EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
by and among
SPRINT CORPORATION,
DD ACQUISITION, CORP.
and
AMERICAN TELECASTING, INC.
dated as of
APRIL 26, 1999
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 The Merger; Effects of the Merger. . . . . . . . . . . 2
Section 1.2 Effective Time . . . . . . . . . . . . . . . . . . . 2
Section 1.3 Closing . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.4 Directors and Officers of the Surviving Corporation . 3
Section 1.5 Subsequent Actions . . . . . . . . . . . . . . . . . 3
Section 1.6 Consideration for the Merger; Conversion or
Cancellation of Company Common Stock in
the Merger . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
SURRENDER OF SHARES OF COMPANY COMMON STOCK;
DISSENTING SHARES; COMPANY OPTIONS . . . . . . . . . . . . . . . . 4
Section 2.1 Surrender of Certificates . . . . . . . . . . . . . . 4
Section 2.2 Dissenting Shares . . . . . . . . . . . . . . . . . . 6
Section 2.3 Company Stock Options and Purchase Plans . . . . . . 7
ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . 8
Section 3.1 Organization and Standing . . . . . . . . . . . . . . 8
Section 3.2 Capitalization . . . . . . . . . . . . . . . . . . . 9
Section 3.3 Authority for Agreement . . . . . . . . . . . . . . 10
Section 3.4 No Conflict . . . . . . . . . . . . . . . . . . . . 11
Section 3.5 Required Filings and Consents . . . . . . . . . . . 12
Section 3.6 Compliance . . . . . . . . . . . . . . . . . . . . 12
Section 3.7 Licenses and Permits . . . . . . . . . . . . . . . 13
Section 3.8 SEC Filings, Financial Statements . . . . . . . . . 17
Section 3.9 Absence of Certain Changes or Events . . . . . . . 19
Section 3.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.11 Title to Assets . . . . . . . . . . . . . . . . . . 20
Section 3.12 Change of Control Agreements . . . . . . . . . . . . 21
Section 3.13 Litigation . . . . . . . . . . . . . . . . . . . . 21
Section 3.14 Contracts and Commitments . . . . . . . . . . . . . 21
Section 3.15 Information Supplied . . . . . . . . . . . . . . . . 22
Section 3.16 Employee Benefit Plans . . . . . . . . . . . . . . . 22
Section 3.17 Labor and Employment Matters . . . . . . . . . . . . 23
Section 3.18 Environmental Compliance and Disclosure . . . . . . 25
Section 3.19 Intellectual Property . . . . . . . . . . . . . . . 27
Section 3.20 Year 2000 Compliance . . . . . . . . . . . . . . . . 28
Section 3.21 Brokers . . . . . . . . . . . . . . . . . . . . . . 29
Section 3.22 Insurance Policies . . . . . . . . . . . . . . . . . 29
Section 3.23 Notes and Accounts Receivable . . . . . . . . . . . 30
Section 3.24 Transactions with Affiliates . . . . . . . . . . . . 30
Section 3.25 Company Warrants . . . . . . . . . . . . . . . . . . 30
Section 3.26 No Existing Discussions . . . . . . . . . . . . . . 30
Section 3.27 Disclosure . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND PURCHASER . . . . . . . . . . . . . . . . . . . . . 31
Section 4.1 Organization and Standing . . . . . . . . . . . . . 31
Section 4.2 Authority for Agreement . . . . . . . . . . . . . . 31
Section 4.3 No Conflict . . . . . . . . . . . . . . . . . . . . 32
Section 4.4 Required Filings and Consents . . . . . . . . . . . 32
Section 4.5 Information Supplied . . . . . . . . . . . . . . . . 33
Section 4.6 Brokers . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.7 No Prior Activities . . . . . . . . . . . . . . . . 33
Section 4.8 Sufficient Funds . . . . . . . . . . . . . . . . . . 33
Section 4.9 Share Ownership . . . . . . . . . . . . . . . . . . 33
ARTICLE V
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.1 Conduct of the Business Pending the Merger . . . . . 34
Section 5.2 Access to Information; Confidentiality . . . . . . . 36
Section 5.3 Notification of Certain Matters . . . . . . . . . . . 36
Section 5.4 Further Assurances . . . . . . . . . . . . . . . . . 37
Section 5.5 Stockholders' Meeting . . . . . . . . . . . . . . . . 38
Section 5.6 Board Recommendations . . . . . . . . . . . . . . . . 39
Section 5.7 Stockholder Litigation . . . . . . . . . . . . . . . 41
Section 5.8 Indemnification . . . . . . . . . . . . . . . . . . 41
Section 5.9 Public Announcements . . . . . . . . . . . . . . . . 42
Section 5.10 Acquisition Proposals . . . . . . . . . . . . . . . 43
Section 5.11 FCC Applications . . . . . . . . . . . . . . . . . . 43
Section 5.12 Undertakings of Parent . . . . . . . . . . . . . . . 44
Section 5.13 Director Resignations . . . . . . . . . . . . . . . 44
Section 5.14 Rights Plan . . . . . . . . . . . . . . . . . . . . 44
Section 5.15 Year 2000 Plan . . . . . . . . . . . . . . . . . . . 44
Section 5.16 Employee Benefits . . . . . . . . . . . . . . . . . 44
Section 5.17 Matters Relating to BARs . . . . . . . . . . . . . . 45
Section 5.18 Matters Relating to Notes . . . . . . . . . . . . . . 46
ARTICLE VI
CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 6.1 Conditions to the Obligation of Each Party . . . . . 46
Section 6.2 Conditions to Obligations of Parent and
Purchaser to Effect the Merger . . . . . . . . . . . 47
Section 6.3 Conditions to Obligations of the Company to
Effect the Merger . . . . . . . . . . . . . . . . . 47
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . 47
Section 7.1 Termination . . . . . . . . . . . . . . . . . . . . . 47
Section 7.2 Effect of Termination . . . . . . . . . . . . . . . . 49
Section 7.3 Amendments . . . . . . . . . . . . . . . . . . . . . 50
Section 7.4 Waiver . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE VIII
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 8.1 No Third Party Beneficiaries . . . . . . . . . . . . 50
Section 8.2 Entire Agreement . . . . . . . . . . . . . . . . . . 50
Section 8.3 Succession and Assignment . . . . . . . . . . . . . . 51
Section 8.4 Counterparts . . . . . . . . . . . . . . . . . . . . 51
Section 8.5 Headings . . . . . . . . . . . . . . . . . . . . . . 51
Section 8.6 Governing Law . . . . . . . . . . . . . . . . . . . . 51
Section 8.7 Severability . . . . . . . . . . . . . . . . . . . . 51
Section 8.8 Specific Performance . . . . . . . . . . . . . . . . 51
Section 8.9 Construction . . . . . . . . . . . . . . . . . . . . 52
Section 8.10 Non-Survival of Representations and Warranties and
Agreements . . . . . . . . . . . . . . . . . . . . 52
Section 8.11 Certain Definitions . . . . . . . . . . . . . . . . . 52
Section 8.12 Fees and Expenses . . . . . . . . . . . . . . . . . 53
Section 8.13 Notices . . . . . . . . . . . . . . . . . . . . . . 53
Section 8.14 Control of the Company . . . . . . . . . . . . . . . 54
Section 8.15 Matters relating to the Voting Agreements . . . . . 54
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 26, 1999 (this
"Agreement"), by and among American Telecasting, Inc. a Delaware
corporation (the "Company"), DD Acquisition Corp., a Delaware corporation
and a wholly owned subsidiary of Parent ("Purchaser"), and Sprint
Corporation, a Kansas corporation ("Parent").
