
and service xxxx registrations
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and applications, Internet domain name registrations and applications, and
copyright registrations and applications owned or licensed by the Company and
material to the business of the Company and the Company Subsidiaries, taken as a
whole, as conducted as of the date hereof, specifying as to each item, as
applicable: (i) the owner of the item; and (ii) the issuance, registration or
application numbers and dates.
(b) Section 5.12(b) of the Company Disclosure Letter sets
forth all material licenses, sublicenses, and other agreements or permissions
("IP Licenses") under which the Company is a licensor or licensee or otherwise
is authorized to use or practice any Intellectual Property. For purposes of this
Agreement, "Intellectual Property" means all of the following as they exist in
all jurisdictions throughout the world, in each case, to the extent owned by,
licensed to, or otherwise used by the Company or any Company Subsidiaries or, as
applicable, Parent or any Parent Subsidiary: (A) patents, patent applications,
and other patent rights (including any divisions, continuations,
continuations-in-part, substitutions, or reissues thereof, whether or not
patents are issued on any such applications and whether or not any such
applications are modified, withdrawn, or resubmitted); (B) trademarks, service
marks, trade dress, trade names, brand names, Internet domain names, designs,
logos, or corporate names, whether registered or unregistered, and all
registrations and applications for registration thereof; (C) copyrights,
including all renewals and extensions, copyright registrations and applications
for registration, and non-registered copyrights; (D) trade secrets, concepts,
ideas, designs, research, processes, procedures, techniques, methods, know-how,
data, mask works, discoveries, inventions, modifications, extensions,
improvements, and other proprietary rights (whether or not patentable or subject
to copyright, mask work, or trade secret protection); and (E) computer software
programs, including all source code, object code, and documentation related
thereto.
(c) Except as set forth in Section 5.12(c) of the Company
Disclosure Schedule, the Company or the Company Subsidiaries are the owner of
free and clear of any Liens, or a licensee under a valid sufficient license for,
all Intellectual Property that is material to the business of the Company and
the Company Subsidiaries conducted as of the date hereof, taken as a whole.
Except as disclosed in the Company SEC Reports or Section 5.12(c) of the Company
Disclosure Schedule, there are no claims pending or, to the Company's knowledge,
threatened, that the Company or any Company Subsidiary is in violation of any
such intellectual property right of any third party or that challenges the
validity, enforceability, ownership, or right to use, sell, or license any
Intellectual Property which would, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, and, to the Company's
knowledge, no third party is in violation of any intellectual property rights of
the Company or any Company Subsidiary which would, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
(d) The Company and/or one or more of its Subsidiaries owns,
or is licensed or otherwise possesses valid rights to use, all material computer
software programs or applications, including the Company's web-based customer
care and billing system, and other tangible or intangible proprietary
information or materials (the "Software") that are
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used in the business of the Company and the Company Subsidiaries as conducted as
of the date hereof, except for software that is "off the shelf" or
"shrink-wrapped" and except for any such failures to own, be licensed or possess
that would not, individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect. In addition to the foregoing, as to the
Company's web-based customer care and billing system, the Company owns all
source code, object code, and documents related thereto, except as would not
reasonably be expected to have a Company Material Adverse Effect. The Software
performs in conformance with its documentation and is fully and freely
transferable to Parent without any third party consents, except for failures to
perform or to be fully and freely transferable that, individually or in the
aggregate, have not resulted and would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect on the Company.
5.13 Environmental Matters. The Company and the Company Subsidiaries
are and have been in compliance with all Environmental Laws (as defined below),
except for any noncompliance that would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. As used in
this Agreement, "Environmental Laws" shall mean all federal, state and local
laws, rules, regulations, ordinances and orders that regulate the release of
hazardous substances or other pollutants or contaminants into the environment,
or impose requirements relating to environmental protection, pollution or health
and safety. As used in this Agreement, "Hazardous Materials" means any
"hazardous waste" as defined in either the United States Resource Conservation
and Recovery Act or regulations adopted pursuant to said act, any "hazardous
substances" or "hazardous materials" as defined in the United States
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA")
and, to the extent not included in the foregoing, any oil or fractions thereof,
pollutants or contaminants. Except as set forth in Section 5.13 of the Company
Disclosure Schedule, there is no administrative or judicial enforcement
proceeding or other claim, demand, order, decree or judgment pending, or to the
knowledge of the Company, threatened against the Company or any Company
Subsidiary under any Environmental Law. Except as set forth in Section 5.13 of
the Company Disclosure Schedule, neither the Company nor any Subsidiary or, to
the knowledge of the Company, any legal predecessor of the Company or any
Subsidiary, has received any written notice that it is potentially responsible
under any Environmental Law for response costs or natural resource damages, as
those terms are
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defined under the Environmental Laws, at any location and neither the Company
nor any Subsidiary has transported or disposed of, or arranged for any third
party to transport or dispose of, any Hazardous Materials at any location
included on the National Priorities List, as defined under CERCLA or any
location proposed for inclusion on that list or at any location on any analogous
state list. Except as set forth in Section 5.13 of the Company Disclosure
Schedule, (i) the Company has no knowledge of any release on the real property
owned or leased by the Company or any Company Subsidiary or predecessor entity
of Hazardous Materials in a manner that could result in an order to which the
Company or any Company Subsidiary is subject to perform a response action or in
material liability to the Company or any Company Subsidiary under the
Environmental Laws, and (ii) to the Company's knowledge, there is no hazardous
waste treatment, storage or disposal facility, underground storage tank,
landfill, surface impoundment, underground injection well, friable asbestos or
PCB's, as those terms are defined under the Environmental Laws, located at any
of the real property owned or leased by the Company or any Company Subsidiary or
predecessor entity or facilities utilized by the Company or the Company
Subsidiaries in a condition likely to result in material liability to the
Company or any Company Subsidiary under Environmental Laws.
5.14 Employee Benefit Plans.
(a) Section 5.14(a) of the Company Disclosure Schedule sets
forth a list of every Benefit Plan (as hereinafter defined) that is maintained
by the Company or an Affiliate (as hereinafter defined) on the date hereof (each
a "Company Benefit Plan").
(b) Each Company Benefit Plan which has been intended to
qualify under Section 401(a) of the Code, has received a favorable determination
or approval letter from the Internal Revenue Service ("IRS") regarding its
qualification under such section, its related trust has been determined to be
exempt from taxation under Section 501(a) of the Code, and nothing has occurred
since the date of such letter that has or is likely to adversely affect such
qualification or exemption. Each Company Benefit Plan that requires registration
with a government body has been so registered.
(c) With respect to any Company Benefit Plan, there has been
no event in that could subject, directly or indirectly, the Company or any
Affiliate or any Company Benefit Plan to any material liability under ERISA, the
Code or any other law, regulation or governmental order applicable to any
Company Benefit Plan, including, without limitation, Section 406, 409, 502(i),
502(l) or 4069 of ERISA, or Section 4971, 4975 or 4976 of the Code, or under any
agreement, instrument, statute, rule of law or regulation pursuant to or under
which the Company or any Affiliate has agreed to indemnify any person against
liability incurred under, or for a violation or failure to satisfy the
requirement of, any such statute, regulation or order. Except as set forth on
Section 5.14(b) of the Company Disclosure Schedule, there are no actions, liens,
suits or claims pending or, to the knowledge of the Company or any Affiliate,
threatened (other than routine claims for benefits) with respect to any Company
Benefit Plan as to which the Company or any Affiliate has or could reasonably be
expected to have any direct or indirect actual or contingent material liability.
No litigation or governmental administrative proceeding (or investigation) or
other proceeding (other than those relating to routine claims for benefits) is
pending or, to the Company's knowledge, threatened with respect to any such
Company Benefit Plan.
(d) Neither the Company nor any Affiliate maintains or has
any obligation to contribute to, or has within the preceding six years
maintained or contributed to, or has had during such period the obligation to
maintain or contribute to, or may have any liability with respect to, any
Company Benefit Plan subject to Title IV of ERISA, Section 412 of the Code, any
Multiemployer Plan or any "multiple employer plan" within the meaning of the
Code or ERISA or the regulations promulgated thereunder.
(e) Except as provided in Section 5.14(c) of the Disclosure
Schedule, neither the Company nor any Affiliate is a party to any plan or
agreement that will, as a result of the consummation of the transactions
contemplated by this Agreement or otherwise,
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(i) result in the acceleration of the time for payment or vesting of, or
increase the amount of compensation due to any employee, former employee,
consultant or independent contractor, (ii) reasonablely be expected to result in
any "excess parachute payment" under Section 280G of the Code or any payment
which is non-deductible under Section 162(m) of the Code. The consummation of
the transactions contemplated by this Agreement will not entitle any employee or
former employee to severance pay or similar payment which payments, individually
or in the aggregate, would be material to the Company and the Company
Subsidiaries.
(f) Neither the Company nor any Affiliate has an announced
plan or legally binding commitment to create any additional Company Benefit
Plans or to amend or modify any existing Company Benefit Plan, other than
amendments to comply with law.
(g) Neither the Company nor any Affiliate has any material
liability, whether absolute or contingent, direct or indirect, including any
obligations under any Company Benefit Plan, with respect to any
misclassification of a person as an independent contractor rather than as an
employee or with respect to any employees "leased" from any employer.
(h) Neither the Company nor any Affiliate has any obligation
to provide or any direct or indirect liability, whether contingent or otherwise,
with respect to the provision of health or death benefits to or in respect of
former employees, except as may be required pursuant to COBRA or state health
coverage continuation law and the costs of which are fully paid by such former
employees.
(i) Each Company Benefit Plan which is a "group health plan"
(as defined in Section 601 of ERISA) is in material compliance with the
provisions of COBRA, HIPAA and any other applicable federal, state or local law.
(j) With respect to each Company Benefit Plan, complete and
correct copies of the following documents (if applicable to such Company Benefit
Plan) have previously been delivered to Parent: (i) all documents embodying or
governing such Company Benefit Plan, and any funding medium for such Company
Benefit Plan (including, without limitation, trust agreements) as they may have
been amended to the date hereof; (ii) the most recent IRS determination or
approval letter with respect to such Company Benefit Plan under Code Section
401(a), and any applications for determination or approval subsequently filed
with the IRS; (iii) the current summary plan description for such Company
Benefit Plan (or other descriptions of such Company Benefit Plan provided to
employees) and all modifications thereto; and for the three most recent years,
(w) the Forms 5500, with all applicable schedules and accountants' opinions
attached thereto; (x) audited financial statements; (y) actuarial valuation
reports, if any; and (z) attorney's response to an auditor's request for
information.
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(k) For purposes of Sections 5.14 and 6.14 of this
Agreement:
(i) "Benefit Plan" means any plan, program,
arrangement, agreement or commitment which is an employment, consulting
or deferred compensation agreement, or an executive compensation,
incentive bonus or other bonus, employee pension, profit-sharing,
savings, retirement, stock option, stock purchase, severance pay, life,
health, disability or accident insurance plan, or vacation, or other
employee benefit plan, program, arrangement, agreement or commitment,
including, without limitation, any "employee benefit plan" as defined in
Section 3(3) of ERISA;
(ii) An entity "maintains" a Benefit Plan if such
entity sponsors, contributes to, or provides benefits under or through
such Benefit Plan, or has any obligation (by agreement or under
applicable law) to contribute to, or has any direct or indirect
liability, whether contingent or otherwise, with respect to any such
Benefit Plan, or if such Benefit Plan provides benefits to or otherwise
covers employees of such entity (or their spouses, dependents, or
beneficiaries);
(iii) An entity is an "Affiliate" of another entity if
it would have ever been considered a single employer with such other
entity under ERISA Section 4001(b) or part of the same "controlled
group" as such other entity for purposes of ERISA Section 302(d)(8)(C)
and Sections 414(b), (c), (m) or (o) of the Code; and
(iv) "Multiemployer Plan" means an employee pension
or welfare benefit plan to which more than one unaffiliated employer
contributes and which is maintained pursuant to one or more collective
bargaining agreements;
(v) "COBRA" means Section 4980B of the Code and
Section 601 et seq. of ERISA, and regulations thereunder; and
(vi) "HIPAA" means the Health Insurance Portability
and Accountability Act of 1996.
5.15 Labor Matters.
(i) Except as disclosed in Section 5.15 of the
Company Disclosure Schedule, neither the Company nor any Company
Subsidiary is a party to, or bound by, any collective bargaining
agreement, contract or other agreement or understanding with a labor
union or labor union organization. There is no unfair labor practice or
labor arbitration proceeding pending or, to the knowledge of the
Company, threatened against the Company or any of the Company
Subsidiaries relating to their business. To the Company's knowledge,
there are no organizational efforts with respect to the formation of a
collective bargaining unit presently being made or threatened involving
employees of the Company or any of the Company Subsidiaries.
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(ii) Neither the Company nor any Company Subsidiary
has violated any provision of federal or state law or any governmental
rule or regulation, or any order, decree, judgment arbitration award of
any court, arbitrator or any government agency regarding the terms and
conditions of employment of employees, former employees or prospective
employees or other labor related matters, including, without limitation,
laws, rules, regulations, orders, rulings, decrees, judgments and awards
relating to discrimination, fair labor standards and occupational health
and safety, wrongful discharge or violation of the personal rights of
employees, former employees or prospective employees, except for such
violations that would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect.
5.16 No Brokers. Neither the Company nor any of the Company
Subsidiaries has entered into any contract, arrangement or understanding with
any person or firm which may result in the obligation of such entity or Parent
to pay any finder's fees, brokerage or agent's commissions or other like
payments in connection with the negotiations leading to this Agreement or
consummation of the Transactions, except that the Company has retained Xxxxxx
Xxxxxxx Xxxx Xxxxxx ("Xxxxxx Xxxxxxx") as its financial advisor in connection
with the Transactions. The Company has delivered to Parent a true and complete
copy of any contract, agreement or understanding entered into with Xxxxxx
Xxxxxxx in connection with the Merger or the Transactions. Other than the
foregoing arrangements and Parent's arrangements with Xxxxxxx Sachs & Co. and
Xxxxxx Xxxxxxxxx, the Company is not aware of any claim for payment of any
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or consummation of
the Transactions.
5.17 Opinion of Financial Advisor. The Company has received the
opinion of Xxxxxx Xxxxxxx to the effect that, as of the date hereof, the Merger
Consideration is fair to the holders of Company Common Stock from a financial
point of view. The Company has delivered or will promptly after receipt of such
written opinion, deliver a signed copy of that opinion to Parent.
5.18 Non-Competition Agreements. Except as set forth in Section 5.18
of the Company Disclosure Letter, neither the Company nor any Company Subsidiary
is a party to any agreement which purports to restrict or prohibit in any
material respect the Company and the Company Subsidiaries collectively from,
directly or indirectly, engaging in any business involving Internet service
access or telecommunications currently engaged in by the Company, any Company
Subsidiary or any other persons affiliated with the Company. None of the
Company's officers, directors or key employees is a party to any agreement
which, by virtue of such person's relationship with the Company, restricts in
any material respect the Company or any Company Subsidiary or affiliate of
either of them from, directly or indirectly, engaging in any of the businesses
described above.
5.19 Material Contracts.
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(a) Schedule 5.19(a) of the Company Disclosure Letter lists
or describes, and the Company has been furnished copies of all material
contracts or arrangements to which the Company or any Company Subsidiary is a
party or to which its assets, property or business is bound or subject (other
than contracts between the Company and any Company Subsidiary), which involve
aggregate payments by or to the Company or any Company Subsidiary (including,
without limitation, payments pursuant to a guaranty of any obligations of any
Company Subsidiary or third party) of $100,000 or more, whether or not made in
the ordinary course of business (the "Company Contracts").
(b) Except for the Company Contracts or as set forth in
Section 5.19(b) of the Company Disclosure Schedule, there is no Contract that is
material to the business, results of operations, assets, properties or financial
condition of the Company and the Company Subsidiaries taken as a whole. Each of
the Company Contracts constitutes a valid and legally binding obligation of the
Company or such Company Subsidiary and, to the knowledge of the Company, of the
other parties thereto, enforceable in accordance with its terms, and is in full
force and effect, except to the extent the failure to be so valid, binding or
enforceable, has not and would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect. Neither the Company nor
any Company Subsidiary, nor to the Company's knowledge, any other person, is in
violation of or in default under (nor does there exist any condition which with
the passage of time or the giving of notice would cause such a violation of or
default under) any Contract to which the Company or a Company Subsidiary is a
party or by which it or any of its properties or assets is bound or affected,
except for violations or defaults that have not resulted and would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. The Company has satisfied all volume commitment
requirements under the applicable Company Contracts to allow for the most
favorable pricing structure to be provided to the Company under such Company
Contracts. Set forth in Schedule 5.19(b), the Company Disclosure Letter is a
description of any material changes to the amount and terms of the indebtedness
of the Company and the consolidated Company Subsidiaries as described in the
notes to the financial statements set forth as incorporated by reference in the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30,
1999. The aggregate amount of indebtedness of the Company and the Company
Subsidiaries which is outstanding under the Amended and Restated Credit
Agreement, dated as of July 26, 1999, among Voyager Information, Inc., Fleet
National Bank, as agent and certain lenders, is no more than $23,750,000.
(c) Section 5.19(c) of the Company Disclosure Schedule sets
forth a true and complete list as of February 1, 2000 of all circuit and related
agreements and any amendments, supplements or other modifications thereto except
for those circuit and related agreements that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
5.20 Certain Agreements. Except as set forth in Section 5.20 of the
Company Disclosure Letter, neither the Company nor any of the Company
Subsidiaries is a party to any oral or written (i) agreement with any executive
officer or other key employee of the Company or Company Subsidiary the benefits
of which are contingent, or the terms of which
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are materially altered, upon the occurrence of a transaction involving the
Company of the nature contemplated by this Agreement, or agreement with respect
to any executive officer of the Company providing any term of employment or
compensation guarantee (x) extending for a period longer than one year after the
Effective Time or (y) for the payment of in excess of $100,000 or (ii) plan or
arrangements, including any stock option plan, stock appreciation right plan,
restricted stock plan or stock purchase plan, any of the benefits of which will
be increased, or the vesting of the benefits of which will be accelerated, by
the occurrence of any of the transactions contemplated by this Agreement or the
value of any of the benefits of which will be calculated on the basis of any of
the transactions contemplated by this Agreement.
5.21 Subscribers. The Company has at least 325,000 subscribers as
calculated in accordance with the Company's customary practices. As used herein,
the term "Subscriber" means a customer of the Company or a Company Subsidiary
who (i) is currently connected to and receiving Internet access service from the
system and (ii) is being charged and is paying for such service. Notwithstanding
the foregoing, it shall not be deemed to be a reduction in the number of
Subscribers if a Subscriber continues to remain as a customer of the Company,
even though such Subscriber has been aggregated with one or more other
Subscribers into one account.
5.22 Information. None of the information to be supplied by the
Company for inclusion or incorporation by reference in the Proxy Statement or
the Form S-4 will, in the case of the Form S-4, at the time it becomes effective
and at the Effective Time, contain any untrue statement of a material fact or
omit to state any material fact required to be stated in that Form S-4 or
necessary to make the statements in that Form S-4 not misleading, or, in the
case of the Proxy Statement or any amendments of or supplements to the Proxy
Statement, at the time of the mailing of the Proxy Statement and any amendments
of or supplements to the Proxy Statement and at the time of the Company
Stockholders Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated in that Proxy Statement or
necessary in order to make the statements in that Proxy Statement, in light of
the circumstances under which they are made, not misleading. The Proxy Statement
(except for those portions of the Proxy Statement that relate only to Parent or
Parent Subsidiaries or affiliates of Parent) will comply as to form in all
material respects with the provisions of the Exchange Act.
5.23 Vote Required. The Requisite Company Vote is the only vote of
the holders of any class or series of the Company's capital stock necessary
(under the Company Certificate and Company By-laws, the DGCL, other applicable
Law or otherwise) to approve this Agreement, the Merger or the other
Transactions.
