CONTRIBUTION AGREEMENT
AMONG
PITTENCRIEFF COMMUNICATIONS, INC.,
A TEXAS CORPORATION,
PITTENCRIEFF COMMUNICATIONS, INC.,
A DELAWARE CORPORATION,
and
EACH OF THE CORPORATIONS,
SELLING STOCKHOLDERS AND PARTNERSHIPS
LISTED ON EXHIBIT A1 HERETO,
EACH OF THE SYSTEM SELLERS
LISTED ON EXHIBIT A2 HERETO
AND THE NOTE SELLER
LISTED ON EXHIBIT A3 HERETO
COMPOSITE COPY
Dated as of September 5, 1995,
and as amended
as of October 16, 1995
COMPOSITE
CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT made as of September 5, 1995
and, as amended as of October 16, 1995 (the "Agreement") among
Pittencrieff Communications, Inc., a Texas corporation
("Pittencrieff"), Pittencrieff Communications, Inc., a Delaware
corporation ("New PCI"), and each of the corporations (the
"Corporations"), stockholders (the "Selling Stockholders"),
partnerships (the "Partnerships") listed on Exhibit Al hereto,
the individuals and entities (the "System Sellers") listed as
System Sellers on Exhibit A2 hereto, and the individual (the
"Note Seller") listed as a Note Seller on Exhibit A3 hereto. The
Selling Stockholders, System Sellers and Note Seller are
sometimes hereinafter collectively referred to as the "Sellers,"
and each singly as a "Seller." Each of Pittencrieff, New PCI,
the Sellers, the Corporations and the Partnerships are sometimes
referred to collectively as the "Parties."
WITNESSETH:
WHEREAS, certain of the Selling Stockholders have caused New
PCI to be organized as a Delaware corporation to participate with
the Sellers and Pittencrieff in the Transaction (as hereinafter
defined); and
WHEREAS, pursuant to an Agreement and Plan of Merger between
Pittencrieff and New PCI, a copy of which is attached as Exhibit
A, Pittencrieff will merge into New PCI, which will be the
surviving corporation in the merger (the "Merger"), and the
shareholders of Pittencrieff will exchange their shares of
Pittencrieff common stock for shares of common stock of New PCI;
and
WHEREAS, contemporaneously with the Merger, each Selling
Stockholder has agreed to contribute to New PCI all of its shares
of capital stock (the "Subject Stock") in the Corporation(s) set
forth beside its name on Exhibit Al hereto in exchange for such
Selling Stockholder's share of the Transaction Consideration (as
defined in Section 1.1) to be paid by New PCI to the Sellers; and
WHEREAS, each System Seller has agreed to contribute to New
PCI assets pertaining to certain 800 MHz specialized mobile radio
("SMR") systems and certain related assets operated by it in
Texas (the "800 MHz Systems"), and, in the case of Advanced
MobileComm, Inc. ("AMI"), the 900 MHz SMR systems and related
assets operated by it in San Diego, California (the "San Diego
Systems," collectively with the 800 MHz Systems, the "Purchased
Systems" and collectively with the SMR systems and related assets
owned by the Corporations and Partnerships, the "Systems"), in
exchange for such System Seller's share of the Transaction
Consideration to be paid by New PCI to the Sellers; and
WHEREAS, the Note Seller has agreed to transfer the
promissory note in the aggregate principal amount of
$1,377,562.03 issued by Bayou Communications, Inc. to the Note
Seller (the "Bayou Note") to New PCI in exchange for the Note
Seller's share of the Transaction Consideration to be paid by New
PCI to Sellers; and
WHEREAS, the transactions contemplated by this Agreement
(the "Transaction") are intended to be tax-free to Pittencrieff,
New PCI and the Sellers;
NOW, THEREFORE, in consideration of the premises and the
respective covenants and representations and warranties herein
contained, the Parties agree as follows:
1. The Transaction.
1.1. Determination of Transaction Consideration. In
consideration of the assignment, transfer, conveyance and
delivery to New PCI of the Subject Stock by each of the Selling
Stockholders, the Purchased Systems by each of the System Sellers
and the Bayou Note by the Note Seller and of the other agreements
of the Sellers herein contained, New PCI agrees to deliver to the
Sellers an aggregate of 11,909,842 shares of common stock of New
PCI ("New PCI Common Stock"), $.01 par value per share (the
"Transaction Consideration"). The allocation of the Transaction
Consideration among the Sellers shall be as set forth in Schedule
1.1. By delivery of written notice to Pittencrieff, Sellers may
make changes in the allocation of the Transaction Consideration
as set forth in Schedule 1.1 up until three business days prior
to the Closing (as hereinafter defined).
1.2. Adjustments to Transaction Consideration.
(a) The Transaction Consideration will be increased by
1,000,000 shares of New PCI Common Stock in the event that
the average of the last closing "bid" price for the common
stock, $.01 par value per share of Pittencrieff
("Pittencrieff Common Stock") as reported by the Nasdaq
National Market System for the ten business days immediately
preceding the third business day prior to the Closing is
equal to or less than $4 per share.
(b) The Transaction Consideration shall be increased
on account of (i) any issuances prior to Closing of
Pittencrieff Common Stock or securities convertible into
Pittencrieff Common Stock by Pittencrieff in connection with
acquisitions of channels listed on the Pittencrieff FCC
Schedule (as hereinafter defined), (ii) any issuances prior
to Closing of Pittencrieff Common Stock or securities
convertible to Pittencrieff Common Stock at less than $6 per
share by Pittencrieff between the date hereof and Closing,
and (iii) any issuance by Pittencrieff prior to Closing of
stock options for Pittencrieff Common Stock exercisable for
the purchase of greater than the 910,000 shares of
Pittencrieff Common Stock; the Transaction Consideration
shall be increased on account of any of the foregoing events
to such number of shares of New PCI Common Stock as will
entitle the Sellers to obtain the same ownership percentage
of New PCI as the issuance of 11,909,842 shares of
Pittencrieff Common Stock, together with shares payable
pursuant to Section 1.2(a), if any, would have represented
as of May 3, 1995 based on the then outstanding Pittencrieff
Common Stock.
(c) Pittencrieff and the Sellers agree that in the
event prior to Closing of any recapitalization of
Pittencrieff in the nature of a stock split, combination,
stock dividend or similar change in Pittencrieff's
capitalization, including any exchange of shares of
Pittencrieff Common Stock for New PCI Common Stock in the
Merger on other than a one share for one share exchange
basis, then appropriate adjustments shall be made to the
Transaction Consideration to place each of Pittencrieff and
the Sellers in the same relative equity position as if the
Closing had occurred immediately prior to the occurrence of
the event giving rise to the adjustment.
1.3. Closing.
(a) The closing of the Transaction (the "Closing")
shall take place on a day, time and location reasonably
determined by Pittencrieff after consultation with AMI, and
such date, time and location shall be confirmed in writing
by such parties and the other Sellers not less than fifteen
business days prior to the Closing.
(b) At the Closing New PCI will deliver to each Seller
one or more stock certificates representing the number of
shares of New PCI Common Stock as is equal to its portion of
the Transaction Consideration, such stock certificates to be
in the denominations and registered in the names of the
Sellers as set forth on Exhibits Al, A2 and A3 hereto, each
Selling Stockholder shall deliver to New PCI duly assigned
stock certificates and stock powers representing the Subject
Stock held by it, as listed on Exhibit Al hereto, each
System Seller shall assign, transfer, sell, convey and
deliver to New PCI, free and clear of all liens or other
encumbrances, all of its right, title and interest in and to
the Purchased Systems owned by it, as indicated in Section
2.1 and the Note Seller shall assign, transfer, sell, convey
and deliver to New PCI free and clear of all liens or other
encumbrances, all of his right, title and interest in and to
the Bayou Note.
2. Purchase and Sale of Assets; Assumption of Liabilities.
2.1. Sale of Assets. Except for the "Excluded Assets," as
defined in Section 2.2 each System Seller severally and not
jointly agrees to sell and transfer to New PCI, and New PCI
agrees to purchase from such System Seller, subject to and upon
the terms and conditions of this Agreement, free and clear of any
lien or other encumbrance, from such System Seller at the Closing
all of such System Seller's right, title and interest in and to
the assets, properties and rights used by such System Seller in
operating the Purchased Systems, as follows:
(a) the FCC licenses set forth on the System Seller
FCC Schedule (as hereinafter defined);
(b) radio transmission, reception, control and other
equipment relating to the Purchased Systems and any
agreement to purchase any of the foregoing, all as set forth
on Schedule 2.1(b);
(c) all rights of each System Seller in and to all
agreements of each System Seller (whether in the name of
such System Seller or an affiliate) for the lease of sites
for communications towers or transmitters or for the lease
of such towers or transmitters that are set forth on
Schedule 2.1(c) (the "Site Rental Agreements");
(d) all rights, contracts and agreements with persons,
firms, partnerships, trust, associations, corporations or
other entities pursuant to which any System Seller provides
services utilizing the Purchased Systems, as described on
Schedule 2.1(d);
(e) all books, files, records, customer lists,
customer records, supplier lists, mailing lists, equipment
repair, maintenance or service records, FCC records and all
other information relating to the operation of the Purchased
Systems, except to the extent that such System Seller is
required by law to retain the same, in which event such
System Seller shall deliver copies thereof to New PCI;
(f) all regulatory filings, applications, grants and
waivers, including without limitation, any wide area digital
grants or applications relating to the Purchased Systems, as
set forth on Schedule 2.1(f);
(g) all accounts receivable and notes receivable due
from customers on the Purchased Systems, excluding those
accounts receivable and notes receivable which relate to the
sales and service businesses of the System Sellers;
(h) all real estate owned or leasehold interests in
real property of such System Seller used in connection with
the operation of the Purchased Systems and set forth on
Schedule 2.1(h);
(i) all billing systems, computer licenses and other
documentation and assets relating thereto used in connection
with the operation of the Purchased Systems and described on
Schedule 2.1(i);
(j) all leasehold interests in equipment or other
tangible personalty used in connection with the operation of
the Purchased Systems as set forth on Schedule 2.1(j); and
(k) all agreements pursuant to which any System Seller
manages any private mobile communications system or
transmitting site on behalf of any person and any option
agreements relating to the foregoing, as described in
Schedule 2.1(k).
2.2. Excluded Assets. The Excluded Assets shall consist of
the following:
(a) cash and cash equivalents;
(b) claims (and benefits to the extent they arise
therefrom) and litigation against third parties to the
extent such claims and litigation relate to liabilities
retained by such System Seller;
(c) retrospective insurance adjustments and federal or
state income tax refunds with respect to all periods prior
to Closing; and
(d) any assets of such System Seller related to the
sales and service business of such System Seller, including
inventory and accounts receivable, as set forth in Schedule
2.2(d).
2.3. Assumption of Certain Liabilities.
(a) On the terms and subject to the conditions
set forth herein, from and after the Closing, New PCI will
assume and satisfy or perform when due the following debts,
liabilities, obligations and commitments of the System
Sellers relating to the operation of the Purchased Systems
(the "Assumed Liabilities"):
(i) all obligations to provide service to customers
subsequent to the Closing (a list of such
customers will be delivered to Pittencrieff five
business days prior to Closing);
(ii) liabilities and obligations of the System Sellers
arising in the ordinary course relating to the
operation of the Purchased Systems; and
(iii) obligations under the option and management
agreements identified on Schedule 2.1(k).
Pittencrieff shall not assume, and shall not have any
liability for, any debts, liabilities or obligations of any
System Seller relating to the Purchased Systems not specifically
assumed by Pittencrieff pursuant to this Section 2.3.
(b) At the Closing, New PCI shall assume the
indebtedness in the aggregate amount of $1,466,000 owing
from ▇▇▇▇ ▇▇▇▇▇▇ to Advanced MobileComm Southwest Limited
Partnership.
3. Representations and Warranties Regarding the Corporations,
Partnerships and the Selling Stockholders. Each of the Selling
Stockholders, Corporations and Partnerships severally and not
jointly represent and warrant to Pittencrieff and New PCI as
follows:
3.1. Entity Status. Each Corporation is a corporation duly
organized, validly existing and in good standing under the laws
of its state of incorporation and has the corporate power and
authority to carry on its business as and where now conducted,
and to own or lease and to operate its properties and assets
where such properties and assets are now owned, leased or
operated by it and where such business is now conducted by it.
Each Partnership is duly organized, validly existing and in good
standing under the laws of its state of organization and has the
partnership power and authority to carry on its business as and
where now conducted, and to own or lease and to operate its
properties and assets where such properties and assets are now
owned, leased or operated by it and where such business is now
conducted by it. Each Corporation and each Partnership is
qualified to do business and is in good standing in each
jurisdiction in which the nature of its business or the property
owned or leased by it make such qualification necessary, except
where the failure to so qualify would not have a material adverse
effect on its business, operations or financial condition. Each
Corporation has delivered to Pittencrieff complete and correct
copies of its charter and by-laws, each as amended and in effect
on the date hereof. Each Partnership has delivered to
Pittencrieff complete and correct copies of its certificate of
limited partnership and partnership agreement, each as amended
and in effect on the date hereof.
3.2. Subsidiaries; Affiliates. Except for Partnership
Interests as indicated on Exhibit Al, no Corporation owns, (as
hereinafter defined) directly or indirectly, and no Partnership
owns, directly or indirectly, any capital stock, any partnership
or equity or other ownership interest in, or any other security
issued by, any other corporation or other entity.
3.3. Capitalization of Corporations. The authorized
capital stock of each Corporation consists of the number of
shares of common stock and other classes of stock set forth
opposite such Corporation's name on Schedule 3.3. Schedule 3.3
also lists the total number of shares of capital stock of such
Corporation which are issued and outstanding on the date hereof.
All of the shares of stock of each Corporation that are issued
and outstanding are duly authorized and are validly issued, fully
paid and non-assessable, and have been issued in compliance with
federal and state securities laws, and all of the outstanding
shares of stock of the Corporations are owned beneficially and of
record by the Selling Stockholders in the amounts specified on
Exhibit Al hereto, free and clear of all liens, claims and
encumbrances, except as set forth on Schedule 3.3. No shares of
any Corporation's capital stock are held in its treasury. Except
as set forth on Schedule 3.3: (i) there are no agreements
restricting the transfer of, or affecting the rights of any
holder of, any shares of any Corporation's capital stock, (ii)
there are no preemptive rights on the part of any holder of any
class of securities of any Corporation, and (iii) there are no
options, warrants, conversion or other rights, agreements or
commitments obligating any Corporation to issue or sell any
shares of its capital stock of any class or any securities
convertible into or exchangeable for any such shares, and no
authorization therefor has been given.
3.4. Capitalization of Partnerships. The total limited and
general partnership interests of each Partnership and capital
contributions are as set forth opposite such Partnership's name
on Schedule 3.4 (collectively, the "Partnership Interests").
Schedule 3.4 also lists the name of each partner in such
Partnership, the percentage equity interest of such partner and
identifies whether such partner is a general or limited partner
in such Partnership. All of the Partnership Interests are owned
of record by the one or more of the Corporations or Partnerships
in the amounts specified on Exhibit Al hereto, free and clear of
all liens, claims and encumbrances. Except as set forth on
Schedule 3.4: (i) there are no agreements restricting the
transfer of, or affecting the rights of any holder of, any
Partnership Interests, (ii) there are no preemptive rights on the
part of any holder of any class of Partnership Interests, and
(iii) there are no options, warrants, conversion or other rights
or agreements obligating any Partnership to issue or sell any
Partnership Interests or any securities convertible into or
exchangeable for any Partnership Interests.
3.5. Authority for Agreement; No Violation.
(a) The Corporations have all power and authority
necessary to execute and deliver this Agreement and to
perform each of their obligations hereunder, and the board
of directors of each Corporation has approved this Agreement
and the Transaction.
(b) The Selling Stockholders have the right and power
and all authority necessary to execute and deliver this
Agreement and to perform fully their obligations hereunder.
(c) The Partnerships have all power and authority
necessary to execute and deliver this Agreement and to
perform each of their obligations hereunder, and the
partners of each Partnership have, to the extent legally
required, approved this Agreement and the Transaction.
(d) This Agreement has been duly executed and
delivered by each Corporation and its Selling Stockholders
and by each Partnership and its partners, and constitutes
the valid and binding obligation of such Corporation, and
its Selling Stockholders and of such Partnership and its
partners, as the case may be, and is enforceable in
accordance with its terms, except as enforceability thereof
may be limited by applicable bankruptcy, reorganization,
insolvency or other laws affecting creditors rights
generally or by general principles of equity, regardless of
whether such enforceability is considered in equity or at
law or by public policies applicable to securities laws.
(e) Except as set forth on Schedule 3.5, the execution
and delivery of this Agreement and the consummation of the
Transaction will not conflict with or result in any
violation of or default under (i) any provision of the
charter or by-laws of any Corporation, (ii) the certificate
of limited partnership or partnership agreement of any
Partnership, (iii) any statute, regulation, order or decree
of any federal, state, governmental body or regulatory
authority or any license or permit applicable to any
Corporation, Partnership or the Selling Stockholders, or
(iv) any mortgage, indenture, lease, agreement, instrument
or other obligation to which any Corporation, Partnership or
the Selling Stockholders is a party. No consent, approval,
order or authorization of, or registration, declaration or
filing with, any third party or governmental authority,
except for FCC approvals and other approvals listed on
Schedule 3.5, is required in connection with the execution
and delivery of this Agreement or the consummation of the
Transaction.
3.6. Financial Statements. Attached hereto as Schedule 3.6
are copies of the following financial statements, which
statements are true and complete in all material respects and
have been prepared in accordance with generally accepted
accounting principles, consistently applied ("GAAP"), except to
the extent stated in the notes thereto, throughout the periods
indicated, and which statements fairly present the financial
condition of the Corporations and Partnerships and each of their
businesses, as of the respective dates thereof, and the results
of their respective operations for the indicated periods (such
financial statements being herein referred to as the "Financial
Statements"):
(a) Financial Statements for each Corporation and each
Partnership as at June 30, 1995 and for the three months
then ended, consisting of a balance sheet and statements of
earnings and retained income for the period then ended; and
(b) Financial Statements for each Corporation and each
Partnership for the fiscal year ended December 31, 1994
consisting of a balance sheet, statements of income and
retained earnings and changes in financial position for the
year then ended.
Except to the extent reflected or reserved against in the
balance sheet as of June 30, 1995 and included in the Financial
Statements at such date or as set forth in Schedule 3.6, there
are no material outstanding liabilities or obligations of the
Corporation or the Partnerships of any nature.
3.7. Absence of Changes. Since June 30, 1995, except as
set forth on Schedule 3.7, the business of each Corporation and
Partnership has been carried on in the ordinary course in
substantially the same manner as prior to that date, and such
Corporation or Partnership, as the case may be, has not:
(a) undergone any material adverse change in its
condition (financial or otherwise), properties, assets,
liabilities, business, operations or prospects;
(b) declared, set aside, made or paid any dividend or
other distribution in respect of its capital stock or
partnership interests or purchased or redeemed, directly or
indirectly, any shares of its capital stock or partnership
interests, other than cash dividends;
(c) issued or sold any shares of its capital stock of
any class or partnership interests or any options, warrants,
conversion or other rights to purchase any such shares or
partnership interests or any securities convertible into or
exchangeable for such shares or partnership interests;
(d) incurred any indebtedness for borrowed money or
issued or sold any debt securities;
(e) mortgaged, pledged or subjected to any lien,
lease, security interest or other charge or encumbrance any
of its properties or assets, tangible or intangible;
(f) acquired or disposed of any assets or properties
in any transaction with any officer, director, shareholder
or employee of the Corporation or Partnership, or any
relative by blood or marriage or any Affiliate or Associate
as such terms are defined in Rule 405 promulgated under the
Securities Act of 1933, as amended (the "Securities Act") of
any of them, or acquired or disposed of any assets or
properties, or entered into any commitment to do so;
(g) forgiven or cancelled any debts or claims, or
waived any rights, except in the ordinary course of
business;
(h) entered into any material transaction, other than
in the ordinary course of business;
(i) suffered any material defects or unresolved
technical problems or difficulties with the operation of any
of the Systems operated by it;
(j) granted to any officer or salaried employee any
increase in compensation in any form (including any increase
in value of any benefits) in excess of the amount in effect
as of June 30, 1995, or any severance or termination pay, or
entered into any employment agreement with any officer or
salaried employee;
(k) adopted or amended any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred
compensation or other plan, agreement, trust, fund or
arrangement for the benefit of employees;
(l) suffered any damage, destruction or loss (whether
or not covered by insurance) that in any case, or in the
aggregate, materially and adversely affects the condition
(financial or otherwise), properties, assets, business or
operations of the Corporation or Partnership;
(m) incurred any liability or obligation (whether
absolute, accrued, contingent or otherwise) material, in any
case, or in the aggregate, to the Partnership or
Corporation;
(n) incurred or committed to incur any capital or
other expenditures in excess of $100,000;
(o) hired any employee having an annual compensation
in excess of $50,000;
(p) terminated or reassigned any officer having annual
compensation in excess of $50,000 or, other than officers
who are retiring in the ordinary course, has become aware of
the intention of any officer to terminate his employment;
(q) discharged any material liability except in the
usual and ordinary course of business; or
(r) paid or agreed to pay any bonus or fee to any
employee in connection with the Transaction.