WHEREAS, the Board of Directors of each of Parent, Purchaser and
the Company has approved, and deems it advisable and in the best interests
of its respective stockholders to consummate the acquisition of the Company
by Parent upon the terms and subject to the conditions set forth herein;
and
WHEREAS, in furtherance thereof, upon the terms and subject to
the conditions set forth in this Agreement, (i) Purchaser would be merged
with and into the Company (the "Merger"), with the Company as the surviving
corporation (the "Surviving Corporation"), in accordance with the General
Corporation Law of the State of Delaware (the "DGCL") and (ii) each issued
and outstanding share of Class A Common Stock, $0.01 par value per share,
of the Company (including any and all rights to be attached thereto to
acquire shares of preferred stock of the Company pursuant to the Rights
Plan (as defined in Section 5.14), and any other rights associated
therewith, to be adopted by the Company pursuant to Section 5.14, the
"Company Common Stock") immediately prior to the Effective Time (as defined
in Section 1.2) would, except as otherwise expressly provided herein, be
converted into the right to receive the Merger Consideration (as defined in
Section 1.6); and
WHEREAS, concurrently herewith and as a condition and inducement
to Parent's and Purchaser's willingness to enter into this Agreement,
Parent and certain stockholders of the Company have entered into voting
agreements, dated as of the date hereof (the "Voting Agreements"), pursuant
to which such stockholders have agreed, upon the terms and conditions set
forth therein, to vote the outstanding shares of Company Common Stock owned
by them in favor of the Merger; and
WHEREAS, the Company, Parent and Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with
the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein,
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger; Effects of the Merger. Subject to the
terms and conditions of this Agreement, at the Effective Time, the Company
and Purchaser shall consummate a merger pursuant to which (a) Purchaser
shall be merged with and into the Company and the separate corporate
existence of Purchaser shall thereupon cease, (b) the Company shall be the
successor or surviving corporation in the Merger and shall continue to be
governed by the laws of the State of Delaware, and (c) the separate
corporate existence of the Company with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger,
except as set forth in this Section 1.1. Pursuant to the Merger, (x) the
certificate of incorporation of the Company, as in effect immediately prior
to the Effective Time, shall be the certificate of incorporation of the
Surviving Corporation until thereafter amended as provided by law and such
certificate of incorporation, and (y) the by-laws of the Company, as in
effect immediately prior to the Effective Time, shall be the by-laws of the
Surviving Corporation until thereafter amended as provided by law, by such
certificate of incorporation or by such by-laws. The Merger shall have the
effects specified in the DGCL.
Section 1.2 Effective Time. Subject to the provisions of this
Agreement, the Merger shall be consummated as promptly as practicable (and
in any event within three business days) after satisfaction or, to the
extent permitted hereunder, waiver of all conditions to each party's
obligation to consummate the Merger contained in Article VI, by duly filing
an appropriate certificate of merger (the "Certificate of Merger"), in such
form as is required by and executed in accordance with, the relevant
provisions of the DGCL. The Merger shall become effective on the date on
which such Certificate of Merger is duly filed with the Secretary of State
of the State of Delaware or such other time as is agreed upon by the
parties and specified in such certificate of merger (the "Effective
Time"). The date on which the Effective Time shall occur is referred to
herein as the "Effective Date."
Section 1.3 Closing. On the Effective Date, the closing
("Closing") of the Merger shall take place at 10:00 a.m. at the offices of
King & ▇▇▇▇▇▇▇▇, ▇▇▇▇ Avenue of the Americas, New York, New York.
Section 1.4 Directors and Officers of the Surviving Corporation.
The directors of Purchaser and the officers of the Company at the Effective
Time shall, from and after the Effective Time, be the directors and
officers, respectively, of the Surviving Corporation until their successors
shall have been duly elected or appointed or qualified or until their
earlier death, resignation or removal in accordance with the certificate of
incorporation and the by-laws of the Surviving Corporation. If, at the
Effective Time, a vacancy shall exist on the Company Board of Directors or
in any office of the Surviving Corporation, such vacancy may thereafter be
filled in the manner provided by law.
Section 1.5 Subsequent Actions. If at any time after the
Effective Time the Surviving Corporation shall consider or be advised that
any deeds, bills of sale, assignments, assurances or any other actions or
things are necessary or desirable to vest, perfect or confirm of record or
otherwise in the Surviving Corporation its right, title or interest in, to
or under any of the rights, properties or assets of either of the Company
or Purchaser acquired or to be acquired by the Surviving Corporation as a
result of, or in connection with, the Merger or otherwise to carry out this
Agreement, the officers and directors of the Surviving Corporation shall be
authorized to execute and deliver, in the name and on behalf of either the
Company or Purchaser, all such deeds, bills of sale, instruments of
conveyance, assignments and assurances and to take and do, in the name and
on behalf of each of such corporations or otherwise, all such other actions
and things as may be necessary or desirable to vest, perfect or confirm any
and all right, title and interest in, to and under such rights, properties
or assets in the Surviving Corporation or otherwise to carry out this
Agreement.
Section 1.6 Consideration for the Merger; Conversion or
Cancellation of Company Common Stock in the Merger. At the Effective Time,
by virtue of the Merger and without any action on the part of Parent,
Purchaser, the Company or the holders of any shares of Company Common
Stock:
(a) Each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time (other than shares to
be cancelled pursuant to Section 1.6(b) and Dissenting Shares (as defined
in Section 2.2, if any)) shall be cancelled and extinguished and converted
automatically into the right to receive $6.50 in cash, without interest
thereon (as may be adjusted pursuant to Section 5.6, the "Merger
Consideration").
(b) Each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time and owned by Parent or
Purchaser (other than shares in trust account, managed accounts, custodial
accounts and the like that are beneficially owned by third parties), or
which is held in the treasury of the Company or any of its Subsidiaries,
shall cease to be outstanding, be cancelled and retired without payment of
any consideration therefor and cease to exist.
(c) Each share of common stock of Purchaser issued and
outstanding immediately prior to the Effective time shall be converted into
and become one validly issued, fully paid and nonassessable share of common
stock, par value $.01 per share, of the Surviving Corporation.
ARTICLE II
SURRENDER OF SHARES OF COMPANY COMMON STOCK;
DISSENTING SHARES; COMPANY OPTIONS
Section 2.1 Surrender of Certificates.
(a) Prior to the Effective Time, Parent shall designate a bank
or trust company reasonably satisfactory to the Company to act as agent
(the "Paying Agent") for the holders of shares of Company Common Stock in
connection with the Merger to receive in trust the funds to which holders
of shares of Company Common Stock shall become entitled pursuant to Section
1.6(a). On or prior to the Effective Time, Parent or Purchaser shall
deposit, or cause to be deposited, with the Paying Agent for the benefit of
holders of shares of Company Common Stock the aggregate Merger
Consideration to which such holders shall be entitled at the Effective Time
pursuant to Section 1.6(a). Such funds shall be invested as directed by
Parent or the Surviving Corporation pending payment thereof by the Paying
Agent to holders of shares of Company Common Stock. Earnings from such
investments shall be the sole and exclusive property of Purchaser and the
Surviving Corporation, and no part of such earnings shall accrue to the
benefit of holders of shares of Company Common Stock.