5.24 Definition of the Company's Knowledge. As used in this
Agreement, the phrase "to the knowledge of the Company" or any similar phrase
means the actual (and not the constructive or imputed) knowledge after due
inquiry of Xxxxxxxxxxx X. Xxxxx, Xxxxxxx xxXxxxx, Xxxxx X. Xxxxxxx and Xxxxx
Xxxxxxxxx.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT
Except as set forth in the disclosure letter delivered at or prior to
the execution hereof to the Company, which shall refer to the relevant Sections
of this Agreement (the "Parent Disclosure Schedule"), each of Parent and
MergerCo represents and warrants to the Company as follows:
6.1 Existence; Good Standing; Authority; Compliance With Law.
(a) Each of Parent and MergerCo is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Except as set forth in Section 6.1 of Parent
Disclosure Schedule, each of Parent and MergerCo is duly licensed or qualified
to do business as a foreign corporation and is in good standing under the laws
of any other state of the United States in which the character of the properties
owned, leased or operated by it therein or in which the transaction of its
business makes such qualification or licensing necessary, except where the
failure to be so licensed or qualified would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, assets, properties, results of operations or financial condition of
Parent and the Parent Subsidiaries (as defined herein) taken as a whole (a
"Parent Material Adverse Effect"). Each of Parent and MergerCo has all requisite
corporate power and authority to own, operate, lease and encumber its properties
and carry on its business as now conducted.
(b) Each of the Parent Subsidiaries is a corporation,
partnership or limited liability company (or similar entity or association in
the case of those Parent Subsidiaries organized and existing other than under
the laws of a state of the United States) duly incorporated or organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, has the corporate or other power and authority to
own its properties and to carry on its business as it is now being conducted,
and is duly qualified or licensed to do business and is in good standing in each
jurisdiction in which character of the properties owned, leased or operated by
it therein or in which the transaction of its business makes such qualification
or licensing necessary, except for jurisdictions in which such failures to be so
qualified or to be in good standing would not, individually or in the aggregate,
reasonably be expected to have a Parent Material Adverse Effect.
(c) Except as set forth in Section 6.1(c) of the Parent
Disclosure Schedule, neither Parent, MergerCo nor any of the Parent Subsidiaries
is in violation of any order of any court, Governmental Entity or arbitration
board or tribunal, or any Law, applicable to Parent, MergerCo or any Parent
Subsidiary or by which any of their respective properties or assets is bound or
affected by which violation would, individually or in the aggregate, reasonably
be expected to have a Parent Material Adverse Effect. Parent, MergerCo and the
Parent Subsidiaries have obtained all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, waivers, rights,
certificates, approvals and orders of, and registrations required to be made
with any Governmental Entity
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that are material to its business as it is now being or is intended to be
conducted (the "Parent Permits"), where the failure to obtain any such Parent
Permits would not, individually or in the aggregate, reasonably be expected to
have a Parent Material Adverse Effect.
(d) The copies of the Parent's Memorandum of Association
("Parent Certificate") and by-laws ("Parent ByLaws"), each as amended through
the date of this Agreement that are incorporated by reference in, as exhibits to
the Parent's Quarterly Report on Form 10-Q for the quarter ended September 30,
1999 and all comparable corporate organizational documents of the Parent
Subsidiary made available to the Company by Parent are complete and correct
copies of those documents. Such Memorandum of Association and by-laws and all
comparable organizational documents of the Parent Subsidiaries are in full force
and effect. The Parent is not in violation of any of the provisions of such
Memorandum of Association or by-laws.
6.2 Authorization, Validity and Effect of Agreements. Each of Parent
and MergerCo has the requisite power and authority to enter into the
Transactions and to execute and deliver this Agreement. The Parent Board has
unanimously approved this Agreement, the Merger and the other Transactions and
has resolved to recommend that the holders of Parent Common Stock adopt and
approve this Agreement at the stockholders' meeting of Parent to be held in
accordance with the provisions of Section 8.1. The Board of Directors of
MergerCo (the "MergerCo Board") and the stockholders of MergerCo have approved
this Agreement and the Transactions. Subject only to the approval of this
Agreement by the holders of a majority of the outstanding shares of Parent
Common Stock (the "Requisite Parent Vote"), the execution by Parent of this
Agreement and the consummation of the Transactions have been duly authorized by
all requisite corporate action on the part of Parent and MergerCo and no other
corporate proceedings on the part of Parent or MergerCo are necessary to
authorize this Agreement or to consummate the Transactions. As of the date
hereof, all of the directors and executive officers of Parent have indicated
that they presently intend to vote all shares of Parent Common Stock which they
own to approve this Agreement and the Transactions at the stockholders' meeting
of Parent to be held in accordance with the provisions of Section 8.1. This
Agreement, assuming due and valid authorization, execution and delivery thereof
by the Company, constitutes a valid and legally binding obligation of Parent and
MergerCo, enforceable against Parent and MergerCo in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights and general principles of equity.
6.3 Capitalization. The authorized capital stock of Parent consists
of 75,000,000 shares of Parent Common Stock and 1,000,000 shares of preferred
stock, par value $.01 per share, of Parent ("Parent Preferred Stock"). As of
March 6, 2000, (i) 39,213,036 shares of Parent Common Stock were issued and
outstanding, (ii) 19,125,000 shares of Parent Common Stock have been authorized
and reserved for issuance and are available for grant pursuant to Parent's stock
option plans (the "Parent Stock Option Plans"), subject to adjustment on the
terms set forth in Parent Stock Option Plans, (iii) 10,511,875 options (the
"Parent Options") were outstanding under Parent Stock Option Plans, (iv) no
shares of Parent Preferred Stock were issued and outstanding, and (v) no shares
of Parent Common Stock and no shares of Parent Preferred Stock were held in the
treasury of
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Parent. As of the date of this Agreement, no shares of capital stock or voting
securities of Parent were issued, outstanding or reserved for issuance by Parent
or outstanding other than as described above and, since such date, no shares of
capital stock or other voting securities or options in respect thereof have been
issued except upon the exercise of the Parent Options outstanding on such date.
The authorized capital stock of MergerCo consists of 1,500 shares of MergerCo
Common Stock, of which 1,500 shares were outstanding as of the date of this
Agreement. All such issued and outstanding shares of capital stock of Parent are
duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights. Parent has no outstanding bonds, debentures, notes or other
obligations the holders of which have the right to vote (or which are
convertible into or exercisable for securities having the right to vote) with
the stockholders of Parent on any matter. Except as set forth in the Parent SEC
Reports and in Section 6.3 of the Parent Disclosure Schedule, there are no
existing options, warrants, calls, subscriptions, convertible securities,
redemption rights or other rights, agreements or commitments to which Parent is
a party or by which Parent is bound relating to the issued or unissued capital
stock of, other equity interests in, or securities exchangeable for or
convertible into capital stock or other equity interests in, Parent or any
Parent Subsidiary or any Parent Subsidiary which obligate Parent to issue,
transfer or sell any shares of capital stock of Parent, other than the Parent
Options. Except as set forth in Section 6.3 of Parent Disclosure Schedule or in
the Parent SEC Reports, there are no agreements or understandings to which
Parent or any Parent Subsidiary is a party with respect to the voting of any
shares of capital stock of Parent or which restrict the transfer of any such
shares, nor does Parent have knowledge of any third party agreements or
understandings with respect to the voting of any such shares or which restrict
the transfer of any such shares. Except as set forth in Section 6.3 of Parent
Disclosure Schedule or in the Parent SEC Reports, there are no outstanding
contractual obligations of Parent or any Parent Subsidiary to repurchase, redeem
or otherwise acquire any shares of capital stock, partnership interests or any
other securities of Parent or any Parent Subsidiary. Except as set forth in
Section 6.3 of Parent Disclosure Schedule or in the Parent SEC Reports, neither
Parent nor any Parent Subsidiary is under any obligation, contingent or
otherwise, by reason of any agreement to register the offer and sale or resale
of any of their securities under the Securities Act.
6.4 Subsidiaries. Parent owns directly or indirectly each of the
outstanding shares of capital stock or other equity interest of MergerCo and
each of the Parent Subsidiaries. Each of the outstanding shares of capital stock
of MergerCo and each of the Parent Subsidiaries having corporate form is duly
authorized, validly issued, fully paid and nonassessable. Each of the
outstanding shares of capital stock or other equity interest of MergerCo and
each of the Parent Subsidiaries is owned, directly or indirectly, by Parent free
and clear of all Liens. Section 6.4 of Parent Disclosure Schedule sets forth:
(i) the name and jurisdiction of incorporation or organization of each
Subsidiary of Parent ("Parent Subsidiaries") and (ii) the name of each
stockholder or equity interest holder and the number of issued and outstanding
shares of capital stock, share capital or other equity interest held by it with
respect to each Parent Subsidiary.
6.5 Other Interests. Except as set forth in Section 6.5 of Parent
Disclosure Schedule, neither Parent nor any Parent Subsidiary owns directly or
indirectly any interest or
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investment (whether equity or debt) in any corporation, partnership, limited
liability company, joint venture, business, trust or other entity (other than
investments in short-term investment securities), other than in any Parent
Subsidiary.
6.6 No Violation; Consents.
(a) Except as set forth in Section 6.6(a) of Parent
Disclosure Schedule, neither the execution and delivery by Parent of this
Agreement nor consummation by Parent of the Transactions in accordance with the
terms hereof, will conflict with or result in a breach of any provisions of
Parent Certificate or Parent ByLaws or any comparable organizational documents
of any Parent Subsidiary. Except as set forth in Section 6.6(a) of Parent
Disclosure Schedule, the execution and delivery by Parent of this Agreement and
consummation by Parent of the Transactions in accordance with the terms hereof
will not violate, or conflict with, or result in (x) a violation of any Law
applicable to Parent or any Parent Subsidiary or by which any property or asset
of Parent or any Parent Subsidiary is bound or affected or (y) any provision of,
or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination or in a
right of termination or cancellation of, or accelerate the performance required
by, or result in the creation of any Lien upon any of the properties or assets
of Parent or the Parent Subsidiaries under, or result in being declared void,
voidable or without further binding effect, any of the terms, conditions or
provisions of any Contract to which Parent or any of Parent Subsidiaries is a
party, or by which Parent or any of the Parent Subsidiaries or any of their
properties is bound, except as would not, individually or in the aggregate,
reasonably be expected to have a Parent Material Adverse Effect. Other than the
Regulatory Filings, the execution and delivery of this Agreement by Parent does
not, and the performance of this Agreement by Parent and consummation of the
Transactions does not, require any consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Entity, except where
the failure to obtain any such consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority would not, individually or in the aggregate, reasonably be expected to
have a Parent Material Adverse Effect.
(b) Section 6.6(b) of the Parent Disclosure Letter sets
forth a correct and complete list of all material Contracts to which Parent or
any Parent Subsidiaries are a party or by which they or their assets or
properties is or may be bound or affected under which consents or waivers are
required prior to consummation of the transactions contemplated by this
Agreement and the Transactions.
6.7 SEC Documents. Parent has filed all required forms, reports,
exhibits, schedules, statements and other documents with the SEC since September
2, 1998 (collectively, the "Parent SEC Reports"), all of which were prepared in
accordance with the applicable requirements of the Securities Laws. All required
Parent SEC Reports have been filed with the SEC and constitute all forms,
reports, exhibits, schedules, statements and other documents required to be
filed by Parent under the Securities Laws since September 2, 1998. As of their
respective dates, Parent SEC Reports, including any financial statement or
schedules included or incorporated therein by reference (i) complied as to form
in all
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material respects with the applicable requirements of the Securities Laws and
(ii) did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading. Each of the consolidated balance sheets of Parent included in or
incorporated by reference into Parent SEC Reports (including the related notes
and schedules) fairly presents the consolidated results of operations and cash
flow position of Parent and Parent Subsidiaries as of its date and each of the
consolidated statements of income, retained earnings and cash flows of Parent
included in or incorporated by reference into Parent SEC Reports (including any
related notes and schedules) fairly presents the results of operations, retained
earnings or cash flows, as the case may be, of Parent and Parent Subsidiaries
for the periods set forth therein (subject, in the case of unaudited statements,
to normal year-end audit adjustments which would not be material in amount or
effect), in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except as may be
noted therein and except, in the case of the unaudited statements, as permitted
by Form 10-Q pursuant to Section 13 or 15(d) of the Exchange Act. All of such
balance sheets and statements complied as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto. No Parent Subsidiary is subject to the periodic
reporting requirements of the Exchange Act or is otherwise required to file any
documents with the SEC or any national securities exchange or quotation service
or comparable Governmental Entity.
6.8 Litigation. Except as set forth in Section 6.8 of Parent
Disclosure Schedule and in the Parent SEC Reports, there is no litigation, suit,
claim, action or proceeding pending or, to the knowledge of Parent, threatened
against Parent or any of Parent Subsidiaries, as to which there is a reasonable
likelihood of an adverse determination and which, if adversely determined,
would, individually or in the aggregate, reasonably be expected to have a Parent
Material Adverse Effect. Neither Parent nor any Parent Subsidiary is subject to
any outstanding order, writ, injunction or decree which, individually or in the
aggregate, has resulted or would, individually or in the aggregate, reasonably
be expected to have a Parent Material Adverse Effect.
6.9 Absence of Certain Changes. Except as disclosed in Parent SEC
Reports filed with the SEC between September 30, 1999 and the date of this
Agreement or in Section 6.9 of the Parent Disclosure Schedule, since September
30, 1999 Parent and Parent Subsidiaries have conducted their businesses only in
the ordinary course of business and there has not been:
(a) any declaration, setting aside or payment of any
dividend or other distribution with respect to Parent Common Stock or any
redemption, purchase or other acquisition of Parent's securities;
(b) any Commitment entered into by Parent or any of Parent
Subsidiaries outside the ordinary course of business except for Commitments for
expenses of attorneys, accountants and investment bankers incurred in connection
with the Transactions;
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(c) any material change in Parent's accounting principles,
practices or methods; or
(d) any damage, destruction or other casualty loss with
respect to any asset or property owned, leased or otherwise used by it or any
Parent Subsidiaries, whether or not covered by insurance, which damage,
destruction or loss, individually or in the aggregate, has resulted or would,
individually or in the aggregate, reasonably be expected to have a Parent
Material Adverse Effect.
6.10 Intellectual Property. Parent or the Parent Subsidiaries are the
owner free and clear of any Liens of, or a licensee under a valid unrestricted
license for, all Intellectual Property which are material to the business of
Parent and the Parent Subsidiaries as currently conducted, taken as a whole.
Except as disclosed in Parent SEC Reports or Section 6.10 of Parent Disclosure
Schedule, there are no claims pending or, to Parent's knowledge, threatened,
that Parent or any Parent Subsidiary is in violation of any such intellectual
property right of any third party or that challenges the validity,
enforceability, ownership, or right to use, sell, or license any Intellectual
Property which would, individually or in the aggregate, reasonably be expected
to have a Parent Material Adverse Effect, and, to Parent's knowledge, no third
party is in violation of any intellectual property rights of Parent or any
Parent Subsidiary which would, individually or in the aggregate, reasonably be
expected to have a Parent Material Adverse Effect.
6.11 No Brokers. Neither Parent nor any of Parent Subsidiaries has
entered into any contract, arrangement or understanding with any person or firm
which may result in the obligation of such entity or the Company to pay any
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or consummation of
the Transactions, except that Parent has retained Xxxxxxx, Xxxxx & Co. and
Xxxxxx Xxxxxxxxx as its financial advisor in connection with the Transactions.
Other than the foregoing arrangements and the Company's arrangements with Xxxxxx
Xxxxxxx, Parent is not aware of any claim for payment of any finder's fees,
brokerage or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or consummation of the Transactions.
6.12 Opinion of Financial Advisor. Parent has received the opinion of
Xxxxxxx, Sachs & Co. to the effect that, as of the date hereof, the Merger
Consideration is fair to the holders of Parent Common Stock from a financial
point of view.
6.13 Taxes. Except as set forth in Section 6.13 of the Parent
Disclosure Schedule, each of the Parent and the Parent Subsidiaries (i) has
filed, or will have filed, all Tax Returns required to be filed by it on or
before the Closing Date (taking into account any applicable extensions) and all
such Tax Returns are true, correct and complete in all material respects, and
(ii) has paid, or will have paid, all Taxes required to be paid by it on or
before the Closing Date (whether or not shown on any Tax Return), except, in
each case, where the failure to file such Tax Returns or pay such Taxes would
not, individually or in the aggregate, reasonably be expected to have a Parent
Material Adverse Effect. Except as set forth in Section 6.13 of the Parent
Disclosure Schedule, the most recent unaudited financial
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statements contained in the Parent's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1999 reflect an adequate reserve for all material
Taxes payable by the Parent and the Parent Subsidiaries for all taxable periods
and portions thereof through the date of such financial statements in accordance
with United States GAAP. To the knowledge of the Parent, and except as set forth
in Section 6.13 of the Parent Disclosure Schedule, no deficiencies for any Taxes
have been proposed, asserted or assessed against the Parent or any of the Parent
Subsidiaries, there are no Tax liens on any assets of the Parent or of any of
the Parent Subsidiaries (other than liens for current Taxes not yet due), and no
requests for waivers of the time to assess any such Taxes are pending. The
transactions described in Section 8.11, including the Reincorporation (as
defined herein), will not result in any material Tax liability to Parent or to
ATX.
6.14 Employee Benefit Plans. Each Parent Benefit Plan which is
intended to be qualified under Section 401(a) of the Code has received a
favorable determination or approval letter from the IRS regarding its
qualification under such section, and neither the Parent nor any Affiliate knows
of any event that has occurred which would preclude qualified status. With
respect each Parent Benefit Plan, there has been no material failure to comply
with any applicable provision of ERISA, the Code or any other law which would
subject the Parent or any Affiliate to liability for any damages, penalty, or
taxes that would, individually or in the aggregate, reasonably be expected to
have a Parent Material Adverse Effect.
6.15 Definition of Parent's Knowledge. As used in this Agreement, the
phrase "to the knowledge of Parent" or any similar phrase means the actual (and
not the constructive or imputed) knowledge after due inquiry of the executive
officers of Parent.
ARTICLE VII
COVENANTS
7.1 No Solicitations.
(a) The Company represents and warrants that it has
terminated, and has caused its subsidiaries and affiliates, and their respective
officers, directors, employees, investment bankers, attorneys, accountants and
other advisors or representatives to terminate, any activities, discussions or
negotiations relating to, or that may be reasonably be expected to lead to, any
Acquisition Proposal (as hereinafter defined) and will promptly request the
return of all confidential information regarding the Company provided to any
third party prior to the date of this Agreement pursuant to the terms of any
confidentiality agreements. From the date hereof until the termination hereof
and except as permitted by the following provisions of this Section 7.1, the
Company shall not, and shall not authorize or permit any of its officers,
directors or employees or any investment banker, financial advisor, attorney,
accountant or other advisor or Representative retained by it to, directly or
indirectly, (i) solicit, initiate or encourage (including by way of furnishing
non-public information), or take any other action to facilitate, any inquiries
or the making of any proposal that constitutes an Acquisition Proposal or any
inquiries or making of any proposal that constitutes, or may
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reasonably be expected to lead to, an Acquisition Proposal, or (ii) participate
in any activities, discussions or negotiations regarding an Acquisition
Proposal; provided, however, that subject to compliance by the Company with the
provisions of Section 7.1(b), the Company Board may furnish information to, or
enter into discussions or negotiations with, any person that makes an
unsolicited written Acquisition Proposal if, and only to the extent that (A) the
Company Board, after consultation with its outside legal counsel, determines in
good faith that such action is necessary for the Company Board to comply with
its fiduciary duties to the Company's stockholders under applicable law, (B)
such Acquisition Proposal is not subject to any financing contingencies or is,
in the good faith judgment of the Company Board after consultation with a
nationally recognized financial advisor, reasonably capable of being financed,
and is at least as likely to be consummated as is the Merger, (C) the Company
Board determines in good faith that such Acquisition Proposal, based upon such
matters as it deems relevant (including consultation with a nationally
recognized financial advisor) would, if consummated, result in a transaction
more favorable to the Company's stockholders from a financial point of view than
the Merger (any such more favorable Acquisition Proposal being referred to
herein as a "Superior Proposal"), (D) the Company receives from such person an
executed confidentiality agreement in reasonably customary form and (E) at least
three (3) business days prior to taking such action, the Company shall provide
written notice to Parent to the effect that it is taking such action.