3.8. Taxes. Except as set forth on Schedule 3.8, each
Corporation and each Partnership makes the following
representations:
(a) Each Corporation and each Partnership has filed
all federal, state and local Tax Returns that are required
to have been filed by it and has paid or reserved for, in
accordance with GAAP on the Financial Statements through the
date hereof, all Taxes that have become due pursuant
thereto. Except as set forth on Schedule 3.8(a), such
Corporation or partner has not received any notice of
deficiency or assessment of additional Taxes and is not a
party to any action or proceeding by any Taxing Authority
for assessment or collection of Taxes.
(b) Nexus. All foreign, state and local jurisdictions
where each Corporation and each Partnership has filed Tax
Returns are set forth in Schedule 3.8(b). No claim has ever
been made by any Taxing Authority in any jurisdiction not
set forth on Schedule 3.8(b) that a Corporation or
Partnership is or may be subject to taxation by such
jurisdiction.
(c) No Accounting Method Changes. No Corporation or
Partnership will be required, as a result of a change in
method of accounting for Taxes for any pre-Closing Tax
period, to include any adjustment under Section 481(c) of
the Code in taxable income for any post-Closing period.
(d) No Section 341 Election. No Corporation has, with
regard to any assets held, acquired, or to be acquired by
it, filed a consent to the application of Section 341(f)(2)
of the Code to such property or assets.
(e) Parachute Payments. No Corporation is a party to
any agreement, contract or other arrangement that would
result, separately or in the aggregate, in a Corporation
being required to pay any "excess parachute payments" within
the meaning of Section 280G of the Code.
(f) Definitions. For purposes of this Agreement,
"Tax" (and, with correlative meaning, "Taxes") means (i) any
net income, alternative or add-on minimum tax, gross income,
gross receipts, estimated, sales, use, ad valorem, personal
property, franchise, profits, license, withholding, payroll,
employment, social security, unemployment, disability,
excise, severance, stamp, occupation, capital stock,
transfer, registration, value added, premium, property or
windfall profit tax, custom, import, license, duty or other
tax, governmental fee or other like assessment or charge,
together with any interest or any penalty, addition to tax
or additional amount imposed by any governmental authority
(a "Taxing Authority") responsible for the imposition of any
such tax (federal, state and local, foreign or domestic) and
(ii) liability for the payment of any amounts of the type
described in (i) as a result of being a member of an
affiliated, consolidated, combined or unitary group for any
period during the pre-Closing period.
For purposes of this Agreement, "Tax Return" means
any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including
any schedule or attachment thereto, and including any
amendment thereof.
3.9. Properties. Except as set forth on Schedule 3.9 or
for Site Rental Agreements listed in Schedule 3.13, the
Corporations and Partnerships do not own or lease and have no
interest in any real property. Except as set forth on Schedule
3.9 or in the Financial Statements, each Corporation and each
Partnership has good and marketable title to all real and
tangible personal property reflected in the June 30, 1995 balance
sheet included in the Financial Statements, (except to the extent
disposed of since such date in the ordinary course of business),
and valid leasehold interests in all real properties leased by
any of them, in each case free and clear of all mortgages, liens,
encumbrances, easements or security interests except (a) liens
for current taxes not due and payable, (b) liens, encumbrances,
easements and security interests that do not materially detract
from the value or interfere with the use by the Corporations or
Partnerships of the properties affected thereby, (c) liens
existing on June 30, 1995 and security interests reflected on the
June 30, 1995 balance sheet included in the Financial Statements,
and (d) purchase money security interests not exceeding $75,000
in the aggregate incurred in the ordinary course of business
after June 30, 1995.
3.10. Material Contracts. Schedule 3.10 contains a list of
all material agreements, contracts and commitments, written or
oral, to which each Corporation or Partnership is a party or by
which any of the assets or properties of such Corporation or
Partnership is bound as of the date hereof, including the
following:
(a) acquisition, merger, option or purchase agreements
for the purchase of any assets, including any licenses for
SMR channels or frequencies or stock of any business or
entity;
(b) agreements for the management of any FCC licenses
or frequencies;
(c) notes, loans, credit agreements, mortgages,
indentures, security agreements and other agreements and
instruments relating to the borrowing of money by or
extension of credit to any Partnership or Corporation;
(d) employment and consulting agreements that
individually involve annual compensation in excess of
$50,000;
(e) bonus, profit sharing, compensation, stock option,
pension, retirement, deferred compensation or other plans,
agreements, trusts, funds or arrangements for the benefit of
employees (whether or not legally binding);
(f) licenses of patent, trademark and other
intellectual property rights;
(g) bonding agreements; and
(h) agreements or commitments for capital expenditures
in excess of $100,000 for any single project.
The Selling Stockholders have delivered to Pittencrieff
complete and correct copies of all written agreements, contracts
and commitments, together with all amendments thereto, and
accurate descriptions of all oral agreements listed in Schedule
3.10. Such agreements, contracts and commitments are in full
force and effect and, except as set forth in Schedule 3.10, all
parties to such agreements, contracts and commitments have in all
material respects performed all obligations required to be
performed by them as of the date hereof and are not in default
thereunder. No agreement, contract or commitment to which any
Corporation or Partnership is a party or by which it or its
property is bound would have a material adverse effect on the
business or operations of any Corporation or Partnership.
3.11. Assets of Corporations and Partnerships. After
giving effect to the acquisitions set forth on Schedule 3.11,
taken together, the Corporations and Partnerships own or have
adequate right to use pursuant to a management agreement, lease
or otherwise all FCC and other licenses, properties and other
assets necessary for the operation and ownership of the SMR
systems operated by them or to be operated by them.
3.12. Employee Benefit Matters.
(a) Set forth in Schedule 3.12 is a true, complete and
correct list of all "employee benefit plans" as defined in
Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), and all other employee
profit-sharing, incentive, deferred compensation, welfare,
pension, retirement, severance, group insurance and other
employee benefit plans, arrangements, agreements and
practices which relate to employee benefits which are
currently maintained or contributed to by the Corporations
and the Partnerships, or to which the Corporations and the
Partnerships currently are obligated to contribute, relating
to present or former employees, directors, officers,
stockholders or consultants of the Corporations and the
Partnerships (collectively, the "Seller Employee Plans").
Except as set forth in Schedule 3.12, to the knowledge of
the Selling Stockholders, there are no material liabilities,
including fines and penalties, with respect to any plans,
arrangements or practices of the type described in the
preceding sentence previously maintained or contributed to
by the Corporations and the Partnerships, or to which the
Corporations or the Partnerships previously had an
obligation to contribute.
(b) The Corporations and the Partnerships previously
have delivered to Pittencrieff complete and correct copies
of each of the Seller Employee Plans, including all
amendments thereto, and any other documents or other
instruments relating thereto reasonably requested by
Pittencrieff.
(c) All the Seller Employee Plans are being, and have
been, maintained, operated and administered in all material
respects in accordance with their respective terms and in
compliance with all applicable laws.
(d) Except as set forth in Schedule 3.12(d), the
Corporations and the Partnerships have not within the past
six years had an obligation to contribute to a "defined
benefit plan" as defined in Section 3(35) of ERISA, a
pension plan subject to the minimum funding standards of
Section 302 of ERISA or Section 412 of the Internal Revenue
Code of 1986, as amended (the "Code"), or a "multiemployer
plan" as defined in Section 3(37) of ERISA or Section 414(f)
of the Code or a "multiple employer plan" within the meaning
of Section 210(a) of ERISA or Section 413(c) of the Code.
None of the Seller Employee Plans are funded through a
"welfare benefit fund" as defined in Section 419(e) of the
Code. Except as set forth in Schedule 3.12(d), no other
trade or business is, or, at any time within the past six
years, has been treated, together with the Corporations and
the Partnerships, as a single employer under Section 414 of
the Code or Section 4001 of ERISA. The consummation of the
Transaction will not constitute a "reportable event" under
Section 4043 of ERISA or result in a "withdrawal" from a
multiemployer plan under Section 4203 or 4205 of ERISA.
(e) Each Seller Employee Plan intended to be qualified
under Section 401(a) of the Code has been determined by the
Internal Revenue Service ("IRS") to be so qualified, or if
not so qualified each such plan may still be amended within
the remedial amendment period to cure any qualification
defect to the extent permitted by applicable law, and each
trust created thereunder which is intended to be exempt from
federal income tax under the provisions of Section 501(a) of
the Code has been determined by the IRS to be so exempt and
no fact or event has occurred since the date of such
determination by the IRS to adversely effect the qualified
status of any Seller Employee Plan or the exempt status of
any such trust.
(f) There have been no prohibited transactions or
breaches of any of the duties imposed on "fiduciaries"
(within the meaning of Section 3(21) of ERISA) by ERISA with
respect to the Seller Employee Plans that could result in
the Corporations or the Partnerships becoming liable
directly or indirectly (by indemnification or otherwise) for
any material excise tax, penalty or other liability under
ERISA or the Code.
(g) Except as set forth in Schedule 3.12(g), there are
no actions or claims pending or, to the knowledge of the
Selling Stockholders, threatened, with respect to any Seller
Employee Plan (other than routine claims for benefits), and
there are no investigations or audits of any Seller Employee
Plan by any governmental authority currently pending and
there have been no such investigations or audits that have
been concluded that resulted in any liability of the
Corporations and the Partnerships that has not been fully
discharged.
(h) All (i) insurance premiums required to be paid
with respect to, (ii) benefits, expenses, and other amounts
due and payable under, and (iii) contributions, transfers or
payments required to be made to, any Seller Employee Plan
have been made on or before their due date. With respect to
any insurance policy providing funding for benefits under
any Seller Employee Plan, (x) there is no material liability
of the Corporations or the Partnerships in the nature of a
retroactive or retrospective rate adjustment, loss sharing
arrangement, or other actual or contingent liability, nor
would there be any such liability if such insurance policy
was terminated on the date hereof, and (y) to the knowledge
of the Selling Stockholders, no insurance company issuing
any such policy is in receivership, conservatorship,
liquidation or similar proceeding and no such proceedings
with respect to any insurer are imminent.
(i) Schedule 3.12(i) contains a separate
identification of each Seller Employee Plan that provides
benefits, including, without limitation, death or medical
benefits, beyond termination of employment or retirement
other than (i) coverage mandated by law, (ii) death or
retirement benefits under any qualified Seller Employee
Plan, deferred compensation benefits fully reflected on the
balance sheets at June 30, 1995 included in the Financial
Statements or (iv) benefits, the full cost of which is borne
by the employee (or the employee's beneficiary) (the "Post-
Employment Benefits"); such balance sheets accurately
reflect the liabilities relating to the Post-Employment
Benefits.
(j) Except as set forth in Schedule 3.12(j), the
execution, delivery and performance of this Agreement will
not, solely in and of itself and without regard to any
subsequent events, (i) constitute an event under any Seller
Employee Plan that will result in any payment (whether of
severance pay or otherwise) becoming due from the
Corporations or the Partnerships to any present or former
officer, employee, director, stockholder or consultant (or
dependents), or (ii) accelerate the time of payment or
vesting, or increase the amount, of compensation due to any
present or former officer, employee, director, stockholder
or consultant of the Corporations or the Partnerships.
(k) Except as set forth in Schedule 3.12(k), the
Corporations and the Partnerships have not agreed or
committed to make any amendments to any Seller Employee
Plans not already embodied in the documents comprising the
Seller Employee Plans, other than any amendments required by
law.
(l) The Corporations and Partnerships have complied in
all material respects with the provisions of COBRA with
respect to any "group health plan" as defined in Section
5000 (b)(i) of the Code maintained by any of them.
3.13. Site Rental Agreements. Schedule 3.13 sets forth a
list of all Site Rental Agreements relating to the Systems
operated by the Corporations and Partnerships; such Site Rental
Agreements constitute all of the leases necessary for the
Corporations and Partnerships to operate the Systems as now
operated by them or as proposed to be operated.
3.14. Insurance. Each Corporation and each Partnership
maintains insurance covering such risks and in such amounts as
set forth in Schedule 3.14.
3.15. Litigation. Except as disclosed on Schedule 3.15,
there are no judicial or administrative actions, claims, suits,
proceedings or investigations pending or, to the knowledge of the
Selling Stockholders, threatened, that might result in any
material adverse change in the condition (financial or
otherwise), properties, assets, business or operations of the
Corporations or Partnerships that arise out of or in connection
with the operation of the Systems operated by them or that
question the validity of this Agreement or of any action to be
taken pursuant to or in connection with the provisions of this
Agreement. There are no judgments, orders, decrees, citations,
fines or penalties heretofore assessed against any of the
Corporations or Partnerships relating to the Systems operated by
them or any of the assets or properties of the Corporations or
Partnerships related to or used in connection with the Systems
operated by them.
3.16. FCC Regulatory Matters.
(a) Definitions. For purposes of this Section 3.16, the
following terms shall have the indicated meanings:
"FCC License" shall mean any paging, mobile telephone,
microwave, commercial mobile radio, private carrier, SMR or other
license, permit, consent, certificate of compliance, franchise,
approval or authorization granted or issued by the FCC,
including, without limitation, any of the foregoing authorizing
the acquisition, construction or operation of an SMR System,
radio paging system or other radio communications system.
"Seller Management Agreement" shall mean any management
or other agreement (other than a loading, reseller or agent's
agreement) pursuant to which any Corporation or Partnership
agrees to manage or to perform other services (other than
loading) with respect to SMR Licenses held by another person in
exchange for either the right to receive a portion of the
revenues derived from such SMR Licenses or the right to purchase
such SMR Licenses, or any loading agreement pursuant to which any
Corporation or Partnership is loading SMR Licenses held by
another person in exchange for either the right to receive a
portion of the revenues derived from such SMR Licenses in excess
of 25% of the aggregate revenues derived from such SMR Licenses
or the right to purchase such SMR Licenses.
"SMR License" shall mean an FCC License authorizing the
construction, ownership and operation of an SMR system in the 800
or 900 MHz band issued pursuant to 47 CFR Part 90 of the Rules
and Regulations of the FCC or any successor section.
"SMR System" shall mean an SMR system licensed under 47
CFR Part 90 of the Rules and Regulations of the FCC.
"SMR Units" shall mean the number of mobile and control
stations (within the meaning of 47 CFR Part 90 of the Rules and
Regulations of the FCC) subscribing to SMR Systems licensed to or
managed by any Corporation or Partnership, excluding, however,
any such units which are subject to a Third-Party Management
Agreement if the respective third party has a right to purchase
the SMR Licenses which are subject to such Third-Party Management
Agreement.
"Third-Party Management Agreement" shall mean any
management or other agreement (other than a loading agreement)
pursuant to which a person (other than the Corporations and
Partnerships) are managing SMR Licenses held by any Corporation
or Partnership or any loading agreement pursuant to which a
person (other than the Corporations and Partnerships) are loading
SMR Licenses held by any Corporation or Partnership in exchange
for the right to receive a portion of the revenues derived from
such SMR Licenses in excess of 25% of the aggregate revenues
derived from such SMR Licenses or the right to purchase such SMR
Licenses.
(b) License Information. Schedule 3.16 (the "Seller FCC
Schedule") sets forth, as of the date hereof, a correct and
complete list of the following information for each SMR License
and other FCC License issued to or operated by the Corporations
and the Partnerships:
(i) for all FCC Licenses (including all SMR Licenses),
the name of the licensee, the name of the seller(s), the call
sign, the transmitter location (by site coordinates and city),
the type of service (e.g., paging, SMR, etc.), the frequency or
frequencies authorized, the license renewal date and operating
entity;
(ii) in the case of SMR Licenses, the number of
channels (including conventional channels) authorized, the number
of channels constructed, whether the SMR License is for a
conventional or trunked SMR System and whether the SMR License is
managed by the Corporations and the Partnerships pursuant to a
Seller Management Agreement or by any other persons pursuant to a
Third-Party Management Agreement;
(iii) each holder of any such FCC License that is
neither wholly owned by the Corporations or Partnerships nor
owned entirely by unaffiliated persons and managed by the
Corporations or Partnerships; and
(iv) for all FCC Licenses (including SMR Licenses),
whether such FCC Licenses are subject to rights of first refusal,
options and other such rights or obligations in existence as of
the date hereof, including, without limitation, entitlements to
acquire additional ownership interests, which may affect the
ownership interests of the Corporations or Partnerships.
(c) Condition of Systems. All of the properties, equipment
and Systems of the Corporations and Partnerships are, and to the
knowledge of the Selling Stockholders all thereof to be acquired
or added in connection with any contemplated System expansion or
construction prior to the Closing will be, in good repair,
working order and condition and are and except as set forth in
the Seller FCC Schedule will be in material compliance with all
standards or rules imposed by any governmental agency or
authority (including, without limitation, the FCC and (if
applicable), any public utilities commission or other state or
local governments or instrumentalities) or as imposed under any
agreements with customers.
(d) Fees; License Compliance. The Corporations and
Partnerships have paid all franchise, license or other fees and
charges which have become due in respect of their businesses and
have made appropriate provision as is required by GAAP for any
such fees and charges which have accrued. Except as set forth in
the Seller FCC Schedule, the Corporations or Partnerships have
duly secured, as of the date hereof, all necessary permits,
licenses, consents and authorizations from, and has filed all
required registrations, applications, reports and other documents
with, the FCC, and, if applicable, any public utilities
commission and other entity exercising jurisdiction over the SMR
businesses, radio paging businesses and other radio
communications businesses of the Corporations and Partnerships or
the construction or delivery of Systems therefor, as such
businesses are currently conducted. Except as set forth on the
Seller FCC Schedule, the Corporations and Partnerships hold the
FCC Licenses specified on the Seller FCC Schedule and, except as
set forth on such Schedule, all such FCC Licenses are valid and
in full force and effect without conditions except for such
conditions as are stated in the FCC License or as are generally
applicable to holders of FCC Licenses. Except as set forth in
the Seller FCC Schedule, to the knowledge of the Selling
Stockholders, no event has occurred and is continuing which could
(i) result in the revocation, termination or adverse modification
of any FCC License listed on such Schedule or (ii) adversely
affect any rights of the Corporation or Partnerships thereunder;
except as set forth on such Schedule, the Corporations and
Partnerships have no reason to believe and have no knowledge that
the SMR Licenses specified on such Schedule will not be renewed
in the ordinary course; and the Corporations and Partnerships
have sufficient time, materials, equipment, contract rights and
other required resources to complete, in a timely fashion and in
full, construction of all their respective SMR Systems, radio
paging and other radio communications systems listed on the
Seller FCC Schedule in compliance with all applicable technical
standards and construction requirements and deadlines. Except as
set forth in the Seller FCC Schedule, the current ownership and
operation by the Corporations and Partnerships of the SMR
Systems, radio paging and other radio communications systems
comply with the Communications Act of 1934, as amended, and all
applicable rules, regulations and policies of the FCC.
(e) Management Agreements. Set forth in the Seller FCC
Schedule is a complete and correct list of all Seller Management
Agreements and Third-Party Management Agreements to which any
Corporation or Partnership is a party that correctly identifies
the manager under each such Agreement and the holder of the SMR
Licenses which are the subject of each such Agreement, the
transmitter locations (by address), and number of channels
covered by such SMR Licenses, the term of such Agreements, any
options or calls (and the respective option or call prices) in
favor of any party to such Agreements to purchase or sell any
interest in such SMR Licenses and the respective fees or revenues
payable or receivable under any such Agreements. To the
knowledge of the Selling Stockholders, the terms of all such
Seller Management Agreements and Third-Party Management
Agreements and the operation of each SMR System pursuant thereto
comply with the Communications Act of 1934, as amended, and all
applicable rules, regulations and policies of the FCC. Other
than those channels identified as subject to Third-Party
Management Agreements on the Seller FCC Schedule and except as
set forth on the Seller FCC Schedule, none of the channels
licensed to any Corporation or Partnership will be subject to a
Third Party Management Agreement as of the Closing.