(b) As soon as reasonably practicable after the Effective Time,
Parent shall cause the Paying Agent to mail to each holder of record of a
certificate representing shares of Company Common Stock (a "Certificate"),
(i) a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only
upon delivery of the Certificates to the Paying Agent and shall be in such
form and have such other provisions not inconsistent with this Agreement as
Parent may specify) and (ii) instructions for use in effecting the
surrender of Certificates in exchange for payment of the Merger
Consideration. Upon surrender of a Certificate for cancellation to the
Paying Agent or to such other agent or agents as may be appointed by
Parent, together with such letter of transmittal, duly executed, the holder
of such Certificate shall be entitled to receive in exchange therefor the
Merger Consideration for each share of Company Common Stock formerly
represented by such Certificate, and the Certificate so surrendered shall
forthwith be cancelled. If payment of the Merger Consideration is to be
made to a person other than the person in whose name the surrendered
Certificate is registered, it shall be a condition of payment that the
Certificate so surrendered shall be properly endorsed or shall be otherwise
in proper form for transfer and that the person requesting such payment
shall have paid any transfer and other taxes required by reason of the
payment of the Merger Consideration to a person other than the registered
holder of the Certificate surrendered or shall have established to the
satisfaction of the Surviving Corporation that such tax either has been
paid or is not applicable. Until surrendered as contemplated by this
Section 2.1, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive the Merger
Consideration in cash as contemplated by this Section 2.1. If any
Certificate shall have been lost, stolen or destroyed, upon making of an
affidavit of that fact by the person claiming such Certificate to be lost,
stolen or destroyed and, if required by the Surviving Corporation or
Parent, the posting by such person of a bond, in such reasonable amount as
the Surviving Corporation or Parent may direct, as indemnity against any
claim that may be made against it with respect to such Certificate, the
Paying Agent will issue in exchange for such lost, stolen or destroyed
Certificate the applicable Merger Consideration such holder is entitled to
receive pursuant to this Section 2.1.
(c) At the Effective Time, the stock transfer books of the
Company shall be closed, and thereafter there shall be no further
registration of transfers of shares of Company Common Stock on the records
of the Company. From and after the Effective Time, the holders of
Certificates evidencing ownership of shares of Company Common Stock
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such shares, except as otherwise provided for herein
or by applicable law. All cash paid pursuant to this Article II upon the
surrender or exchange of Certificates shall be deemed to have been paid in
full satisfaction of all rights pertaining to the shares of Company Common
Stock theretofore represented by such Certificate.
(d) At any time following six months after the Effective Time,
the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds (including any earnings received with respect
thereto) which had been made available to the Paying Agent and which have
not been disbursed to holders of Certificates, and thereafter such holders
shall be entitled to look only to the Surviving Corporation (subject to
abandoned property, escheat or other similar laws) and only as general
creditors thereof with respect to the Merger Consideration payable upon due
surrender of their Certificates. If any Certificates representing shares
of Company Common Stock shall not have been surrendered immediately prior
to such date on which the Merger Consideration in respect of such
Certificate would otherwise escheat to or become the property of any
Governmental Entity, any such cash, shares, dividends or distributions
payable in respect of such Certificate shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and
clear of all claims or interest of any person previously entitled thereto.
Notwithstanding the foregoing, neither the Surviving Corporation nor the
Paying Agent shall be liable to any holder of a Certificate for Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(e) Parent, Purchaser, the Surviving Corporation and the Paying
Agent, as the case may be, shall be entitled to deduct and withhold from
the Merger Consideration otherwise payable pursuant to this Agreement to
any holder of shares of Company Common Stock and Company Options such
amounts that Parent, Purchaser, the Surviving Corporation or the Paying
Agent is required to deduct and withhold with respect to the making of such
payment under the Internal Revenue Code of 1986, as amended ( the "Code"),
the rules and regulations promulgated thereunder or any provision of state,
local or foreign tax law. To the extent that amounts are so withheld by
Parent, Purchaser, the Surviving Corporation or the Paying Agent, such
amounts shall be treated for all purposes of this Agreement as having been
paid to the holder of shares of Company Common Stock and Company Options in
respect of which such deduction and withholding was made by Parent,
Purchaser, the Surviving Corporation or the Paying Agent.
Section 2.2 Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the
contrary, any shares of Company Common Stock as to which the holder thereof
has demanded appraisal with respect to the Merger in accordance with
Section 262 of the DGCL and as of the Effective Time has neither
effectively withdrawn nor lost his right to such appraisal ("Dissenting
Shares") shall not be converted into or represent a right to receive cash
pursuant to Section 1.6, but the holder thereof shall be entitled to only
such rights as are granted in Section 262 of the DGCL.
(b) Notwithstanding the provisions of Section 2.2(a), if any
holder of shares of Company Common Stock who demands appraisal of such
shares under the DGCL effectively withdraws or loses (through failure to
perfect or otherwise) his right to appraisal, then as of the Effective Time
or the occurrence of such event, whichever later occurs, such holder's
shares of Company Common Stock shall automatically be converted into and
represent only the right to receive the Merger Consideration as provided in
Section 1.6(a), without interest, upon surrender of the Certificate or
Certificates representing such shares pursuant to Section 2.1.
(c) The Company shall give Parent (i) prompt notice of any
written demands for appraisal or payment of the fair value of any shares of
Company Common Stock, withdrawals of such demands, and any other
instruments served on the Company pursuant to the DGCL received by the
Company and (ii) the opportunity to direct all negotiations and proceedings
with respect to demands for appraisal under the DGCL. Except with the
prior written consent of Parent, the Company shall not voluntarily make any
payment with respect to any demands for appraisal, settle or offer to
settle any such demands.
Section 2.3 Company Stock Options and Purchase Plans.
(a) Immediately prior to the Effective Time, each holder of an
employee stock option to purchase shares of Company Common Stock (a
"Company Option"), whether vested or unvested, will be entitled to receive
from the Company, and shall receive, in settlement of each Company Option
an amount in cash equal to the product of (i) the excess, if any, of the
Merger Consideration over the exercise price per share of such Company
Option and (ii) the number of shares of Company Common Stock subject to
such Company Option. All Options shall terminate as of the Effective Time.
(b) Except as may be otherwise agreed to by Parent and the
Company, all stock option and purchase plans established by the Company or
any of its Subsidiaries shall terminate as of the Effective Time and the
provisions in any other plan, program or arrangement providing for the
issuance or grant of any other interest in respect of the capital stock of
Company or any of its Subsidiaries shall be deleted, terminated and of no
further force or effect as of the Effective Time.
(c) If and to the extent necessary or required by the terms of
the plans governing Company Options or pursuant to the terms of any Company
Option granted thereunder, each of Parent and the Company shall use its
best efforts to obtain the consent of each holder of outstanding Company
Options to the foregoing treatment of such Company Options.
(d) Parent, Purchaser and the Company shall take all such steps
as may be required to cause the transactions contemplated by this Section
2.3 and any other dispositions of the Company equity securities (including
derivative securities) or acquisitions of Parent equity securities
(including derivative securities) in connection with this Agreement by each
individual who (a) is a director or officer of the Company or (b) at the
Effective Time, will become a director or officer of Parent, to be exempt
under Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), such steps to be taken in accordance with the
No-Action Letter dated January 12, 1999, issued by the Securities and
Exchange Commission (the "SEC") to Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
LLP.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule prepared and
signed by the Company and delivered to Parent simultaneously with the
execution hereof (the "Company Disclosure Letter"), the Company represents
and warrants to Parent and Purchaser that all of the statements contained
in this Article III are true and correct as of the date of this Agreement
(or, if made as of a specified date, as of such date).