(b) Prior to providing any information to or entering into
discussions with any person in connection with an Acquisition Proposal by a
person as set forth in Section 7.1(a), the Company shall notify Parent orally
and in writing of any Acquisition Proposal (including, without limitation, the
material terms and conditions thereof and the identity of the person making it)
or any inquiries indicating that any person is considering making or wishes to
make an Acquisition Proposal, as promptly as practicable (but in no case later
than 24 hours) after its receipt thereof, and shall provide Parent with a copy
of any written Acquisition Proposal or amendments or supplements thereto, and
shall thereafter inform Parent on a prompt basis of (x) any material changes to
the terms and conditions of such Acquisition Proposal, and shall promptly give
Parent a copy of any information delivered to such person that amends or
supplements the Acquisition Proposal and that has not previously been provided
to Parent, and (y) any request by any person for nonpublic information relating
to its or any Company Subsidiaries' properties, books or records.
(c) The Company Board will not withdraw or modify, or
propose to withdraw or modify, in any manner adverse to Parent, its approval or
recommendation of this Agreement or the Merger except in connection with a
Superior Proposal and then only upon or after the termination of this Agreement
pursuant to Section 10.1(c) and payment to Parent of the amounts referred to in
Section 10.2(b).
(d) Nothing contained in this Section 7.1 shall prohibit the
Company from at any time taking and disclosing to its stockholders a position
contemplated by Rule 14d-9 or Rule 14e-2 promulgated under the Exchange Act or
making any disclosure required by Rule 14a-9 promulgated under the Exchange Act
if, the Company Board determines, in its good faith reasonable judgment after
consultation with outside legal counsel, that failure to so disclose would be
inconsistent with its obligations under applicable law.
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(e) As used in this Agreement, the term "Acquisition
Proposal" shall mean any proposed or actual (i) merger, consolidation or similar
transaction involving the Company, (ii) sale, lease, exchange, mortgage, pledge,
transfer or other disposition, directly or indirectly, by merger, consolidation,
share exchange or otherwise, of any assets of the Company or the Company
Subsidiaries representing 15% or more of the consolidated assets of the Company
and the Company Subsidiaries, (iii) issue, sale or other disposition by the
Company of (including by way of merger, consolidation, share exchange or any
similar transaction) securities (or options, rights or warrants to purchase, or
securities convertible into, such securities) representing 15% or more of the
votes associated with the outstanding securities of the Company, (iv) tender
offer or exchange offer in which any person shall acquire beneficial ownership
(as such term is defined in Rule 13d-3 under the Exchange Act), or the right to
acquire beneficial ownership, or any "group" (as such term is defined under the
Exchange Act) shall have been formed which beneficially owns or has the right to
acquire beneficial ownership of, 15% or more of the outstanding shares of
Company Common Stock, (v) recapitalization, restructuring, liquidation,
dissolution, or other similar type of transaction with respect to the Company,
(vi) transaction which is similar in form, substance or purpose to any of the
foregoing transactions or (vii) any public announcement of a proposal or plan to
do any of the foregoing (including, without limitation, the filing of a
registration statement under the Securities Act) or any agreement to engage in
any of the foregoing; provided, however, that the term "Acquisition Proposal"
shall not include the Merger and the other Transactions.
7.2 Conduct of Businesses.
(a) Conduct by the Company. Prior to the Effective Time,
except as specifically permitted by this Agreement, unless Parent or MergerCo
has consented in writing thereto, the Company shall cause each Company
Subsidiary to conduct its operations according to their usual, regular and
ordinary course of business consistent with past practice or in accordance with
the Business Plan of the Company which has been provided to Parent ("Business
Plan") and, to the extent consistent therewith, with no less diligence and
effort then would be applied in the absence of this Agreement, will use its
reasonable best efforts to, and to cause each Company Subsidiary to, preserve
intact the business organization of the Company and each of the Company
Subsidiaries, to keep available the services of the present officers and key
employees of the Company and the Company Subsidiaries, and to preserve the good
will of customers, suppliers and all other persons having business relationships
with the Company and the Company Subsidiaries. Without limiting the generality
of the foregoing, and except as set forth on Section 7.2(a) of the Company
Disclosure Schedule, neither the Company nor any Company Subsidiary shall
(except as expressly permitted by this Agreement or to the extent Parent or
MergerCo shall otherwise consent in writing):
(i) directly or indirectly, split, combine,
subdivide, reclassify or redeem, retire, purchase or otherwise acquire,
or propose to redeem, retire or purchase or otherwise acquire, any
shares of its capital stock, or any of its other securities; or declare,
set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of Company
Common Stock, except for dividends paid by any Company Subsidiary to the
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Company or any Company Subsidiary that is, directly or indirectly,
wholly owned by the Company;
(ii) authorize for issuance, issue, pledge, reissue,
sell, deliver or agree or commit to issue, pledge, reissue, sell or
deliver (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any stock
of any class or any other securities (including indebtedness having the
right to vote) or equity equivalents (including, without limitation,
securities convertible into capital stock, options, warrants and stock
appreciation rights), other than the issuance of shares of Company
Common Stock upon the exercise of Company Options in accordance with
their present terms;
(iii) acquire, sell, lease, encumber, license, pledge,
grant, transfer or dispose of any assets outside the ordinary course of
business which are material to the Company or any of the Company
Subsidiaries (whether by merger, consolidation, purchase, sale, asset
acquisition, stock acquisition or otherwise) or enter into any material
commitment or transaction outside the ordinary course of business,
except as set forth in Section 7.2(a) of the Company Disclosure
Schedule;
(iv) except as contemplated by the Business Plan,
incur, assume or prepay any amount of indebtedness for borrowed money,
guarantee any indebtedness, issue or sell debt securities or warrants or
rights to acquire any debt securities, guarantee (or become liable or
responsible for, whether directly, contingently or otherwise) any debt
of others, make any loans, advances or capital contributions, or
investments in, mortgage, pledge or otherwise encumber any material
assets, create or suffer any material Lien thereupon other than in the
ordinary course of business consistent with prior practice;
(v) pay, discharge or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than any payment, discharge or
satisfaction (A) in the ordinary course of business consistent with past
practice, or (B) in connection with the transactions contemplated by
this Agreement;
(vi) change any of the accounting principles or
practices used by it (except as required by GAAP, in which case written
notice shall be provided to Parent prior to any such change);
(vii) except as required by law, (A) enter into,
adopt, amend or terminate any Company Benefit Plan, (B) enter into,
adopt, amend or terminate any agreement, arrangement, plan or policy
between the Company or any of the Company Subsidiaries and one or more
of their directors or officers, (C) except for normal increases in the
ordinary course of business consistent with past practice, increase in
any manner the compensation or fringe benefits of any
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director, officer or employee or pay any benefit not required by any
Company Benefit Plan or arrangement as in effect as of the date hereof,
(D) pay any benefit not required by any existing plan or arrangement
(including the granting of stock options, stock appreciation rights,
shares of restricted stock or performance units) or grant any severance
or termination pay to (except pursuant to existing agreements, plans or
policies), or enter into any employment or severance agreement with, any
director, officer or other employee of the Company or any Company
Subsidiaries or (E) establish, adopt, enter into, amend or take any
action to accelerate rights under any collective bargaining, bonus,
profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, savings, welfare, deferred compensation,
employment, termination, severance or other employee benefit plan,
agreement, trust, fund, policy or arrangement for the benefit or welfare
of any directors, officers or current or former employees, except in
each case to the extent required by applicable Law; provided, however,
that nothing in this Agreement will be deemed to prohibit the payment of
benefits as they become payable;
(viii) adopt any amendments to the Company Certificate
or the Company Bylaws or comparable organizational documents of any
Company Subsidiary, except as expressly provided by the terms of this
Agreement;
(ix) make or file and elections in respect of Taxes
with respect to the Company or any of its Subsidiaries;
(x) terminate, cancel or request any material change
in, or agree to any material change in any Contract which is material to
the Company and the Company Subsidiaries taken as a whole, or enter into
any Contract which would be material to the Company and the Company
Subsidiaries taken as a whole, in either case other than in the ordinary
course of business consistent with past practice;
(xi) make or authorize any capital expenditure, which
would be material to the Company and the Company Subsidiaries taken as a
whole, other than in the ordinary course of business consistent with
past practice or in accordance with the Business Plan;
(xii) enter into any agreement or arrangement that
materially limits or otherwise restricts the Company or any Company
Subsidiary or any successor thereto, or that would, after the Effective
Time, limit or restrict the Surviving Corporation and its affiliates
(including Parent) or any successor thereto, from engaging or competing
in any line of business or in any geographic area, other than in the
ordinary course of business consistent with past practice;
(xiii) adopt a plan of complete or partial liquidation
or resolutions providing for or authorizing such a liquidation or a
dissolution, merger,
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consolidation, restructuring, recapitalization or reorganization (other
than plans of complete or partial liquidation or dissolution of inactive
Company Subsidiaries);
(xiv) settle, waive, release, assign or compromise any
material rights, claims or litigation (whether or not commenced prior to
the date of this Agreement);
(xv) take any action that would result in any of its
representations or warranties set forth in this Agreement becoming
untrue or cause any conditions to closing set forth in Article IX, to
not be satisfied, other than those actions that would not materially
adversely affect the Company's ability to consummate the transactions
contemplated by this Agreement; or
(xvi) authorize or enter into any formal or informal
written or other agreement or otherwise make any commitment to do any of
the foregoing actions.
(b) Conduct by Parent. Except as expressly provided in this
Agreement or as disclosed on Section 7.2(b) of Parent Disclosure Schedule,
neither Parent nor any Parent Subsidiary shall (except as expressly permitted by
this Agreement or to the extent the Company shall otherwise consent in writing):
(i) declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of Parent Common Stock, except for dividends paid by
any Parent Subsidiary to Parent or any Parent Subsidiary that is,
directly or indirectly, wholly owned by Parent; or
(ii) authorize or enter into any formal or informal
written or other agreement or otherwise make any commitment to do any of
the foregoing actions; provided that nothing in this Section 7.2(b)
shall prohibit Parent from undertaking any actions contemplated by the
definition of Base Adjustments in Section 3.1(c)(ii) prior to Closing.
7.3 Tax-Free Treatment. Parent, MergerCo and the Company intend that
the Merger will qualify as either (i) a reorganization within the meaning of
Section 368(a) of the Code or (ii) a transaction that, together with the
Reincorporation (as defined herein) qualifies as an exchange under the
provisions of Section 351 of the Code and which is treated for U.S. federal
income tax purposes as a transfer of Company Common Stock by the shareholders of
the Company to Parent in exchange for the Merger Consideration. None of Parent,
MergerCo or the Company shall take, or fail to take, or cause to be taken or
fail to cause to be taken, any action, whether before or after the Closing,
which action or failure to take any action would cause the Merger to fail to
constitute a "reorganization" within the meaning of Section 368(a) of the Code
or a transaction that, together with the Reincorporation (as defined herein)
qualifies as an exchange under the provisions of Section 351 of the Code and
which is treated for U.S. federal income tax purposes as a transfer of Company
Common
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Stock by the shareholders of the Company to Parent in exchange for the Merger
Consideration. However, it is further intended by all of the parties hereto that
if the transactions with ATX described in Section 8.11 occur, and this Agreement
is assigned as provided in Section 11.5, then the incorporation of ATX, the
transactions with ATX described in Section 8.11, and the transactions described
in this Agreement will be treated for U.S. federal income tax purposes as one
integrated transaction qualifying as an exchange under the provisions of Section
351 of the Code in which the shareholders of the Company transfer Company Common
Stock in exchange for ATX stock. No party to this Agreement shall take a
position on any Tax return that is inconsistent with the intentions expressed in
this Section 7.3.
ARTICLE VIII
ADDITIONAL AGREEMENTS
8.1 Meetings of Stockholders. Following execution of this Agreement,
(i) Parent will take all action necessary in accordance with applicable law,
Parent Certificate and Parent ByLaws to convene a meeting of its stockholders as
promptly as practicable to consider and vote upon the approval of the issuance
of Parent Common Stock to be issued pursuant to the Merger and (ii) the Company
will take all action necessary in accordance with applicable Law, the Company
Certificate and the Company Bylaws to convene a meeting of its stockholders as
promptly as practicable to consider and vote upon the approval of this Agreement
and the Transactions (the "Company Stockholders Meeting"). The proxy statements
of Parent and the Company related to their respective stockholders' meeting
shall, subject to Section 7.1 hereof, contain the recommendation of Parent Board
and the Company Board, respectively, that its stockholders approve this
Agreement and the Transactions. Subject to and in accordance with applicable
Law, each of Parent and the Company shall use its reasonable best efforts to
obtain the such approval, including, without limitation, by timely mailing the
Proxy Statement (as hereinafter defined) contained in the Form S-4 to its
stockholders. Parent and the Company shall coordinate and cooperate with each
other with respect to the timing of their respective stockholders' meetings and
shall use their reasonable best efforts to hold such meetings on the same day.
8.2 HSR and Other Filings.
(a) Subject to the terms and conditions herein provided and
to applicable legal requirements, each of the parties hereto agrees to use its
reasonable best efforts to (i) take, or cause to be taken, all actions and to
do, or cause to be done, all things necessary, proper or advisable to consummate
and make effective as promptly as practicable the transactions contemplated by
this Agreement and (ii) to cooperate with each other in connection with the
foregoing, including the taking of such actions as are necessary to obtain any
necessary consents, licenses, approvals, orders, exemptions and authorizations
by or from any public or private third party or Governmental Entity, including,
without limitation, those consents, licenses, approvals, exemptions or
authorizations required with respect to the agreements set forth in Sections
5.6(a) and 5.6(b) of the Company Disclosure Schedule and
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any others that are required to be obtained under any Law or any Contract to
which the Company or any Company Subsidiary is a party or by which any of their
respective properties or assets are bound, (iii) to defend all lawsuits or other
legal proceedings challenging this Agreement or the consummation of the
Transactions, (iv) to cause to be lifted or rescinded any injunction or
restraining order or other order adversely affecting the ability of the parties
to consummate the Transactions, and (iv) to effect all necessary registrations
and submissions of information requested by governmental authorities. For
purposes of the foregoing sentence, the obligations of Parent and the Company to
use their "reasonable best efforts" to obtain waivers, consents and approvals to
loan agreements, leases and other contracts shall not include any obligation to
agree to an adverse modification of the terms of such documents or to prepay or
incur additional obligations to such other parties. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purpose of this Agreement, the proper officers and directors of Parent and the
Company shall take all such necessary action. The Company shall use its
reasonable best efforts to properly record all assignments of its Intellectual
Property and make all other necessary filings with the United States Patent and
Trademark Office and the United States Copyright Office.
(b) Without limiting the generality of the foregoing, as
promptly as practicable, Parent and the Company each shall properly prepare and
file any other filings required under applicable Law relating to the Merger and
the other Transactions (including filings, if any, required under the HSR Act,
the Securities Act, the Exchange Act and any other applicable federal or Blue
Sky Laws, the DGCL, Bermuda Law, other applicable Law and the rules and
regulations of NASDAQ, and the Communications Act, the PUC Regulations, and the
Utility Laws (collectively, "Other Filings"). Each of Parent and the Company
shall promptly notify the other of the receipt of any comments on, or any
request for amendments or supplements to, any Other Filings by any Governmental
Entity or official, and each of Parent and the Company shall supply the other
with copies of all correspondence between it and each of its Subsidiaries and
representatives, on the one hand, and any other appropriate governmental
official, on the other hand, with respect to any Other Filings. None of the
parties will file any such document if any of the other parties shall have
reasonably objected to the filing of such document. No party to this Agreement
shall consent to any voluntary extension of any statutory deadline or waiting
period or to any voluntary delay of the consummation of the Merger and the other
Transactions at the behest of any Governmental Entity without the consent and
agreement of the other party to this Agreement, which consent shall not be
unreasonably withheld or delayed. Parent and the Company hereby covenant and
agree to use their respective reasonable best efforts to secure termination of
any waiting periods under the HSR Act and obtain the approval of the Federal
Trade Commission (the "FTC") or any other Governmental Entity for the
transactions contemplated hereby. The Company and Parent shall keep the other
apprised of the status of matters relating to the completion of the transactions
contemplated hereby and work cooperatively in connection with obtaining any
consents from Governmental Entity, including, without limitation: (i) promptly
notifying the other of, and if in writing, furnishing the other with copies of
(or, in the case of material oral communications, advise the other orally of)
any communications from or with any Governmental Entity with respect to the
Merger or any of the other transactions contemplated by this Agreement, (ii)
permitting the
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other party to review and discuss in advance, and considering in good faith the
views of one another in connection with, any proposed written (or any material
proposed oral) communication with any Governmental Entity, (iii) not
participating in any meeting with any Governmental Entity unless it consults
with the other party in advance and to the extent permitted by such Governmental
Entity gives the other party the opportunity to attend and participate thereat,
(iv) furnishing the other party with copies of all correspondence, filings and
communications (and memoranda setting forth the substance thereof) between it
and any Governmental Entity with respect to this Agreement and the Merger, and
(v) furnishing the other party with such necessary information and reasonable
assistance as such other party may reasonably request in connection with its
preparation of necessary filings or submissions of information to any
Governmental Entity. The Company and Parent may, as each deems advisable and
necessary, reasonably designate any competitively sensitive material provided to
the other under this Section as "outside counsel only." Such materials and the
information contained therein shall be given only to the outside legal counsel
of the recipient and will not be disclosed by such outside counsel to employees,
officers, or directors of the recipient unless express permission is obtained in
advance from the source of the materials (the Company or Parent, as the case may
be) or its legal counsel.
8.3 Proxy Statement; Registration Statement. As promptly as
practicable after the execution of this Agreement, Parent and the Company shall
prepare and file with the SEC under the Securities Act a registration statement
on Form S-4 (such registration statement, together with any amendments or
supplements thereto, the "Form S-4"), in connection with the registration under
the Securities Act of the shares of Parent Common Stock to be distributed to the
stockholders of the Company in the Merger (the "Registered Securities"). The
Form S-4 also shall include a joint proxy statement/prospectus and forms of
proxies (such joint proxy statement/prospectus together with any amendments or
supplements thereto, the "Proxy Statement") relating to the stockholder meetings
of Parent and the Company and the vote of the stockholders of Parent and the
Company with respect to this Agreement and the Transactions. Parent will cause
the Proxy Statement and the Form S-4 to comply as to form in all material
respects with the applicable provisions of the Securities Act, the Exchange Act
and the rules and regulations thereunder, the rules and regulations of NASDAQ,
and the DGCL and Bermuda Law, and the Company will cause the Proxy Statement to
comply as to form in all material respects with the applicable provisions of the
Exchange Act and the rules and regulations thereunder, the rules and regulations
of NASDAQ and the DGCL. Each of Parent and the Company shall furnish all
information about itself and its business and operations and all necessary
financial information to the other as the other may reasonably request in
connection with the preparation of the Proxy Statement and the Form S-4. Parent
shall use its reasonable best efforts, and the Company will cooperate with them,
to have the Form S-4 declared effective by the SEC as promptly as practicable
(including clearing the Proxy Statement with the SEC). Each of Parent and the
Company agrees promptly to correct any information provided by it for use in the
Proxy Statement and the Form S-4 if and to the extent that such information
shall have become false or misleading in any material respect, and each of the
parties hereto further agrees to take all steps necessary to amend or supplement
the Proxy Statement and, in the case of Parent, the Form S-4, and to cause the
Proxy Statement and, in the case of Parent, the Form S-4, as so amended or
supplemented to be filed with the SEC and to be disseminated to their
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respective stockholders, in each case as and to the extent required by
applicable federal and state securities laws. No amendment or supplement to the
Proxy Statement will be made without the approval of each of Parent and the
Company, which approval shall not be unreasonably withheld or delayed. Each of
Parent and the Company agrees that the information provided by it for inclusion
in the Proxy Statement or the Form S-4 and each amendment or supplement thereto,
at the time of mailing thereof and at the time of the respective meetings of
stockholders of Parent and the Company, will not include an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. Each of the Company and Parent will advise
the other, and deliver copies (if any) to the other, promptly after either
receives notice thereof, of any request by the SEC for amendment of the Proxy
Statement or the Form S-4 or comments thereon and responses thereto or requests
by the SEC for additional information, or notice of the time when the Form S-4
has become effective or any supplement or amendment has been filed, the issuance
of any stop order or the suspension of the qualification of the Registered
Securities issuable in connection with the Merger for offering or sale in any
jurisdiction. Each of Parent and the Company shall use its reasonable best
efforts to timely mail the Proxy Statement to its stockholders as promptly as
practicable following the effective date of the Proxy Statement.