(f) Wide Area Applications. The Selling Stockholders have
delivered to Pittencrieff a true and correct copy of each Request
for Rule Waiver or Extended Implementation and related Wide Area
Specialized Mobile Radio application, as filed with the FCC, and
all supplemental or related materials filed in connection
therewith by or on behalf of any Corporation or Partnership, all
materials submitted to the FCC or to the Corporations or
Partnerships in connection therewith by any third party, and any
written communications issued by the FCC or any FCC staff member
in response to, or otherwise in connection with, any of the
foregoing.
3.17. Brokers, Finders, etc. Except as set forth on
Schedule 3.17, all negotiations relating to this Agreement and
the Transaction have been carried on without the intervention of
any person acting on behalf of the Corporations, the Partnerships
or the Selling Stockholders in such manner as to give rise to any
valid claim against any of them for any brokerage or finder's
commission, fee or similar compensation for bringing the Parties
together or bringing about the Transaction.
3.18. Compensation. Each of the Corporations and each of
the Partnerships has delivered to Pittencrieff a true and
complete list of all of its employees which list states the rate
of compensation, the positions held by the employees listed and
the duration of their employment.
3.19. Environmental and Other Matters. Each Corporation
and each Partnership and the business of each Corporation and
each Partnership are not in violation of, or delinquent in
respect to, any material decree, order or arbitration award of
law, statute or regulation of or agreement with, or any material
license or permit from, any federal, state or local governmental
authority including, without limitation, laws, statutes and
regulations relating to occupational health and safety, equal
employment opportunities, fair employment practices, and sex,
race, religious and age discrimination or the environment
(including, without limitation, federal, state and local laws,
statutes, rules and regulations and the common law relating to
environmental matters and contamination of any type whatsoever,
including, without limitation: (i) treatment, storage, disposal,
generation and transportation of industrial, toxic or hazardous
substances or solid or hazardous waste; (ii) air, water and noise
pollution; (iii) groundwater contamination; (iv) the release or
threatened release into the environment of industrial, toxic or
hazardous substances, or solid or hazardous waste, including,
without limitation, emissions, discharges, injections, spills,
escapes, or dumping of pollutants, contaminants or chemicals; (v)
the protection of wildlife, marine sanctuaries and wetlands; (vi)
the protection of natural resources; (vii) storage tanks, vessels
and related equipment; (viii) abandoned or discarded barrels,
containers and other closed receptacles; (ix) health and safety
of employees and other persons; and (x) otherwise relating to the
manufacture, processing, use, distribution, treatment, storage,
disposal, transportation, or handling of pollutants,
contaminants, chemicals or industrial, toxic or hazardous
substances or solid or hazardous waste (the "Environmental
Laws")). All notices and complaints that any Corporation or
Partnership has received in the last three years of any violation
of a type referred to in any portion of this Section 3.19 are set
forth in Schedule 3.19. No Corporation, Partnership or any
Selling Stockholder has received notice of any violation of a
type referred to in any portion of this Section 3.19 that has not
been corrected. Copies of each Corporation's and Partnership's
last inspection reports from each applicable authority with
respect to any law described in any portion of this Section 3.19
and relating to the properties, assets, personnel or business
activities of the business of the Corporation and Partnership are
attached to Schedule 3.19. Schedule 3.19 sets forth a complete
list of all above-ground and underground storage tanks, vessels,
and related equipment and containers that are subject to federal,
state or local laws, statutes, rules or regulations, and sets
forth their present contents, what the contents have been in the
past, and what program of remediation, if any, is contemplated
with respect thereto.
3.20. Disclosure. This Agreement, including exhibits and
schedules hereto, does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements contained herein in the context in which
they were made not misleading.
4. Representations and Warranties Regarding the System Sellers.
Each System Seller jointly represents and warrants to
Pittencrieff and New PCI as follows, except that representations
and warranties relating to the San Diego Systems shall be made
solely by AMI:
4.1. Entity Status. Each System Seller has the necessary
power and authority to carry on its business as and where now
conducted, and to own or lease and to operate its properties and
assets where such properties and assets are now owned, leased or
operated by it and where such business is now conducted by it.
To the extent applicable, each System Seller is in good standing
in its state of incorporation and is qualified to do business and
is in good standing in each jurisdiction in which the nature of
its business or the property owned or leased by such System
Seller make such qualification necessary, except where the
failure to so qualify would not have a material adverse effect on
its business, operations or financial condition. To the extent
applicable, each Such System Seller has delivered to Pittencrieff
complete and correct copies of its charter and by-laws, each as
amended and in effect on the date hereof.
. 4.2. Authority for Agreement; No Violation.
(a) Each System Seller has necessary power and
authority to execute and deliver this Agreement and to
perform each of its obligations hereunder. This Agreement
and the transactions contemplated hereby have been approved
by the Board of Directors of AMI and the partners of Trunked
Mobile Radio Systems.
(b) This Agreement has been duly executed and
delivered by each System Seller and constitutes the valid
and binding obligation of such System Seller, and is
enforceable in accordance with its terms, except as
enforceability thereof may be limited by applicable
bankruptcy, reorganization, insolvency or other laws
affecting creditors, rights generally or by general
principles of equity, regardless of whether such
enforceability is considered in equity or at law or by
public policies applicable to securities laws.
(c) Except as set forth on Schedule 4.2, the execution
and delivery of this Agreement and the consummation of the
Transaction will not conflict with or result in any
violation of or default under (i) any provision of the
charter or by-laws of any System Seller, (ii) any statute,
regulation, order or decree of any federal, state,
governmental body or regulatory authority or any license or
permit applicable to any System Seller, or (iii) any
mortgage, indenture, lease, agreement, instrument or other
obligation to which any System Seller is a party. Such
execution, delivery and consummation will not accelerate the
maturity of or otherwise modify the terms of any
indebtedness related to the operation of the Purchased
Systems or result in the creation of any lien on the
Purchased Systems. No consent, approval, order or
authorization of, or registration, declaration or filing
with, any third party or governmental authority, except for
FCC approvals and other approvals listed on Schedule 4.2, is
required in connection with the execution and delivery of
this Agreement by each System Seller or the consummation of
the Transaction.
4.3. Financial Statements. Attached hereto as Schedule 4.3
are copies of the following financial statements, which
statements are true and complete in all material respects and
have been prepared in accordance with GAAP, except to the extent
stated in the notes thereto throughout the periods indicated, and
which statements fairly present the financial condition of the
System Sellers and each of the Purchased Systems, as of the
respective dates thereof, and the results of their respective
operations for the indicated periods (such financial statements
being herein referred to as the "System Seller Financial
Statements");
(a) System Seller Financial Statements as at June 30,
1995 and for the three months then ended, consisting of a
balance sheet and statements of income and retained earnings
for the period then ended; and
(b) System Seller Financial Statements for the fiscal
year ended December 31, 1994, consisting of a balance sheet,
statements of income and retained earnings and changes in
financial position for the year then ended.
Except as and to the extent reflected or reserved against in
the balance sheet as of June 30, 1995 and included in the System
Seller Financial Statements at such date, or as set forth on
Schedule 4.3, there are no material outstanding liabilities or
obligations of any nature of any System Seller that relate to the
Purchased Systems.
4.4. Absence of Changes. Since June 30, 1995, except as
set forth on Schedule 4.4, the business of each System Seller as
it relates to the Purchased Systems has been carried on in the
ordinary course in substantially the same manner as prior to that
date, and such System Seller has not, with respect to the
Purchased Systems:
(a) undergone any material adverse change in its
condition (financial or otherwise), properties, assets,
liabilities, business, operations or prospects;
(b) declared, set aside, made or paid any dividend or
other distribution in respect of its capital stock or
purchased or redeemed, directly or indirectly, any shares of
its capital stock;
(c) issued or sold any shares of its capital stock of
any class or any options, warrants, conversion or other
rights to purchase any such shares or any securities
convertible into or exchangeable for such shares;
(d) incurred any indebtedness for borrowed money or
issued or sold any debt securities;
(e) mortgaged, pledged or subjected to any lien,
lease, security interest or other charge or encumbrance any
of its properties or assets, tangible or intangible;
(f) acquired or disposed of any assets or properties
in any transaction with any officer, director, shareholder
or employee of the System Sellers, or any relative by blood
or marriage or any Affiliate or Associate as such terms are
defined in Rule 405 promulgated under the Securities Act of
any of them, or acquired or disposed of any assets or
properties, or entered into any commitment to do so;
(g) forgiven or cancelled any debts or claims, or
waived any rights, except in the ordinary course of
business;
(h) entered into any material transaction, other than
in the ordinary course of business;
(i) suffered any material defects or unresolved
technical problems or difficulties with the operation of any
of the Purchased Systems;
(j) granted to any officer or salaried employee any
increase in compensation in any form (including any increase
in value of any benefits) in excess of the amount thereof in
effect as of June 30, 1995, or any severance or termination
pay, or entered into any employment agreement with any
officer or salaried employee;
(k) adopted or amended any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred
compensation or other plan, agreement, trust, fund or
arrangement for the benefit of employees;
(l) suffered any damage, destruction or loss (whether
or not covered by insurance) that in any case, or in the
aggregate, materially and adversely affects the condition
(financial or otherwise), properties, assets, business or
operations of any System Seller;
(m) incurred any liability or obligation (whether
absolute, accrued, contingent or otherwise) material, in any
case, or in the aggregate, to any System Seller;
(n) incurred or committed to incur any capital or
other expenditures in excess of $100,000;
(o) hired any employee having an annual compensation
in excess of $50,000;
(p) terminated or reassigned any officer having annual
compensation in excess of $50,000 or, other than officers
who are retiring in the ordinary course, has become aware of
the intention of any officer to terminate his or her
employment;
(q) discharged any material liability except in the
usual and ordinary course of business; or
(r) paid or agreed to pay any bonus or fee to any
employee in connection with the Transaction.
4.5. Taxes. Except as set forth on Schedule 4.5, each
System Seller makes the following representation:
(a) Each System Seller has filed all federal, state
and local Tax Returns that are required to have been filed
by it and has paid or reserved for, in accordance with GAAP
on the System Seller Financial Statements through the date
hereof, all Taxes that have become due pursuant thereto.
Except as set forth on Schedule 4.5(a), such System Seller
has not received any notice of deficiency or assessment of
additional Taxes and is not a party to any action or
proceeding by any Taxing Authority for assessment or
collection of Taxes.
(b) Nexus. All foreign, state and local jurisdictions
where each System Seller has filed Tax Returns are set forth
in Schedule 4.5(b). No claim has ever been made by any
Taxing Authority in any jurisdiction not set forth on
Schedule 4.5(b) that a System Seller is or may be subject to
taxation by such jurisdiction.
4.6. Properties. Except as set forth on Schedule 4.6 or
for Site Rental Agreements listed in Schedule 4.10, the System
Sellers do not own or lease and have no interest in any real
property that relates to the Purchased Systems. Except as set
forth in Schedule 4.6 or in the System Seller Financial
Statements, each System Seller has good and marketable title to
all real and tangible personal property reflected in the June 30,
1995 balance sheet included in the System Seller Financial
Statements (except to the extent disposed of since such date in
the ordinary course of business), and valid leasehold interests
in all real properties leased by it, in each case free and clear
of all mortgages, liens, encumbrances, easements or security
interests except (a) liens for current taxes not due and payable,
(b) liens, encumbrances, easements and security interests that do
not materially detract from the value or interfere with the use
by the System Sellers of the properties affected thereby, (c)
liens existing on June 30, 1995 and security interests reflected
on the June 30, 1995 balance sheet included in the System Seller
Financial Statements, and (d) purchase money security interests
not exceeding $75,000 in the aggregate incurred in the ordinary
course of business after June 30, 1995.
4.7. Material Contracts. Schedule 4.7 contains a list of
all material agreements, contracts and commitments, written or
oral, to which each System Seller is a party or by which any of
the assets or properties of each System Seller is bound as of the
date hereof, as they relate to the Purchased Systems, including
the following:
(a) acquisition, merger, option or purchase agreements
for the purchase of any assets, including any FCC or other
licenses for SMR channels or frequencies or stock of any
business or entity;
(b) agreements for the management of any FCC licenses
or frequencies;
(c) notes, loans, credit agreements, mortgages,
indentures, security agreements and other agreements and
instruments relating to the borrowing of money by or
extension of credit to any System Seller;
(d) employment and consulting agreements that
individually involve annual compensation in excess of
$50,000;
(e) bonus, profit sharing, compensation, stock option,
pension, retirement, deferred compensation or other plans,
agreements, trusts, funds or arrangements for the benefit of
employees;
(f) licenses of patent, trademark and other
intellectual property rights;
(g) bonding agreements; and
(h) agreements or commitments for capital expenditures
in excess of $100,000 for any single project.
The System Sellers have delivered to Pittencrieff complete
and correct copies of all written agreements, contracts and
commitments, together with all amendments thereto, and accurate
descriptions of all oral agreements listed in Schedule 4.7. Such
agreements, contracts and commitments are in full force and
effect and, except as disclosed in Schedule 4.7, all parties to
such agreements, contracts and commitments have in all material
respects performed all obligations required to be performed by
them as of the date hereof and are not in default thereunder. No
agreement, contract or commitment to which any System Seller is a
party or by which it or its property is bound would have a
material adverse effect on the business or operations of any
System Seller.
4.8. Assets of System Sellers. After giving effect to the
acquisitions set forth on Schedule 4.8, taken together, the
System Sellers own or have adequate right to use pursuant to a
management agreement, lease or otherwise all FCC and other
licenses, properties and other assets necessary for the operation
and ownership of the Purchased Systems.
4.9. Employee Benefit Matters.
(a) Set forth in Schedule 4.9 is a true, complete and
correct list of all "employee benefit plans" as defined in
Section 3(3) of ERISA and all other employee profit-sharing,
incentive, deferred compensation, welfare, pension,
retirement, severance, group insurance and other employee
benefit plans, arrangements, agreements and practices which
relate to employee benefits which are currently maintained
or contributed to by the System Sellers, or to which the
System Sellers currently are obligated to contribute,
relating to present or former employees, directors,
officers, stockholders or consultants of the System Sellers
(collectively, the "System Seller Employee Plans"). Except
as set forth on Schedule 4.9, to the knowledge of the System
Sellers, there are no material liabilities, including fines
or penalties, with respect to any plans, arrangements or
practices of the type described in the preceding sentence
previously maintained or contributed to by the System
Sellers, or to which the System Sellers previously had an
obligation to contribute.
(b) The System Sellers previously have delivered to
Pittencrieff true, complete and correct copies of each of
the System Seller Employee Plans, including all amendments
thereto, and any other documents or other instruments
relating thereto reasonably requested by Pittencrieff.
(c) All the System Seller Employee Plans are being,
and have been, maintained, operated and administered in all
material respects in accordance with their respective terms
and in compliance with all applicable laws.
(d) Except as set forth in Schedule 4.9(d), the System
Sellers have not within the past six years had an obligation
to contribute to a "defined benefit plan" as defined in
Section 3(35) of ERISA, a pension plan subject to the
minimum funding standards of Section 302 of ERISA or Section
412 of the Code, or a "multiemployer plan" as defined in
Section 3(37) of ERISA or Section 414(f) of the Code or a
"multiple employer plan" within the meaning of Section
210(a) of ERISA or Section 413(c) of the Code. None of the
System Seller Employee Plans are funded through a "welfare
benefit fund" as defined in Section 419(e) of the Code.
Except as set forth in Schedule 4.9(d), no other trade or
business is, or, at any time within the past six years, has
been treated, together with the System Sellers, as a single
employer under Section 414 of the Code or Section 4001 of
ERISA. The consummation of the Transaction will not
constitute a "reportable event" under Section 4043 of ERISA
or result in a "withdrawal" from a multiemployer plan under
Section 4203 or 4205 of ERISA.
(e) Each System Seller Employee Plan intended to be
qualified under Section 401(a) of the Code has been
determined by the IRS to be so qualified, or if not so
qualified each such plan may still be amended within the
remedial amendment period to cure any qualification defect
to the extent permitted by applicable law, and each trust
created thereunder which is intended to be exempt from
federal income tax under the provisions of Section 501(a) of
the Code has been determined by the IRS to be so exempt and
no fact or event has occurred since the date of such
determination by the IRS to adversely effect the qualified
status of any System Seller Employee Plan or the exempt
status of any such trust.
(f) There have been no prohibited transactions or
breaches of any of the duties imposed on "fiduciaries"
(within the meaning of Section 3(21) of ERISA) by ERISA with
respect to the System Seller Employee Plans that could
result in the System Sellers becoming liable directly or
indirectly (by indemnification or otherwise) for any
material excise tax, penalty or other liability under ERISA
or the Code.
(g) Except as set forth in Schedule 4.9(g), there are
no actions or claims pending or, to the knowledge of the
System Sellers, threatened, with respect to any System
Seller Employee Plan (other than routine claims for
benefits), and there are no investigations or audits of any
System Seller Employee Plan by any governmental authority
currently pending and there have been no such investigations
or audits that have been concluded that resulted in any
liability of the System Sellers that has not been fully
discharged.
(h) All (i) insurance premiums required to be paid
with respect to, (ii) benefits, expenses, and other amounts
due and payable under, and (iii) contributions, transfers or
payments required to be made to, any System Seller Employee
Plan have been made on or before their due date. With
respect to any insurance policy providing funding for
benefits under any System Seller Employee Plan, (x) there is
no material liability of the System Sellers in the nature of
a retroactive or retrospective rate adjustment, loss sharing
arrangement, or other actual or contingent liability, nor
would there be any such liability if such insurance policy
was terminated on the date hereof, and (y) to the knowledge
of the System Sellers, no insurance company issuing any such
policy is in receivership, conservatorship, liquidation or
similar proceeding and no such proceedings with respect to
any insurer are imminent.
(i) Schedule 4.9(i) contains a separate identification
of each System Seller Employee Plan that provides benefits,
including, without limitation, death or medical benefits,
beyond termination of employment or retirement other than
(i) coverage mandated by law, (ii) death or retirement
benefits under any qualified System Seller Employee Plan,
(iii) deferred compensation benefits fully reflected on the
balance sheets at June 30, 1995 included in the System
Sellers Financial Statements or (iv) benefits, the full cost
of which are borne by the employee (or the employee's
beneficiary) (the "Post-Employment Benefits"); such balance
sheets accurately reflect the liabilities relating to the
Post-Employment Benefits.
(j) Except as set forth in Schedule 4.9(j), the
execution, delivery and performance of this Agreement will
not, solely in and of itself and without regard to any
subsequent events, (i) constitute an event under any System
Seller Employee Plan that will result in any payment
(whether of severance pay or otherwise) becoming due from
the System Sellers to any present or former officer,
employee, director, stockholder or consultant (or
dependents), or (ii) accelerate the time of payment or
vesting, or increase the amount, of compensation due to any
present or former officer, employee, director, stockholder
or consultant of the System Sellers.
(k) Except as set forth in Schedule 4.9(k), the System
Sellers have not agreed or committed to make any amendments
to any System Seller Employee Plans not already embodied in
the documents comprising the System Seller Employee Plan,
other than any amendments required by law.
(l) The System Sellers have complied in all material
respects with the provisions of COBRA with respect to any
"group health plan" as described in Section 5000(b)(i) of
the Code maintained by any of them.
4.10. Site Rental Agreements. Schedule 4.10 hereto sets
forth a list of all Site Rental Agreements relating to the
Purchased Systems; such Site Rental Agreements constitute all of
the leases necessary for the System Sellers to operate the
Purchased Systems.
4.11. Insurance. Each Corporation and each Partnership
maintains insurance relating to the Purchased Systems covering
such risks and in such amounts as set forth in Schedule 4.11.
4.12. Litigation. Except as disclosed on Schedule 4.12,
there are no judicial or administrative actions, claims, suits,
proceedings or investigations pending or, to the knowledge of the
System Sellers, threatened, that might result in any material
adverse change in the condition (financial or otherwise),
properties, assets, business or operations of the System Sellers
that arise out of or in connection with the operation of the
Purchased Systems or that question the validity of this Agreement
or of any action to be taken pursuant to or in connection with
the provisions of this Agreement. There are no judgments,
orders, decrees, citations, fines or penalties heretofore
assessed against any of the System Sellers relating to the
Purchased Systems or any of the assets or properties of the
System Sellers related to or used in connection with the
Purchased Systems.
4.13. FCC Regulatory Matters.
(a) Definitions. For purposes of this Section 4.13, the
following terms shall have the indicated meanings:
"FCC License" shall mean any paging, mobile telephone,
microwave, commercial mobile radio, private carrier, SMR or other
license, permit, consent, certificate of compliance, franchise,
approval or authorization granted or issued by the FCC,
including, without limitation, any of the foregoing authorizing
the acquisition, construction or operation of an SMR System,
radio paging system or other radio communications system.