Section 3.1 Organization and Standing. Each of the Company and
each Subsidiary (i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization,
(ii) has full corporate power and authority and all necessary government
approvals to own, lease and operate its properties and assets and to
conduct its business as presently conducted and (iii) is duly qualified or
licensed to do business as a foreign corporation and is in good standing in
each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such qualification or
licensing necessary except where failure to be so qualified or licensed
would not, individually or in the aggregate, have a Company Material
Adverse Effect. "Company Material Adverse Effect" means any material
adverse change in or effect on the consolidated businesses, financial
condition or results of operations of the Company and its Subsidiaries,
taken as a whole (including, but not limited to, any change that materially
adversely affects the FCC Licenses or Channel Leases), other than any
change or effect related to (i) any loss of subscribers to the Company's
wireless cable television services and (ii) any adverse developments in the
Company's consolidated revenue or results of operations. The Company has
furnished or made available to Parent true and complete copies of its
certificate of incorporation (including any certificates of designations
attached thereto, the "Company Certificate of Incorporation") and by-laws
(the "Company By-laws") and the certificate of incorporation and bylaws (or
equivalent organizational documents) of each Subsidiary, each as amended to
date. Such certificate of incorporation, bylaws or equivalent
organizational documents are in full force and effect, and neither the
Company nor any Subsidiary is in violation of any provision of its
certificate of incorporation, bylaws or equivalent organizational
documents.
Section 3.2 Capitalization. The authorized capital stock of
the Company (the "Company Stock") consists of 2,500,000 shares of Preferred
Stock (the "Preferred Stock"), 500,000 shares of Series B Convertible
Preferred Stock (the "Convertible Preferred Stock"), 45,000,000 shares of
Company Common Stock and 10,000,000 shares of Class B Common Stock (the
"Class B Common Stock"). As of the date hereof, (i) 25,818,154 shares of
Company Common Stock are issued and outstanding, all of which are validly
issued, fully paid and nonassessable and free of preemptive rights, (ii) no
shares of Company Common Stock are held in the treasury of the Company,
(iii) 503,220 shares of Company Common Stock are issuable pursuant to
outstanding Company Options, (iv) 1,898,856 shares of Company Common Stock
are issuable upon exercise of outstanding warrants of the Company (the
"Company Warrants"), and (v) there are no issued and outstanding shares of
Preferred Stock, Convertible Preferred Stock or Class B Common Stock. The
Company will authorize and reserve shares of Series A Junior Participating
Preferred Stock for future issuance pursuant to the Rights Plan. The
Company Disclosure Letter sets forth a true and complete list of the
outstanding Company Options and Company Warrants, in each case with the
exercise price. Except as set forth above or in the Company Disclosure
Letter, there are no options, warrants, convertible securities,
subscriptions, stock appreciation rights, phantom stock plans or stock
equivalents or other rights, agreements, arrangements or commitments
(contingent or otherwise) of any character issued or authorized by the
Company relating to the issued or unissued capital stock of the Company or
any Subsidiary or obligating the Company or any Subsidiary to issue or sell
any shares of capital stock of, or options, warrants, convertible
securities, subscriptions or other equity interests in, the Company or any
Subsidiary. All Company Stock subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant
to which they are issuable, will be duly authorized, validly issued, fully
paid and nonassessable. Except as set forth in the Company Disclosure
Letter, there are no outstanding contractual obligations of the Company or
any Subsidiary to repurchase, redeem or otherwise acquire any shares of
Company Stock or any capital stock of any Subsidiary or to pay any dividend
or make any other distribution in respect thereof or to provide funds to,
or make any investment (in the form of a loan, capital contribution or
otherwise) in, any person. Except as set forth in the Company Disclosure
Letter, the Company owns beneficially and of record all of the issued and
outstanding capital stock of each Subsidiary and does not own an equity
interest in any other corporation, partnership or entity, other than in the
Subsidiaries. Each outstanding share of capital stock of each Subsidiary
is duly authorized, validly issued, fully paid and nonassessable and each
such share owned by the Company or another Subsidiary is free and clear of
all security interests, liens, claims, pledges, options, rights of first
refusal, agreements, limitations on the Company's or such other
Subsidiary's voting rights, charges and other encumbrances of any nature
whatsoever.
Section 3.3 Authority for Agreement.
(a) The Company has all necessary corporate power and authority
to execute and deliver this Agreement, to perform its obligations hereunder
and, subject to obtaining necessary stockholder approval, to consummate the
Merger and the other transactions contemplated by this Agreement. The
execution, delivery and performance by the Company of this Agreement, and
the consummation by the Company of the Merger and the other transactions
contemplated by this Agreement, have been duly authorized by all necessary
corporate action (including, without limitation, the unanimous approval of
the Company Board of Directors) and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement or to
consummate the Merger or the other transactions contemplated by this
Agreement (other than, with respect to the Merger, the approval and
adoption of this Agreement by the affirmative vote of a majority of the
voting power of the then outstanding shares of Company Common Stock and the
filing and recordation of appropriate merger documents as required by the
DGCL). This Agreement has been duly executed and delivered by the Company
and, assuming the due authorization, execution and delivery by Parent and
Purchaser, constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms. The
affirmative vote of holders of the outstanding shares of Company Common
Stock entitled to vote at a duly called and held meeting of stockholders is
the only vote of the Company's stockholders necessary to approve this
Agreement, the Merger and the other transactions contemplated by this
Agreement.
(b) At a meeting duly called and held on April 26, 1999, the
Company Board of Directors unanimously (i) determined that this Agreement
and the other transactions contemplated hereby, including the Merger, are
fair to and in the best interests of the Company and the holders of shares
of Company Common Stock, (ii) approved, authorized and adopted this
Agreement, the Merger and the other transactions contemplated hereby, and
(iii) resolved, subject to the rights of the Company Board of Directors
under Section 5.6 hereof, to recommend that the stockholders of the
Company approve and adopt this Agreement and the Merger, and none of the
aforesaid actions by the Company Board of Directors has been amended,
rescinded or modified. The action taken by the Company Board of Directors
constitutes approval of the Merger and the other transactions contemplated
hereby by the Company Board of Directors under the provisions of Section
203 of the DGCL such that Section 203 of the DGCL does not apply to this
Agreement or the other transactions contemplated hereby.
(c) Lazard Freres & Co. LLC has advised the Company Board of
Directors of its opinion, and has undertaken to deliver to the Company
Board of Directors such opinion in writing dated the date of this
Agreement, that, as of such date and based on the assumptions,
qualifications and limitations contained therein, the Merger Consideration
is fair, from a financial point of view, to such holders.