8.4 Listing Application. Parent and the Company shall cooperate and
promptly prepare and submit to the NASDAQ all reports, applications and other
documents that may be necessary or desirable to enable all of the shares of
Parent Common Stock that will be outstanding or will be reserved for issuance at
the Effective Time to be listed for trading on the NASDAQ. Each of Parent and
the Company shall furnish all information about itself and its business and
operation and all necessary financial information to the other as the other may
reasonably request in connection with such NASDAQ listing process. Each of
Parent and the Company agrees promptly to correct any information provided by it
for use in the NASDAQ listing process if and to the extent that such information
shall have become false or misleading in any material respect. Each of Parent
and the Company will advise and deliver copies (if any) to the other party,
promptly after it receives notice thereof, of any request by the NASDAQ for
amendment of any submitted materials or comments thereon and responses thereto
or requests by the NASDAQ for additional information. The parties shall use
their reasonable best efforts to cause the Surviving Corporation to cause the
Company Common Stock to be de-listed from NASDAQ and de-registered under the
Exchange Act as soon as practicable following the Effective Time.
8.5 Affiliates of the Company.
(a) At least 30 days prior to the Closing Date, the Company
shall deliver to Parent a list of names and addresses of those persons who were,
in the Company's reasonable judgment, at the record date for its stockholders'
meeting to approve the Merger, "affiliates" (each such person, an "Affiliate")
of the Company within the meaning of Rule 145. The Company shall provide Parent
such information and documents as Parent shall reasonably request for purposes
of reviewing such list. The Company shall advise the persons identified on the
list of the resale restrictions imposed by applicable securities laws
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and shall use its reasonable best efforts to deliver or cause to be delivered to
Parent, prior to the Closing Date, from each of the Affiliates of the Company
identified in the foregoing list, an Affiliate Letter in the form attached
hereto as Exhibit A. Parent shall be entitled to place legends as specified in
such Affiliate Letters on the certificates evidencing any shares of Parent
Common Stock to be received by such Affiliates pursuant to the terms of this
Agreement, and to issue appropriate stop transfer instructions to the transfer
agent for such shares of Parent Common Stock, consistent with the terms of such
Affiliate Letters.
(b) Parent shall file the reports required to be filed by it
under the Exchange Act and the rules and regulations adopted by the SEC
thereunder, and it will take such further action as any Affiliate of the Company
may reasonably request, all to the extent required from time to time to enable
such Affiliate to sell shares of Parent Common Stock received by such Affiliate
in the Merger without registration under the Securities Act pursuant to (i) Rule
145(d)(1) or (ii) any successor rule or regulation hereafter adopted by the SEC.
8.6 Expenses. Except as otherwise provided in Section 10.2(b),
whether or not the Merger is consummated, all Expenses incurred in connection
with this Agreement and the Transactions shall be paid by the party incurring
such Expenses. For purposes of this Agreement, "Expenses" consist of all
out-of-pocket expenses (including, all fees and expenses of counsel,
accountants, investment bankers, experts and consultants to a party to this
Agreement 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, the preparation, printing, filing and mailing of
the Proxy Statement, the solicitation of stockholder approvals and all other
matters related to the closing of the transactions contemplated by this
Agreement.
8.7 Officers' and Directors' Indemnification.
(a) In the event of any threatened or actual claim, action,
proceeding or investigation, whether civil, criminal or administrative,
including, without limitation, any such claim, action, suit, demand, proceeding
or investigation in which any person who is now, or has been at any time prior
to the date hereof, or who becomes prior to the Effective Time, a director,
officer, employee, fiduciary or agent of the Company or any of the Company
Subsidiaries (the "Indemnified Parties") is, or is threatened to be, made a
party based in whole or in part on, or arising in whole or in part out of, or
pertaining to (i) the fact that he is or was a director, officer, employee,
fiduciary or agent of the Company or any of the Company Subsidiaries, or is or
was serving at the request of the Company or any of the Company Subsidiaries as
a director, officer, employee, fiduciary or agent of the Company or any Company
Subsidiary or (ii) the negotiation, execution or performance of this Agreement
or any of the Transactions, whether in any case asserted or arising before or
after the Effective Time, the parties hereto agree to cooperate and use their
reasonable best efforts to defend against and respond thereto. It is understood
and agreed that the Company shall indemnify and hold harmless, and after the
Effective Time the Surviving Corporation and Parent shall indemnify and hold
harmless, as and to the full extent permitted by applicable law, each
Indemnified Party against any losses, claims, damages, liabilities, costs,
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expenses (including attorneys' fees and expenses), judgments, fines and amounts
paid in settlement in connection with any such threatened or actual claim,
action, suit, demand, proceeding or investigation. In the event any such
Indemnified Party is or becomes involved in any capacity in any action,
proceeding or investigation for which indemnification is to be provided under
this Agreement (whether asserted or arising before or after the Effective Time),
(A) the Company, and Parent and the Surviving Corporation after the Effective
Time, shall promptly pay expenses in advance of the final disposition of any
claim, action, suit, demand, proceeding or investigation to the full extent
permitted by law, provided that the Indemnified Party may not retain more than
one counsel (in addition to any necessary local counsel) to represent all the
Indemnified Parties and the Company, Parent and the Surviving Corporation shall
pay all reasonable fees and expenses for such counsel for the Indemnified
Parties promptly after statements therefor are received and (B) the Company,
Parent and the Surviving Corporation will use their respective reasonable best
efforts to assist in the defense of any such matter; provided that in no event
shall the Company, Parent or the Surviving Corporation be liable for any
settlement effected without its prior written consent (which consent shall not
be unreasonably withheld); and provided further that neither Parent nor the
Surviving Corporation shall have no obligation hereunder to any Indemnified
Party when and if a court of competent jurisdiction shall ultimately determine,
and such determination shall become final and non-appealable, that
indemnification of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable law. Any Indemnified Party wishing to claim
indemnification under this Section 8.7, upon learning of any such claim, action,
suit, demand, proceeding or investigation, shall notify the Company and, after
the Effective Time, Parent and the Surviving Corporation, thereof; provided that
the failure to so notify shall not affect the obligations of the Company, Parent
and the Surviving Corporation except to the extent such failure to notify
materially prejudices such party.
(b) Parent agrees that all rights to indemnification
existing in favor of, and all limitations on the personal liability of, the
directors, officers, employees and agents of the Company and the Company
Subsidiaries provided for in the Company Certificate or Bylaws as in effect as
of the date hereof with respect to matters occurring prior to the Effective
Time, and including the Merger, shall continue in full force and effect for a
period of not less then six years from the Effective Time; provided, however,
that all rights to indemnification in respect of any claims (each a "Claim")
asserted or made within such period shall continue until the final disposition
of such Claim. Prior to the Effective Time, the Company may purchase an extended
reporting period endorsement under the Company's existing directors' and
officers' liability insurance coverage for the Company's directors and officers
in a form and with terms acceptable to the Company, which shall provide such
directors and officers with coverage for six years following the Effective Time
of not less than the existing coverage under, and have other terms not
materially less favorable to, the insured persons than the directors' and
officers' liability insurance coverage presently maintained by the Company, so
long as the cost is less than $ 750,000, provided that, the Company agrees to
cooperate in good faith with the Parent in order to obtain the lowest premium
for the above referenced coverage. In the event that $ 750,000 is insufficient
for the above referenced coverage, the Company may spend up to that amount to
purchase such lesser coverage as is possible.
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(c) This Section 8.7 is intended for the irrevocable benefit
of, and to grant third party rights to, the Indemnified Parties and shall be
binding on all successors and assigns of Parent, the Company and the Surviving
Corporation. Each of the Indemnified Parties shall be entitled to enforce the
covenants contained in this Section 8.7.
(d) In the event that Parent, the Surviving Corporation or
any of its successors or assigns (i) consolidates with or merges into any other
person or entity and shall not be the continuing or surviving corporation or
entity of such consolidation or merger or (ii) transfers or conveys all or
substantially all of its properties and assets to any person or entity, then,
and in each such case, proper provision shall be made so that the successors and
assigns of Parent or the Surviving Corporation assume the obligations set forth
in this Section 8.7.
8.8 Access to Information; Confidentiality. From the date hereof
until the Effective Time, each of Parent and the Company shall, and shall cause
each of their respective Subsidiaries and each of their and their respective
Subsidiaries' officers, employees and agents to, afford to the other and to the
officers, accountants, consultants, legal counsel, financial advisors,
investment bankers, employees, agents and other representatives (collectively
"Representatives") of the other complete access at all reasonable times, upon
prior notice, to such Representatives, properties, books, records and contracts,
and shall furnish to the other such financial, operating and other data and
information concerning the business, properties, contracts, assets, liabilities,
personnel and other aspects of the other party and its Subsidiaries as the other
or its Representatives may reasonably request. Prior to the Effective Time, the
Company and the Parent shall hold in confidence all such information on the
terms and subject to the conditions contained in that certain confidentiality
agreement between Parent and the Company dated January 27, 2000 (the
"Confidentiality Agreement"). The Company hereby waives the provisions of the
Confidentiality Agreement as and to the extent necessary to permit the making
and consummation of the transactions contemplated by this Agreement. At the
Effective Time, such Confidentiality Agreement shall terminate.
8.9 Publicity. Parent and the Company shall consult with each other
before issuing any press release or otherwise making any public statements with
respect to this Agreement or any transaction contemplated hereby and shall not
issue any such press release or make any such public statement without the prior
consent of the other party, which consent shall not be unreasonably withheld;
provided, however, that a party may, without the prior consent of the other
party, issue such press release or make such public statement as may be required
by law or the applicable rules of any stock exchange if it has used its best
efforts to consult with the other party and to obtain such party's consent but
has been unable to do so in a timely manner. With regard to the Merger, the
parties shall make a joint public announcement of the Transactions no later than
(i) the close of trading on NASDAQ on the day this Agreement is signed, if such
signing occurs during a business day or (ii) the opening of trading on NASDAQ on
the business day following the date on which this Agreement is signed, if such
signing does not occur during a business day.
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8.10 Employee Benefits.
(a) Parent agrees that the Company will honor, and from and
after the Effective Time, Parent will cause the Surviving Corporation to honor,
all obligations under the existing terms of the employment and severance
agreements to which the Company or any Company Subsidiary is presently a party,
except as may otherwise be agreed to by the parties thereto.
(b) Parent agrees that individuals who are employed by the
Company or any Company Subsidiary immediately prior to the Closing Date shall
remain employees of the Company or such Company Subsidiary as of the Closing
Date (each such employee, an "Affected Employee"); provided, however, that
nothing contained herein shall confer upon any Affected Employee the right to
continued employment by the Company or any Company Subsidiary for any period of
time after the Closing Date which is not otherwise required by law or contract.
(c) To the extent that any Affected Employees becomes a
participant in any employee benefit plan maintained by Parent or any Parent
Subsidiary, Parent shall, or shall cause such Parent Subsidiary to, give such
Affected Employees full credit solely for the purposes of eligibility and
vesting under such employee benefits plans for such Affected Employee's service
with Parent, the Company or any affiliate thereof to the same extent recognized
immediately prior to the Closing Date; provided, that the entry dates into such
employee benefit plans for such Affected Employees will be in the normal course
of such plan's administration, which may be the beginning of the plan year.
(d) After the Effective Time, until the date Parent
determines in its sole discretion to modify, amend, terminate or replace the
Company Benefit Plans, Parent shall cause the Surviving Corporation to maintain
the Company Benefit Plans (but not bonus or equity-based plans) on substantially
similar terms to those currently in effect. After the Effective Time, if Parent
decides to move the Affected Employees to a Parent employee benefit plan, the
Affected Employees will be permitted to participate in Parent employee benefit
plan on terms substantially similar to those provided to employees of Parent.
8.11 Reincorporation and Acquisition.
(a) Parent shall take any and all action which may be deemed
advisable or necessary to reincorporate by merger (the "Reincorporation") from a
Bermuda corporation to a Delaware corporation so that at the time of the
consummation of the transactions contemplated by this Agreement, Parent is a
Delaware corporation.
(b) Parent shall be permitted to take any and all action
which may be deemed advisable or necessary to consummate the transactions
contemplated by the Recapitalization and Plan of Merger, dated as of March 9,
2000, among ATX, certain stockholders of ATX and Parent (the "ATX Transaction");
provided that, none of the actions taken in accordance with Sections 8.11(a) and
(b) or consequences thereof shall be deemed a breach of a representation or
warranty or be deemed to cause a failure of a condition set
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forth in Article IX not to be satisfied if, but for such action or consequence
thereof, such condition would otherwise be satisfied.
8.12 Other Actions. (a) During the period from the date of this
Agreement to the Effective Time, the Company and Parent shall not, and shall not
permit any of their respective subsidiaries to, take any action that would, or
that could reasonably be expected to, result in any of the conditions to the
Merger set forth in Article IX of this Agreement not being satisfied other than
as provided in this Agreement.
(b) Parent shall have the right to have its designated
representatives, as provided to the Company from time to time (the "Designated
Parent Representatives"), upon reasonable notice, present within normal business
hours and without material disruption to the business of the Company for
consultation at the Company's principal offices from the date hereof until the
Closing Date. Such Designated Parent Representatives shall have the right to
review and become familiar with the conduct of the business of the Company and
shall be available to be consulted and shall have authority on behalf of Parent
in regard to consultation in regard to Material Decisions (as defined below in
this Section 8.12(b)). Parent shall take all reasonable actions necessary to
ensure that its Designated Parent Representatives will be readily available
during normal business hours. Without written notice to and favorable
consultation (which shall not be unreasonably withheld, delayed or conditioned
with respect to time or content) with the Designated Parent Representatives,
unless the Parent or the Designated Parent Representatives shall have failed to
respond within five business days to such written notice, the Company shall not
take any action involving any Material Decision. "Material Decision" shall mean,
for purposes of this Agreement, any of the following to the extent the same may
affect the assets, the obligations or the business of the Company following the
date hereof: (i) any purchase order, capital expenditure or other purchase of
assets in excess of $100,000 in any instance to be delivered, or the payment for
which shall become due, after the Closing Date; (ii) the acceptance of any
material customer contract or the establishing of any pricing policy that
deviates in any material respect from the terms and conditions of current
pricing policies as set forth in Section 8.12(b) of the Company Disclosure
Schedule; (iii) any general communication with customers related to the business
or to the Merger; or (iv) a material change in material promotional or marketing
decisions or policies.
8.13 Notification of Certain Matters. The Parent and the Company
shall promptly notify each other of (a) the occurrence or non-occurrence of any
fact or event which would reasonably be expected (i) to cause any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date of this Agreement to the Effective
Time, (ii) to cause any material covenant, condition or agreement hereunder not
to be complied with or satisfied in all material respects or (iii) to result in
the case of Parent, a Parent Material Adverse Effect, or in the case of the
Company, a Company Material Adverse Effect, (b) any failure of the Company or
Parent, as the case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder in any material
respect; provided, however, that no such notification shall affect the
representations or warranties of any party or the conditions to the obligations
of any party hereunder, (c) any notice or other material
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communications from any Governmental Entity in connection with the transactions
contemplated by this Agreement and (d) the commencement of any suit, action or
proceeding that seeks to prevent, seeks damages in respect of, or otherwise
relates to the consummation of the transactions contemplated by this Agreement.
8.14 Notification of Parent Transactions. If prior to the Closing
Date Parent shall enter into a definitive agreement for a Parent Transaction,
Parent shall promptly notify the Company of such transaction. Nothing set forth
in this Agreement shall be deemed to prohibit or otherwise limit Parent from
pursuing and entering into agreements for or consummating Parent Transactions.
ARTICLE IX
CONDITIONS TO THE MERGER
9.1 Conditions to the Obligations of Each Party to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the fulfillment or waiver, where permissible, at or prior to the
Closing Date, of each of the following conditions:
(a) Stockholder Approvals. This Agreement and the
Transactions shall have been duly approved by the Requisite Company Vote of the
stockholders of the Company and the issuance of shares of Parent Common Stock in
the Merger shall have been duly approved by the Requisite Parent Vote.
(b) Xxxx-Xxxxx-Xxxxxx Act. Any waiting period (and any
extension thereof) applicable to the consummation of the Merger under the HSR
Act shall have expired or been terminated.
(c) No Injunctions, Orders or Restraints; Illegality. No
statute, rule, regulation, executive order, decree, ruling or injunction,
whether permanent, preliminary or temporary (an "Injunction"), shall have been
enacted, entered, promulgated or enforced by any Governmental Entity or court
which restrains, enjoins or otherwise prohibits the consummation of the Merger
substantially on the terms contemplated hereby and no Governmental Entity shall
have instituted any proceeding seeking any such law, order, injunction or decree
or any other Person has filed a motion and such motion has not been dismissed,
including for an Injunction, which restrains, enjoins or otherwise prohibits
consummation of the Merger substantially on the terms contemplated hereby;
provided that the party seeking to rely upon this condition has fully complied
with and performed its obligations pursuant to Section 8.2 hereof.
(d) Form S-4. The Form S-4 shall have been declared
effective by the SEC under the Securities Act, and no stop order suspending the
effectiveness of the Form S-4 shall have been issued by the SEC, and no
proceeding for that purpose shall have been initiated or, to the knowledge of
Parent or the Company, threatened by the SEC.
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(e) Listing. Parent shall have obtained the approval for the
listing of the shares of Parent Common Stock issuable in the Merger and upon
exercise of the Assumed Options on NASDAQ, subject to official notice of
issuance.
(f) Registration Rights Agreement. Parent and the Voting
Agreement Stockholders shall have entered into a registration rights agreement
in substantially the form set forth in Exhibit B to this Agreement (the
"Registration Rights Agreement").
(g) Government Consents. All consents, approvals and action
of any Governmental Entity required to permit the consummation of the Merger and
the other transactions contemplated by this Agreement shall have been obtained
or made, free of any condition that would reasonably be expected to have a
Company Material Adverse Effect or a Parent Material Adverse Effect, as the case
may be.
9.2 Conditions to Obligations of the Company. The obligations of the
Company to effect the Merger are further subject to the following conditions:
(a) Representations and Warranties. (i) Those
representations and warranties of Parent set forth in this Agreement which are
qualified by a Parent Material Adverse Effect or words of similar effect 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 such
representations and warranties expressly relate to a specific date or as of the
date hereof, in which case such representations and warranties shall be true and
correct as of such date), and (ii) those representations and warranties of
Parent set forth in this Agreement which are not so qualified shall be true and
correct in all material respects as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date (other than
representations and warranties that expressly relate to a specific date or as of
the date hereof, in which case such representations and warranties shall be true
and correct in all material respects as of such date).
(b) Performance of Obligations of Parent. Parent shall have
performed in all material respects all obligations required to be performed by
it under this Agreement, including, without limitation, the covenants contained
in Articles VII and VIII hereof.
(c) Officers' Certificate. The Company shall have received a
certificate of the Chief Executive Officer or President and the Chief Financial
Officer of Parent, dated the Closing Date, to the effect that the statements set
forth in paragraphs (a) and (b) of this Section 9.2 are true and correct.
(d) Consents, Approvals, Etc. All material consents,
authorizations, orders and approvals of (or filings or registrations with) any
governmental commission, board, other Governmental Entity or third parties
required to be made or obtained by Parent and Parent Subsidiaries and affiliated
entities in connection with the execution, delivery and performance of this
Agreement shall have been obtained or made.