"System Seller Management Agreement" shall mean any
management or other agreement (other than a loading, reseller or
agent's agreement) pursuant to which any System Seller agrees to
manage or to perform other services (other than loading) with
respect to SMR Licenses held by another person in exchange for
either the right to receive a portion of the revenues derived
from such SMR Licenses or the right to purchase such SMR
Licenses, or any loading agreement pursuant to which any System
Seller is loading SMR Licenses held by another person in exchange
for either the right to receive a portion of the revenues derived
from such SMR Licenses in excess of 25% of the aggregate revenues
derived from such SMR Licenses or the right to purchase such SMR
Licenses.
"SMR License" shall mean an FCC License authorizing the
construction, ownership and operation of an SMR system in the 800
or 900 MHz band issued pursuant to 47 CFR Part 90 of the Rules
and Regulations of the FCC.
"SMR System" shall mean an SMR system licensed under 47
CFR Part 90 of the Rules and Regulations of the FCC or any
successor section.
"SMR Units" shall mean the number of mobile and control
stations (within the meaning of 47 CFR Part 90 of the Rules and
Regulations of the FCC) subscribing to SMR Systems licensed to or
managed by the System Sellers, excluding, however, any such units
which are subject to a Third-Party Management Agreement if the
respective third party has a right to purchase the SMR Licenses
which are subject to such Third-Party Management Agreement.
"Third-Party Management Agreement" shall mean any
management or other agreement (other than a loading agreement)
pursuant to which a person (other than the System Sellers), is
managing SMR Licenses held by the System Sellers or any loading
agreement pursuant to which a person (other than the System
Sellers), is loading SMR Licenses held by the System Seller in
exchange for the right to receive a portion of the revenues
derived from such SMR Licenses in excess of 25% of the aggregate
revenues derived from such SMR Licenses or the right to purchase
such SMR Licenses.
(b) License Information. Schedule 4.13(b) (the "System
Seller FCC Schedule") sets forth, as of the date hereof, a
correct and complete list of the following information for each
SMR License and other FCC License issued to or operated by the
System Seller:
(i) for all FCC Licenses (including all SMR Licenses),
the name of the licensee, the name of the seller(s), the call
sign, the transmitter location (by site coordinates and city),
the type of service (e.g., paging, SMR, etc.), the frequency or
frequencies authorized, the license renewal date and operating
entity;
(ii) in the case of SMR Licenses, the number of
channels (including conventional channels) authorized, the number
of channels constructed whether the SMR License is for a
conventional or trunked SMR System and whether the SMR License is
managed by the System Sellers pursuant to the System Seller
Management Agreement or by any other persons pursuant to a Third-
Party Management Agreement;
(iii) each holder of any such FCC License that is
neither wholly owned by the System Sellers nor owned entirely by
unaffiliated persons and managed by the System Sellers; and
(iv) for all FCC Licenses (including SMR Licenses),
whether such FCC Licenses are subject to rights of first refusal,
options and other such rights or obligations in existence as of
the date hereof, including, without limitation, entitlements to
acquire additional ownership interests, which may affect the
ownership interests of the System Sellers.
(c) Condition of Systems. All of the properties, equipment
and systems of the System Sellers are, and to the knowledge of
the System Sellers, all thereof to be acquired or added in
connection with any contemplated System expansion or construction
prior to the Closing will be, in good repair, working order and
condition and are and except as set forth in the System Seller
FCC Schedule will be in material compliance with all standards or
rules imposed by any governmental agency or authority (including,
without limitation, the FCC and (if applicable), any public
utilities commission or other state or local governments or
instrumentalities) or as imposed under any agreements with
customers.
(d) Fees; License Compliance. Each System Seller has paid
all franchise, license or other fees and charges which have
become due in respect of its business and has made appropriate
provision as is required by GAAP for any such fees and charges
which have accrued. Except as set forth in the System Seller FCC
Schedule, each System Seller has duly secured, as of the date
hereof, all necessary permits, licenses, consents and
authorizations from, and has filed all required registrations,
applications, reports and other documents with, the FCC, and, if
applicable, any public utilities commission and other entity
exercising jurisdiction over the SMR businesses, radio paging
businesses and other radio communications businesses of the
System Sellers or the construction or delivery of Systems
therefor, as such businesses are currently conducted. Except as
set forth on the System Seller FCC Schedule, each System Seller
holds the FCC Licenses specified on the System Seller FCC
Schedule and, except as set forth on such Schedule, all such FCC
Licenses are valid and in full force and effect without
conditions except for such conditions as are stated in the FCC
License or as are generally applicable to holders of FCC
Licenses. Except as set forth in the System Seller FCC Schedule,
to the knowledge the System Sellers, no event has occurred and is
continuing which could (i) result in the revocation, termination
or adverse modification of any FCC License listed on such
Schedule or (ii) adversely affect any rights of the Assets
Sellers thereunder; except as set forth on such Schedule, the
Assets Sellers have no reason to believe and have no knowledge
that the SMR Licenses specified on such Schedule will not be
renewed in the ordinary course; and each System Seller has
sufficient time, materials, equipment, contract rights and other
required resources to complete, in a timely fashion and in full,
construction of all its respective SMR Systems, radio paging and
other radio communications systems listed on the System Seller
FCC Schedule in compliance with all applicable technical
standards and construction requirements and deadlines. Except as
set forth in the System Seller FCC Schedule, the current
ownership and operation by the System Sellers of the SMR Systems,
radio paging and other radio communications systems comply with
the Communications Act of 1934, as amended, and all applicable
rules, regulations and policies of the FCC.
(e) Management Agreements. Set forth in the System Seller
FCC Schedule is a complete and correct list of all System Sellers
Management Agreements and Third-Party Management Agreements to
which any System Seller is a party that correctly identifies the
manager under each such Agreement and the holder of the SMR
Licenses which are the subject of such Agreements, the
transmitter locations (by address), and number of channels
covered by such SMR Licenses, the term of such Agreements, any
options or calls (and the respective option or call prices) in
favor of any party to such Agreements to purchase or sell any
interest in such SMR Licenses and the respective fees or revenues
payable or receivable under any such Agreements. To the
knowledge of the System Sellers, the terms of all such System
Seller Management Agreements and Third-Party Management
Agreements and the operation of each SMR System pursuant thereto
comply with the Communications Act of 1934, as amended, and all
applicable rules, regulations and policies of the FCC. Other
than those channels identified as subject to Third-Party
Management Agreements on the System Seller FCC Schedule, none of
the channels licensed to the System Sellers will be subject to a
Third Party Management Agreement as of the Closing.
(f) Wide Area Applications. The System Sellers have
delivered to Pittencrieff a true and correct copy of each Request
for Rule Waiver or Extended Implementation and related Wide Area
Specialized Mobile Radio application, as filed with the FCC, and
all supplemental or related materials filed in connection
therewith by or on behalf of the System Sellers, all materials
submitted to the FCC or to the System Sellers in connection
therewith by any third party, and any written communications
issued by the FCC or any FCC staff member in response to, or
otherwise in connection with, any of the foregoing.
4.14. Brokers, Finders, etc. Except as set forth on
Schedule 4.14, All negotiations relating to this Agreement and
the Transaction have been carried on without the intervention of
any person acting on behalf of the System Sellers in such manner
as to give rise to any valid claim against any of them for any
brokerage or finder's commission, fee or similar compensation for
bringing the Parties together or bringing about the Transaction.
4.15. Compensation. Each of the System Sellers has
delivered to Pittencrieff a true and complete list of all of its
employees which list states the rate of compensation, the
positions held by the employees listed and the duration of their
employment.
4.16. Environmental and Other Matters. Each System Seller
and the business operations of each System Seller are not in
violation of, or delinquent in respect to, any material decree,
order or arbitration award of law, statute, or regulation of or
agreement with, or any material license or permit from, any
federal, state or local governmental authority including, without
limitation, laws, statutes and regulations relating to
occupational health and safety, equal employment opportunities,
fair employment practices, and sex, race, religious and age
discrimination or Environmental Laws. All notices and complaints
that any System Seller has received in the last three (3) years
of any violation of a type referred to in any portion of this
Section 4.16 are set forth in Schedule 4.16. No System Seller
has received notice of any violation of a type referred to in any
portion of this Section 4.16 that has not been corrected. Copies
of each System Seller's last inspection reports from each
applicable authority with respect to any law described in any
portion of this Section 4.16 and relating to the properties,
assets, personnel or business activities of the business of each
System Seller are attached to Schedule 4.16. Schedule 4.16 sets
forth a complete list of all above-ground and underground storage
tanks, vessels, and related equipment and containers that are
subject to federal, state or local laws, statutes, rules or
regulations, and sets forth their present contents, what the
contents have been at any time in the past, and what program of
remediation, if any, is contemplated with respect thereto.
4.17. Disclosure. This Agreement, including exhibits and
schedules hereto, does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements contained herein in the context in which
they were made not misleading.
4A. Representations and Warranties of the Note Seller. The Note
Seller represents and warrants to Pittencrieff and New PCI as
follows:
4A.1. Authority for Agreement; No Violation.
(a) The Note Seller has the necessary power and
authority to execute and deliver this Agreement and to
perform his obligations hereunder.
(b) This Agreement has been duly executed and
delivered by the Note Seller and constitutes the valid and
binding obligation of the Note Seller, and is enforceable in
accordance with its terms, except as enforceability thereof
may be limited by applicable bankruptcy, reorganization,
insolvency or other laws affecting creditors, rights
generally or by general principles of equity, regardless of
whether such enforceability is considered in equity or at
law or by public policies applicable to securities laws.
(c) The execution and delivery of this Agreement and
the consummation of the Transaction will not conflict with
or result in any violation of or default under (i) any
statute, regulation, order or decree of any federal, state,
governmental body or regulatory authority or any license or
permit applicable to the Note Seller, or (ii) any mortgage,
indenture, lease, agreement, instrument or other obligation
to which the Note Seller is a party. Such execution,
delivery and consummation will not accelerate the maturity
of or otherwise modify the terms of any indebtedness of the
Note Seller or result in the creation of any lien on the
Bayou Note. No consent, approval, order or authorization
of, or registration, declaration or filing with, any third
party or governmental authority is required in connection
with the execution and delivery of this Agreement by the
Note Seller or the consummation of the Transaction by him.
4A.2. Title. The Bayou Note is owned by the Note Seller
free and clear of all pledges, liens and other encumbrances.
5. Representations and Warranties Regarding Pittencrieff and the
Pittencrieff Subsidiaries. Pittencrieff represents and warrants
to the Sellers as follows:
5.1. Entity Status. Pittencrieff is a corporation duly
organized, validly existing and in good standing under the laws
of its state of incorporation and has the corporate power and
authority to carry on its business as and where now conducted,
and to own or lease and to operate its properties and assets
where such properties and assets are now owned, leased or
operated by it and where such business is now conducted by it.
Pittencrieff is qualified to do business and is in good standing
in each jurisdiction in which the nature of its business or the
property owned or leased by it makes such qualification
necessary, except where the failure to so qualify would not have
a material adverse effect on its business, operations or
financial condition. Pittencrieff has delivered to AMI complete
and correct copies of its charter and by-laws, as amended and in
effect on the date hereof.
5.2. Pittencrieff Subsidiaries and Affiliates. All of
Pittencrieff's subsidiaries (individually, a "Pittencrieff
Subsidiary" and collectively, the "Pittencrieff Subsidiaries")
are listed in Schedule 5.2, and, except as set forth in Schedule
5.2, Pittencrieff is the record and beneficial owner of all of
the outstanding capital stock of each of the Pittencrieff
Subsidiaries, and holds such capital stock free and clear of all
options, mortgages, liens, charges, encumbrances, pledges or
security interests of any kind. There are no agreements
restricting the transfer of, or affecting the rights of
Pittencrieff in the capital stock of, the Pittencrieff
Subsidiaries. Except as set forth on Schedule 5.2, Pittencrieff
does not own, directly or indirectly, any shares of capital stock
or other equity interest in any corporation, partnership,
association or other entity or business enterprise. Each of the
Pittencrieff Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its state
or country of incorporation, has the corporate power and
authority to carry on its business as now conducted and to own or
lease and operate its properties where such business is now
conducted and such properties are now owned, leased or operated,
and is qualified to do business and is in good standing in each
jurisdiction in which the nature of its business or the property
owned or leased by it make such qualification necessary, except
where the failure to be so qualified would not have a material
adverse effect on the business, properties or assets of
Pittencrieff and the Pittencrieff Subsidiaries, taken as a whole.
5.3. Capitalization. The authorized capital stock of
Pittencrieff consists of the number of shares of Pittencrieff
Common Stock and other classes of stock set forth on Schedule
5.3. Schedule 5.3 also lists the total number of shares of
capital stock of Pittencrieff which are issued and outstanding on
the date hereof. All of the shares of stock of Pittencrieff that
are issued and outstanding are duly authorized and are validly
issued, fully paid and non-assessable and have been issued in
compliance with federal and state securities laws. Except as set
forth on Schedule 5.3, no shares of Pittencrieff's capital stock
are held in its treasury. Except as set forth on Schedule 5.3:
(i) there are no agreements restricting the transfer of, or
affecting the rights of any holder of, any shares of
Pittencrieff's capital stock, (ii) there are no preemptive rights
on the part of any holder of any class of securities of
Pittencrieff, and (iii) there are no options, warrants,
conversion or other rights, agreements or commitments obligating
Pittencrieff to issue or sell any shares of its capital stock of
any class or any securities convertible into or exchangeable for
any such shares, and no authorization therefor has been given.
5.4. Authority for Agreement; No Violation.
(a) Pittencrieff has all necessary power and authority
to execute and deliver this Agreement and to perform its
obligations hereunder, and the board of directors of
Pittencrieff has approved this Agreement and the
Transaction.
(b) This Agreement has been duly executed and
delivered by Pittencrieff and constitutes the valid and
binding obligation of Pittencrieff and is enforceable in
accordance with its terms, except as enforceability thereof
may be limited by applicable bankruptcy, reorganization,
insolvency or other laws affecting creditors rights
generally or by general principles of equity, regardless of
whether such enforceability is considered in equity or at
law or by public policies applicable to securities laws.
(c) Except as set forth on Schedule 5.4, the execution
and delivery of this Agreement and the consummation of the
Transaction will not conflict with or result in any
violation of or default under (i) any provision of the
charter or by-laws of Pittencrieff, (ii) any statute,
regulation, order or decree of any federal, state,
governmental body or regulatory authority or any license or
permit applicable to Pittencrieff, or (iii) any mortgage,
indenture, note, lease, agreement, instrument or other
obligation to which Pittencrieff is a party. No consent,
approval, order or authorization of, or registration,
declaration or filing with, any third party or governmental
authority, except for FCC approvals and other approvals
listed on Schedule 5.4, is required in connection with the
execution and delivery of this Agreement or the consummation
of the Transaction and the Merger.
5.5. Absence of Changes. Since June 30, 1995, except as
set forth on Schedule 5.5, the business of each of Pittencrieff
and the Pittencrieff Subsidiaries has been carried on in the
ordinary course in substantially the same manner as prior to that
date, and neither of Pittencrieff nor any Pittencrieff
Subsidiary, as the case may be, has:
(a) undergone any material adverse change in its
condition (financial or otherwise), properties, assets,
liabilities, business, operations or prospects;
(b) declared, set aside, made or paid any dividend or
other distribution in respect of its capital stock or
purchased or redeemed, directly or indirectly, any shares of
its capital stock;
(c) issued or sold any shares of its capital stock of
any class or any options, warrants, conversion or other
rights to purchase any such shares or any securities
convertible into or exchangeable for such shares;
(d) incurred any indebtedness for borrowed money or
issued or sold any debt securities;
(e) mortgaged, pledged or subjected to any lien,
lease, security interest or other charge or encumbrance any
of its properties or assets, tangible or intangible;
(f) acquired or disposed or any assets or properties
in any transaction with any officer, director, shareholder
or employee of Pittencrieff or any Pittencrieff Subsidiary,
or any relative by blood or marriage or any Affiliate or
Associate as such terms are defined in Rule 405 promulgated
under the Securities Act of any of them, or acquired or
disposed of any assets or properties, or entered into any
commitment to do so;
(g) forgiven or cancelled any debts or claims, or
waived any rights, except in the ordinary course of
business;
(h) entered into any material transaction, other than
in the ordinary course of business;
(i) suffered any material defects or unresolved
technical problems or difficulties with the operation of any
of the SMR systems operated by any of them;
(j) granted to any officer or salaried employee any
increase in compensation in any form (including any increase
in value of any benefits) in excess of the amount thereof in
effect as of June 30, 1995, or any severance or termination
pay, or entered into any employment agreement with any
officer or salaried employee;
(k) adopted or amended any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred
compensation or other plan, agreement, trust, fund or
arrangement for the benefit of employees;
(l) suffered any damage, destruction or loss (whether
or not covered by insurance) that in any case, or in the
aggregate, materially and adversely affects the condition
(financial or otherwise), properties, assets, business or
operations of Pittencrieff or the Pittencrieff Subsidiaries;
(m) incurred any liability or obligation (whether
absolute, accrued, contingent or otherwise) material, in any
case, or in the aggregate, to Pittencrieff or any
Pittencrieff Subsidiary;
(n) incurred or committed to incur any capital or
other expenditures in excess of $100,000;
(o) hired any employee having an annual compensation
in excess of $50,000;
(p) terminated or reassigned any officer having annual
compensation in excess of $50,000 or, other than officers
who are retiring in the ordinary course, has become aware of
the intention of any officer to terminate his employment;
(q) discharged any material liability except in the
usual and ordinary course of business; or
(r) paid or agreed to pay any bonus or fee to any
employee in connection with the Transaction.
5.6. Taxes. Except as set forth on Schedule 5.6, each of
Pittencrieff and the Pittencrieff Subsidiaries makes the
following representations:
(a) Each of Pittencrieff and the Pittencrieff
Subsidiaries has filed all federal, state and local Tax
Returns that are required to have been filed by it and has
paid or reserved for, in accordance with GAAP on the
Pittencrieff Financial Statements (as hereinafter defined)
through the date hereof, all Taxes that have become due
pursuant thereto. Except as set forth on Schedule 5.6(a),
neither Pittencrieff nor any Pittencrieff Subsidiary has
received any notice of deficiency or assessment of
additional Taxes or is a party to any action or proceeding
by any Taxing Authority for assessment or collection of
Taxes.
(b) Nexus. All foreign, state and local jurisdictions
where Pittencrieff and each Pittencrieff Subsidiary has
filed Tax Returns are set forth in Schedule 5.6(b). No
claim has ever been made by any Taxing Authority in any
jurisdiction not set forth on Schedule 5.6(b) that
Pittencrieff or a Pittencrieff Subsidiary is or may be
subject to taxation by such jurisdiction.
(c) No Accounting Method Changes. Neither
Pittencrieff nor any Pittencrieff Subsidiary will be
required, as a result of a change in a method of accounting
for Taxes for any pre-Closing Tax period, to include any
adjustment under Section 481(c) of the Code in taxable
income for any post-Closing period.
(d) No Section 341 Election. Neither Pittencrieff nor
any Pittencrieff Subsidiary has, with regard to any assets
held, acquired, or to be acquired by it, filed a consent to
the application of Section 341(f)(2) of the Code to such
property or assets.
(e) Parachute Payments. Neither Pittencrieff nor any
Pittencrieff Subsidiary is a party to any agreement,
contract or other arrangement that would result, separately
or in the aggregate, in Pittencrieff or any Pittencrieff
Subsidiary being required to pay any "excess parachute
payments" within the meaning of Section 280G of the Code.
5.7. Properties. Except as set forth on Schedule 5.7,
neither Pittencrieff nor any Pittencrieff Subsidiary owns or
leases or has any interest in any real property. Except as set
forth in Schedule 5.7 or in the Pittencrieff Financial
Statements, each of Pittencrieff and the Pittencrieff
Subsidiaries has good and marketable title to all real and
tangible personal property reflected in the June 30, 1995 balance
sheet included in the Pittencrieff Financial Statements, (except
to the extent disposed of since such date in the ordinary course
of business), and valid leasehold interests in all real
properties leased by any of them, in each case free and clear of
all mortgages, liens, encumbrances, easements or security
interests except (a) liens for current taxes not due and payable,
(b) liens, encumbrances, easements and security interests that do
not materially detract from the value or interfere with the use
by each of Pittencrieff and the Pittencrieff Subsidiaries of the
properties affected thereby, (c) liens existing on June 30, 1995
and security interests reflected on the June 30, 1995 balance
sheet included in the Pittencrieff Financial Statements, and (d)
purchase money security interests not exceeding $75,000 in the
aggregate incurred in the ordinary course of business after June
30, 1995.