Section 3.4 No Conflict. The execution and delivery of this
Agreement by the Company do not, and the performance of this Agreement by
the Company and the consummation of the Merger and the other transactions
contemplated by this Agreement will not, (i) conflict with or violate the
Company Certificate of Incorporation or Company Bylaws or equivalent
organizational documents of any of its Subsidiaries, (ii) subject to
Section 3.5, conflict with or violate any United States federal, state or
local or any foreign statute, law, rule, regulation, ordinance, code,
order, judgment, decree or any other requirement or rule of law (a "Law")
applicable to the Company or any of its Subsidiaries or by which any
property or asset of the Company or any of its Subsidiaries is bound or
affected, or (iii) except as set forth in the Company Disclosure Letter,
result in a breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, give to
others any right of termination, amendment, acceleration or cancellation
of, result in triggering any payment or other obligations, or result in the
creation of a lien or other encumbrance on any property or asset of the
Company or any of its Subsidiaries pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of its Subsidiaries is
a party or by which the Company or any of its Subsidiaries or any property
or asset of any of them is bound or affected, except in the case of clauses
(ii) and (iii) above for any such conflicts, violations, breaches, defaults
or other occurrences which could not, individually or in the aggregate,
have a Company Material Adverse Effect.
Section 3.5 Required Filings and Consents. The execution and
delivery of this Agreement by the Company do not, and the performance of
this Agreement by the Company will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any United
States federal, state or local or any foreign government or any court,
administrative or regulatory agency or commission or other governmental
authority or agency, domestic or foreign (a "Governmental Entity"), except
(i) for applicable requirements, if any, of the Exchange Act, state
securities or "blue sky" laws ("Blue Sky Laws") and filing and recordation
of appropriate merger documents as required by the DGCL, (ii) for those
required by the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (iii) for those required by the Federal
Communications Commission or any successor entity (the "FCC") under the
Communications Act of 1934, as amended, and the rules, regulations and
policies of the FCC promulgated thereunder (collectively, the
"Communications Act"), including those required in connection with the
transfer of control of the Company and the assignment of the FCC Licenses
(as defined in Section 3.7 hereof) held by the Company and its Subsidiaries
and affiliates (the "FCC Filings"), (iv) for filings contemplated by
Section 3.15 hereof, and (v) where failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or
notifications, could not, individually or in the aggregate, have a Company
Material Adverse Effect.
Section 3.6 Compliance. Subject to Section 3.7 and except as
disclosed in the Company Disclosure Letter, each of the Company and its
Subsidiaries (i) has been operated at all times in compliance with all Laws
applicable to the Company or any of its Subsidiaries or by which any
property, business or asset of the Company or any of its Subsidiaries is
bound or affected and (ii) is not in default or violation of any notes,
bonds, mortgages, indentures, contracts, agreements, leases, licenses,
permits, franchises, or other instruments or obligations to which the
Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries or any property or asset of the Company or any of
its Subsidiaries is bound or affected, except in either case for any such
failures to comply, conflicts, defaults or violations that could not,
individually or in the aggregate, have a Company Material Adverse Effect.
Section 3.7 Licenses and Permits.
(a) The Company Disclosure Letter sets forth all of the FCC
licenses, permits, applications, and authorizations for BTAs (as
hereinafter defined), MDS stations (as hereinafter defined), Local
Multipoint Distribution Service facilities ("LMDS"), ITFS stations (as
hereinafter defined) and other FCC licensed facilities (collectively, the
"FCC Licenses") either held by the Company or a Subsidiary thereof, or that
are subject to an agreement pursuant to which the use of the transmission
capacity associated therewith is leased by the Company or a Subsidiary
thereof (the "Channel Leases"). The Company Disclosure Letter correctly
sets forth the identity of the holder and lessor and lessee (if other than
the Company or a Subsidiary thereof) of the transmission capacity of such
FCC Licenses and the termination date of such FCC Licenses. Except as set
forth in the Company Disclosure Letter, each FCC License held by the
Company or a Subsidiary thereof, and to the knowledge of the Company, each
other FCC License was duly and validly issued and assigned to the holder
thereof by the FCC pursuant to procedures which comply with all
requirements of applicable Law, including the requirements of any
international agreements implemented by the FCC related to channel use or
frequency coordination. There has been no occurrence of any event or the
existence of any circumstances which may lead to the forfeiture,
revocation, suspension, impairment, adverse modification or non-renewal of
any FCC License held by the Company or a Subsidiary thereof, or to the
knowledge of the Company, of any FCC License held by the lessor of a
Channel Lease or the imposition of a monetary fine or forfeiture against
the holder of an FCC License including, without limitation, any limitation
or discontinuance of service or operation of the facility associated with
the FCC License. Except as set forth in the Company Disclosure Letter,
each FCC License held by the Company or a Subsidiary thereof, and to the
knowledge of the Company, each other FCC License has been duly authorized
and is in full force and effect, and there is no known conflict with the
valid rights of others which could have a material adverse effect on the
value or use of the FCC Licenses or the transmission capacity associated
therewith. Except as set forth in the Company Disclosure Letter or in any
Channel Lease, there are no agreements, arrangements or understandings
relating to the assignment, transfer, conveyance or pledge of any FCC
License held by the Company or a Subsidiary thereof, or to the knowledge of
the Company, any other FCC License, in whole or in part, or any interest
therein for the markets in which the Company or any of its Subsidiaries
operate.
(b) Except as disclosed in Schedule 3.7(a) of the Company
Disclosure Letter, the Company, its Subsidiaries and, to the knowledge of
the Company, each of the other holders of the FCC Licenses has duly filed
in a timely manner all filings and reports relating to the FCC Licenses and
the Channel Leases required to be filed with a Governmental Entity by the
holders of the FCC Licenses, the Company or its Subsidiaries, as the case
may be, under the Communications Act, other applicable Laws or FCC rules.
The Company, its Subsidiaries and, to the knowledge of the Company, the
other holders of the FCC Licenses are in material compliance with all
applicable Laws, including, without limitation, the Communications Act and
the FCC rules relating to the operation or use of the FCC Licenses, and,
each filing and report filed with a Governmental Entity with respect to the
Company, its Subsidiaries, their FCC Licenses, or to the knowledge of the
Company, the other FCC Licenses is true, correct and complete in all
respects and there have been no changes in the ownership of the FCC
Licenses since the filing of the most recent ownership report.
(c) The Company Disclosure Letter correctly sets forth all of
the Channel Leases pursuant to which the Company or a Subsidiary thereof
may use the transmission capacity of the FCC Licenses corresponding
thereto. Except as disclosed in the Company Disclosure Letter, each of the
Channel Leases was duly and validly entered into by the parties thereto
pursuant to procedures which comply with all requirements of applicable
Law, including the requirements of the FCC, and no event has occurred or
circumstances exist which may lead to the revocation, suspension,
termination, breach, default, adverse modification or non-renewal of any
Channel Lease or material provision thereof, or cause any Channel Lease, or
any material provision thereof, not to comply with the requirements of the
FCC. Except as disclosed in the Company Disclosure Letter, no provision
of any of the Channel Leases prohibits, restricts or would reasonably be
expected to materially adversely affect or delay: (i) the Colocation (as
defined herein) of the FCC Licenses at the corresponding Colocation Site
(as defined herein), and the filing with the FCC, by the holder of the
corresponding FCC License, of any application for authorization (including
a Colocation Application) relating thereto; (ii) the use or implementation
of digital technology in connection with the provision of one-way
transmission of data, Internet, video (including video programming), and
other similar services using the transmission capacity of the FCC License
("Digital Services"), and the filing with the FCC, by the holder of the
corresponding FCC License, of any application for authorization relating to
such Digital Service; or (iii) the use or implementation of two-way
technology in connection with the provision of two-way transmission of
data, Internet, video (including video programming), telephony and other
similar services using the transmission capacity of the FCC License ("Two-
Way Services"), and the filing with the FCC, by the holder of the
corresponding FCC License, of any application for authorization relating to
such Two-Way Service. Except as set forth in the Company Disclosure
Letter, the Company has the sole right under each of the Channel Leases to
use all of the transmission capacity associated with the FCC License for
the provision of any services authorized by the FCC, including analog
services, Digital Services, and Two-Way Services (other than the
transmission capacity expressly reserved by such Channel Lease for the
holder of an FCC License in the Instructional Television Fixed Service (the
"ITFS Service")). Buyer upon the closing of the transactions contemplated
by this Agreement, will have the sole right to use the transmission
capacity of the FCC License under each of the Channel Leases for the
provision of any services authorized by the FCC, including analog services,
Digital Services and Two-Way Services (other than the transmission capacity
expressly reserved by such Channel Lease for the holder of an FCC License
in the ITFS Service). Each Channel Lease is in full force and effect and
the parties thereto are in compliance with the terms thereof and there are
no known conflicts with the valid rights of others. No third party has any
rights to assert any interests in any of the Channel Leases or the rights
and benefits granted to the Company or its Subsidiaries pursuant thereto.