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(e) Legal Opinion. The Company shall have received a written
opinion from its counsel, Xxxxxxx, Procter & Xxxx LLP, in form and substance
reasonably satisfactory to it, to the effect that the Merger will constitute
either (i) a tax free reorganization within the meaning of Section 368(a) of the
Code or (ii) a transaction that, together with the Reincorporation (as defined
herein) qualifies as an exchange under the provisions of Section 351 of the Code
and which is treated for U.S. federal income tax purposes as a transfer of
Company Common Stock by the shareholders of the Company to Parent in exchange
for the Merger Consideration and such opinion shall not have been withdrawn.
9.3 Conditions to Obligations of Parent. The obligation of Parent to
effect the Merger is further subject to the following conditions:
(a) Representations and Warranties. (i) Those
representations and warranties of the Company set forth in this Agreement which
are qualified by a Company Material Adverse Effect or words of similar effect
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 such
representations and warranties expressly relate to a specific date or as of the
date hereof, in which case such representations and warranties shall be true and
correct as of such date), and (ii) those representations and warranties of the
Company set forth in this Agreement which are not so qualified shall be true and
correct in all material respects as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date (other than such
representations and warranties that expressly relate to a specific date, in
which case such representations and warranties shall be true and correct in all
material respects as of such date).
(b) Performance of Obligations of the Company. The Company
shall have performed in all material respects all obligations required to be
performed by it under this Agreement, including, without limitation, the
covenants contained in Articles VII and VIII hereof.
(c) Absence of Company Changes. From September 30, 1999
through the Closing Date, there shall not have occurred any change concerning
the Company or any of the Company Subsidiaries that has had, or is reasonably
expected to have, a material adverse effect on the business, properties, assets,
results of operations or financial condition of the Company and the Company
Subsidiaries taken as a whole (other than any (i) regulatory changes generally
affecting the industries in which the Company operates, including changes due to
actual or proposed changes in law or regulations, or (ii) changes that are
related to a general drop in stock prices in the United States resulting from
political or economic turmoil.)
(d) Officers' Certificate. Parent shall have received a
certificate of the Chief Executive Officer or President and the Controller of
the Company to the effect that the statements set forth in paragraphs (a) and
(b) of this Section 9.3 are true and correct.
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(e) Consents, Approvals, Etc. All material consents,
authorizations, orders and approvals of (or filings or registrations with) any
governmental commission, board, other Governmental Entity or third parties
required to be made or obtained by the Company and the Company Subsidiaries and
affiliated entities in connection with the execution, delivery and performance
of this Agreement shall have been obtained or made.
(f) Stockholders Agreement. The Principal Stockholders who
are required by the Voting Agreement to enter into the Stockholders Agreement,
substantially in the form of Exhibit C attached hereto, and Parent shall have
entered into such agreement, which shall remain in full force and effect.
(g) Legal Opinion. Parent shall have received a written
opinion from its counsel, Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, in form and
substance reasonably satisfactory to it, to the effect that the Merger will
constitute (i) a tax free reorganization within the meaning of Section 368(a) of
the Code or (ii) a transaction that, together with the Reincorporation (as
defined herein) qualifies as an exchange under the provisions of Section 351 of
the Code and which is treated for U.S. federal income tax purposes as a transfer
of Company Common Stock by the shareholders of the Company to Parent in exchange
for the Merger Consideration and such opinion shall not have been withdrawn.
(h) Affiliate Letters. The Parent shall have received an
executed copy of an Affiliate Letter from each Affiliate of the Company.
(i) Other Agreements. Those letter agreements dated as of
the date hereof between Parent and certain individuals and executed in
connection herewith shall have been performed at or prior to Closing.
9.4 Parent Transactions. In the event that Parent undertakes any
action contemplated by the definition of Base Adjustments in Section 3.1(c)(ii)
prior to the Closing, no condition set forth in this Article IX shall be deemed
not to be satisfied if, but for such action or the consequences thereof, such
condition would otherwise be satisfied.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
10.1 Termination. This Agreement may be terminated and abandoned at
any time prior to the Effective Time, whether before or after the approval of
matters presented in connection with the Merger by the stockholders of Parent
and the Company:
(a) by the mutual written consent of Parent and the Company.
(b) by either of Parent or the Company:
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(i) if any required approval of the stockholders of
Parent or the Company that is a condition to the obligations of Parent
or the Company under Section 9.1 of this Agreement shall not have been
obtained at the Company Stockholders Meeting or the special meeting of
the Parent's stockholders to be held to consider approval of the
issuance of Parent Common Stock to be issued in the Merger; or
(ii) if any Governmental Entity shall have issued a
final and nonappealable Injunction (which Injunction the parties have
used their best efforts to lift), which permanently enjoins the Merger.
(c) by the Company, if the Company Board shall elect to
terminate this Agreement in order to recommend or approve a Superior Proposal,
provided that (i) the Company has complied with all the terms of Section 7.1 and
notified Parent in writing that it intends to terminate this Agreement in order
to recommend or approve a Superior Proposal, attaching the most current version
of such proposal to such notice, (ii) at any time after the third business day
following written notification by the Company to Parent of the Company's
intention to enter into a binding agreement with respect to such proposal, after
taking into account any modifications to the transactions contemplated by this
Agreement that Parent has then proposed in writing and not withdrawn, the
Company Board has determined that such proposal is and continues to be a
Superior Proposal and (iii) concurrently with the effectiveness of such
termination, pays to Parent the termination fee under Section 10.2(b), it being
understood on the date of the effectiveness of such termination, whether or not
prior to such effectiveness, the Company may enter into an agreement with
respect to such Superior Proposal which agreement, if entered into prior to such
effectiveness must be conditioned upon the payment of the termination fee on the
same date as provided herein. The termination under this Section 10.1(c) shall
not be effective until the Company has made payment to Parent of the amounts
required to be paid pursuant to Section 10.2(b).
(d) by Parent, if (i) the Company Board shall have resolved
to or shall have (A) withdrawn, modified or changed in a manner adverse to
Parent its approval or recommendation of this Agreement, (B) failed to include
such recommendation in the Proxy Statement, (C) approved or recommended any
Acquisition Proposal, (D) entered into a definitive agreement with respect to a
Superior Proposal or (E) made a public announcement of its intention to take any
of the foregoing actions or (ii) a tender offer or exchange offer for more than
15% of the outstanding shares of the Company Common Stock is commenced and the
Company Board fails to recommend against acceptance of such tender offer or
exchange offer by its stockholders (including by taking no position with respect
to the acceptance of such tender offer or exchange offer by its stockholders).
(e) by Parent, if it is not in material breach of its
obligations under this Agreement, on or after the later of (x) October 31, 2000,
or (y) 120 days following the date on which Parent last made an initial
announcement that it had entered into a definitive agreement for a Parent
Transaction, if any of the conditions provided in Sections 9.1 and 9.3 of this
Agreement have not been satisfied and have not been waived in writing by Parent
prior to such date; provided that, if the Merger has not occurred by reason of
the
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nonsatisfaction of the condition set forth in Section 9.1(b) hereof or the
pendency of a non final Injunction, Parent shall have used its best efforts to
cause such condition to be satisfied or have any such Injunction stayed or
reversed.
(f) by the Company, if it is not in material breach of its
obligations under this Agreement, on or after October 31, 2000, if any of the
conditions provided in Sections 9.1 and 9.2 of this Agreement have not been
satisfied and have not been waived by the Company; provided, however, if the
Merger has not occurred by reason of the nonsatisfaction of the condition set
forth in Section 9.1(b) hereof or the pendency of a non-final Injunction, the
Company shall have used its best efforts to cause such condition to be satisfied
or have any such Injunction stayed or reversed.
(g) by Parent, upon a breach of any material representation,
warranty, covenant or agreement on the part of the Company set forth in this
Agreement, or if any representation or warranty of the Company shall have become
untrue, in either case such that the conditions set forth in either of Section
9.3(a) or 9.3(b) would not be satisfied (a "Terminating Company Breach");
provided, however, that, if such Terminating Company Breach is curable by the
Company through the exercise of its reasonable best efforts and for so long as
the Company continues to exercise such reasonable best efforts, Parent may not
terminate this Agreement under this Section 10.1(g).
(h) by the Company, upon breach of any material
representation, warranty, covenant or agreement on the part of Parent set forth
in this Agreement, or if any representation or warranty of Parent shall have
become untrue, in either case such that the conditions set forth in either of
Section 9.2(a) or 9.2(b) would not be satisfied (a "Terminating Parent Breach");
provided, however, that, if such Terminating Parent Breach is curable by Parent
through its reasonable best efforts and for so long as Parent continues to
exercise such reasonable best efforts, the Company may not terminate this
Agreement under this Section 10.1(h); or
(i) by the Company if (i) as of a date not more than three
business days before the expected Closing Date, the Average Parent Common Stock
Price would be less than 69% of the Base Stock Price, (ii) irrevocable notice
shall have been provided to Parent in accordance with the notice provisions
hereunder indicating the Company's intention to terminate the Agreement, and
(iii) within one business day of receipt of such notice, Parent shall not have
agreed (by unilateral notice to the Company) to increase the number of shares of
Parent Common Stock to be issued to the shareholders of the Company pursuant to
the Merger such that as of the Closing Date, the aggregate value (based on the
Average Parent Common Stock Price) of the Parent Common Stock to be received by
the shareholders of the Company will be equal to the aggregate value (based on
the Average Parent Common Stock Price) of Parent Common Stock they would have
been entitled to receive if the Average Parent Common Stock Price were equal to
the Floor Stock Price. In the event the Company serves the notice provided for
in (ii) above, and the Parent does not agree to increase the number of shares in
accordance with (iii) above, then the termination shall become effective
immediately on the following business day.
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10.2 Effect of Termination.
(a) In the event of the termination of this Agreement
pursuant to Section 10.1 hereof, this Agreement shall forthwith become null and
void and have no effect, without any liability on the part of any party hereto
or its Representatives, affiliates, trustees, directors, officers or
stockholders and all rights and obligations of any party hereto shall cease
except for the agreements contained in Sections 8.6, 8.8 and 11.4 and this
Section 10.2 which shall survive the termination; provided, however, that
nothing contained in this Section 10.2 shall relieve any party from liability
for any fraud or willful breach of its representations or warranties or breach
of its covenants or agreements set forth in this Agreement.
(b) In the event the Company shall have terminated this
Agreement pursuant to Section 10.1(c), or Parent shall have terminated this
Agreement pursuant to Section 10.1(d)(i), then the Company shall simultaneously
with such termination pay Parent a termination fee equal to $19.0 million (the
"Termination Amount"). In the event that Parent shall have terminated this
Agreement pursuant to Section 10.1(d)(ii) and either (x) the Company shall have
entered into a definitive agreement with respect to the tender or exchange offer
giving rise to such termination or (y) the person making the tender or exchange
offer giving rise to such termination shall have accepted shares for payment
pursuant to such tender or exchange offer, the Company shall pay, upon the
earlier of entering into a definitive agreement and the acceptance of shares for
payment, to the Parent a termination fee equal to the Termination Amount.
(c) Any payment required by this Section 10.2 shall be
payable by the Company to Parent by wire transfer of immediately available funds
to an account designated by Parent.
(d) The Company acknowledges that the agreements contained
in this Section 10.2 are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Parent and MergerCo would
not enter into this Agreement; accordingly, if the Company fails to pay promptly
the amounts due pursuant to Section 10.2(b), and, in order to obtain such
payment, Parent commences a suit which results in a judgment against the Company
for all or a portion of such amounts, the Company shall pay to Parent's Expenses
in connection with such suit, together with interest on the amounts payable to
Parent at the prime rate of The Chase Manhattan Bank in effect on the date such
payment was required to be made.
10.3 Amendment. This Agreement may be amended by the parties hereto
by an instrument in writing signed on behalf of each of the parties hereto at
any time before or after any approval hereof by the stockholders of Parent and
the Company, but in any event following authorization by Parent Board and the
Company Board; provided, however, that after any such stockholder approval, no
amendment shall be made which by law requires further approval by the
stockholders without obtaining such approval.
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ARTICLE XI
GENERAL PROVISIONS
11.1 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered or sent if delivered personally or sent by
cable, telegram, telecopier, facsimile or telex or sent by prepaid overnight
carrier to the parties at the following addresses (or at such other addresses as
shall be specified by the parties by like notice):
(a) if to Parent:
CoreComm Limited
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxxxxx, Esq.
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
(b) if to the Company:
Xxxxxxx.xxx, Inc.
0000 X. Xxxxxxxx Xxxx
Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxx, P.C.
Xxxxxx X. Xxxxxxx III
Xxxx XxXxxxxxxx, P.C.
Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
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11.2 Certain Definitions. For purposes of this Agreement:
(a) The term "affiliate," as applied to any person, means
any other person directly or indirectly controlling, controlled by, or under
common control with, that person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that person, whether through the
ownership of voting securities, by contract or otherwise.
(b) The term "business day" means any day, other than
Saturday, Sunday or a federal holiday, and shall consist of the time period from
12:01 a.m. through 12:00 midnight Eastern time. In computing any time period
under this Agreement, the date of the event which begins the running of such
time period shall be included except that if such event occurs on other than a
business day such period shall begin to run on and shall include the first
business day thereafter.
(c) The term "including" means, unless the context clearly
requires otherwise, including but not limited to the things or matters named or
listed after that term.
(d) The term "person" shall include individuals,
corporations, limited and general partnerships, trusts, limited liability
companies, associations, joint ventures, Governmental Entities and other
entities and groups (which term shall include a "group" as such term is defined
in Section 13(d)(3) of the Exchange Act).
(e) The term "Subsidiary" means any corporation more than
50% of whose outstanding voting securities, or any partnership, joint venture or
other entity more than 50% of whose total equity interest, is directly or
indirectly owned by Parent or the Company, as the case may be.
11.3 Non-Survival of Representations, Warranties, Covenants and
Agreements. Except for Articles I, II and IV, the last sentence of Section
8.2(a), and Sections 7.3, 8.4, 8.5, 8.6, 8.7 and 8.10 and this Article XI, none
of the representations, warranties, covenants and agreements contained in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time, and thereafter there shall be no liability on the
part of none of Parent, MergerCo or the Company or any of their respective
officers, directors or stockholders in respect thereof. Except as expressly set
forth in this Agreement, there are no representations or warranties of any party
hereto, express or implied.
11.4 Miscellaneous. This Agreement (i) constitutes, together with the
Confidentiality Agreement, Parent Disclosure Schedule and the Company Disclosure
Schedule, the entire agreement and supersedes all of the prior agreements and
understandings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof, (ii) shall be binding upon and inure to
the benefits of the parties hereto and their respective successors and assigns
and is not intended to confer upon any other
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person (except as set forth below) any rights or remedies hereunder and (iii)
may be executed in two or more counterparts which together shall constitute a
single agreement. Except as provided in Section 8.7, this Agreement is not
intended to confer upon any person other than the parties to this Agreement any
rights or remedies under this Agreement. The parties hereto 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 or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in the Delaware Courts (as
hereinafter defined), this being in addition to any other remedy to which they
are entitled at law or in equity.
11.5 Assignment. Except as expressly permitted by the terms hereof,
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by either party hereto without the prior written consent of
the other party, except that Parent shall assign all of its rights, interests
and obligations under this Agreement to ATX, upon consummation of the ATX
Transaction if such consummation occurs prior to the Closing provided that,
notwithstanding such assignment, Parent shall remain liable under this
Agreement. If such assignment occurs, then (i) ATX will acquire the Company by
merging a wholly owned first-tier domestic subsidiary of ATX into the Company,
(ii) the acquisition of Parent by ATX will be consummated after the
Reincorporation of Parent, and (iii) the acquisition of Parent by ATX will be
structured so that it will be treated for U.S. federal income tax purposes as a
transfer of stock of Parent by Parent stockholders in exchange for stock issued
by ATX.
11.6 Severability. If any provision of this Agreement, or the
application thereof to any person or circumstance is held invalid or
unenforceable, the remainder of this Agreement, and the application of such
provision to other persons or circumstances, shall not be affected thereby, and
to such end, the provisions of this Agreement are agreed to be severable.
11.7 Choice of Law/Consent to Jurisdiction. All disputes, claims or
controversies arising out of this Agreement, or the negotiation, validity or
performance of this Agreement, or the Transactions shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
its rules of conflict of laws. Each of Parent, MergerCo and the Company hereby
irrevocably and unconditionally consents to submit to the sole and exclusive
jurisdiction of the courts of the State of Delaware and of the United States of
America located in the State of Delaware (the "Delaware Courts") for any
litigation arising out of or relating to this Agreement, or the negotiation,
validity or performance of this Agreement, or the Transactions (and agrees not
to commence any litigation relating thereto except in such courts), waives any
objection to the laying of venue of any such litigation in the Delaware Courts
and agrees not to plead or claim in any Delaware Court that such litigation
brought therein has been brought in any inconvenient forum. Each of the parties
hereto agrees, (a) to the extent such party is not otherwise subject to service
of process in the State of Delaware, to appoint and maintain an agent in the
State of Delaware as such party's agent for acceptance of legal process, and (b)
that service of process may also be made on such party by prepaid certified mail
with a proof of mailing
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receipt validated by the United States Postal Service constituting evidence of
valid service. Service made pursuant to (a) or (b) above shall have the same
legal force and effect as if served upon such party personally within the State
of Delaware. For purposes of implementing the parties' agreement to appoint and
maintain an agent for service of process in State of Delaware, each such party
does hereby appoint The Corporation Trust Company, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000, as such agent.
11.8 Incorporation. The Parent Disclosure Schedule and the Company
Disclosure Schedule and all Exhibits and Schedules attached hereto and thereto
and referred to herein and therein respectively are hereby incorporated herein
and made a part hereof for all purposes as if fully set forth herein.
11.9 The Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.10 No Agreement Until Executed. Irrespective of negotiations among
the parties or the exchanging of drafts of this Agreement, this Agreement shall
not constitute or be deemed to evidence a contract, agreement, arrangement or
understanding among the parties hereto unless and until (i) the Company Board
has approved the terms of this Agreement, including, without limitation, for
purposes of Section 203 of the DGCL and any applicable provision of the Company
Certificate, (ii) Parent Board has approved the terms of this Agreement,
including, without limitation, for purposes of the DGCL and Bermuda law and any
applicable provisions of Parent Certificate and (ii) this Agreement is executed
by the parties hereto.
11.11 Obligations of Parent and of the Company. Whenever this
Agreement requires a Parent Subsidiary to take any action, that requirement
shall be deemed to include an undertaking on the part of Parent to cause that
Parent Subsidiary to take that action. Whenever this Agreement requires a
Company Subsidiary to take any action, that requirement shall be deemed to
include an undertaking on the part of the Company to cause that Company
Subsidiary to take that action and, after the Effective Time, on the part of the
Surviving Corporation to cause that Company Subsidiary to take that action.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Parent, MergerCo and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
CORECOMM LIMITED
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President--
General Counsel
XXXXXXX.XXX, INC.
By: /s/ XXXXXXXXXXX X. XXXXX
--------------------------------
Name: Xxxxxxxxxxx X. Xxxxx
Title: Chief Executive Officer
CORECOMM GROUP SUB I,
INC.
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President--
General Counsel
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EXHIBIT B
FORM OF REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of __________ __, 2000
(the "Agreement"), by and between [CoreComm Limited], a _____________
corporation ("CoreComm" or the "Company") and the holders of Common Stock (as
hereinafter defined) listed on Schedule 1 attached hereto (each a "Stockholder"
and, collectively, the "Stockholders").
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as
of March ___, 2000 (the "Merger Agreement"), by and among the Company, CoreComm
Group Sub I, Inc., a Delaware corporation and a wholly-owned subsidiary of
Parent, and Xxxxxxx.xxx, Inc., a Delaware corporation, and, with respect to
certain provisions thereof, each of the Stockholders is entitled to receive
shares of the Company's common stock, par value $.01 per share (the "Common
Stock") and cash;
WHEREAS, it is a condition to the consummation of the merger
and the other transactions contemplated by the Merger Agreement that the Company
grant to the Stockholders the registration rights and other rights set forth
herein; and
In consideration of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. General; Securities Subject to this Agreement.
1.1 Grant of Rights. The Company hereby grants
registration rights to the Stockholders upon the terms and subject to the
conditions set forth in this Agreement. Capitalized terms used herein and not
defined shall have the meanings assigned to such terms in the Merger Agreement.