5.8. Material Contracts. Schedule 5.8 contains a list of
all material agreements, contracts and commitments, written or
oral, to which Pittencrieff or any Pittencrieff Subsidiary is a
party or by which any of the assets or properties of Pittencrieff
or any Pittencrieff Subsidiary is bound as of the date hereof,
including the following:
(a) acquisition, merger, option or purchase agreements
for the purchase of any assets, including any licenses for
SMR channels or frequencies or stock of any business or
entity;
(b) agreements for the management of any FCC licenses
or frequencies;
(c) notes, loans, credit agreements, mortgages,
indentures, security agreements and other agreements and
instruments relating to the borrowing of money by or
extension of credit to Pittencrieff or any Pittencrieff
Subsidiary;
(d) employment and consulting agreements that
individually involve annual compensation in excess of
$50,000;
(e) bonus, profit sharing, compensation, stock option,
pension, retirement, deferred compensation or other plans,
agreements, trusts, funds or arrangements for the benefit of
employees;
(f) licenses of patent, trademark and other
intellectual property rights;
(g) bonding agreements; and
(h) agreements or commitments for capital expenditures
in excess of $100,000 for any single project.
Pittencrieff has delivered to AMI complete and correct
copies of all written agreements, contracts and commitments,
together with all amendments thereto, and accurate descriptions
of all oral agreements, listed on Schedule 5.8. Such agreements,
contracts and commitments are in full force and effect and,
except as disclosed on Schedule 5.8, all parties to such
agreements, contracts and commitments have in all material
respects performed all obligations required to be performed by
them as of the date hereof and are not in default thereunder. No
agreement, contract or commitment to which Pittencrieff or any
Pittencrieff Subsidiary is a party or by which it or its property
is bound would have a material adverse effect on the business or
operations of Pittencrieff and the Pittencrieff Subsidiaries.
5.9. Assets of Pittencrieff and Pittencrieff Subsidiaries.
After giving effect to the acquisitions set forth on Schedule
5.9, taken together, Pittencrieff and the Pittencrieff
Subsidiaries own or have adequate right to use pursuant to a
management agreement, lease or otherwise all FCC and other
licenses, properties and other assets necessary for the operation
and ownership of the SMR systems operated by them, or to be
operated by them.
5.10. Employee Benefit Matters.
(a) Set forth in Schedule 5.10 is a true, complete and
correct list of all "employee benefit plans" as defined in
Section 3(3) of ERISA and all other employee profit-sharing,
incentive, deferred compensation, welfare, pension,
retirement, severance, group insurance and other employee
benefit plans, arrangements, agreements and practices which
relate to employee benefits which are currently maintained
or contributed to by Pittencrieff or the Pittencrieff
Subsidiaries, or to which Pittencrieff or the Pittencrieff
Subsidiaries currently are obligated to contribute, relating
to present or former employees, directors, officers,
stockholders or consultants of Pittencrieff or the
Pittencrieff Subsidiaries (collectively, the "Pittencrieff
Employee Plans"). Except as set forth on Schedule 5.10, to
the knowledge of Pittencrieff, there are no material
liabilities, including fines or penalties, with respect to
any plans, arrangements or practices of the type described
in the preceding sentence previously maintained or
contributed to by Pittencrieff or the Pittencrieff
Subsidiaries, or to which Pittencrieff or the Pittencrieff
Subsidiaries previously had an obligation to contribute.
(b) Pittencrieff previously has delivered to AMI
complete and correct copies of each of the Pittencrieff
Employee Plans, including all amendments thereto, and any
other documents or other instruments relating thereto
reasonably requested by AMI.
(c) All the Pittencrieff Employee Plans are being, and
have been, maintained, operated and administered in all
material respects in accordance with their respective terms
and in compliance with all applicable laws.
(d) Except as provided on Schedule 5.10(d), neither
Pittencrieff nor the Pittencrieff Subsidiaries have, within
the past six years, had an obligation to contribute to a
"defined benefit plan" as defined in Section 3(35) of ERISA,
a pension plan subject to the minimum funding standards of
Section 302 of ERISA or Section 412 of the Code, or a
"multiemployer plan" as defined in Section 3(37) of ERISA or
Section 414(f) of the Code or a "multiple employer plan"
within the meaning of Section 210(a) of ERISA or Section
413(c) of the Code. None of the Pittencrieff Employee Plans
are funded through a "welfare benefit fund" as defined in
Section 419(e) of the Code. Except as set forth on Schedule
5.10(d), no other trade or business is, or, at any time
within the past six years, has been treated, together with
Pittencrieff and the Pittencrieff Subsidiaries, as a single
employer under Section 414 of the Code or Section 4001 of
ERISA. The consummation of the Transaction will not
constitute a "reportable event" under Section 4043 of ERISA
or result in a "withdrawal" from a multiemployer plan under
Section 4203 or 4205 of ERISA.
(e) Each Pittencrieff Employee Plan intended to be
qualified under Section 401(a) of the Code has been
determined by the IRS to be so qualified, or if not so
qualified each such plan may still be amended within the
remedial amendment period to cure any qualification defect
to the extent permitted by applicable law, and each trust
created thereunder which is intended to be exempt from
federal income tax under the provisions of Section 501(a) of
the Code has been determined by the IRS to be so exempt and
no fact or event has occurred since the date of such
determination by the IRS to adversely effect the qualified
status of any Pittencrieff Employee Plan or the exempt
status of any such trust.
(f) There have been no prohibited transactions or
breaches of any of the duties imposed on "fiduciaries"
(within the meaning of Section 3(21) of ERISA) by ERISA with
respect to the Pittencrieff Employee Plans that could result
in Pittencrieff or any Pittencrieff Subsidiary becoming
liable directly or indirectly (by indemnification or
otherwise) for any material excise tax, penalty or other
liability under ERISA or the Code.
(g) Except as set forth on Schedule 5.10(g), there are
no actions or claims pending or, to the knowledge of
Pittencrieff, threatened, with respect to any Pittencrieff
Employee Plan (other than routine claims for benefits), and
there are no investigations or audits of any Pittencrieff
Employee Plan by any governmental authority currently
pending and there have been no such investigations or audits
that have been concluded that resulted in any liability of
Pittencrieff or any Pittencrieff Subsidiary that has not
been fully discharged.
(h) All (i) insurance premiums required to be paid
with respect to, (ii) benefits, expenses, and other amounts
due and payable under, and (iii) contributions, transfers or
payments required to be made to, any Pittencrieff Employee
Plan have been made on or before their due date. With
respect to any insurance policy providing funding for
benefits under any Pittencrieff Employee Plan, (x) there is
no material liability of Pittencrieff or any Pittencrieff
Subsidiary in the nature of a retroactive or retrospective
rate adjustment, loss sharing arrangement, or other actual
or contingent liability, nor would there be any such
liability if such insurance policy was terminated on the
date hereof, and (y) to the knowledge of Pittencrieff, no
insurance company issuing any such policy is in
receivership, conservatorship, liquidation or similar
proceeding and no such proceedings with respect to any
insurer are imminent.
(i) Schedule 5.10(i) contains a separate
identification of each Pittencrieff Employee Plan that
provides benefits, including, without limitation, death or
medical benefits, beyond termination of employment or
retirement other than (i) coverage mandated by law, (ii)
death or retirement benefits under any qualified
Pittencrieff Employee Plan, (iii) deferred compensation
benefits fully reflected on the balance sheet included in
the Pittencrieff Financial Statements at June 30, 1995 or
(iv) benefits, the full cost of which are borne by the
employee (or the employee's beneficiary) (the "Post-
Employment Benefits"); such balance sheet accurately
reflects the liabilities relating to the Post-Employment
Benefits.
(j) Except as set forth on Schedule 5.10(j), the
execution, delivery and performance of this Agreement will
not, solely in and of itself and without regard to any
subsequent events, (i) constitute an event under any
Pittencrieff Employee Plan that will result in any payment
(whether of severance pay or otherwise) becoming due from
Pittencrieff or the Pittencrieff Subsidiaries to any present
or former officer, employee, director, stockholder or
consultant (or dependents of any thereof), or (ii)
accelerate the time of payment or vesting, or increase the
amount, of compensation due to any present or former
officer, employee, director, stockholder or consultant of
Pittencrieff or any Pittencrieff Subsidiary.
(k) Except as set forth on Schedule 5.10(k), neither
Pittencrieff nor any Pittencrieff Subsidiary has agreed or
committed to make any amendments to any of the Pittencrieff
Employee Plans not already embodied in the documents
comprising the Pittencrieff Employee Plans, other than any
amendments required by law.
(l) Pittencrieff and each Pittencrieff Subsidiary has
complied in all material respects with the provisions of
COBRA with respect to any "group health plan" as defined in
Section 5000(b)(i) of the Code maintained by any of them.
5.11. Site Rental Agreements. Schedule 5.11 hereto sets
forth a list of all Site Rental Agreements relating to the SMR
systems operated by Pittencrieff and the Pittencrieff
Subsidiaries; such Site Rental Agreements constitute all of the
leases necessary for Pittencrieff and the Pittencrieff
Subsidiaries to operate the SMR systems as now operated by them
or as proposed to be operated.
5.12. Insurance. Pittencrieff and each Pittencrieff
Subsidiary maintain insurance covering such risks and in such
amounts as set forth in Schedule 5.12.
5.13. Litigation. Except as disclosed on Schedule 5.13,
there are no judicial or administrative actions, claims, suits,
proceedings or investigations pending or, to the knowledge of
Pittencrieff, threatened, that might result in any material
adverse change in the condition (financial or otherwise),
properties, assets, business or operations of Pittencrieff or the
Pittencrieff Subsidiaries that arise out of or in connection with
the conduct or operation of the SMR systems operated by them or
that question the validity of this Agreement or of any action to
be taken pursuant to or in connection with the provisions of this
Agreement. There are no judgments, orders, decrees, citations,
fines or penalties heretofore assessed against Pittencrieff or
any Pittencrieff Subsidiary relating to any SMR systems operated
by them or any of their assets or properties related to or used
in connection with the SMR systems operated by them.
5.14. FCC Regulatory Matters.
(a) Definitions: For purposes of this Section 5.14, the
following terms shall have the indicated meanings:
"FCC License" shall mean any paging, mobile telephone,
microwave, commercial mobile radio, private carrier, SMR or other
license, permit, consent, certificate of compliance, franchise,
approval or authorization granted or issued by the FCC,
including, without limitation, any of the foregoing authorizing
the acquisition, construction or operation of an SMR System,
radio paging system or other radio communications system.
"Pittencrieff Management Agreement" shall mean any
management or other agreement (other than a loading, reseller or
agent's agreement) pursuant to which Pittencrieff or any
Pittencrieff Subsidiary agrees to manage or to perform other
services (other than loading) with respect to SMR Licenses held
by another person in exchange for either the right to receive a
portion of the revenues derived from such SMR Licenses or the
right to purchase such SMR Licenses, or any loading agreement
pursuant to which Pittencrieff or any Pittencrieff Subsidiary is
loading SMR Licenses held by another person in exchange for
either the right to receive a portion of the revenues derived
from such SMR Licenses in excess of 25% of the aggregate revenues
derived from such SMR Licenses or the right to purchase such SMR
Licenses.
"SMR License" shall mean an FCC License authorizing the
construction, ownership and operation of an SMR system in the 800
or 900 MHz band issued pursuant to 47 CFR Part 90 of the Rules
and Regulations of the FCC.
"SMR System" shall mean an SMR system licensed under 47
CFR Part 90 of the Rules and Regulations of the FCC or any
successor section.
"SMR Units" shall mean the number of mobile and control
stations (within the meaning of 47 CFR Part 90 of the Rules and
Regulations of the FCC) subscribing to SMR Systems licensed to or
managed by Pittencrieff or any Pittencrieff Subsidiary,
excluding, however, any such units which are subject to a Third-
Party Management Agreement if the respective third party has a
right to purchase the SMR Licenses which are subject to such
Third-Party Management Agreement.
"Third-Party Management Agreement" shall mean any
management or other agreement (other than a loading agreement)
pursuant to which a person (other than Pittencrieff or any
Pittencrieff Subsidiary) is managing SMR Licenses held by
Pittencrieff or any Pittencrieff Subsidiary, or any loading
agreement pursuant to which a person (other than Pittencrieff or
any Pittencrieff Subsidiary) is loading SMR Licenses held by
Pittencrieff or any Pittencrieff Subsidiary in exchange for the
right to receive a portion of the revenues derived from such SMR
Licenses in excess of 25% of the aggregate revenues derived from
such SMR Licenses or the right to purchase such SMR Licenses.
(b) License Information. Schedule 5.14 (the "Pittencrieff
FCC Schedule") sets forth, as of the date hereof, a correct and
complete list of the following information for each SMR License
and other FCC License issued to or operated by Pittencrieff or
any Pittencrieff Subsidiary:
(i) for all FCC Licenses (including all SMR Licenses),
the name of the licensee, the name of the seller(s), the call
sign, the transmitter location (by site coordinates and city),
the type of service (e.g., paging, SMR, etc.), the frequency or
frequencies authorized, the
license renewal date and operating entity;
(ii) in the case of SMR Licenses, the number of
channels (including conventional channels) authorized, the number
of channels, whether the SMR License is for a conventional or
trunked SMR System and whether the SMR License is managed by
Pittencrieff or any Pittencrieff Subsidiary pursuant to a
Pittencrieff Management Agreement or by any other persons
pursuant to a Third-Party Management Agreement;
(iii) each holder of any such FCC License that is
neither wholly owned by Pittencrieff or a Pittencrieff Subsidiary
nor owned entirely by unaffiliated persons and managed by
Pittencrieff or a Pittencrieff Subsidiary; and
(iv) for all FCC Licenses (including SMR Licenses),
whether such FCC Licenses are subject to rights of first refusal,
options and other such rights or obligations in existence as of
the date hereof, including, without limitation, entitlements to
acquire additional ownership interests, which may affect the
ownership interests of Pittencrieff or any Pittencrieff
Subsidiary.
(c) Condition of Systems. All of the properties, equipment
and systems of Pittencrieff and the Pittencrieff Subsidiaries
are, and to the knowledge of Pittencrieff, all thereof to be
acquired or added in connection with any contemplated System
expansion or construction prior to the Closing will be, in good
repair, working order and condition and are and except as set
forth in the Pittencrieff FCC Schedule will be in material
compliance with all standards or rules imposed by any
governmental agency or authority (including, without limitation,
the FCC and (if applicable), any public utilities commission or
other state or local governments or instrumentalities) or as
imposed under any agreements with customers.
(d) Fees; License Compliance. Pittencrieff and the
Pittencrieff Subsidiaries have paid all franchise, license or
other fees and charges which have become due in respect of its
business and have made appropriate provision as is required by
GAAP for any such fees and charges which have accrued. Except as
set forth in the Pittencrieff FCC Schedule, Pittencrieff and the
Pittencrieff Subsidiaries have duly secured, as of the date
hereof, all necessary permits, licenses, consents and
authorizations from, and has filed all required registrations,
applications, reports and other documents with, the FCC, and, if
applicable, any public utilities commission and other entity
exercising jurisdiction over the SMR businesses, radio paging
businesses and other radio communications businesses of
Pittencrieff and the Pittencrieff Subsidiaries or the
construction or delivery of Systems therefor, as such businesses
are currently conducted. Except as set forth on the Pittencrieff
FCC Schedule, Pittencrieff and the Pittencrieff Subsidiaries hold
the FCC Licenses specified on the Pittencrieff FCC Schedule and,
except as set forth on such Schedule or disclosed in writing by
Pittencrieff to AMI prior to the date hereof, all such FCC
Licenses are valid and in full force and effect without
conditions except for such conditions as are stated on the FCC
License or as are generally applicable to holders of FCC
Licenses, and all channels represented by SMR Licenses are fully
constructed. Except as set forth on the Pittencrieff FCC
Schedule, to the knowledge of Pittencrieff, no event has occurred
and is continuing which could (i) result in the revocation,
termination or adverse modification of any FCC License listed on
such Schedule or (ii) adversely affect any rights of Pittencrieff
or any Pittencrieff Subsidiary thereunder; except as set forth on
such Schedule, Pittencrieff and the Pittencrieff Subsidiaries
have no reason to believe and have no knowledge that the SMR
Licenses specified on such Schedule will not be renewed in the
ordinary course; and Pittencrieff and the Pittencrieff
Subsidiaries have sufficient time, materials, equipment, contract
rights and other required resources to complete, in a timely
fashion and in full, construction of all its respective SMR
Systems, radio paging and other radio communications systems
listed on the FCC Schedule in compliance with all applicable
technical standards and construction requirements and deadlines,
except as disclosed in writing by Pittencrieff to AMI prior to
the date hereof. Except as set forth in the Pittencrieff
FCC Schedule, the current ownership and operation by Pittencrieff
and the Pittencrieff Subsidiaries of such SMR Systems, radio
paging and other radio communications systems comply with the
Communications Act of 1934, as amended, and all applicable rules,
regulations and policies of the FCC.
(e) Management Agreements. Set forth in the Pittencrieff
FCC Schedule is a complete and correct list of all Pittencrieff
Management Agreements and Third-Party Management Agreements to
which Pittencrieff or any Pittencrieff Subsidiary is a party that
correctly identifies the manager under each such Agreement and
the holder of the SMR Licenses which are the subject of such
Agreements, the transmitter locations (by address), and number of
channels covered by such SMR Licenses, the term of such
Agreements, any options or calls (and the respective option or
call prices) in favor of any party to such Agreements to purchase
or sell any interest in such SMR Licenses and the respective fees
or revenues payable or receivable under any such Agreements. To
the knowledge of Pittencrieff, the terms of all such Pittencrieff
Management Agreements and Third-Party Management Agreements and
the operation of each SMR System pursuant thereto comply with the
Communications Act of 1934, as amended, and all applicable rules,
regulations and policies of the FCC. Other than those channels
identified as subject to Third-Party Management Agreements on the
Pittencrieff FCC Schedule and except as set forth on the
Pittencrieff FCC Schedule, none of the channels licensed to
Pittencrieff or any Pittencrieff Subsidiary will be subject to a
Third Party Management Agreement as of the Closing.
(f) Wide Area Frequency Application. Pittencrieff has
delivered to AMI a true and correct copy of each Request for Rule
Waiver or Extended Implementation and related Wide Area
Specialized Mobile Radio application, as filed with the FCC, and
all supplemental or related materials filed in connection
therewith by or on behalf of Pittencrieff or a Pittencrieff
Subsidiary, all materials submitted to the FCC or to Pittencrieff
in connection therewith by any third party, and any written
communications issued by the FCC or any FCC staff member in
response to, or otherwise in connection with, any of the
foregoing.
5.15. Brokers, Finders, etc. Except as set forth on
Schedule 5.15, all negotiations relating to this Agreement and
the Transaction have been carried on without the intervention of
any person acting on behalf of Pittencrieff in such manner as to
give rise to any valid claim against Pittencrieff for any
brokerage or finder's commission, fee or similar compensation for
bringing the Parties together or bringing about the Transaction.
5.16. Compensation. Pittencrieff has delivered to AMI a
true and complete list of all of its employees and those of the
Pittencrieff Subsidiaries which list states the rate of
compensation, the positions held by the employees listed and the
duration of their employment.
5.17. Environmental and Other Matters. Pittencrieff and
each Pittencrieff Subsidiary and the business operations of each
of them are not in violation of, or delinquent in respect to, any
material decree, order or arbitration award of law, statute, or
regulation of or agreement with, or any material license or
permit from, any federal, state or local governmental authority
including, without limitation, laws, statutes and regulations
relating to occupational health and safety, equal employment
opportunities, fair employment practices, and sex, race,
religious and age discrimination or Environmental Laws. All
notices and complaints that Pittencrieff or any Pittencrieff
Subsidiary has received in the last three (3) years of any
violation of a type referred to in any portion of this Section
5.17 are set forth in Schedule 5.17. Neither Pittencrieff nor
any Pittencrieff Subsidiary has received notice of any violation
of a type referred to in any portion of this Section 5.17 that
has not been corrected. Copies of Pittencrieff's and each
Pittencrieff Subsidiary's last inspection reports from each
applicable authority with respect to any law described in any
portion of this Section 5.17 and relating to the properties,
assets, personnel or business activities of the business of
Pittencrieff and each Pittencrieff Subsidiary are attached to
Schedule 5.17. Schedule 5.17 sets forth a complete list of all
above-ground and underground storage tanks, vessels, and related
equipment and containers that are subject to federal, state or
local laws, statutes, rules or regulations, and sets forth their
present contents, what the contents have been at any time in the
past, and what program of remediation, if any, is contemplated
with respect thereto.