No event has occurred which permits, or after notice or lapse of time or
both would permit the revocation, suspension, termination, breach, default,
adverse modification or non-renewal of any Channel Lease by the lessor of
such Channel Lease. There are no existing or alleged defaults by the
lessors or the Company or its Subsidiaries under any of the Channel Leases,
including any defaults relating to the payment obligations thereunder.
Except as set forth in the Company Disclosure Letter, the consummation of
the transactions contemplated by this Agreement will not result in the
breach or violation of any of the terms, conditions, or provisions of any
of the Channel Leases or give rise to any right of termination of any
Channel Lease.
(d) Except as set forth in the Company Disclosure Letter,
neither the Company nor any Subsidiary thereof, nor , to the knowledge of
the Company, any lessor under any Channel Lease has agreed to accept any
interference from any third party or to take any action to protect any
third party's reception from interference that would have a Company
Material Adverse Effect on the development of the Company's current
business. The Company Disclosure Letter sets forth all interference and
coordination agreements entered into by the Company, any of its
Subsidiaries or affiliates or, to the knowledge of the Company, any other
holder of an FCC License.
(e) There is no outstanding adverse judgment, injunction, decree
or order that has been issued by the FCC against the Company, or a
Subsidiary or affiliate thereof or, to the knowledge of the Company, the
holder of an FCC License, or any action, proceeding or investigation
pending before or, to the knowledge of the Company, threatened by the FCC
or a third party (excluding a cable franchising authority) specifically,
including, but not limited to, any pending or threatened proceeding that
would have the effect of revoking or restricting or impairing one or more
of the FCC Licenses or the operations of the Company or a Subsidiary or
affiliate thereof.
(f) Except as set forth in the Company Disclosure Letter, all
regulatory fees and expenses due and payable to the FCC associated with the
FCC Licenses have been paid by the Company or a Subsidiary thereof and, to
the knowledge of the Company, by each other holder of an FCC License,
including all fees and costs associated with the FCC Licenses held by the
Company or a Subsidiary thereof to provide LMDS or MDS service in basic
trading areas, as defined by Rand ▇▇▇▇▇▇▇ (the "BTAs"). The Company
Disclosure Letter discloses any discounts or bidding credits that the
Company or a Subsidiary thereof received from the FCC in conjunction with
the licensing of the BTAs.
(g) The Company Disclosure Letter accurately lists each of
the FCC Licenses, and accurately discloses and describes (i) whether an
application is pending before, or has been granted by the FCC to authorize
the operation of the facilities associated with any FCC License at a common
transmitter site with other Multichannel Multipoint Distribution Service
and Multipoint Distribution Service stations (collectively, "MDS") and ITFS
stations (a "Colocation Application" for the "Colocation" of the FCC
License); (ii) whether any other applications, in addition to Colocation
Applications, have been filed with or granted by the FCC, to authorize the
provision of Digital Services and/or Two-Way Services on the facilities
associated with any FCC License (collectively referred to as "Other
Applications"); and (iii) the status of each Colocation Application and
Other Application, including (A) the transmission site proposed in the
Colocation Application (the "Colocation Site") or in the Other
Applications, or authorized by the grant thereof; and (B) the authorized or
proposed technical parameters and conditions for the provision of analog
services and, to the extent applicable, Digital Services and Two-Way
Services pursuant to the Colocation Application or Other Application.
Except as set forth in the Company Disclosure Letter, (i) each Colocation
Application and Other Application filed with the FCC by the Company, a
Subsidiary thereof or the holder of an FCC License complies with the FCC
rules and other applicable Laws (including the interference protection and
coordination requirements) and has been accepted for filing by the FCC;
(ii) there are no pending, or to the knowledge of the Company, threatened
interference issues, petitions to deny, written informal objections,
outstanding no-objection letters, comments, petitions for reconsideration,
petitions for review, waiver requests, other similar filings, or to the
knowledge of the Company, competing or conflicting applications, relating
to such Colocation Applications and Other Applications; and (iii) a
protected service area for the FCC License has been granted or requested,
unless such FCC License is associated with a BTA authorization for the MDS
service.
(h) Tower Site Leases
(i) The Company Disclosure Letter accurately and completely
lists and sets forth a description (including location of premises, term,
and assignability) of all agreements between the Company and any Person
relating to the location and use of towers, earth stations and associated
real estate at such sites (including at the Colocation Sites) (the "Tower
Site Leases"). All such Tower Site Leases are valid, subsisting, and in
full force and effect and not subject to a breach by the Company or, to the
knowledge of the Company, any of the parties thereto.
(ii) All of the existing towers owned by the Company or its
Subsidiaries or affiliates and located at the Colocation Sites ("Company
Towers"), and to the knowledge of the Company, all other towers used in
conjunction with one or more FCC Licenses ("Other Towers") are obstruction-
marked and lighted to the extent required by, and in accordance with
applicable Laws, including the rules and regulations of the Federal
Aviation Administration (the "FAA") and the FCC. Except as set forth in
the Company Disclosure Letter, all appropriate notifications to the FAA
have been filed for each Company Tower, and to the knowledge of the
Company, each Other Tower where required by the rules and regulations of
the FAA or the FCC.
(i) Cable Franchises. The Company Disclose Letter
discloses all cable franchises ("Franchises") held by the Company or its
Subsidiaries. Except as set forth in the Company Disclosure Letter, (i)
all such Franchises are valid and in full force and effect; (ii) the
Company and its Subsidiaries are in compliance with the terms and
conditions of such Franchises; and (iii) no third parties have asserted any
rights in such Franchises.
Section 3.8 SEC Filings, Financial Statements.