1.2 Registrable Securities. For the purposes of
this Agreement, "Registrable Securities" means any shares of Common Stock issued
to the Stockholders pursuant to the Merger Agreement; provided, however, that
(i) shares shall cease to be Registrable Securities for purposes of this
Agreement when a registration statement covering such Registrable Securities has
been declared effective under the Securities Act by the Commission and all such
Registrable Securities have been disposed of pursuant to such effective
registration statement and (ii) the securities of a Stockholder shall be deemed
not to be Registrable Securities at any time when the entire amount of such
Stockholder's Registrable Securities proposed to be sold in a single sale are
or, in the opinion of counsel satisfactory to the Company, in its reasonable
judgment, may be distributed to the public pursuant to Rule 144 (or any
successor provision then in effect) under the Securities Act.
1.3 Stockholders of Registrable Securities. A
Person is deemed to be a holder of Registrable Securities whenever such Person
(i) is a party to this Agreement (or a permitted transferee thereof) and (ii)
owns of record Registrable Securities. If the Company receives conflicting
instructions, notices or elections from
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two or more Persons with respect to the same Registrable Securities, the Company
may act upon the basis of the instructions, notice or election received from the
registered owner of such Registrable Securities.
2. Demand Registration Rights.
2.1 Demand Registration.
(a) At any time on or after six (6)
months from the date of this Agreement, the Stockholders may make a written
request (specifying the intended method of disposition) (such Stockholders, the
"Initiating Stockholders") for registration under the Securities Act (a "Demand
Registration") of all or part of the shares of Common Stock which constitute
such Initiating Stockholders' Registrable Securities; provided, however, that,
(i) the Company shall not be required to effect more than one (1) Demand
Registration pursuant to this Agreement, (ii) the number of the shares of Common
Stock proposed to be registered by the Initiating Stockholders shall not be less
than 1,500,000 shares (subject to appropriate adjustments to reflect stock
splits, stock dividends, corporate recapitalizations or similar transactions) as
of the date of the request, and (iii) the Initiating Stockholders shall be the
holders as of the date of the request of at least 43.5% of the then outstanding
shares of Common Stock that constitute Registrable Securities hereunder.
(b) If at the time of any request to
register Registrable Securities pursuant to this Section 2.1, the Company is
engaged or plans to engage in within ninety (90) days of the time of such
request in a registered public offering or any other activity which, in the good
faith determination of the Board of Directors of the Company, would be required
to be disclosed under applicable law as a result of such request or would be
materially and adversely affected by the requested registration (each, a
"Company Event"), then the Company may at its option direct that such request be
delayed for a reasonable period of time not in excess of three (3) months from
the effective date of such offering or the date of completion of such other
activity, as the case may be, such right to delay a request to be exercised by
the Company not more than once in any 365-day period. In addition, the Company
shall not be required to effect any registration within three (3) months after
the effective date of any other Registration Statement of the Company. Within
ten days after receipt of a request for a Demand Registration, the Company shall
give written notice (the "Notice") of such request to all other Stockholders
holding the class of stock to which such Demand Registration relates and shall
include in such registration all Registrable Securities of that class that the
Company has received written requests for inclusion therein within 15 days after
the Notice is given. Thereafter, in the case of Demand Registration, the Company
may elect to include in such registration additional shares of Common Stock
issued by the Company. All requests made pursuant to this Section 2.1 shall
specify the class and aggregate number of Registrable Securities to be
registered.
2.2 Effective Demand Registration. The Company
shall use reasonable commercial efforts to cause any Demand Registration to
become effective
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not later than ninety (90) days after it receives a request under Section 2.1
hereof and to remain effective for the lesser of (i) the period during which all
Registrable Securities registered in the Demand Registration are sold and (ii)
one hundred and twenty (120) days; provided, however, that if the Initiating
Stockholders request the Company to withdraw such registration, other than as
the result of a breach by the Company, it shall constitute a Demand Registration
unless the Initiating Stockholders promptly pay all of the costs and expenses
incurred by the Company in connection with such registration.
2.3 Underwriting Procedures.
(a) The offering of Registrable
Securities pursuant to a Demand Registration shall be in the form of a firm
commitment underwritten offering and the managing underwriter and other
underwriters selected for such offering shall be selected by the Company,
provided that the managing underwriter and other underwriters are reasonably
acceptable to the Initiating Stockholders (having due regard to the experience
and relationship with the Company of the managing underwriter and the other
underwriters) (the "Approved Underwriter"). In such event, if the Approved
Underwriter advises the Company in writing that in its opinion the aggregate
amount of such Registrable Securities requested to be included in such offering
is sufficiently large to have a material adverse effect on the success of such
offering, the Company shall include in such registration only the aggregate
amount of Registrable Securities that in the opinion of the Approved Underwriter
may be sold without any such material adverse effect and shall reduce pro rata
based on the number of Registrable Securities included in the request for Demand
Registration, the amount of Registrable Securities to be included by each
Stockholder in such registration.
(b) Distribution by Underwriters. The
managing underwriter or underwriters selected for any offering shall enter into
an agreement with the Company and the Stockholders whereby the underwriters
shall be prohibited from (i) distributing 5% or greater of the Registrable
Securities to any Person in connection with the initial placement of the
Registrable Securities for the offering and from (ii) distributing 5% or greater
of the Registrable Securities to any Person for 90 days after such initial
placement.
3. Incidental or "Piggy-Back" Registration Rights.
3.1 Notice of Registration. If, at any time or
from time to time prior to the second anniversary of the date hereof, the
Company shall determine to register any of its Common Stock for sale in an
Underwritten Offering for its own account (other than a registration relating to
(i) a registration of an employee compensation plan or arrangement adopted in
the ordinary course of business on Form S-8 (or any successor form) or any
dividend reinvestment plan or (ii) a registration of securities on Form S-4 (or
any successor form) including, without limitation, in connection with a proposed
issuance in exchange for securities or assets of, or in connection with a merger
or consolidation with another corporation), the
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Company will promptly give to the Stockholders written notice thereof, and
include in such registration (subject to Section 3.2) all the Registrable
Securities specified in a written request made by any one or more of the
Stockholders within ten days after such Stockholder's receipt of such written
notice from the Company ("Incidental Registration"). The right of such
Stockholder to have Registrable Securities included in a registration pursuant
to this Section 3.1 shall be conditioned upon such Stockholder's entering into
(together with the Company and/or the other holders, if any, distributing their
securities through such underwriting) an underwriting agreement in customary
form with the managing underwriter or underwriters selected for such
underwriting by the Company (the "Company Underwriter").
3.2 Cutback. If the lead managing underwriter
of an offering covered by Section 3.1 shall advise the Company in writing on or
before the date five days prior to the date then scheduled for such offering
that, in its opinion, the amount of Common Stock (including Registrable
Securities) requested to be included in such registration exceeds the amount
which can be sold in such offering without adversely affecting the distribution
of the Common Stock being offered, then the Company will include in such
registration: first, any shares proposed to be offered by the Company; second,
Registrable Securities requested to be registered by the Stockholders and any
other shares requested by other stockholders of the Company, including the
Stockholders, to be included in such registration, allocated, if necessary, pro
rata among the Stockholders and such other holders requesting such registration
on the basis of the number of the shares Beneficially Owned at the time,
provided, however, that in the event the Company will not, by virtue of the
foregoing cut-back mechanism, include in any such registration all of the
Registrable Securities requested to be included in such registration, the
Stockholders may, upon written notice to the Company given within three days of
the time the Stockholders first are notified of such matter, reduce the amount
of Registrable Securities they desire to have included in such registration,
whereupon only the Registrable Securities, if any, they desire to have included
will be considered for such inclusion.
3.3 Right of Termination. The Company shall
have the right to terminate or withdraw any registration initiated by it under
Section 3.2 prior to the effectiveness of such registration whether or not the
Stockholders have elected to include Registrable Securities in such
registration.
4. Provisions Applicable to Demand and Piggy-Back
Registrations.
4.1 Expenses. The Company shall pay all
Registration Expenses (as defined in Section 6 hereof) incurred in connection
with any registration pursuant to Section 2 or 3 hereto, unless such
registration fails to become effective as a result of the fault of one or more
Stockholders, in which case the Company will not be required to pay the
Registration Expenses incurred with respect to the offering of such
Stockholder's or Stockholders' Registrable Securities. The Registration Expenses
incurred with respect to the offering of such Stockholder's or Stockholders'
Registrable Securities shall be the product of (a) the aggregate amount of all
Registration Expenses incurred in connection with such registration and (b) the
ratio
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that the number of such Registrable Securities bears to the total number of
Registrable Securities included in the registration.
4.2 Holdback Agreements. Each Stockholder
agrees not to effect any public sale or distribution of any Registrable
Securities being registered or of any securities convertible into or
exchangeable or exercisable for such Registrable Securities, including a sale
pursuant to Rule 144 under the Act, during the ninety (90) day period beginning
on the effective date of any Demand Registration or Incidental Registration or
other underwritten offering in which such Stockholder is participating (except
as part of such registration), if and to the extent requested by any other
Stockholders, in the case of a non-underwritten public offering, or if and to
the extent requested by the Approved Underwriter or Company Underwriter, in the
case of an underwritten public offering.
5. Registration Procedures.
In connection with any registration statement filed
pursuant to this Agreement, the Company will, as expeditiously as possible:
(a) in connection with a request pursuant to
this Agreement, prepare and file with the Commission, after receipt of a request
to file a registration statement with respect to Registrable Securities, a
registration statement on any form for which the Company then qualifies or which
counsel for the Company shall deem appropriate and which form shall be available
for the sale of such Registrable Securities in accordance with the intended
method of distribution thereof and, if the offering is an underwritten offering,
shall be reasonably satisfactory to the managing underwriter or underwriters,
and use its best efforts to cause such registration statement to become
effective; provided, however, that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company shall (i)
furnish to the counsel selected by the Stockholder or Stockholders making the
demand, if any, copies of all such documents proposed to be filed, and (ii)
notify such counsel and each seller or prospective seller of Registrable
Securities of any stop order issued or threatened by the Commission and take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered;
(b) in connection with a registration pursuant
to this Agreement, prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
a period of not more than one hundred twenty (120) days (or such shorter period
that will terminate when all Registrable Securities covered by such registration
statement have been disposed of);
(c) furnish to each seller of Registrable
Securities such number of copies of the registration statement, each amendment
and supplement thereto (in each case including all exhibits thereto), the
prospectus included in such registration statement (including each preliminary
prospectus) and such other
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documents as each seller may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such seller;
(d) use reasonable efforts to register or
qualify such Registrable Securities under such other securities or "blue sky"
laws of such jurisdictions as any seller or underwriter reasonably requests in
writing and to do any and all other acts and things that may be reasonably
necessary or advisable to register or qualify for sale in such jurisdictions the
Registrable Securities owned by such seller; provided, however, that the Company
shall not be required to (i) qualify generally to do business in any
jurisdiction where it is not then so qualified, (ii) subject itself to taxation
in any such jurisdiction, (iii) consent to general service of process in any
such jurisdiction or (iv) provide any undertaking required by such other
securities or "blue sky" laws or make any change in its charter or by-laws that
the Board of Directors of the Company determines in good faith to be contrary to
the best interest of the Company and its stockholders;
(e) use reasonable efforts to cause the
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of the Company to enable the
seller or sellers thereof or the underwriters, if any, to consummate the
disposition of such Registrable Securities;
(f) notify each seller of such Registrable
Securities at any time when a prospectus relating thereto is required to be
delivered under the Securities Act of the happening of any event as a result of
which the prospectus included in such registration statement contains an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and prepare and file
with the Commission as soon thereafter as practicable, after consultation with
the Initiating Stockholders, a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading;
(g) enter into customary agreements (including
an underwriting agreement in customary form, if the offering is an underwritten
offering) and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities;
(h) otherwise use reasonable efforts to comply
with all applicable rules and regulations of the Commission; and
(i) use reasonable efforts to cause all
Registrable Securities covered by the registration statement to be listed on
each securities exchange or
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market, if any, on which similar securities issued by the Company are then
listed, provided that the applicable listing requirements are satisfied.
The Company may require each seller or prospective seller of
Registrable Securities as to which any registration is being effected to furnish
to the Company such information regarding the distribution of such securities
and other matters as may be required to be included in the registration
statement.
Each holder of Registrable Securities agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in paragraph (f) of this Section 5, such holder shall forthwith
discontinue disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such holder's receipt of
the copies of the supplemented or amended prospectus contemplated by paragraph
(f) of this Section 5 and, if so directed by the Company, such holder shall
deliver to the Company all copies, other than permanent file copies then in such
holder's possession or copies delivered to prospective purchasers, of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice. If the Company shall give any such notice, the Company shall
extend the period during which such registration statement shall be maintained
effective pursuant to this Agreement (including the period referred to in
paragraph (b) of this Section 5) by the number of days during the period from
and including the date of the giving of such notice pursuant to paragraph (f) of
this Section 5 to and including the date when each seller of Registrable
Securities covered by such registration statement shall have received the copies
of the supplemented or amended prospectus contemplated by paragraph (f) of this
Section 5.
6. Registration Expenses. The Company shall pay all expenses
incident to its performance of or compliance with this Agreement; provided,
however, that the Company shall not pay the costs and expenses of any
Stockholder relating to underwriters' commissions and discounts relating to
Registrable Securities to be sold by such Stockholder, brokerage fees, transfer
taxes or the fees or expenses of any counsel, accountants or other
representatives retained by the Stockholders, individually or in the aggregate.
All of the expenses described in this Section 6 that are to be paid by the
Company are herein called the "Registration Expenses."
7. Indemnification; Contribution.
7.1 Indemnification by the Company. The Company
agrees to indemnify, in the case of any registration statement filed pursuant to
this Agreement, each seller of any Registrable Securities covered by such
registration statement, each other person who participates as an underwriter in
the offering or sale of such securities, and each person, if any, who controls
such seller or any such underwriter within the meaning of the Securities Act
(each an "Indemnified Party" and collectively, the "Indemnified Parties")
against any losses, claims, damages or liabilities to which such Indemnified
Party may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact
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contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein in
light of the circumstances in which they were made not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company; provided, however, that the Company shall
not be liable to the extent that any loss, claim, or liability arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Indemnified Party expressly for use in the
Registration Statement; provided, further, that the Company shall not be liable
to any seller of Registrable Securities (or to any person who acts as an
underwriter in such sale or who controls such seller) to the extent that any
loss, claim, or liability arises out of an untrue statement, alleged untrue
statement, omission, or alleged omission made in any preliminary prospectus if
either (a)(i) such seller failed to send or deliver a copy of the prospectus
with or prior to written confirmation of the sale by such seller to the person
asserting the claim and (ii) the prospectus would have corrected such untrue
statement, alleged untrue statement, omission or alleged omission; or (b)(x)
such untrue statement, alleged untrue statement, omission or alleged omission is
corrected in an amendment or supplement to the prospectus and (y) having been
furnished by or on behalf of the Company with copies of the prospectus as so
amended or supplemented, such seller fails to deliver such prospectus as so
amended or supplemented, with or prior to the written confirmation of the sale
by such seller to the person asserting the claim.
7.2 Indemnification by Stockholders. In
connection with any registration statement in which a Stockholder is
participating, each such Stockholder shall furnish to the Company in writing
such information and affidavits with respect to such Stockholder as the Company
reasonably requests for use in connection with any such registration statement
or prospectus and agrees to indemnify, to the fullest extent permitted by law,
the Company, its officers, directors and agents and each person, if any, who
controls the Company (within the meaning of the Securities Act) against any and
all losses, claims, damages, and liabilities resulting from any untrue or
alleged untrue statement of a material fact or any omission or alleged omission
of a material fact required to be stated in any registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto or necessary to make the statements therein (in the case of a
prospectus, in light of the circumstances under which they were made) not
misleading, to the extent that such untrue or alleged untrue statement or
omission is contained in or omitted from, as the case may be, any information or
affidavit with respect to such Stockholder so furnished in writing by such
Stockholder expressly for use in any such prospectus or preliminary prospectus;
provided, however, that the liability of such Stockholder shall not exceed the
net proceeds received by such Stockholder from the sale of its Registrable
Securities. Each Stockholder also shall indemnify any underwriters of the
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Registrable Securities, their officers and directors and each person who
controls such underwriters (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification of the
Company; provided, however, that the indemnification of such Stockholder shall
be limited to the net proceeds received by such Stockholder from the sale of its
Registrable Securities.
7.3 Contribution. If the indemnification
provided for in this Section 7 is unavailable to any Indemnified Party hereunder
in respect of any losses, claims, damages, liabilities or expenses referred to
herein, then the indemnifying party, to the extent such indemnification is
unavailable, in lieu of indemnifying such Indemnified Party, shall contribute to
the amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and Indemnified Parties in
connection with the actions that resulted in such losses, claims, damages,
liabilities or expenses. The relative fault of such indemnifying party and
Indemnified Parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
Indemnified Parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7.3 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person.
8. Definitions. As used herein, the following terms
shall have the following respective meanings:
"Beneficial Ownership" shall have the meaning set
forth in Rule 13d-3 under the Exchange Act.
"Board of Directors" means the board of directors of
the Company.
"Commission" means the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
"Common Stock" means the common stock of the Company
or any other equity securities of the Company into which such securities are
converted, reclassified, reconstituted or exchanged.
"Person" means any individual, firm, corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company,
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government (or an agency or political subdivision thereof) or other entity of
any kind, and shall include any successor (by merger or otherwise) of any such
entity.
"Registration Expenses" shall have the meaning
specified in Section 6 herein.
"Securities Act" means the Securities Act of 1933, or
any successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Underwritten Offering" shall mean a sale of
securities of the Company to an underwriter or underwriters for re-offering to
the public, which shall include a road show and other customary selling efforts.
9. Miscellaneous.
9.1 Limitations on Subsequent Registration
Rights. From and after the date of this Agreement, the Company shall not,
without the prior written consent of the holders of a majority of the
Registrable Securities then outstanding, enter into any agreement with any
holder or prospective holder of any securities of the Company which would allow
such holder or prospective holder to include such securities in any registration
filed under Section 2.1(a) hereof, unless under the terms of such agreement,
such holder or prospective holder may include such securities in any such
registration only to the extent that the inclusion of such securities will not
reduce the amount of the Registrable Securities of the holders which is
included.
9.2 Assignment. The rights of the Stockholders
to have the Company register Registrable Securities pursuant to this Agreement
shall be automatically assignable by each Stockholder to any transferee (other
than the transferee of such shares in a registered transaction) of all or any
portion of the Registrable Securities if: (i) the Stockholder agrees in writing
with the transferee or assignee to assign such rights, and a copy of such
agreement is furnished to the Company after such assignment, (ii) the Company is
furnished with written notice of (a) the name and address of such transferee or
assignee, and (b) the securities with respect to which such registration rights
are being transferred or assigned, (iii) the transferee or assignee agrees in
writing for the benefit of the Company to be bound by all of the provisions
contained herein, and (iv) if required under the terms of the Stockholders
Agreement, such transferee enters into the requisite stockholders agreement with
the Company as contemplated by the Stockholders Agreement, of even date
herewith, among the Company and the Stockholders (the "Stockholders Agreement").
9.3 Amendments and Waivers. Except as otherwise
provided herein, the provisions of this Agreement may not be amended, modified
or supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the Company has obtained the written consent of
the
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Stockholders that own, in the aggregate, 50% or more of the Registrable
Securities then outstanding.
9.4 Notices. Any notice or other communication
required or permitted hereunder shall be in writing and shall be delivered
personally, telecopied (and confirmed) or sent by certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally, telecopied (and confirmed) or, if mailed, five days (or,
in the case of express mail, one day) after the date of deposit in the United
States mail, as follows:
(i) if to the Company, to:
CoreComm Limited
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
with copies to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
(ii) if to any Stockholder, to the most current
address of such Stockholder provided by such
Stockholder to the Company in writing.
with copies to:
Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx III, Esq.
Xxxx XxXxxxxxxx, P.C.