5.18. SEC Reports. Pittencrieff has filed with the
Securities and Exchange Commission ("SEC") all proxy statements,
reports and other documents required to be filed by it under the
Securities and Exchange Act of 1934, as amended (the "Exchange
Act") (including any interim reports required to be filed), and
Pittencrieff has furnished to AMI copies of its Annual Report on
Form 10-K for the fiscal year ended December 31, 1994, its
quarterly report on Form 10-Q for the quarter ended June 30,
1995, and all final proxy statements and reports filed by
Pittencrieff under the Exchange Act since June 30, 1993, each as
filed (collectively, the "SEC Reports"). Each SEC Report was in
compliance in all material respects with the requirements of its
respective form, and none of the SEC Reports contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. The audited consolidated financial
statements and unaudited consolidated interim financial
statements included in the SEC Reports (the "Pittencrieff
Financial Statements") are true and correct and fairly present
the financial position of Pittencrieff and the Pittencrieff
Subsidiaries as of the dates thereof and the consolidated results
of operations, cash flows and changes in financial position or
other information included therein for the periods or as of the
dates thereof in each case in accordance with GAAP, and in each
case in accordance with past practice during the periods involved
(except as otherwise stated therein and except for normal
recurring adjustments for interim periods, and that the unaudited
Financial Statements do not have complete footnotes). Except and
to the extent reflected or reserved against in the Pittencrieff
Financial Statements, neither Pittencrieff nor any Pittencrieff
Subsidiary has any liabilities or obligations of any nature,
whether absolute, accrued, contingent or otherwise, and whether
due or to become due, for the periods covered thereby.
Pittencrieff does not know or have reasonable grounds to know of
any basis for the assertion against Pittencrieff or any
Pittencrieff Subsidiary of any claim or liability of any nature
or in any amount not fully reflected or reserved against in the
Pittencrieff Financial Statements for the periods provided,
whether or not previously disclosed to AMI.
5.19. Disclosure. This Agreement, including exhibits and
schedules hereto, does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements contained herein in the context in which
they were made not misleading.
5A. Representations and Warranties Regarding New PCI. New PCI
represents and warrants to the Sellers as follows:
5A.1. Entity Status. New PCI is a corporation duly
organized validly existing and in good standing under the laws of
its state of incorporation and has the corporate power and
authority to carry on its business as and where now conducted,
and to own or lease and to operate its properties and assets
where such properties and assets are now owned, leased or
operated by it and where such business is now conducted by it.
New PCI is qualified to do business and is in good standing in
each jurisdiction in which the nature of its business or the
property owned or leased by it makes such qualification
necessary, except where the failure to so qualify would not have
a material adverse effect on its business, operations or
financial condition. New PCI has delivered to AMI complete and
correct copies of its charter and by-laws, as amended and in
effect on the date hereof.
5A.2. Capitalization. The authorized capital stock of New
PCI consists of the number of shares of New PCI Common Stock set
forth in Schedule 5A.2. Schedule 5A.2 also lists the total
number of shares of capital stock of New PCI which are issued and
outstanding on the date hereof. All of the shares of New PCI
that are issued and outstanding are duly authorized and are
validly issued, fully paid and nonassessable and have been issued
in compliance with federal and state securities laws. Except as
set forth in Schedule 5A.2, there are (i) no shares of New PCI's
capital stock held in its treasury, (ii) no agreements
restricting the transfer of, or affecting the rights of any
holder of, any shares of New PCI's capital stock, (iii) except
those granted to the Sellers hereunder no preemptive rights on
the part of any holder of any class of securities of New PCI, and
(iv) no options, warrants, conversion or other rights, agreements
or commitments obligating New PCI to issue or sell any shares of
its capital stock of any class or any securities convertible into
or exchangeable for any such shares, and no authorization
therefor has been given. The Transaction Consideration and the
New PCI Common Stock to be issued in the Merger will be duly
authorized, fully paid and nonassessable and issued in compliance
with federal and state securities laws.
5A.3. Authority for Agreement; No Violation.
(a) New PCI has all necessary power and authority to
execute and deliver this Agreement and to perform its obligations
hereunder and the board of directors of New PCI has approved this
Agreement and the Transaction.
(b) This Agreement has been duly executed and delivered by
New PCI and constitutes the valid and binding obligation of New
PCI and is enforceable in accordance with its terms, except as
enforceability thereof may be limited by applicable bankruptcy,
reorganization, insolvency or other laws affecting creditors
rights generally or by general principles of equity, regardless
of whether such enforceability is considered in equity or at law.
(c) Except as set forth on Schedule 5A.3, the execution and
delivery of this Agreement and the consummation of the
Transaction will not conflict with or result in any violations of
or default under (i) any provision of the charter or by-laws of
New PCI, (ii) any statute, regulations, order or decree of any
federal, state, governmental body or regulatory authority or any
license or permit applicable to New PCI, or (iii) any mortgage,
indenture, note, lease, agreement, instrument or other obligation
to which New PCI is a party. No consent, approval, order or
authorization of, or registration, declaration or filing with,
any third party or governmental authority, except for FCC
approvals and other approvals listed on Schedule 5A.3, is
required in connection with the execution and delivery of this
Agreement or the consummation of the Transaction and the Merger.
6. FCC Approval.
(a) New PCI, Pittencrieff, the Selling Stockholders,
the System Sellers, the Partnerships and the Corporations
will use their best efforts to join in and submit as
promptly as possible after the date hereof one or more
applications (the "Applications") to the FCC requesting the
FCC's written consent to the change in control or the
transfer, as the case may be, of the FCC licenses to New PCI
and, if required, to the change of control relating to the
Merger.
(b) Except as otherwise provided herein, each Party
shall bear its own expenses in connection with the
preparation and prosecution of the Applications. The
Selling Stockholders, System Sellers, Partnerships and
Corporations shall bear the cost of publishing any required
local public notices in connection with the Applications.
Pittencrieff, on the one hand, and the Selling Stockholders
and the System Sellers, on the other, shall equally share in
any application, consent or other fees charged by the FCC in
connection with the Applications.
7. Covenant of Sellers.
7.1. Preparation for Closing. The Selling Stockholders and
the System Sellers agree to use their best efforts to bring about
the fulfillment of the conditions precedent to Closing contained
in this Agreement (both those relating to them and to
Pittencrieff).
7.2. Conduct of Business. From the date hereof to the
Closing, except as expressly provided for or contemplated by this
Agreement, or as otherwise consented to by Pittencrieff in
writing, each of the Selling Stockholders and the System Sellers
will cause each Corporation and Partnership to:
(a) conduct its business in the ordinary course in
substantially the same manner as heretofore conducted and,
to the extent consistent with prudent management of its
business, use reasonable efforts to preserve intact its
present business organization, keep available the services
of its present officers and employees, and preserve its FCC
licenses and its relationships with customers, suppliers and
others having business dealings with them;
(b) except as otherwise provided in Section 8.13,
maintain all of the structures, equipment and other tangible
personal property used in its business in good repair, order
and condition in all material respects except for depletion,
depreciation, ordinary wear and tear and damage by
unavoidable casualty;
(c) keep in full force and effect insurance comparable
in amount and scope of coverage to insurance now carried in
respect of the Systems operated by it;
(d) perform in all material respects all of its
obligations under agreements, contracts and instruments
relating to or affecting the Systems operated by it;
(e) maintain the books of account and records of the
Systems operated by it in the usual, regular and ordinary
manner;
(f) comply in all material respects with all statutes,
laws, ordinances, rules and regulations applicable to the
Systems operated by it;
(g) Except as provided in Section 7.4, not merge or
consolidate with, or agree to merge or consolidate with, or
purchase substantially all of the assets of, or otherwise
acquire any business or any corporation, partnership,
association or other business organization or division
thereof; and
(h) not take, or permit to be taken, any action which
is represented and warranted in Sections 3.7 and 4.4 not to
have been taken since June 30, 1995, except as provided in
Sections 7.4. and 8.14.
7.3. Delivery of Channels. Each System Seller will use its
best efforts to deliver at Closing, and each Selling Stockholder
will use its best efforts to cause the Partnerships and
Corporations to deliver at Closing, all granted and pending
channels that are identified on the Seller FCC Schedule and the
System Seller FCC Schedule.
7.4. Acquisition of Licenses. Each System Seller shall
exercise, and/or use its best efforts to complete, as the case
may be, and each of the Selling Stockholders shall cause each
Corporation and Partnership to so exercise, and/or complete, all
options or transactions to which it (or a Corporation or
Partnership) is a party to acquire the FCC licenses and related
assets included on the Seller FCC Schedule and the System Seller
FCC Schedule, including the payment of any purchase price
therefor.
7.5. SEC Registration. The Sellers shall furnish to
Pittencrieff such information about the Sellers, the Corporations
and Partnerships, as applicable, as may be necessary to enable
Pittencrieff to prepare and file with the SEC the Registration
Statement described in Section 8.3 for New PCI.
7.6. Antitrust Filing. AMI shall promptly file all
documents and other information required to be filed pursuant to
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of ▇▇▇▇ (▇▇▇
"▇▇▇ ▇▇▇") and the rules and regulations promulgated thereunder.
7.7. Access and Information. The Selling Stockholders and
System Sellers shall provide to Pittencrieff and each of its
officers, employees, accountants, counsel and other authorized
representatives reasonable access throughout the period prior to
the Closing to the Sellers, the Partnerships' and the
Corporations' properties, books and records, and shall each use
their respective best efforts to furnish to Pittencrieff such
additional financial and operating data and other information as
any may from time to time reasonably be requested by
Pittencrieff. Without limiting the generality of the foregoing,
the Selling Stockholders and System Sellers shall provide
Pittencrieff's accountants with sufficient access and information
to permit any audit of the Sellers prior to Closing.
7.8. Lock-Up Provisions. Except as set forth in Schedule
7.8, the Sellers agree that they shall not, without the prior
written consent of New PCI, sell, transfer, grant an option with
respect to or otherwise dispose of (i) any of the Transaction
Consideration during the twelve-month period after the Closing;
(ii) more than an aggregate of ten percent of the Transaction
Consideration during the period between twelve and eighteen
months after the Closing; and (iii) more than an aggregate of
twenty-five percent of the Transaction Consideration during the
period between eighteen and twenty-four months after the Closing.
Notwithstanding the foregoing, the provisions of this Section 7.8
shall not prohibit AMI from transferring all or any portion of
the Transaction Consideration received by it to FMR Corp. or to
any direct or indirect subsidiary of FMR Corp.
7.9. Non-Competition. The Selling Stockholders and System
Sellers agree for themselves and their respective affiliates that
for a period of two years after the Closing, the Selling
Stockholders and System Sellers (and their respective affiliates)
shall not engage in, or have a direct ownership interest in a
third party that engages in, or become employed by, or serve as
an officer or director of, any entity that is engaged in, the
ownership, operation or management of 800 MHz or 900 MHz SMR
systems (a "Competitive Business") in the State of Texas in the
counties in which SMR systems listed in the Seller FCC Schedule,
the System Seller FCC Schedule and the Pittencrieff FCC Schedule
are located; provided, however, that (a) such restriction shall
not prohibit any affiliate of AMI from making investments in a
Competitive Business in the ordinary course in connection with
its mutual fund, brokerage and investment management businesses;
and (b) any Selling Stockholder or System Seller may become
employed by or act as a consultant or agent for Pittencrieff; and
(c) the foregoing shall not apply to the sales and servicing of
equipment necessary to utilize SMR systems except in Dallas,
▇▇▇▇▇▇, Orange, ▇▇▇▇▇▇▇▇▇▇, Tarrant and Collin counties; and (d)
AMI may acquire and hold the equity securities of NEXTEL
Communications, Inc., including its predecessor in interest,
OneComm Corporation, and Dial Page, Inc. that were owned by AMI
on July 14, 1995.
7.10. Public Announcements. The Sellers, the Corporations
and the Partnerships will not, at any time, without the prior
written consent of Pittencrieff, make any announcement, issue any
press release or make any statement to any third party (which
announcement, press release or statement is with respect to any
of the specific matters discussed or agreed among the parties).
7.11. No Solicitation by the Sellers, Partnerships and
Corporations. The Selling Stockholders and System Sellers
undertake and agree that between the date hereof and the Closing
or, if earlier, the termination of this Agreement, none of them
nor their respective officers, directors, partners,
representatives and agents will indirectly or directly solicit,
encourage or initiate the submission of proposals or offers from,
or provide any confidential information to, or participate in
discussions or negotiations or enter into any agreement or
understanding with, any corporation, partnership, person or other
entity or group concerning the sale of shares of capital stock or
any merger, combination, sale of assets, or similar transactions
with respect to any of them. AMI will promptly notify
Pittencrieff if it or any of the other Sellers receive any
proposals, offers or invitations to discuss any of the foregoing.
7.12. Further Assurances. At any time and from time to
time after the Closing, at the request of New PCI and without
further consideration, except as stated below, the Sellers,
Partnerships and the Corporations will execute and deliver such
other instruments of sale, transfer, conveyance, assignment and
confirmation and take such action as New PCI may reasonably
determine is necessary to transfer, convey and assign to New PCI,
and to confirm New PCI's title to or interest in the Purchased
Systems, the Subject Stock and the Bayou Note, to put New PCI in
actual possession and operating control of the Partnerships, the
Corporations, the Systems and the FCC licenses, management
agreements and options relating to such FCC licenses and to
assist New PCI in exercising all rights with respect thereto.
8. Covenants of Pittencrieff.
8.1. Preparation for Closing. Pittencrieff agrees to use
its best efforts to bring about the fulfillment of the conditions
precedent to Closing contained in this Agreement (both those
relating to it and to the Sellers).
8.2. Conduct of Business. From the date hereof to the
Closing, except as expressly provided for or contemplated by this
Agreement, or as otherwise consented to by AMI in writing,
Pittencrieff will, and will cause each Pittencrieff Subsidiary
to:
(a) conduct its business in the ordinary course in
substantially the same manner as heretofore conducted and,
to the extent consistent with prudent management of its
business, use reasonable efforts to preserve intact its
present business organization, keep available the services
of its present officers and employees, and preserve its FCC
licenses and its relationships with customers, suppliers and
others having business dealings with them;
(b) maintain all of the structures, equipment and
other tangible personal property used in its business in
good repair, order and condition in all material respects
except for depletion, depreciation, ordinary wear and tear
and damage by unavoidable casualty;
(c) keep in full force and effect insurance comparable
in amount and scope of coverage to insurance now carried in
respect of its business;
(d) perform in all material respects all of its
obligations under agreements, contracts and instruments
relating to or affecting its business;
(e) maintain the books of account and records of its
business in the usual, regular and ordinary manner;
(f) comply in all material respects with all statutes,
laws, ordinances, rules and regulations applicable to its
business;
(g) except as provided in Section 8.8, not merge or
consolidate with, or agree to merge or consolidate with, or
purchase substantially all of the assets of, or otherwise
acquire any business or any corporation, partnership,
association or other business organization or division
thereof; and
(h) not take, or permit to be taken, any action which
is represented and warranted in Section 5.5 not to have been
taken since June 30, 1995, except as set forth on Schedule
5.5 or as provided in Section 8.8; provided, however, that
without the consent of AMI, Pittencrieff may (i) incur long-
term (i.e. in excess of one year) indebtedness not to exceed
$2,000,000 in the aggregate; and (ii) issue shares of
Pittencrieff Common Stock in connection with (w)
Pittencrieff's existing stock option plans; (x) the exercise
of warrants issued to the Toronto Dominion Bank and
Kansallis-Osake-Pankki as of the date hereof in connection
with the $10,000,000 bridge financing obtained by
Pittencrieff in September, 1994 (the "Bridge Warrants"); (y)
the exercise of warrants issued to Susquehanna Financial
Group, Inc. as of the date hereof in connection with the
provision of financial advisory services (the "Susquehanna
Warrants"); and (z) Pittencrieff's purchase and sale
agreement dated April 21, 1995 with Susquehanna Financial
Group, Inc.
8.3. Registration Statement. Pittencrieff shall prepare
and file with the SEC as soon as reasonably practicable after the
date hereof a Registration Statement comprising a preliminary
proxy and prospectus with respect to the Transaction and the
Merger, and shall use its best efforts to have such proxy
statement and prospectus cleared or declared effective, as the
case may be, by the SEC, and Pittencrieff shall cause the proxy
statement and prospectus to be mailed to the shareholders of
Pittencrieff as soon as practicable thereafter. The information
contained in the proxy statement and prospectus with respect to
Pittencrieff and the Pittencrieff Subsidiaries will not, as of
the date of the proxy statement and prospectus, contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances in which
they were made, not misleading. If required under the federal
securities laws, Pittencrieff shall prepare supplements or
amendments to the proxy statement and prospectus which correct
any misstatement or omission, and shall cause the same to be
filed with the SEC, cleared or declared effective by the SEC to
the extent required thereby, and distributed to shareholders of
Pittencrieff.
8.4. Nasdaq Listing. Pittencrieff shall use its best
efforts to list (subject to notice of issuance) on the National
Market System of the Nasdaq Stock Market (the "Nasdaq National
Market") the Transaction Consideration and the New PCI Common
Stock to be issued in the Merger.
8.5. Antitrust Filing. Pittencrieff shall promptly file
all documents and other information required to be filed pursuant
to the HSR Act and the rules and regulations promulgated
thereunder.
8.6. Delivery of Channels. Pittencrieff will use its best
efforts to deliver at Closing, and will cause each Pittencrieff
Subsidiary to use its best efforts to deliver at Closing, all
granted and pending channels that are identified on the
Pittencrieff FCC Schedule.
8.7. Acquisition of Licenses. Pittencrieff shall exercise
and/or use its best efforts to complete, as the case may be, and
shall cause each Pittencrieff Subsidiary to so exercise and/or
complete, all options or transactions to which it is a party to
acquire FCC licenses and related assets included on the
Pittencrieff FCC Schedule, including the payment of any purchase
price therefor.
8.8. Access and Information. Pittencrieff shall provide to
AMI and each of its officers, employees, accountants, counsel and
other authorized representatives reasonable access throughout the
period prior to the Closing to Pittencrieff's and the
Pittencrieff Subsidiaries, properties, books and records, and
shall use its best efforts to cause its representatives to
furnish to AMI such additional financial and operating data and
other information as it may from time to time reasonably request.
Without limiting the generality of the foregoing, Pittencrieff
shall provide to AMI's accountants sufficient access and
information to permit any audit of Pittencrieff prior to Closing.
8.9. Public Announcements. Except as may be required by
applicable federal or state law, or regulations promulgated
thereunder, or the rules or regulations of the Nasdaq Stock
Market or any securities exchange upon which the Pittencrieff
Common Stock is listed or traded or to which application has been
made for listing or trading of the New PCI Common Stock,
Pittencrieff will not, at any time, without the prior written
consent of AMI, make any announcement, issue any press release or
make any statement to any third party (which announcement, press
release or statement is with respect to any of the specific
matters discussed or agreed to among the parties).
8.10. No Solicitation by Pittencrieff. Pittencrieff
undertakes and agrees that between the date of the execution of
this Agreement and the Closing or, if earlier, termination of
this Agreement, neither it nor its officers, directors, partners,
representatives and agents will indirectly or directly solicit,
encourage or initiate the submission of proposals or offers from,
or provide any confidential information to, or participate in
discussions or negotiations or enter into any agreement or
understanding with, any corporation, partnership, person or other
entity or group concerning the sale of shares of capital stock or
any merger, combination, sale of assets, or similar transactions.
Pittencrieff will promptly notify AMI if it receives any
proposals, offers or invitations to discuss any of the foregoing.
8.11. Securities Laws Acknowledgment. Each of Pittencrieff
and New PCI hereby acknowledges that the Sellers shall be
entitled to all of their respective rights and remedies under the
federal and state securities laws in connection with their
acquisition of shares of New PCI Common Stock hereunder.
8.12. Bulk Transfers Laws. Pittencrieff and New PCI hereby
waive compliance with the provisions of any bulk transfer laws
applicable to the Transaction and each System Seller agrees to
fully indemnify Pittencrieff and New PCI for any liabilities
arising from such laws except with respect to liabilities being
specifically assumed by New PCI pursuant to Section 2.3.
8.13. Disposition of Certain Assets. Pittencrieff
acknowledges and agrees that notwithstanding any other provision
of this Agreement to the contrary, prior to Closing each Selling
Stockholder shall have the right to cause the Corporations and
Partnerships, as applicable, to dispose of the assets described
in Schedule 8.13, by way of a dividend.
8.14. Certain Employees. On or prior to the Closing,
Pittencrieff agrees to extend offers of employment to the then
current employees of Advanced MobileComm of Texas, L.P. for
comparable positions at comparable compensation as that of such
employees at such time.
8.15. Registration Statement. After the Closing, New PCI
shall promptly file with the SEC any required post-effective
amendments to the Form S-4 Registration Statement contemplated by
Sections 9.17 and 10.9, utilizing Form S-3 (or other appropriate
and available form), to disclose the details of the Transaction,
and shall maintain such Registration Statement current and
effective as it relates to the resale of the Transaction
Consideration.