(a) The Company has filed all forms, reports, statements and
documents required to be filed with the SEC since January 1, 1997
(collectively, the "SEC Reports"), each of which has complied in all
material respects with the applicable requirements of the Securities Act of
1933, as amended (the "Securities Act"), and the rules and regulations
promulgated thereunder, or the Exchange Act, and the rules and regulations
promulgated thereunder, each as in effect on the date so filed. None of the
SEC Reports (including, but not limited to, any financial statements or
schedules included or incorporated by reference therein) contained when
filed any untrue statement of a material fact or omitted or omits to state
a material fact required to be stated or incorporated by reference therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) Each of the audited consolidated balance sheets of the
Company as of December 31, 1998 and December 31, 1997 and the related
consolidated statements of operations, shareholders' deficit and cash flows
for the three fiscal years in the period ended December 31, 1998 included
in its Annual Report on Form 10-K for the fiscal year ended December 31,
1998 (the "Company 10-K"), in each case, including any related notes
thereto, as filed with the SEC (collectively, the "Company Financial
Statements"), has been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto) and
fairly presents in all material respects the consolidated financial
position of the Company and its Subsidiaries at the respective date thereof
and the consolidated results of its operations and changes in cash flows
for the periods indicated.
(c) Except as disclosed in the Company Disclosure Letter, there
are no liabilities of the Company or any of its Subsidiaries of any kind
whatsoever, whether or not accrued and whether or not contingent or
absolute, that are material to the Company and its Subsidiaries, taken as a
whole, other than (i) liabilities disclosed or provided for in the
consolidated balance sheet of the Company and its Subsidiaries at December
31, 1998, including the notes thereto, (ii) liabilities disclosed in the
SEC Reports, (iii) liabilities incurred on behalf of the Company in
connection with this Agreement and the transactions contemplated hereby,
and (iv) liabilities incurred in the ordinary course of business consistent
with past practice since December 31, 1998, none of which are, individually
or in the aggregate, reasonably likely to have a Company Material Adverse
Effect.
(d) The Company has heretofore furnished or made available to
Parent a complete and correct copy of any amendments or modifications
through the date hereof which have not yet been filed with the SEC to
agreements, documents or other instruments which previously had been filed
by the Company with the SEC as exhibits to the SEC Reports pursuant to the
Securities Act and the rules and regulations promulgated thereunder or the
Exchange Act and the rules and regulations promulgated thereunder.
Section 3.9 Absence of Certain Changes or Events. Except as
contemplated by this Agreement or as disclosed in the Company Disclosure
Letter or the Recent SEC Reports, since December 31, 1998, the Company and
its Subsidiaries have conducted their respective businesses only in the
ordinary course and consistent with prior practice and there has not been
(i) any event or occurrence of any condition that has had or would
reasonably be expected to have a Company Material Adverse Effect, (ii) any
declaration, setting aside or payment of any dividend or any other
distribution with respect to any of the capital stock of the Company or any
Subsidiary, (iii) any material change in accounting methods, principles or
practices employed by the Company, or (iv) any action of the type described
in Sections 5.1(b) (other than Section 5.1(b)(v) and (vi)) or 5.1(c) which
had such action been taken after the date of this Agreement would be in
violation of any such Section.
Section 3.10 Taxes. Except as set forth in the Company
Disclosure Letter: (a) the Company and each of its Subsidiaries have timely
filed all material Tax Returns required to be filed by it and all such Tax
Returns are true, correct and complete in all material respects, or
requests for extensions to file such returns or reports have been timely
filed, granted and have not expired, except to the extent that such
failures to file, to be complete or correct or to have extensions granted
that remain in effect individually or in the aggregate would not have a
material adverse effect on the Company; (b) the Company and each of its
Subsidiaries has paid (or there has been paid on its behalf) all Taxes
shown as due on such Tax Returns, paid all Taxes otherwise due and payable
except for such Taxes otherwise due and payable that would not individually
or in the aggregate have a Company Material Adverse Effect, and the most
recent financial statements contained in the SEC Reports reflect an
adequate reserve in accordance with GAAP for all Taxes payable by the
Company and its Subsidiaries for all taxable periods and portions thereof
accrued through the date of the financial statements; (c) no deficiencies
for any Taxes have been proposed, asserted or assessed against the Company
or any of its Subsidiaries that are not adequately reserved for, except for
deficiencies that individually or in the aggregate would not have a
material adverse effect on the Company; (d) neither the Company nor any of
its Subsidiaries has made an election under Section 341(f) of the Code; (e)
neither the Company nor any of its Subsidiaries has waived any statute of
limitations in respect of any material Taxes or agreed to any extension of
time with respect to a material Tax assessment or material deficiency; and
(f) neither the Company nor any of its Subsidiaries is a party to, is bound
by or has any obligation under, a Tax sharing contract or other agreement
or arrangement for the allocation, apportionment, sharing, indemnification,
or payment of Taxes. For purposes of this Agreement, (a) "Tax" (and, with
correlative meaning, "Taxes") means any federal, state, local or foreign
income, gross receipts, property, sales, use, license, excise, franchise,
employment, payroll, premium, withholding, alternative or added minimum, ad
valorem, transfer or excise tax, or any other tax, custom, duty,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or penalty or addition thereto, whether disputed
or not, imposed by any Governmental Entity, and (b) "Tax Return" means any
return, report or similar statement required to be filed with respect to
any Tax (including any attached schedules), including, without limitation,
any information return, claim for refund, amended return or declaration of
estimated Tax.
Section 3.11 Title to Assets.
(a) Except as set forth in the SEC Reports filed since January
1, 1999 and prior to the date hereof (the "Recent SEC Reports") or in the
Company Disclosure Letter, the Company and each of its Subsidiaries have
good and marketable title to, or a valid leasehold interest in, all of
their real and personal properties and assets reflected in the Recent SEC
Reports or acquired after December 31, 1998 (other than assets disposed of
since December 31, 1998 in the ordinary course of business consistent with
past practice), in each case free and clear of all title defects, liens,
encumbrances and restrictions, except for (i) liens, encumbrances or
restrictions which secure indebtedness which are reflected in the Recent
SEC Reports; (ii) liens for Taxes accrued but not yet payable; (iii) liens
arising as a matter of law in the ordinary course of business with respect
to obligations incurred after December 31, 1998, provided that the
obligations secured by such liens are not delinquent; and (iv) such title
defects, liens, encumbrances and restrictions, if any, as individually or
in the aggregate are not reasonably likely to have a Company Material
Adverse Effect. The Company Disclosure Letter sets forth a true, correct
and complete list of all real property owned by the Company or any of its
Subsidiaries, or as to which the Company or any such Subsidiary has the
option to purchase or acquire. Except as set forth in the Company
Disclosure Letter, the Company and each of its Subsidiaries either own, or
have valid leasehold interests in, all properties and assets used by them
in the conduct of their business, except where the absence of such
ownership or leasehold interest could not individually or in the aggregate
have a Company Material Adverse Effect.
(b) Except as set forth in the Recent SEC Reports or in the
Company Disclosure Letter, neither the Company nor any of its Subsidiaries
has any legal obligation, absolute or contingent, to any other person to
sell or otherwise dispose of, or to grant any right of first refusal or
right to proceeds relating to such sale or disposition of, any of its
assets with an individual value in excess of $25,000.
Section 3.12 Change of Control Agreements. Except as disclosed
in the Company Disclosure Letter or the Recent SEC Reports, neither the
execution and delivery of this Agreement nor the consummation of the Merger
or the other transactions contemplated by this Agreement, will (either
alone or in conjunction with any other event) result in, cause the
accelerated vesting or delivery of, or increase the amount or value of, any
payment or benefit to any director, officer or employee of the Company.
Except as set forth in the Company Disclosure Letter, without limiting the
generality of the foregoing, no amount paid or payable by the Company in
connection with the Merger or the other transactions contemplated by this
Agreement, including accelerated vesting of options (either solely as a
result thereof or as a result of such transactions in conjunction with any
other event) will be an "excess parachute payment" within the meaning of
Section 280G of the Code.