Telecopier No.: (000) 000-0000
Any party may by notice given in accordance with this section
to the other parties designate another address or person for receipt of notices
hereunder.
9.5 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the Stockholders and their permitted successors
and assigns as provided for in Section 9.1 hereof and the successors and assigns
of the Company; provided, however, that such successors and assigns become
parties to this
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Agreement by executing counterparts thereto and, in the case of successors and
assigns of a Stockholder, there has been compliance with Section 9.1 hereof.
9.6 Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
9.7 Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
9.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO
THE RULES OF CONFLICT OF LAWS OF THE STATE OF DELAWARE OR ANY OTHER
JURISDICTION.
9.9 Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired.
9.10 Entire Agreement. This Agreement is entered into and
delivered pursuant to the Merger Agreement and as such contains the entire
agreements among the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings, written or oral, with
respect thereto.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered as of the date first written above.
CORECOMM LIMITED
By:_____________________________________
Name:
Title:
STOCKHOLDERS:
MEDIA/COMMUNICATIONS
PARTNERS II LIMITED PARTNERSHIP
By: M/XX XX Limited Partnership,
its general partner
By: M/XX XX General Partner-H, Inc.,
a general partner
By:_____________________________________
Name:
Title:
MEDIA/COMMUNICATIONS
INVESTORS LIMITED PARTNERSHIP
________________________________________
Name:
APACHE HOLDINGS II LIMITED
PARTNERSHIP
By:_____________________________________
Name:
Title:
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APACHE HOLDINGS LIMITED
PARTNERSHIP
By:_____________________________________
Name:
Title:
________________________________________
Xxxxx X. Xxxxxxx
________________________________________
Xxxxxxxxxxx X. Xxxxx
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EXHIBIT C
FORM OF STOCKHOLDERS AGREEMENT
AGREEMENT dated as of ________ ___, 2000 among [CoreComm
Limited], a ________ corporation (the "Company"), and each of the Persons listed
on Schedule A hereto (each, a "Stockholder").
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of
March ___, 2000 (the "Merger Agreement"), by and among the Company, [MergerCo],
a Delaware corporation and a wholly-owned subsidiary of the Company
("MergerCo"), and Xxxxxxx.xxx, Inc., a Delaware corporation ("Voyager"),
MergerCo is being merged with and into Voyager (the "Merger") and as a result
thereof each share of Voyager's common stock, par value $.01 per share, issued
and outstanding immediately prior to the effective time of the Merger (the
"Effective Time") is being converted into ___ shares the Company's common stock,
par value $.01 per share (the "Common Stock"), as well as the right to receive
cash; and
WHEREAS, it is a condition to the obligation of the Company to
consummate the Merger, that the Company and each of Stockholders enter into this
Agreement; and
WHEREAS, each Stockholder has independently determined that the
Merger is in its best interest and each Stockholder wishes to facilitate the
consummation of the Merger by entering into this Agreement and agreeing to be
bound by the terms hereof;
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements, provisions and covenants herein contained, each Stockholder
and the Company hereby agree as follows:
SECTION 1. COVENANTS OF STOCKHOLDERS WITH RESPECT TO VOTING
SECURITIES OF THE COMPANY.
During the term of this Agreement and subject to all of the
provisions hereof, each Stockholder and the Company agree as follows:
1.1 Acquisition of Voting Securities. Each Stockholder shall not
acquire, agree to acquire or offer or propose to acquire, directly or
indirectly, or in conjunction with or through any Person, record or beneficial
ownership of any Voting Securities (as hereinafter defined), except (i) through
the exercise of conversion rights, if any, of Voting Securities; (ii) by way of
stock splits, reclassifications or stock dividends or other distributions or
offerings made on a pro rata basis to holders of Voting Securities or any class
of Voting Securities; (iii) from another Stockholder by bequest (including,
without limitation, through the creation of a trust), gift, will, pledge,
hypothecation or otherwise in accordance with clause (i) of Section 1.6 hereof;
(iv) pursuant to a bequest or similar gift or transfer from a Person who is not
a Stockholder, including, without limitation, through the creation of a trust
for the
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benefit of a Stockholder; (v) pursuant to a will or the laws of descent and
distribution from a Person who is not a Stockholder; or (vi) pursuant to the
exercise of stock options or the receipt of other compensation or benefits
involving Voting Securities granted to a Stockholder in such Stockholder's
capacity (if applicable) as an employee of the Company or any subsidiary of the
Company; provided, however, that if, in connection with the transfer of Voting
Securities to a Stockholder pursuant to clauses (iv) and (v) of this Section
1.1, a trust, corporation or other entity is formed for the purpose of holding
Voting Securities for the benefit of a Stockholder (other than solely as an
income beneficiary of a trust), then, as a condition precedent to the receipt by
such Stockholder of any direct or indirect beneficial interest in such Voting
Securities, such trust, corporation or other entity shall agree to be bound by
the terms and conditions of a stockholder agreement having the same or
substantially the same terms and conditions as this Agreement.
If a Stockholder shall acquire, directly or indirectly, record or
beneficial ownership of, or the right to acquire, any Voting Securities in
contravention of this Agreement, then such Stockholder shall promptly notify the
Company, and the Company, in its sole discretion, may either (x) purchase (or
cause its designee(s) to purchase) any or all of such acquired Voting Securities
at a price equal to the price paid by such Stockholder or (y) require such
Stockholder to dispose of, within 30 days from the date on which the Company
requests such Stockholder to do so, only in accordance with the provisions of
Section 1.6 (ii) or (iv), the Voting Securities acquired in violation of this
Section 1.1, provided that any sale may be delayed to avoid a violation of
Section 16(b) of the Exchange Act or any other provisions of the Exchange Act or
Securities Act, including, without limitation, any applicable volume limits
under Rule 144 of the Securities Act, or any successor rules or regulations
permitting sales of unregistered or otherwise restricted securities. Each
Stockholder hereby acknowledges that any acquisition of Voting Securities in
contravention of this Agreement shall constitute a breach of this Agreement and
that the Company's right to purchase or require the disposition of Voting
Securities pursuant to this Section 1.1 shall not be exclusive and shall be in
addition to any other rights and remedies the Company may have in connection
with a breach of this Agreement.
For the purposes of this Agreement, "Voting Securities" means all
securities of the Company, or any successor to the Company, entitling the holder
thereof to vote as a stockholder for any purpose or under any circumstance or
any securities convertible into or exchangeable for under any circumstance such
securities or any rights, warrants or options to acquire (through purchase,
exchange, conversion or otherwise) any such securities under any circumstance.
1.2 Voting of Voting Securities. Each Stockholder shall vote or
direct the vote of all Shares of Voting Securities that are (a) acquired
pursuant to the Merger, (b) acquired by a Stockholder pursuant to Section 1.1,
(c) held in trusts, corporations or other entities formed as contemplated by
Section 1.6 or (d) otherwise hereinafter acquired, with respect to which such
Stockholder has the legal capacity to
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vote or to direct the vote of such Voting Securities, on each matter submitted
to a vote of the stockholders of the Company, (x) in the same proportion as the
votes cast by all holders of Voting Securities other than the Stockholders and
any affiliates and associates of the Company, with respect to such matter, or,
(y) in the event of a proposed change of control transaction for the Company, in
the manner recommended to the stockholders by the Board of Directors of the
Company provided that the Board of Directors, prior to such recommendation,
shall have received an opinion from a nationally recognized investment banking
firm to the effect that the transaction or the consideration to be received by
the unaffiliated holders of the Common Stock is fair from a financial point of
view to such stockholders; provided, further, that in the absence of such
opinion such Voting Securities shall be voted as provided in clause (x) of this
Section 1.2.
Each Stockholder shall take such action as may be required so
that all Voting Securities with respect to which such Stockholder has the legal
capacity to vote or to direct the vote of such Voting Securities as provided for
herein shall be present in person or by proxy at all duly noticed and convened
meetings of holders of Voting Securities for the purpose of determining the
presence of a quorum at such meetings.
1.3 No Voting Trusts. No Stockholder shall, directly or
indirectly, deposit any Voting Securities in a voting trust or in any other
manner, except pursuant to this Agreement, subject any Voting Securities to any
arrangement or agreement with respect to the voting thereof.
1.4 No Election Contests. No Stockholder shall, directly or
indirectly, solicit proxies or become a "participant" in a "solicitation" in
opposition to the recommendation of the Company's Board of Directors with
respect to any matter, including, without limitation, any "election contest"
relating to the election of directors of the Company (as such terms are defined
in Regulation 14A under the Exchange Act) or initiate, propose or otherwise
solicit stockholders of the Company for the approval of one or more stockholder
proposals at any time, or induce or attempt to induce any other person to
initiate any stockholder proposal; provided, however, that each Stockholder
shall vote any Voting Securities directly or indirectly beneficially owned by
such Stockholder in any "election contest" in accordance with the provisions of
the first paragraph of Section 1.2 hereof.
1.5 No Syndications. No Stockholder shall, directly or
indirectly, join or encourage the formation of a partnership, limited
partnership, syndicate or other "group," or otherwise act in concert with any
other Person (except as contemplated by Section 1.2 hereof) for the purpose of
affecting or influencing control of the Company or acquiring, holding, or
disposing of Voting Securities.
1.6 Disposition of Voting Securities. No Stockholder shall,
directly or indirectly, offer, sell, assign, pledge, encumber or otherwise
dispose of or transfer in
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any manner any Voting Securities (or enter into agreements or understandings
with respect to the foregoing), if after such disposition, the Person holding
such Voting Securities would own 5% or more of any class or Series of the
Company's Voting Securities (or Voting Securities which are convertible into or
exercisable for shares which, after giving effect to such exercise or
conversion, would represent 5% or more of any class of the Company's Voting
Securities). Any offer, sale, assignment, pledge, encumbrance or other
disposition or transfer of Voting Securities not otherwise prohibited by this
Agreement shall only be effected, to the extent otherwise legally permissible,
in the following manners: (i) pursuant to a bona fide public offering of Voting
Securities (which may include a secondary distribution effected through the
facilities of any national securities exchange on which the Voting Securities
are listed); provided, however, that in case of any such proposed public
offering, each Stockholder selling pursuant to such offering (the "Selling
Stockholder") will use his/her/its best efforts (and will instruct the managing
underwriter of any such public offering or broker-dealer to or through which
such public offering is being made to use its best efforts) to achieve a
sufficiently broad public distribution of the securities being offered (in light
of the number of securities being offered), with the intention that no person or
related group of persons should purchase in such public offering Voting
Securities representing 5% or more of the securities being offered; (ii)
pursuant to an unsolicited open market sale or sales during any three-month
period involving, in the aggregate, Voting Securities representing not more than
1% of the Total Voting Power, as defined in Section 5.4, (in accordance with the
requirements as to the manner of sale set forth in Rules 144(f), 144(g) and 145
and (g) of the Securities Act or any successor rules or regulations permitting
sales of unregistered or otherwise restricted securities, whether or not such
sale is subject to Rule 144, Rule 145 or such successor rules or regulations) on
any national securities exchange on which the Voting Securities are listed;
(iii) pursuant to a tender offer made by the Company or any subsidiary of the
Company or made by a third person to the stockholders of the Company as to which
the Company's Board of Directors has recommended to the stockholders of the
Company; (iv) pursuant to a privately-negotiated transaction with a Person who
is not a Stockholder; provided, that in no case shall any such sale, transfer or
other disposition under this clause (iv) be made to such Person if, immediately
after such transaction, such Person (based upon the written representation of
such Person, which as a condition precedent to such sale, transfer or other
disposition shall be delivered to such Stockholder and to the Company prior to
the consummation of such transaction), together with its affiliates and
associates would be the direct or indirect beneficial or record owner of Voting
Securities (when added to the Voting Securities (if any) already beneficially
owned by such Person and its affiliates and associates) representing in excess
of 5% of the Total Voting Power; (v) pursuant to a will or the laws of descent
and distribution; provided, that the estate of a Stockholder shall be bound by
the terms and conditions of this Agreement and if, immediately after any
distribution out of such estate, any distributee, together with such
distributee's affiliates and associates would (other than solely as an income
beneficiary of a trust) be the direct or indirect beneficial or record owner of,
or have the right to acquire,
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Voting Securities (when added to the Voting Securities (if any) already owned by
such distributee and his/her affiliates and associates representing in excess of
5% of the Total Voting Power, then such distributee shall, as a condition
precedent to receiving such shares of Voting Securities, agree to be bound by
the terms and conditions of a stockholder agreement having the same terms and
conditions as this Agreement; (vi) pursuant to a bequest or similar gift or
transfer to any Person who is not a Stockholder or; provided that if,
immediately after delivery of a bequest or similar gift or transfer, including,
but not limited to, through the creation of a trust, the recipient, together
with such recipient's affiliates and associates (including, as the case may be,
the Stockholder making such transfer), would (other than solely as an income
beneficiary of a trust) be the direct or indirect beneficial or record owner of,
or have the right to acquire, Voting Securities (when added to the Voting
Securities (if any) already owned by such recipient and its affiliates and
associates (including, as the case may be, the Stockholder making such
transfer)) representing in excess of 5% of the Total Voting Power, then such
recipient shall, as a condition precedent to receiving such shares of Voting
Securities, agree to be bound by the terms and conditions of a stockholder
agreement having the same terms and conditions as this Agreement; or (vii) as a
result of any pledge or hypothecation to a bona fide financial institution to
secure a bona fide loan, guaranty or other financial accommodation or as a
result of any foreclosure with respect thereto; provided, however, that in
connection with any transfer by a Stockholder of Voting Securities pursuant to
clauses (v) or (vi) of this Section 1.6 to a trust, corporation or other entity
and a Stockholder retains the authority, as trustee or otherwise, to vote,
acquire or dispose of, or to direct the voting, acquisition or disposition of,
Voting Securities to be held by such trust or other entity, then as a condition
precedent to the transfer of such shares of Voting Securities to such trust or
other entity, such Stockholder shall cause such trust or other entity to be
bound by the terms and conditions of a stockholder agreement having the same or
substantially the same terms and conditions as this Agreement.
Notwithstanding anything to the contrary contained herein, a
Stockholder shall not dispose of or otherwise transfer any Voting Securities in
violation of the provisions of Section 5 of the Securities Act.
1.7 No Solicitation. No Stockholder shall propose, solicit or
participate in any fashion, in any transaction relating to an acquisition of, a
business combination or similar transaction with, or a change of control of, the
Company or make or solicit or encourage any Person to make a tender offer for
Voting Securities.
1.8 Legend on Voting Securities. Each Stockholder agrees that
each certificate representing its Voting Securities shall bear the following
legend, which will remain thereon as long as such Voting Securities are subject
to the restrictions contained in this Agreement:
The shares represented by this certificate are subject to the
provisions of a Stockholder Agreement dated as of ______ ___, 2000,
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among the Company and certain Stockholders, and may not be sold or
transferred except in accordance therewith. Copies of said Agreement are
on file at the offices of the Secretary of the Company.
The Company may enter a stop transfer order with the transfer agent (or agents)
and the registrar (or registrars) of the Voting Securities against the transfer
of legended Voting Securities held by a Stockholder except in compliance with
the requirements of this Agreement. The Company agrees to remove promptly any
stop transfer order with respect to, and issue promptly either legended (if the
Voting Securities remain subject to the restrictions of this Agreement) or
unlegended certificates in substitution for, certificates for any such Voting
Securities that are no longer subject to or are to be transferred in compliance
with the restrictions contained in this Agreement. Without limiting the
generality of the foregoing, the Company shall promptly remove any stop transfer
order in effect with respect to such certificates, upon the delivery to the
Company of an opinion of counsel to a Stockholder, in form and substance
reasonably satisfactory to the Company, that legended certificates representing
Voting Securities are no longer subject to this Agreement or that such Voting
Securities are being transferred in compliance with the provisions of Sections
1.6, and shall promptly issue unlegended certificates in substitution for such
legended certificates, except if such legended certificates are being
transferred pursuant to Section 1.6 to a transferee who shall be bound by the
terms and conditions of a Stockholder Agreement, in which event the Company may
issue legended certificates.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
2.1 Representations and Warranties of the Stockholders. Each
Stockholder represents and warrants to the Company as follows:
(i) At the Effective Time, such Stockholder will be the
record and beneficial owner of the Shares of Common Stock set forth beside its
name on Schedule A hereto (such Stockholder's "Shares") and will be the lawful
owner of such Shares, free and clear of all liens, charges, encumbrances, voting
agreements and commitments of every kind, other than this Agreement. Such
Stockholder has full legal power, authority and right to vote all of such
Stockholder's Shares in the manner required by this Agreement without the
consent or approval of, or any other action on the part of, any other person or
entity.
(ii) The execution, delivery and performance by such
Stockholder of this Agreement has been approved by all necessary action on the
part of such Stockholder.
(iii) This Agreement has been duly executed and delivered
by such Stockholder and constitutes the valid and binding agreement of such
Stockholder, enforceable against the Stockholder in accordance with its terms.
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(iv) The execution, delivery and performance of this
Agreement by such Stockholder does not violate or breach, and will not give rise
to any violation or breach of, any law, contract, instrument, arrangement or
agreement by which such Stockholder is, or any of such Stockholder's Shares are,
bound.
(v) The execution, delivery and performance of this
Agreement by such Stockholder does not create or give rise to any right in any
other Person or entity (other than the Company) with respect to such
Stockholder's Shares or any other Voting Securities.
2.2 Representations and Warranties of the Company. The Company
represents and warrants to each Stockholder as follows:
(i) The execution, delivery and performance by the
Company of this Agreement has been approved by all necessary corporate action on
the part of the Company.
(ii) This Agreement has been duly executed and delivered
by a duly authorized officer of the Company and constitutes a valid and binding
agreement of the Company, enforceable against The Company in accordance with its
terms.
(iii) The execution and delivery of this Agreement by the
Company does not violate or breach, and will not give rise to any violation or
breach of, the charter or bylaws of the Company, or, except as will not
materially impair its ability to effectuate, carry out or comply with all of the
terms of this Agreement, any law, contract, instrument, arrangement or agreement
by which the Company is bound.
2.3 No Indirect Conduct. No Stockholder shall engage in any
conduct or take any action through any agent or any entity acting in concert
with such Stockholder that the Stockholder has hereby agreed not to engage in or
take.
SECTION 3. COVENANTS OF THE COMPANY.
3.1 Registration Rights. During the term and subject to all of
the provisions hereof (including, without limitation Section 1.6(vi)), the
Company agrees to provide registration rights to each Stockholder on the terms
and subject to the provisions set forth in Registration Rights Agreement
attached as Appendix I hereto.
3.2 Access to Management. The Company agrees that so long as a
Stockholder continues to hold 7.5% or more of any class of Voting Securities,
the Company shall provide such Stockholder with an opportunity on a regularly
scheduled basis to review with senior management of the Company, significant
issues facing the Company; provided, however, that such Stockholder shall agree
(i) to maintain the confidentiality of any non-public information disclosed to
such Stockholder in any such session, and (ii) if necessary, refrain from
engaging in any transaction involving the Company's securities (or any other
securities) while in possession of any material
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non-public information about the Company disclosed to such Stockholder by the
Company in the course of the Company's complying with the provisions of this
Section 3.2.
SECTION 4. TERM OF AGREEMENT.
The term of this Agreement shall commence at the Effective Time
and shall terminate with respect to any given Stockholder (but only such
Stockholder) when such Stockholder ceases to hold at least 7.5% of the issued
and outstanding shares of Common Stock (as adjusted for any stock splits, stock
dividends, combinations, recapitalizations, reclassifications or other similar
event) unless the transaction or transactions which resulted in such Stockholder
ceasing to hold at least 7.5% of any Common Stock or Voting Securities shall
have violated the terms of this Agreement. For purposes hereof, ownership of
Common Stock or Voting Securities shall include record ownership of such
securities as well as beneficial ownership thereof within the meaning of Rule
13d-3 under the Securities Exchange Act of 1934, as amended.
SECTION 5. MISCELLANEOUS.
5.1 Specific Performance. The Company and each Stockholder
acknowledge and agree that irreparable damage would occur in the event any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
Company or a Stockholder, as the case may be, shall be entitled to an injunction
or injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically, the terms and provisions hereof in any court of the United
States or any state thereof having jurisdiction, in addition to any other remedy
to which it may be entitled at law or equity.