9. Conditions Precedent to New PCI's and Pittencrieff's
Obligations. The obligations of Pittencrieff and New PCI to
consummate the Transaction shall be subject to the satisfaction,
prior to or at the Closing, of each of the following conditions,
any of which may be waived by Pittencrieff:
9.1. Representations and Warranties; Certificate. The
representations and warranties made by the Sellers, Partnerships
and the Corporations in this Agreement shall be true and correct
in all material respects on the Closing except as provided for
herein. For purposes of this Section 9.1, materiality shall be
determined by considering the Sellers, Partnerships and the
Corporations and each of the representations and warranties made
by them in the aggregate. Notwithstanding the foregoing, each of
the representations and warranties contained in Section 3.16 and
4.13 shall be read for purpose of this Section 9.1 as if such
representations and warranties were made only with respect to the
SMR channels comprising the Sellers' Minimum Channel Obligation
(as hereinafter defined). At Closing, the Sellers shall deliver
a certificate to Pittencrieff and New PCI to such effect, as
applicable.
9.2. Consents. To the extent required, all filings with
and consents from (a) all federal, state and local governmental
agencies required to consummate the Transaction and the Merger
and (b) all parties to the contracts and agreements listed on
Schedules 3.10, 4.7 and 5.8 shall have been completed or
obtained.
9.3. FCC Licenses. Without limiting the generality of
Section 9.2, the FCC shall have granted final approval of (i) the
change of control or the transfer, as the case may be, of FCC
licenses required to enable the Sellers, Partnerships and
Corporations to deliver the Sellers' Minimum Channel Obligation
to New PCI, and (ii) the transfer of control relating to the
Merger.
9.4. Transfer of Minimum Channels. Sellers shall have
delivered, or caused the Partnerships and Corporations to
deliver, to New PCI (i) 90% of the granted and qualified channels
listed on the Seller FCC Schedule and the System Seller FCC
Schedule and (ii) for each Metropolitan Statistical Area
("M.S.A.") listed on the Seller FCC Schedule and the System
Seller FCC Schedule in which the Sellers, Partnerships or
Corporations have at least 30 granted and qualified channels
listed on the Seller FCC Schedule and the System Seller FCC
Schedule, 90% of the number of the granted and qualified channels
corresponding to such M.S.A. (collectively, the "Sellers' Minimum
Channel Obligation"). For purposes of this Section 9.4 and for
purposes of Section 10.4, a granted and qualified channel in
order to satisfy Sellers' Minimum Channel Obligation and
Pittencrieff's Minimum Channel Obligation shall be (w) a channel
listed as Qualified on, if for Sellers, the Seller FCC Schedule
or System Seller FCC Schedule or, if for Pittencrieff, the
Pittencrieff FCC Schedule, (x) deliverable at Closing,
constructed and in operation, or within its initial construction
period, or unconstructed as part of a granted or pending ESMR
license or application, (y) in compliance with all applicable FCC
rules and regulations and (z) except as otherwise specifically
agreed to by the Parties, not subject to any pending finder's
preference action against the channel filed by a third party.
Notwithstanding the foregoing, Sellers shall have the right to
substitute for any granted and qualified channel listed as
"Qualified" on the Seller FCC Schedule an "economically
equivalent granted and qualified channel." For purposes of this
section and Section 10.4, the term "economically equivalent
granted and qualified channel" shall mean channels and FCC
licenses for such channels (i) which service the same markets as
the listed Qualified channels for which they are substituted; and
(ii) for which no delay in the Closing results from the
substitution.
9.5. Pittencrieff Stockholder Approval. The holders of
shares of Pittencrieff Common Stock entitled to vote thereon
shall have duly approved this Agreement and the Merger, all in
accordance with the requirements of Texas law and the Articles of
Incorporation and bylaws of Pittencrieff.
9.6. New PCI Stockholder Approval. The holders of shares
of New PCI Common Stock entitled to vote thereon shall have duly
approved this Agreement and the Merger, all in accordance with
the requirements of Delaware law and the certificate of
incorporation and by-laws of New PCI.
9.7. Anti-Trust Matters. The waiting period (and any
extension thereof) as prescribed by the regulations promulgated
under the HSR Act with respect to the Transaction shall have
expired or shall have been terminated.
9.8. Resignation of the Corporations Directors and
Officers. All of the directors and officers of the Corporations
shall have submitted their written resignations, effective on the
date of Closing.
9.9. Delivery of Stock Certificates and Other Documents.
The Selling Stockholders shall have delivered to New PCI stock
certificates and executed stock powers conveying to New PCI all
of the Subject Stock, free and clear of any pledge, lien or other
encumbrance, the Assets Sellers shall have executed and delivered
bills of sale conveying the Purchased Systems to New PCI, free
and clear of any pledge, mortgage, lien or other encumbrance, and
the Note Seller shall have delivered to New PCI the Bayou Note,
free and clear of any pledge, lien or other encumbrance, together
with an executed instrument of transfer.
9.10. Performance by the Sellers, the Partnerships and the
Corporations; Certificate. The Sellers, the Partnerships and the
Corporations shall have performed and complied with all
agreements and conditions required by this Agreement to be
performed or complied with by them in all material respects prior
to or at the Closing. For purposes of this Section 9.10,
materiality shall be determined by considering the Sellers,
Partnerships and the Corporations and each of the agreements and
conditions applicable to any of them in the aggregate. At
Closing, Sellers shall deliver a certificate to Pittencrieff and
New PCI to such effect.
9.11. Opinions of Counsel for the Sellers, Partnerships and
Corporations. Pittencrieff and New PCI shall have received
favorable opinions addressed to it and dated as of the Closing of
▇▇▇▇▇▇▇▇ & Worcester (which opinions may rely on opinions of
local counsel where appropriate), counsel for the Sellers,
Partnerships and Corporations, substantially in the form of
Exhibit 9.11(a) hereto and of Meyer, Faller, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
P.C., FCC counsel to the Sellers, substantially in the form of
Exhibit 9.11(b) hereto.
9.12. Tax Opinion. Pittencrieff shall have obtained an
opinion of Gardere & ▇▇▇▇▇, L.L.P., its counsel, as to the tax-
free nature of the Merger to Pittencrieff and New PCI.
9.13. No Material Adverse Change; Certificate. During the
period from May 3, 1995 to the date of Closing, there shall not
have been any material adverse change in the financial condition
of the Corporations' or Partnerships' Systems, taken as a whole,
provided, however that neither (x) a change that relates to or
affects the SMR industry generally nor (y) a diminution in net
revenues of the Corporations, Partnerships or Purchased Systems
taken as a whole, shall constitute a material adverse change
unless it constitutes a decrease in excess of fifty percent in
the annualized gross recurring revenues of the Corporations,
Partnerships and the Purchased Systems, taken as a whole (the
"▇▇▇ ▇▇▇▇▇ Revenues"), for a period of three full calendar months
during the period from the date hereof through Closing from the
▇▇▇ ▇▇▇▇▇ Revenues for the year ended December 31, 1994. At
Closing the Sellers shall deliver a certificate to Pittencrieff
and New PCI to such effect.
9.14. Absence of Litigation. No action or proceeding shall
have been instituted or threatened at Closing before any court or
governmental body or authority pertaining to the Transaction or
the Merger, the result of which could prevent or make illegal the
consummation of the Transaction or the Merger.
9.15. Pittencrieff Shareholders' Dissenters Rights. The
monetary claims of the shareholders of Pittencrieff who exercise
their dissenters rights with respect to the Merger pursuant to
Article 5.12 of the Texas Business Corporation Act shall not
exceed $2,500,000.
9.16. Tax Certificates. Sellers and the Corporations shall
have executed and delivered tax certificates relating to certain
tax matters substantially in the form of Schedule 9.16.
9.17. SEC and Related Matters.
(a) New PCI's Registration Statement on Form S-4 (or
other appropriate and available form) relating to the resale
of the Transaction Consideration and the Merger shall have
become effective under the Securities Act, and no stop order
suspending such effectiveness shall have been initiated or
threatened by the SEC.
(b) The registration statements or other filings
required under applicable blue sky laws shall have become
effective, and no stop order shall be threatened or in
effect with respect thereto.
(c) The Transaction Consideration shall have been
listed or approved for listing upon notice of issuance by
the Nasdaq National Market.
10. Conditions Precedent to the Obligations of the Sellers,
Partnerships and the Corporations. The obligations of the
Sellers, the Partnerships and the Corporations to consummate the
Transaction shall be subject to the satisfaction, prior to or at
the Closing, of each of the following conditions; any of which
may be waived by the Sellers:
10.1. Representations and Warranties; Certificate. The
representations and warranties made by Pittencrieff in this
Agreement shall be true and correct in all material respects at
the Closing, except as provided herein. Notwithstanding the
foregoing, each of the representations and warranties contained
in Section 5.14 shall be read for purpose of this Section 10.1 as
if such representations and warranties made only with respect to
the SMR channels comprising Pittencrieff's Minimum Channel
Obligation (as hereinafter defined). At closing Pittencrieff and
New PCI shall deliver a certificate to the Sellers to such
effect.
10.2. Consents. To the extent required, all filings with
and consents from (a) all federal, state and local governmental
agencies required to consummate the Transaction and the Merger
and (b) all parties to the contracts and agreements listed in
Schedules 3.10, 4.7 and 5.8 shall have been obtained at or prior
to the Closing.
10.3. FCC Approval. Without limiting the generality of
Section 10.2, the FCC shall have granted final approval of (i)
the change of control of FCC licenses required to enable
Pittencrieff to deliver Pittencrieff's Minimum Channel Obligation
in the Merger; and (ii) the change in control or transfer, as the
case may be, of FCC licenses to enable the Sellers, Corporations
and the Partnerships to deliver the Sellers' Minimum Channel
Obligation.
10.4. Pittencrieff Merger; Transfer of Minimum Channels.
Pittencrieff shall have merged with and into New PCI in
accordance with the provisions of the Merger Agreement and, in
connection therewith, Pittencrieff, immediately prior to the
Merger, shall own or control (i) 90% of the granted channels
listed as such on the Pittencrieff FCC Schedule; (ii) 90% of the
granted and qualified (as defined in Section 9.4) channels listed
as such on the Pittencrieff FCC Schedule in each M.S.A. specified
on the Pittencrieff FCC Schedule in which Pittencrieff has at
least 30 and qualified granted channels listed on the
Pittencrieff FCC Schedule; and (iii) 90% of all granted and
qualified channels listed as such on the Pittencrieff FCC
Schedule in New Mexico Rural Statistical Areas 4 and 6
(collectively, "Pittencrieff's Minimum Channel Obligation").
Notwithstanding the foregoing, Pittencrieff shall have the right,
to substitute for any channel listed as "Qualified" on the
Pittencrieff FCC Schedule an "economically equivalent granted and
qualified channel" (as defined in Section 9.4), the acquisition
price of which does not exceed, without the consent of AMI,
$200,000.
10.5. Performance of New PCI and Pittencrieff; Certificate.
New PCI and Pittencrieff shall have performed and complied with
all agreements and conditions required by this Agreement to be
performed or complied with by them in all material respects prior
to or at the Closing. At Closing, Pittencrieff and New PCI shall
deliver to Sellers a certificate to such effect.
10.6. Absence of Litigation. No action or proceeding shall
have been instituted or threatened prior to or at the Closing
before any court or governmental body or authority pertaining to
the Transaction or the Merger, the result of which could prevent
or make illegal the consummation of the Transaction or the
Merger.
10.7. Board of Directors Representation; Committees. The
initial Board of Directors of New PCI shall be fixed at eight,
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall have
been elected to serve as members of the Board of Directors of New
PCI, and the other members of the Board of Directors of New PCI
shall be the persons serving on the Board of Directors of
Pittencrieff on the date hereof. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ shall have been
named to serve on the Executive and Compensation Committees of
New PCI's Board of Directors, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall have
been named to serve on the Audit Committee of New PCI's Board of
Directors.
10.8. New PCI By-Law Provisions. The By-Laws of New PCI
shall include the following provisions:
(a) "Section 2. Number, Tenure, and Qualification. The
number of directors shall be fixed from time to time exclusively
pursuant to a resolution adopted by the affirmative vote of two-
thirds or more of the whole Board of Directors; provided that
upon the removal or resignation of any director or directors such
that the number of remaining directors is less than five, a
majority of the directors then remaining in office, though less
than a quorum, or a sole remaining director may decrease the
number of directors constituting the whole Board of Directors.
The number of directors which shall constitute the whole Board of
Directors shall not be less than one. Directors need not be
stockholders. The directors shall be elected at the annual
meeting of the stockholders, except as provided in Sections 4 and
6 of this Article III, and each director elected shall hold
office until the annual meeting next after his election and until
his successor is duly elected and qualified, or until his death
or retirement or until he resigns or is removed in the manner
hereinafter provided. Directors shall be elected by a plurality
of the votes of the shares present in person or represented by
proxy and entitled to vote on the election of directors at any
annual or special meeting of stockholders. Such election shall
be by written ballot. This Section 2 may only be amended by the
affirmative vote of two-thirds or more of the whole Board of
Directors or otherwise in accordance with the Certificate of
Incorporation."
(b) "(c) Notwithstanding anything to the contrary in
this Section 3 or these By-Laws, AMI shall have the right to
designate three of the management nominees to be elected to the
Board of Directors in the following manner. Three of the initial
directors shall be so designated by AMI (such designees serving
on the Board of Directors and any successor designees serving on
the Board of Directors referred to hereby individually as an `AMI
Designee' and collectively as the `AMI Designees'). The AMI
Designees, or the remaining AMI Designees if less than three as a
result of a vacancy, as a special committee of the Board of
Directors shall select the nominee or nominees to fill any
vacancy created by the removal, resignation, or death of an AMI
Designee or the nominees to serve as the AMI Designees included
as part of the management nominees for election as directors at
an annual meeting of stockholders. If there are no AMI Designees
then serving on the Board of Directors, AMI shall be entitled to
notify the nominating committee of AMI's nominees to serve on the
Board of Directors as AMI Designees. The nominating committee
shall adopt any such selections as part of its nominations and
shall only determine nominations for any remaining existing
vacancies or positions for election at an annual meeting.
Notwithstanding the foregoing, AMI's right to designate AMI
Designees hereunder shall (i) be reduced from three to two at
such time as AMI holds less than twenty percent of the shares of
the Corporation's common stock outstanding on the date on which
AMI first becomes a holder of record of shares of the common
stock (the "Initial Acquisition Date"), (ii) be reduced from two
to one at such time as AMI holds less than ten percent of the
Corporation's common stock outstanding on the Initial Acquisition
Date, (iii) at any time after the second anniversary of the
Initial Acquisition Date, be reduced to one if at such time AMI
holds less than fifteen percent of the then outstanding shares of
the Corporation's common stock, and (iv) terminate at such time
as AMI holds less than three percent of the Corporation's common
stock outstanding on the Initial Acquisition Date. This Section
3(c) provision may only be amended by the affirmative vote of
two-thirds or more of the whole Board of Directors or otherwise
in accordance with the Certificate of Incorporation."
10.9. SEC and Related Matters.
(a) New PCI's Registration Statement on Form S-4 (or
other appropriate and available form) relating to the resale
of the Transaction Consideration and the Merger shall have
become effective under the Securities Act, and no stop order
suspending such effectiveness shall have been initiated or
threatened by the SEC.
(b) The registration statements or other filings
required under applicable blue sky laws shall have become
effective, and no stop order shall be threatened or in
effect with respect thereto.
(c) The Transaction Consideration shall have been
listed or approved for listing upon notice of issuance by
the Nasdaq National Market.
10.10. Opinion of Counsel for Pittencrieff and New PCI.
Sellers shall have received favorable opinions addressed to it
and dated as of the Closing, of Gardere & ▇▇▇▇▇, L.L.P. (which
opinions may rely on, or be substituted with, opinions of local
counsel where appropriate) counsel for Pittencrieff and New PCI,
and ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, its FCC counsel, substantially in
the forms of Schedules 10.10(a) and (b) hereto.
10.11. Tax-Free Reorganization. The Sellers shall have
received, at their option, either (i) a favorable private letter
ruling from the IRS with respect to the tax-free nature of the
Transaction on the issues as to which a ruling was requested by
the Sellers; or (ii) an opinion of ▇▇▇▇▇▇▇▇ & Worcester, counsel
to the Sellers, the Partnerships and the Corporations that the
Transaction qualifies as a tax-free transaction under the Code
and the rules and regulations thereunder as it relates to the
Sellers; this condition may be satisfied by the receipt by the
Sellers of a private letter ruling addressing certain aspects of
the tax-free nature of the Transaction and an opinion of ▇▇▇▇▇▇▇▇
& Worcester addressing other issues relating to the tax-free
nature of the Transaction.
10.12. No Material Adverse Change; Certificate. During the
period from May 3, 1995 to the Closing, there shall not have been
any material adverse change in the business or financial
condition of Pittencrieff or New PCI, provided, however, that a
change that relates to or affects the SMR industry generally
shall not constitute a material adverse change. At Closing,
Pittencrieff shall deliver to Sellers a certificate to such
effect.
10.13. Tax Certificates. Pittencrieff and New PCI shall
have executed and delivered certificates relating to certain tax
matters substantially in the form of Schedule 10.13.
10.14. Consulting Agreements. New PCI shall have entered
into consulting or employment agreements with the persons listed
on Schedule 10.14, such agreements to provide for aggregate
payments by New PCI for consulting services to all persons listed
on Schedule 10.14 of $300,000.
10.15. Pittencrieff Shareholders' Dissenters Rights. The
monetary claims of the shareholders of Pittencrieff who exercise
their dissenters rights with respect to the Merger pursuant to
Article 5.12 of the Texas Business Corporation Act shall not
exceed $2,500,000.
11. Preemptive Rights. After the Closing, if New PCI proposes
to offer additional shares of New PCI Common Stock (or securities
convertible into New PCI Common Stock (the "Offered Shares")),
New PCI will first offer all such shares to the Sellers, pro
rata, and to the extent that any Seller declines to acquire all
or part his pro-rata share of the Offered Shares, the other
Sellers shall have the right to acquire, pro rata, the Offered
Shares which were declined; provided that the provisions of this
Section 11 shall not apply to (i) issuances of New PCI Common
Stock to Susquehanna Financial Group, Inc. pursuant to a purchase
and sale agreement dated ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) New PCI Common
Stock reserved for issuance under Pittencrieff's stock option
plans, as approved or amended from time to time by the board of
directors of New PCI, (iii) the exercise of the Bridge Warrants,
(iv) the exercise of the Susquehanna Warrants, and (v) the
issuance of warrants, if any, to any Seller or affiliate of any
Seller at or about the Closing or pursuant to any agreement
entered into with New PCI or any Pittencrieff Subsidiary at or
about the Closing, or the exercise thereof.
12. Survival of Representations, Warranties and Agreements. All
representations, warranties and agreements of the Sellers, the
Partnerships, the Corporations, New PCI and Pittencrieff
contained herein (including all Schedules hereto) or in any
document, statement, certificate or other instrument referred to
herein or delivered at the Closing in connection with the
Transaction shall survive for eighteen months following the
Closing; provided, however, the limitation of the period of
survival to eighteen months shall not apply to the
representations and warranties contained in Sections 3.8, 3.12,
3.19, 4.5, 4.9, 4.17, 5.6, 5.10 and 5.17, which representations
and warranties shall survive until the expiration of any and all
applicable statutes of limitation periods. Notwithstanding the
foregoing, the provisions of Sections 7.12, 8.15, 10.13 and 11
and shall survive the Closing without limitation and the
provisions of Sections 7.8 and 7.9 shall survive the Closing for
a period of two years.
13. Indemnities.
13.1. Indemnities of Sellers. The Note Seller, severally,
and all of the other Sellers, jointly and severally, agree to
indemnify and hold harmless Pittencrieff and New PCI and their
officers, directors, employees and agents against and in respect
of all Pittencrieff Losses of such indemnified party. The term
"Pittencrieff Losses" of an indemnified party shall mean all
liabilities, judgments, assessments, losses, fines, penalties,
costs (including reasonable attorney's fees and disbursements),
damages and expenses arising out of or in respect of (x) a breach
of any representation, warranty or covenant made by the Sellers,
the Partnerships or the Corporations in this Agreement and any
liability for Taxes or for liabilities arising under ERISA, in
either case that are attributable to the Sellers, the
Corporations, the Partnerships or any of their affiliates for
periods prior to the Closing, notwithstanding any disclosure made
in any Schedule to this Agreement relating thereto; or (y) any
inaccuracy or misrepresentation in any Schedule to this Agreement
or in any certificate delivered by the Sellers at Closing; or (z)
any claim or action asserted by any third party arising out of or
in connection with any event, act or omission occurring prior to
the Closing in connection with the Sellers' Partnerships' or
Corporations' conduct of business prior to the Closing. If and
when any Pittencrieff Losses shall have been finally determined
under this Section 13, Sellers shall, if pursuant to a third
party action, pay to any third party that part of the
Pittencrieff Losses due to such third party and, if the
indemnified party has incurred any portion of the Pittencrieff
Losses, pay to the indemnified party such portion in
reimbursement thereof. In no event shall there by any
duplication of payment of the Pittencrieff Losses.