5.2 The Term "Company." The term "Company" shall be deemed to
include any successor to the Company by way of merger, consolidation, sale of
assets or otherwise, except as the context otherwise requires, it being the
intention hereof that this Agreement shall continue to be binding on each
Stockholder notwithstanding such merger, consolidation, sale of assets or other
succession, unless the provisions of Section 4.2 of this Agreement shall
otherwise provide.
5.3 The Terms "Affiliate," Associate," "Beneficial Owner"
"Entity," and "Person." As used herein, the term "affiliate" shall have the
meaning set forth in Rule 12b-2 under the Exchange Act; the term "beneficial
owner" (which shall include "beneficially owned" or other similar phrasing as
used herein) shall have the meaning set forth in Section 13(d)(3) of the
Securities Act; the term "associate" shall mean (1) a corporation or
organization (other than the Company or a subsidiary of the Company) of which
such Person (as defined herein) is an officer or partner or is, directly or
indirectly, the beneficial owner of 10 percent or more of any class of
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equity securities, (2) any trust or other estate in which such Person has a
substantial beneficial interest or as to which such Person serves as trustee or
in a similar capacity, and (3) any relative or spouse of such Person, or any
relative of such spouse, who has the same home as such Person; and the term
"Person" shall mean any individual, partnership, corporation, joint venture,
association, unincorporated organization, trust, government or agency thereof,
or any other entity.
5.4 The Term "Total Voting Power." The term "Total Voting Power,"
as used in this Agreement, shall mean the aggregate voting power of all Voting
Securities outstanding at the time of any determination which at such time have
ordinary voting power to vote in the election of directors of the Company. In
determining Total Voting Power for purposes of this Agreement, the Stockholder
may conclusively rely on the most recent reports filed by the Company with the
SEC in which the number of Voting Securities outstanding is set forth or from
which Total Voting Power can reasonably be derived, it being understood that
each Stockholder shall not be considered to be in breach of this Agreement if
he/she has acted in good faith on the basis of a determination of Total Voting
Power as contemplated herein.
5.5 Notices. All notices, requests and other communications to
any person named hereunder shall be in writing (including wire, telex or similar
writing) and shall be given to such person at its address set forth below or
such address or telex number as such person may hereafter specify for the
purpose by notice to the other person:
If to the Company:
CoreComm Limited
000 Xxxx 00xx Xxxxxx
00 Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Facsimile: 212-757-3990
If to any Stockholder, to the most current address of such
Stockholder provided by such Stockholder to the Company in
writing.
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Each such notice, request or other communication shall be effective (a) if given
by facsimile, when such facsimile is transmitted to the facsimile number
specified in this subsection and the appropriate answer back is received or (b)
if given by any other means, when actually received at the address specified in
this subsection, provided that a notice given other than during normal business
hours on a business day at the place of receipt shall not be effective until the
opening of business on the next business day.
5.6 Governing Law and Jurisdiction. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE
APPLICABLE TO AGREEMENTS MADE AND PERFORMED ENTIRELY WITHIN SUCH STATE. THE
UNDERSIGNED HEREBY SUBMITS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURTS
LOCATED WITHIN THE STATE OF DELAWARE, COUNTY OF NEW CASTLE, AND WAIVES ANY RIGHT
TO A TRIAL BY JURY IN CONNECTION WITH ANY ACTION OR PROCEEDING RELATING HERETO.
5.7 Amendments. This Agreement may be amended, modified or
supplemented only by written agreement of each Stockholder and the Company.
5.8 Waiver. Any failure of any party to comply with any
obligation, covenant, agreement or condition herein may be waived by the party
entitled to the benefit of such obligation, covenant, agreement or condition
only by a written instrument signed by such party, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other non-compliance. Wherever this Agreement requires or permits
consent by or on behalf of any party hereto, such consent shall be given in
writing in a manner consistent with the requirements for a waiver of compliance
as set forth in this Section 5.8.
5.9 Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, including, without
limitation, (i) any person who acquires any interest, beneficial or otherwise,
in Voting Securities by will or pursuant to the laws of descent and distribution
and (ii) any successor trust.
5.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.11 Entire Agreement. This Agreement, including the appendices
referred to herein, embodies the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, representations, warranties, covenants or undertakings,
other than those expressly set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
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5.12 Severability. If any provision of this Agreement shall be
deemed or declared to be unenforceable, invalid or void, the same shall not
impair any of the other provisions of this Agreement.
5.13 Other Rights and Privileges. Except as otherwise
specifically set forth in this Agreement, each Stockholder shall have and enjoy
all rights and privileges otherwise permitted stockholders of the Company under
applicable law.
IN WITNESS WHEREOF, each Stockholder and the Company have duly
executed this Agreement as of day and year first above written.
CORECOMM LIMITED
By:_____________________________________
Name:
Title:
STOCKHOLDERS:
MEDIA/COMMUNICATIONS
PARTNERS II LIMITED PARTNERSHIP
By: M/XX XX Limited Partnership,
its general partners
By: M/XX XX General Partner-H, Inc.,
a general partner
By:_____________________________________
Name:
Title:
MEDIA/COMMUNICATIONS
INVESTORS LIMITED PARTNERSHIP
________________________________________
Name:
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APACHE HOLDINGS II LIMITED
PARTNERSHIP
By:_____________________________________
Xxxxx X. Xxxxxxx, Managing General Partner
APACHE HOLDINGS LIMITED
PARTNERSHIP
By:_____________________________________
Xxxxx X. Xxxxxxx, Managing General Partner
________________________________________
Xxxxx X. Xxxxxxx
________________________________________
Xxxxxxxxxxx X. Xxxxx
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VOTING AGREEMENT
VOTING AGREEMENT, dated as of March 12, 2000 (the "Agreement"),
by and among CoreComm Limited, a Bermuda corporation ("Parent"), and the Persons
listed on Schedule A hereto (each, a "Shareholder" and, collectively, the
"Shareholders").
WHEREAS, Xxxxxxx.xxx, Inc., a Delaware corporation (the
"Company"), and Parent propose to enter into an Agreement and Plan of Merger in
the form attached hereto as Exhibit A (as amended, the "Merger Agreement"),
which provides for, among other things, the merger of a wholly owned subsidiary
of Parent with and into the Company (the "Merger");
WHEREAS, as of the date hereof, the Shareholders are holders of
record or Beneficially Own (as defined herein) shares of common stock, par value
$.01 per share ("Company Common Stock"), of the Company; and
WHEREAS, as a condition to the willingness of Parent to enter
into the Merger Agreement, Parent has required that each Shareholder agree, and
in order to induce Parent to enter into the Merger Agreement, each Shareholder
has agreed, to enter into this Agreement with respect to all of the shares of
Company Common Stock now held of record or Beneficially Owned and which may
hereafter be acquired by such Shareholder (collectively, the "Shares").
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
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ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 General. Capitalized terms used and not defined
herein have the respective meanings ascribed to them in the Merger Agreement.
Section 1.2 Beneficial Ownership. For purposes of this
Agreement, "Beneficially Own" or "Beneficial Ownership" with respect to any
securities shall mean "beneficial ownership" of such securities (as determined
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), including pursuant to any agreement, arrangement or
understanding, whether or not in writing. Without duplicative counting of the
same securities by the same holder, securities Beneficially Owned by a
Shareholder shall include securities Beneficially Owned by all other Persons (as
defined in the Merger Agreement) with whom such Person would constitute a
"group" within the meaning of Section 13(d) of the Exchange Act other than
parties to this Agreement.
ARTICLE II
Section 2.1 Voting Agreement. Each of the Shareholders hereby
irrevocably and unconditionally agrees that during the term of this Agreement as
specified in Section 5.1, at any meeting of the shareholders of the Company,
however called, and in any action by consent of the shareholders of the Company,
each of the Shareholders shall vote (or cause to be voted) the Shares held of
record (to the extent such Person also has the right to vote such Shares) or
Beneficially Owned (to the extent such Person also has the right to vote such
Shares) by such Shareholder:
(a) in favor of the Merger, the Merger Agreement
(provided that the Merger Agreement shall not have been amended in a manner
materially adverse to the interests
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of the Shareholders thereunder) and the transactions contemplated by the Merger
Agreement. Each of the Shareholders acknowledges receipt and review of a copy of
the Merger Agreement.
(b) against any Business Combination (as defined below)
other than the Merger. For purposes of this Agreement, "Business Combination"
shall mean, whether effected in one transaction or a series of transactions, or
(a) any merger, consolidation, reorganization or other business combination
pursuant to which the business of the Company is combined with that of one or
more Persons including, without limitation, any joint venture, in violation of
the Merger Agreement, or (b) the acquisition, directly or indirectly, by another
Person of all or a substantial portion of the assets of, or of any right to all
or a substantial portion of the revenues or income of, the Company by way of a
negotiated purchase, lease, license, exchange, joint venture or other means, in
violation of the Merger Agreement, or (c) the acquisition, directly or
indirectly, by another Person of control of the Company through a proxy contest
or otherwise, in violation of the Merger Agreement, or (d) the acquisition,
directly or indirectly, by another Person of Voting Securities representing more
than 15% of the Total Voting Power of the Company.
Section 2.2 Grant of Irrevocable Proxy. In furtherance and not
in limitation of the foregoing, each Shareholder hereby grants to, and appoints,
the Parent and each of Xxxxxxx Xxxxx and Xxxxxxx Xxxxxxx in their respective
capacities as officers of the Parent, and any individual who shall hereafter
succeed any such officer of the Parent, and any other designee of the Parent,
each of them individually, its irrevocable proxy and attorney-in-fact (with full
power of substitution and resubstitution) to vote the Shares as indicated in
this Article II. Each Shareholder intends this proxy to be irrevocable and
coupled with an interest and will take such further action and execute such
other instruments as may be necessary to effectuate the intent of this proxy.
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Section 2.3 The Terms "Total Voting Power" and "Voting
Securities". The term "Total Voting Power," as used in this Agreement, shall
mean the aggregate voting power of all Voting Securities outstanding at the time
of any determination which at such time have ordinary voting power to vote in
the election of directors of the Company. For the purposes of this Agreement,
"Voting Securities" means all securities of the Company, or any successor to the
Company, entitling the holder thereof to vote as a shareholder for any purpose
or under any circumstance or any securities convertible into or exchangeable for
under any circumstance such securities or any rights, warrants or options to
acquire (through purchase, exchange, conversion or otherwise) any such
securities under any circumstance.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Each of the Shareholders hereby represents and warrants,
severally and not jointly, to Parent as follows:
Section 3.1 Authority Relative to this Agreement. Such
Shareholder has all necessary power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. Where such Shareholder is a corporation,
limited liability company, partnership or other entity, the execution and
delivery of this Agreement by such Shareholder and the consummation by such
Shareholder of the transactions contemplated hereby have been duly and validly
authorized by the board of directors or other governing body of such
Shareholder, and no other proceedings on the part of such Shareholder are
necessary to authorize this Agreement or to consummate such transactions. This
Agreement has been duly and validly executed and delivered by such Shareholder
and constitutes a legal, valid and binding obligation of such Shareholder,
enforceable against such Shareholder
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in accordance with its terms, except to the extent enforceability may be limited
by bankruptcy, insolvency, moratorium or other laws affecting creditors' rights
generally or by general principles governing the availability of equitable
remedies.
Section 3.2 No Conflict.
(a) The execution and delivery of this Agreement by
such Shareholder does not, and the performance of this Agreement by such
Shareholder shall not, (i) where such Shareholder is a corporation, limited
liability company, partnership or other entity, conflict with or violate the
organizational documents of such Shareholder, (ii) conflict with or violate any
agreement, arrangement, law, rule, regulation, order, judgment or decree to
which such Shareholder is a party or by which such Shareholder (or the Shares
held of record or Beneficially Owned by such Shareholder) is bound or affected
or (iii) result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or encumbrance on any of the Shares held of record or
Beneficially Owned by such Shareholder pursuant to any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which such Shareholder is a party or by which such
Shareholder (or the Shares held of record or Beneficially Owned by such
Shareholder) is bound or affected, except, in the case of clauses (ii) and (iii)
of this Section 3.2(a), for any such conflicts, violations, breaches, defaults
or other occurrences which would not prevent or delay the performance by such
Shareholder of its obligations under this Agreement.
(b) The execution and delivery of this Agreement by
such Shareholder does not, and the performance of this Agreement by such
Shareholder shall not, require any consent, approval, authorization or permit
of, or filing with or notification to, any governmental
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entity except for applicable requirements, if any, of the Exchange Act, and
except where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not prevent or delay
the performance by such Shareholder of its obligations under this Agreement.
Section 3.3 Title to the Shares. As of the date hereof, such
Shareholder is the record or Beneficial Owner of the number of Shares listed
opposite the name of such Shareholder on Schedule A hereto. The Shares listed
opposite the name of such Shareholder on Schedule A hereto are all the
securities of the Company either held of record or Beneficially Owned by such
Shareholder. Such Shareholder has not appointed or granted any proxy, which
appointment or grant is still effective, with respect to the Shares held of
record or Beneficially Owned by such Shareholder. Each Shareholder has the right
to vote or cause to be voted each of the Shares listed opposite the name of such
Shareholder on Schedule A hereto and such Shares are owned free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on such Shareholder's voting rights, charges and other
encumbrances of any nature whatsoever.
ARTICLE IV
COVENANTS OF THE SHAREHOLDERS
Section 4.1 No Inconsistent Agreement or Action. Each of the
Shareholders hereby covenants and agrees that such Shareholder shall not, or
permit any Person under such Shareholder's control to, enter into any voting
agreement or grant a proxy or power of attorney with respect to the Shares held
of record or Beneficially Owned by such Shareholder or form any "group" for
purposes of the Exchange Act or the rules promulgated thereunder. No Shareholder
shall (i) solicit, initiate, encourage (including by way of furnishing
information or assistance) or take any other action to facilitate, any inquiry
or the making of any proposal
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which constitutes, or may reasonably be expected to lead to, any Acquisition
Proposals (as defined in the Merger Agreement) or agree to or endorse any
Acquisition Proposal, (ii) propose, enter into or participate in any discussions
or negotiations regarding any of the foregoing, (iii) furnish to any other
Person any information with respect to the Company's business, properties or
assets or (iv) otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage, any effort or attempt by any other Person to do or seek
any of the foregoing, provided, without limiting any of the obligations of any
Shareholder under this Agreement in his capacity as a shareholder of the
Company, any Shareholder acting solely in his capacity as a director of the
Company may take any of the actions that are expressly permitted by Section 7.1
of Merger Agreement.
Section 4.2 Transfer of Title. Each of the Shareholders hereby
covenants and agrees that such Shareholder shall not (i) tender any Shares, (ii)
sell, assign or transfer record or Beneficial Ownership of any of the Shares, or
(iii) pledge, hypothecate or otherwise dispose of any Shares.
Section 4.3 Stockholders Agreement. Each of the Shareholders
hereby covenants and agrees that each Shareholder that will hold 7.5% or more of
the issued and outstanding shares of common stock of Parent upon consummation of
the Merger shall enter into the Stockholders Agreement substantially in the form
of Exhibit C attached to the Merger Agreement at the closing of the Merger. For
purposes hereof, ownership of Common Stock shall include record ownership of
such securities as well as beneficial ownership thereof within the meaning of
Rule 13d-3 under the Securities Exchange Act of 1934, as amended.
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ARTICLE V
MISCELLANEOUS
Section 5.1 Termination. This Agreement shall be effective as
of the date of this Agreement and shall terminate upon the earliest to occur of:
(i) the closing of the transactions contemplated by the Merger Agreement;
(ii) the date the Merger Agreement is terminated, if such termination is
by the Company pursuant to Section 10.1(h) of the Merger Agreement;
(iii) the date the Merger Agreement is terminated, if such termination is
by mutual consent pursuant to Section 10.1(a) of the Merger Agreement;
(iv) the date the Merger Agreement is terminated, if such termination is
by either Parent or the Company pursuant to Section 10.1(b)(ii) of the
Merger Agreement;
(v) the date the Merger Agreement is terminated, if such termination is by
the Company pursuant to Section 10.1(f);
(vi) the date the Merger Agreement is terminated, if such termination is
by the Company pursuant to Section 10.1(i);
(vii) the date the Merger Agreement is terminated, if such termination is
by either Parent or the Company pursuant to Section 10.1(b)(i) of the
Merger Agreement due to the failure to obtain the required approval of the
stockholders of Parent, which approval is required to be obtained under
Section 9.1(a) of the Merger Agreement; and
(viii) 180 days after the date the Merger Agreement is terminated in
accordance with its terms, other than as set forth in clauses (ii) and
(iii) above.
Section 5.2 Additional Shares. If, after the date hereof, a
Shareholder acquires the right to vote any additional shares of Company Common
Stock (any such shares shall be referred to herein as "Additional Shares"),
including, without limitation, upon exercise of any
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option, warrant or right to acquire shares of Company Common Stock or through
any stock dividend or stock split, the provisions of this Agreement applicable
to the Shares shall be applicable to such Additional Shares as if such
Additional Shares had been Shares as of the date hereof. The provisions of the
immediately preceding sentence shall be effective with respect to Additional
Shares without action by any Person immediately upon the acquisition by a
Shareholder of record or Beneficial Ownership of such Additional Shares.
Section 5.3 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
Section 5.4 Entire Agreement. This Agreement constitutes the
entire agreement between Parent and the Shareholders with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, between Parent and the Shareholders with respect to the
subject matter hereof.
Section 5.5 Amendment and Waiver. No alteration, waiver,
amendment or supplement of this Agreement shall be binding or effective unless
the same is set forth in an instrument in writing signed by the parties hereto.
The waiver or failure to insist upon strict compliance with any condition or
provision hereof shall not operate as a waiver of, or estoppel with respect to,
any subsequent or other waiver or failure.
Section 5.6 Severability. If any term or other provision of
this Agreement is held to be invalid, illegal or unenforceable, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of this Agreement is
not affected in any manner materially adverse to any party. Upon such
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determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereby shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in a mutually
acceptable manner in order that the terms of this Agreement remain as originally
contemplated.
Section 5.7 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware applicable to
agreements made and to be performed entirely within such state.
Section 5.8 Waiver of Jury Trial. Parent and each Shareholder
hereby irrevocably waives, to the fullest extent permitted by law, all rights to
trial by Jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Agreement or any
of the transactions contemplated hereby.
Section 5.9 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be an original and all of which,
when taken together, shall constitute one and the same instrument.
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irrevocably waives, to the fullest extent permitted by law, all rights to
trial by Jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Agreement or any
of the transactions contemplated hereby.
Section V.9 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be an original and all of which,
when taken together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the Shareholders and Parent have
caused this Agreement to be duly executed as of the date first written above.
CORECOMM LIMITED
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President--
General Counsel
THE SHAREHOLDERS
MEDIA/COMMUNICATIONS
PARTNERS II LIMITED PARTNERSHIP
By: M/XX XX Limited Partnership,
its general partner
By: M/XX XX General Partner-H, Inc.,
a general partner
By: /s/ Xxxx Xxxx
---------------------
Name: Xxxx Xxxx
Title:
MEDIA/COMMUNICATIONS I
INVESTORS
LIMITED PARTNERSHIP
By: /s/ Xxxx Xxxx
---------------------
Name: Xxxx Xxxx
Title:
107
APACHE HOLDINGS II LIMITED
PARTNERSHIP
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing General Partner
APACHE HOLDINGS LIMITED
PARTNERSHIP
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing General Partner
/s/ Xxxxx X. Xxxxxxx
----------------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxxxxxxxx X. Xxxxx
----------------------------------
Xxxxxxxxxxx X. Xxxxx
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SCHEDULE A
Name of Shareholder Number of Shares
------------------- ----------------------
Media/Communications
Partners II Limited Partnership 13,761,243
Media/Communications
Investors Limited Partnership 426,256
Apache Holdings II Limited
Partnership 2,853,078
Apache Holdings Limited Partnership 310,000
Xxxxx X. Xxxxxxx 868,000
Xxxxxxxxxxx X. Xxxxx 1,994,000
----------
20,212,577
13