Notwithstanding the foregoing, the indemnification obligations
hereunder with respect to the San Diego Systems shall be solely
the obligation of AMI.
13.2. Certification of Loss of New PCI or Pittencrieff. If
New PCI or Pittencrieff is of the opinion that any Pittencrieff
Loss has occurred or will or may occur, one of them shall
promptly notify the Sellers of such Pittencrieff Loss, and each
such notice shall specify the circumstances of such asserted
Pittencrieff Loss.
13.3. New PCI Indemnity.
New PCI agrees to indemnify and hold harmless the Sellers
and their officers, directors, employees and agents against and
in respect of all Seller Losses of such indemnified party. The
term "Seller Losses" shall mean the sum of (i) all liabilities,
judgments, assessments, losses, fines, penalties, costs
(including reasonable attorney's fees and disbursements), damages
and expenses arising out of or in respect of (w) a breach of any
representation, warranty or covenant made by Pittencrieff or New
PCI in this Agreement, (x) any inaccuracy or misrepresentation in
any Schedule to this Agreement or in any certificate delivered by
Pittencrieff or New PCI at Closing, (y) any claim or action
asserted by any third party arising out of or in connection with
any event act or omission occurring prior to the Closing in
connection with Pittencrieff's or any Pittencrieff Subsidiary's
conduct of business prior to the Closing, or (z) any liability
for Taxes arising out of the Liquidation and the Exchange, each
as defined under the heading "Certain Relationships and Related
Transactions--Exchange of PCI Common Stock" in the preliminary
Prospectus/Proxy Statement dated August 28, 1995, prepared by
Pittencrieff and New PCI in connection with the Transaction; plus
(ii) such indemnified party's Indemnity Percentage of the
amounts, liabilities, claims and other amounts determined
pursuant to clauses (w), (x), (y) and (z) above.
(a) If and when any Seller Losses shall have been
finally determined under this Section 13, New PCI shall if
pursuant to a third party action, pay to any third party that
part of the Seller Losses due to such third party and, if the
indemnified party has incurred any portion of the Seller Losses,
pay to the indemnified party such portion in reimbursement
thereof. In no event shall there be any duplication of payment
of the Seller Losses. Within five business days after the date
when payment of the Seller Losses is to be made by New PCI
hereunder, New PCI shall pay each indemnified person its
Indemnity Percentage of the Seller Losses.
(b) An indemnified person's "Indemnity Percentage"
shall mean a fraction (expressed as a percentage), the numerator
of which is the number of shares of New PCI Common Stock held by
such person on the date when payment of Seller Losses is to be
made hereunder plus (i) the number of shares issuable upon the
exercise in full of any warrants to purchase New PCI Common
Stock, if any, and (ii) any equity securities of New PCI issued
pursuant to Section 11 hereof held by such person on the date of
payment of the claim under this Section 13 (whether or not
exercised), in each case as adjusted to reflect any stock splits,
stock dividends or other recapitalizations and the denominator of
which is the number of shares of New PCI Common Stock outstanding
plus the number of shares of New PCI Common Stock issuable upon
the exercise in full of any such warrants which have not then
been exercised.
13.4. Certification of Seller Losses. If any of the
Sellers is of the opinion that any Seller Losses has occurred or
will occur, such Seller shall promptly notify New PCI and
Pittencrieff of such Seller Losses, and each such notice shall
specify the circumstances of such asserted Seller Losses.
13.5. Limitation on Liability of Sellers. Notwithstanding
any other provision hereof, (i) the Sellers shall have liability
under this Section 13 in respect of Pittencrieff Losses only to
the extent that the aggregate of all Pittencrieff Losses exceeds
$500,000, and (ii) Sellers shall have no liability under this
Section 13 in respect of Pittencrieff Losses in excess of
$12,000,000 in the aggregate.
13.6. Limitation on Liability of Pittencrieff and New PCI.
Notwithstanding any other provision hereof, (i) Pittencrieff and
New PCI shall have liability under this Section 13 in respect of
Seller Losses only to the extent that the aggregate of all Seller
Losses exceeds $500,000, and (ii) Pittencrieff and New PCI shall
have no liability under this Section 13 in respect of Seller
Losses in excess of $14,000,000 in the aggregate.
13.7. Third Party Actions. If any claim is made, suit is
brought or tax audit or other proceeding instituted against an
indemnified party that involves or appears reasonably likely to
involve either Pittencrieff Losses or Seller Losses, as the case
may be, the indemnified party will, promptly after receipt of
notice of any such claim, suit or proceeding for which
indemnification may be sought, notify the indemnifying party of
the commencement thereof. The indemnified party (at its expense,
unless a conflict exists such that the parties cannot be
represented by the same counsel, in which event the indemnifying
party shall pay for one counsel for the indemnified party) shall
have the right and shall be given the opportunity to associate
with the indemnifying party in the defense of such claim, suit or
proceeding, provided that counsel for the indemnifying party
shall act as lead counsel in all matters pertaining to the
defense or settlement of such claim, suit or proceeding, and the
indemnifying party shall have control of such claim, suit or
proceeding, including the right to settle such claim, suit or
proceeding without the consent of the indemnified party. An
indemnified party shall not, except at its own cost, make any
settlement with respect to any such claim, suit or proceeding
without the prior consent of the indemnifying party, which
consent shall not be unreasonably withheld. If an indemnified
party determines to settle any such claim, suit or proceeding
without the prior consent of the indemnifying party, the
indemnifying party shall have no further indemnification
obligations under this Section 13 with respect to such claim,
suit or proceeding. Notwithstanding anything in this Section
13.7 to the contrary, if the indemnifying party, by the fifteenth
day after its receipt of notice of any such claim, suit or
proceeding (or, if earlier, by the fifth day preceding the day on
which an answer or other pleading must be served in order to
prevent judgment by default in favor of the person asserting such
claim), does not notify the indemnified party that it has
undertaken to defend against such claim, the party to be
indemnified will have the right, but not the obligation, to
undertake the defense, compromise or settlement of such claim on
behalf of and for the account and risk of the indemnifying party
and at the indemnifying party's expense, subject to the right of
the indemnifying party to assume the defense of such claims at
any time prior to settlement, compromise or final determination
thereof. In such event, the indemnified party will notify the
indemnifying party of any proposed settlement no later than three
days before such settlement is effected.
14. Termination. This Agreement may be terminated by the
parties as set forth in this Section 14:
(a) at any time by the mutual written consent of
Pittencrieff and AMI;
(b) by Pittencrieff if the conditions set forth in
Section 9 shall not have been complied with or performed and
such noncompliance or nonperformance shall not have been
cured or eliminated by the Sellers, Partnerships and Selling
Stockholders by February 28, 1996;
(c) by the Sellers, Partnerships and Corporations, if
the conditions set forth in Section 10 shall not have been
complied with or performed and such noncompliance or
nonperformance shall not have been cured or eliminated by
New PCI and Pittencrieff by February 28, 1996; or
(d) by AMI on the one hand, or by Pittencrieff, on the
other, if there shall have been a breach of any
representation, warranty, covenant or agreement on the part
of the others set forth or contemplated by this Agreement,
which breach shall not have been cured, in the case of a
representation or warranty, prior to the Closing, or in the
case of a covenant or agreement, within twenty business days
following receipt by the breaching party of notice of such
breach; provided, however, that the terminating party may
not terminate its obligations under this Agreement if such
terminating party is in continuing breach of this Agreement
in any material respect.
Notwithstanding any termination of this Agreement pursuant
to this Section 14, the provisions of Sections 7.10, 8.10 and 15
shall remain in full force and effect.
15. Expenses. Except as otherwise agreed to in writing by AMI
and Pittencrieff, the Sellers shall assume and bear all of their
respective expenses, costs and fees incurred or assumed by them
in the preparation and execution of this Agreement and compliance
herewith, whether or not the Transaction shall be consummated.
Except as otherwise agreed to in writing by AMI and Pittencrieff,
New PCI and Pittencrieff shall assume and bear all of their
respective expenses, costs and fees incurred or assumed by them
in connection with the preparation and execution of this
Agreement and compliance herewith, whether or not the Transaction
shall be consummated.
16. Appointment of Agent. Each Seller, Partnership and
Corporation hereby appoints AMI as its attorney-in-fact to act
for it in connection with Transaction and all decisions relating
thereto. Each Seller, Partnership and Corporation hereby agrees
that AMI may take any action on its behalf in connection with
this Agreement, including without limitation waiving any of the
conditions to Closing set forth in Section 10.
17. Entire Agreement; Assignability. This Agreement, together
with the schedules and exhibits hereto, and the letter agreement
dated May 3, 1995, as amended, among the Sellers and Pittencrieff
relating to the payment under certain circumstances of a so-
called "break-up" fee and the letter agreement dated the date
hereof relating to the payment of expenses constitutes the entire
agreement between the parties hereto pertaining to the subject
matter hereof and supersedes all prior and contemporaneous
agreements, understandings, negotiations and discussions, whether
oral or written, of the Parties, and there are no warranties,
representations or other agreements between the Parties in
connection with the subject matter hereof except as specifically
set forth herein. This Agreement may not be assigned by any of
the Parties without the prior written consent of all of the other
Parties; provided, however, that AMI may assign all of its rights
and obligations under this Agreement to FMR Corp. or to any
entity that is directly or indirectly owned by FMR Corp.
18. Amendment. This Agreement may be amended by the parties
hereto at any time, but only by an instrument in writing duly
executed and delivered on behalf of each of New PCI and
Pittencrieff and AMI as agent acting pursuant to the authority
granted to AMI pursuant to Section 16 for the Sellers,
Partnerships and Corporations.
19. Headings. Section headings are not to be considered part of
this Agreement and are included solely for convenience and are
not intended to be full or accurate descriptions of the contents
thereof. References to Sections are to portions of this
Agreement unless the context requires otherwise.
20. Exhibits, etc. Exhibits and schedules and other documents
referred to in this Agreement are an integral part of this
Agreement.
21. Successors and Assigns. All of the terms and provisions of
this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective transferees,
successors and permitted transferees and assigns.
22. Notices, etc. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed
to have been duly given on the date of delivery if delivered or
mailed, first-class postage prepaid,
(a) if to any of the Sellers, Partnerships or
Corporations: c/o Advanced MobileComm, Inc., ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
President and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.), with a copy (which
shall not constitute notice) to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire,
▇▇▇▇▇▇▇▇ & Worcester, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇; and
(b) if to New PCI or Pittencrieff: Pittencrieff
Communications, Inc., Post Office Box 6088, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
▇▇▇▇▇▇▇, President and ▇.▇. ▇▇▇▇▇▇▇, Senior Vice President
and General Counsel, with a copy (which shall not constitute
notice) to ▇▇▇▇▇▇▇ ▇. ▇▇▇, Esquire, Gardere & ▇▇▇▇▇, L.L.P.,
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
23. Accounting Terms. All accounting terms not otherwise
defined herein have the meanings assigned to them in accordance
with GAAP.
24. Governing Law. This Agreement and the rights and
obligations of the parties hereto arising out of this Agreement
shall be governed by and construed in accordance with the laws of
the State of Texas without regard to the internal conflict of law
provisions thereof.
25. Severability. The provisions of this Agreement are
severable, and if any one or more provisions are deemed illegal
or unenforceable, the remaining provisions shall remain in full
force and effect.
26. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
PITTENCRIEFF COMMUNICATIONS, INC.,
a Texas corporation
By:____________________________________
Name:
Title:
PITTENCRIEFF COMMUNICATIONS, INC.,
a Delaware corporation
By:____________________________________
Name:
Title:
PARTNERSHIPS:
ADVANCED MOBILECOMM OF TEXAS, L.P.
By: Metroplex Mobile Communications,
Inc.,
General Partner,
By:_______________________________
Name:
Title:
ADVANCED MOBILECOMM SOUTHWEST
LIMITED PARTNERSHIP
By: Advanced MobileComm Southwest Corp.
(d/b/a Mobile America Corp.),
General Partner
By:_______________________________
Name:
Title:
CORPORATIONS:
FFC COMMUNICATIONS, INC.
By:_______________________________
Name:
Title:
VIKING AMUSEMENT CORPORATION
d/b/a Empire Mobile Communications
By:_______________________________
Name:
Title:
BAYOU COMMUNICATIONS, INC.
By:_______________________________
Name:
Title:
CONFIDENTIAL COMMUNICATIONS
CORPORATION
By:_______________________________
Name:
Title:
A&D MOBILE SYSTEMS, INC.
By:_______________________________
Name:
Title:
D&E COMMUNICATIONS, INC.
By:_______________________________
Name:
Title:
GULF STATES TOWERS, INC.
By:_______________________________
Name:
Title:
METROPLEX MOBILE COMMUNICATIONS, INC.
By:_______________________________
Name:
Title:
ADVANCED MOBILECOMM SOUTHWEST CORP.
By:_______________________________
Name:
Title:
SYSTEM SELLERS:
____________________________________
▇▇▇▇▇ ▇▇▇▇▇, for himself and doing
business
as Mobitel Communications Services, and
Range Unlimited and as authorized agent
for
Trunked Mobile Radio Systems
By:_________________________________
Name:
Title:
ADVANCED MOBILECOMM, INC.
By:_________________________________
Name:
Title:
SELLING STOCKHOLDERS:
__________________________________
▇▇▇▇▇ ▇▇▇▇▇
__________________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
__________________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
__________________________________
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
__________________________________
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
__________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
ADVANCED MOBILECOMM, INC.
By:_______________________________
Name:
Title:
__________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Individually
and as Trustee
__________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇
__________________________________
▇▇▇▇ ▇▇▇▇▇
NOTE SELLER:
__________________________________
J. R. ▇▇▇▇
TABLE OF CONTENTS
1. The Transaction 2
1.1. Determination of Transaction Consideration 2
1.2. Adjustments to Transaction Consideration 2
1.3. Closing 3
2. Purchase and Sale of Assets; Assumption of Liabilities 3
2.1. Sale of Assets 3
2.2. Excluded Assets 4
2.3. Assumption of Certain Liabilities 5
3. Representations and Warranties Regarding the Corporations,
Partnerships and the Selling Stockholders 5
3.1. Entity Status 5
3.2. Subsidiaries; Affiliates 6
3.3. Capitalization of Corporations 6
3.4. Capitalization of Partnerships 6
3.5. Authority for Agreement; No Violation 7
3.6. Financial Statements 8
3.7. Absence of Changes 8
3.8. Taxes 10
3.9. Properties 11
3.10. Material Contracts 11
3.11. Assets of Corporations and Partnerships 12
3.12. Employee Benefit Matters 12
3.13. Site Rental Agreements 15
3.14. Insurance 15
3.15. Litigation 15
3.16. FCC Regulatory Matters 15
3.17. Brokers, Finders, etc 18
3.18. Compensation 18
3.19. Environmental and Other Matters 18
3.20. Disclosure 19
4. Representations and Warranties Regarding the System Sellers 19
4.1. Entity Status 19
4.2. Authority for Agreement; No Violation 20
4.3. Financial Statements 20
4.4. Absence of Changes 21
4.5. Taxes 22
4.6. Properties 23
4.7. Material Contracts 23
4.8. Assets of System Sellers 24
4.9. Employee Benefit Matters 24
4.10. Site Rental Agreements 26
4.11. Insurance 26
4.12. Litigation 27
4.13. FCC Regulatory Matters 27
4.14. Brokers, Finders, etc 30
4.15. Compensation 30
4.16. Environmental and Other Matters 30
4.17. ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇. Representations and Warranties of the Note Seller 30
4A.1. Authority for Agreement; No Violation 31
4A.2. Title 31
5. Representations and Warranties Regarding Pittencrieff and the
Pittencrieff Subsidiaries 31
5.1. Entity Status 31
5.2. Pittencrieff Subsidiaries and Affiliates 31
5.3. Capitalization 32
5.4. Authority for Agreement; No Violation 32
5.5. Absence of Changes 33
5.6. Taxes 34
5.8. Material Contracts 35
5.9. Assets of Pittencrieff and Pittencrieff
Subsidiaries 36
5.10. Employee Benefit Matters 37
5.11. Site Rental Agreements 39
5.12. Insurance 39
5.13. Litigation 39
5.14. FCC Regulatory Matters 39
5.15. Brokers, Finders, etc 43
5.16. Compensation 43
5.17. Environmental and Other Matters 43
5.18. SEC Reports 43
5.19. ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇. Representations and Warranties Regarding New PCI 44
5A.1. Entity Status 44
5A.2. Capitalization 44
5A.3. Authority for Agreement; No Violation 45
6. FCC Approval 45
7. Covenant of Sellers 46
7.1. Preparation for Closing 46
7.2. Conduct of Business 46
7.3. Delivery of Channels 47
7.4. Acquisition of Licenses 47
7.5. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
7.6. Antitrust Filing 47
7.7. Access and Information 47
7.8. Lock-Up Provisions 47
7.9. Non-Competition 48
7.10. Public Announcements 48
7.11. No Solicitation by the Sellers, Partnerships
and Corporations 48
7.12. Further Assurances 48
8. Covenants of Pittencrieff 49
8.1. Preparation for Closing 49
8.2. Conduct of Business 49
8.3. Registration Statement 50
8.4. Nasdaq Listing 50
8.5. Antitrust Filing 50
8.6. Delivery of Channels 50
8.7. Acquisition of Licenses 50
8.8. Access and Information 51
8.9. Public Announcements 51
8.10. No Solicitation by Pittencrieff 51
8.11. Securities Laws Acknowledgment 51
8.12. Bulk Transfers Laws 51
8.13. Disposition of Certain Assets 51
8.14. Certain Employees 52
8.15. Registration Statement 52
9. Conditions Precedent to New PCI's and Pittencrieff's
Obligations 52
9.1. Representations and Warranties; Certificate 52
9.2. Consents 52
9.3. FCC Licenses 52
9.4. Transfer of Minimum Channels 52
9.5. Pittencrieff Stockholder Approval 53
9.6. New PCI Stockholder Approval 53
9.7. Anti-Trust Matters 53
9.8. Resignation of the Corporations Directors and
Officers 53
9.9. Delivery of Stock Certificates and Other
Documents 53
9.10. Performance by the Sellers, the Partnerships
and the Corporations; Certificate 54
9.11. Opinions of Counsel for the Sellers,
Partnerships and Corporations 54
9.12. Tax Opinion 54
9.13. No Material Adverse Change; Certificate 54
9.14. Absence of Litigation 54
9.15. Pittencrieff Shareholders' Dissenters Rights 54
9.16. Tax Certificates 54
9.17. SEC and Related Matters 55
10. Conditions Precedent to the Obligations of the Sellers,
Partnerships and the Corporations 55
10.1. Representations and Warranties; Certificate 55
10.2. Consents 55
10.3. FCC Approval 55
10.4. Pittencrieff Merger; Transfer of Minimum
Channels 55
10.5. Performance of New PCI and Pittencrieff;
Certificate. 56
10.6. Absence of Litigation 56
10.7. Board of Directors Representation; Committees 56
10.8. New PCI By-Law Provisions 56
10.9. SEC and Related Matters 57
10.10. Opinion of Counsel for Pittencrieff and New
PCI 58
10.11. Tax-Free Reorganization 58
10.12. No Material Adverse Change; Certificate 58
10.13. Tax Certificates 58
10.14. Consulting Agreements 58
10.15. Pittencrieff Shareholders' Dissenters Rights 58
11. Preemptive Rights 58
12. Survival of Representations, Warranties 59
13. Indemnities 59
13.1. Indemnities of Sellers 59
13.2. Certification of Loss of New PCI or
Pittencrieff 60
13.3. New PCI Indemnity 60
13.4. Certification of Seller Losses 61
13.5. Limitation on Liability of Sellers 61
13.6. Limitation on Liability of Pittencrieff and
New PCI 61
13.7. Third Party Actions 61
14. Termination 62
15. Expenses 62
16. Appointment of Agent 62
17. Entire Agreement; Assignability 63
18. Amendment 63
19. Headings 63
20. Exhibits, etc 63
21. Successors and Assigns 63
22. Notices, etc 63
23. Accounting Terms 64
24. Governing Law 64
25. Severability 64
26. Counterparts 64