Section 3.13 Litigation. Except for such matters disclosed in
the Company Disclosure Letter or the Recent SEC Reports which, if adversely
determined, have not had, and would not reasonably be expected to have, a
Company Material Adverse Effect, there are no claims, suits, actions,
investigations, indictments or information, or administrative, arbitration
or other proceedings ("Litigation") pending or, to the knowledge of the
Company, threatened against the Company or any of its Subsidiaries. Except
for such matters which have not had, and could not reasonably be expected
to have, a Company Material Adverse Effect, there are no judgments, orders,
injunctions, decrees, stipulations or awards (whether rendered by a court,
administrative agency, or by arbitration, pursuant to a grievance or other
procedure) against or relating to the Company or any of its Subsidiaries.
Section 3.14 Contracts and Commitments. The Company Disclosure
Letter sets forth a true, correct and complete list of the following
contracts to which the Company or a Subsidiary is a party (including every
amendment, modification or supplement to the foregoing): (i) any contracts
of employment, (ii) agreements or arrangements for the purchase or sale of
any assets (otherwise than in the ordinary course of business), (iii)
agreements, contracts or indentures relating to the borrowing of money,
(iv) agreements with unions, material independent contractor agreements and
material leased or temporary employee agreements, (v) tower site leases and
other leases of any real property involving annual rent of $25,000 or more,
(vi) programming and retransmission consent agreements, (vii) contracts
containing covenants limiting the freedom of the Company, or any of its
Subsidiaries, to engage in any line of business or to compete with any
entity and (viii) other than respect to contracts identified in the Company
Disclosure Letter pursuant to Section 3.7, all other contracts, agreements
or commitments involving annual payments made by or to the Company or a
Subsidiary of $100,000. Except for agreements, arrangements or commitments
disclosed in the Company Disclosure Letter, neither the Company nor any of
its Subsidiaries is a party to any agreement, arrangement or commitment
which is material to the business of the Company taken as a whole. The
Company has delivered or made available true, correct and complete copies
of all such agreements, arrangements and commitments to Parent. Neither the
Company nor any of its Subsidiaries is in default under any such agreement,
arrangement or commitment which has had, or could reasonably be expected to
have, a Company Material Adverse Effect.
Section 3.15 Information Supplied. The proxy statement to be
mailed to the Company's stockholders in connection with the Stockholders'
Meeting (as defined in Section 5.5) (the "Proxy Statement") at the date
such document is first published, sent or delivered to the Company's
stockholders or, unless promptly corrected, at any time during the pendency
of the Stockholders' Meeting, will not, unless promptly corrected, 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
made therein, in light of the circumstances under which they were made, not
misleading. The Proxy Statement will comply as to form and substance in
all material respects with the requirements of the Exchange Act and the
applicable rules and regulations of the SEC thereunder. Notwithstanding the
foregoing, no representation or warranty is made by the Company with
respect to statements made or incorporated by reference therein based on
information supplied by Parent or Purchaser for inclusion or incorporation
by reference in the foregoing document.
Section 3.16 Employee Benefit Plans. All employee benefit
plans, compensation arrangements and other benefit arrangements covering
employees of the Company or any of its Subsidiaries (the "Company Benefit
Plans") and all employee agreements providing for compensation, severance
or other benefits to any employee or former employee of the Company or any
of its Subsidiaries are set forth in the Company Disclosure Letter. True
and complete copies of the Company Benefit Plans have been made available
to Parent. Any Company Benefit Plan intended to be qualified under Section
401(a) of the Code has received a determination letter or is a model
prototype plan and continues to satisfy the requirements for such
qualification. Neither the Company nor any of its Subsidiaries nor any
ERISA Affiliate of the Company maintains, contributes to or has maintained
or contributed in the past six (6) years to any benefit plan which is
covered by Title IV of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or Section 412 of the Code. Neither any Company
Benefit Plan, nor the Company nor any Subsidiary has incurred any material
liability or penalty under Section 4975 of the Code or Section 502(i) of
ERISA or engaged in any transaction that is reasonably likely to result in
any such liability or penalty. Except as set forth in the Company
Disclosure Letter, each Company Benefit Plan has been maintained and
administered in compliance with its terms and with ERISA and the Code to
the extent applicable thereto, except for such non-compliance which
individually or in the aggregate could not reasonably be expected to have a
Company Material Adverse Effect. There is no pending or anticipated
Litigation against or otherwise involving any of the Company Benefit Plans
and no Litigation (excluding claims for benefits incurred in the ordinary
course of Company Benefit Plan activities) has been brought against or with
respect to any such Company Benefit Plan, except for any of the foregoing
which individually or in the aggregate could not have a Company Material
Adverse Effect. All contributions required to be made as of the date
hereof to the Company Benefit Plans have been made or provided for. Except
as described in the SEC Reports or as required by Law, neither the Company
nor any of its Subsidiaries maintains or contributes to any plan or
arrangement which provides or has any liability to provide life insurance
or medical or other employee welfare benefits to any employee or former
employee upon his retirement or termination of employment, and neither the
Company nor any of its Subsidiaries has ever represented, promised or
contracted (whether in oral or written form) to any employee or former
employee that such benefits would be provided.
For purposes of this Agreement "ERISA Affiliate" means any
business or entity which is a member of the same "controlled group of
corporations," an "affiliated service group" or is under "common control"
with an entity within the meanings of Sections 414(b), (c) or (m) of the
Code, is required to be aggregated with the entity under Section 414(o) of
the Code, or is under "common control" with the entity, within the meaning
of Section 4001(a)(14) of ERISA, or any regulations promulgated or proposed
under any of the foregoing sections.
Section 3.17 Labor and Employment Matters. Except as set forth
in the Company Disclosure Letter:
(a) Neither the Company nor any of its Subsidiaries is a party
to, or bound by, any collective bargaining agreement or other contracts,
arrangements, agreements or understandings with a labor union or labor
organization that was certified by the National Labor Relations Board
("NLRB"). Except for such matters which, individually or in the aggregate,
could not have a Company Material Adverse Effect, there is no existing,
pending or threatened (i) unfair labor practice charge or complaint, labor
dispute, labor arbitration proceeding or any other matter before the NLRB
or any other comparable state agency against or involving the Company or
any of its Subsidiaries, (ii) activity or proceeding by a labor union or
representative thereof to organize any employees of the Company or any of
its Subsidiaries, (iii) certification or decertification question relating
to collective bargaining units at the premises of the Company or any of its
Subsidiaries or (iv) lockout, strike, organized slowdown, work stoppage or
work interruption with respect to such employees.
(b) Neither the Company nor any of its Subsidiaries has taken
any action that would constitute a "Mass Layoff" or "Plant Closing" within
the meaning of the Worker Adjustment and Retraining Notification ("WARN")
Act or would otherwise trigger notice requirements or liability under any
state or local plant closing notice law. No agreement, arbitration or
court decision or governmental order in any way limits or restricts any of
the Company, any of its Subsidiaries or Parent from relocating or closing
any of the operations of the Company or any of its Subsidiaries.
(c) Neither the Company nor any of its Subsidiaries has failed
to pay when due any wages, bonuses, commissions, benefits, taxes, penalties
or assessments or other monies, owed to, or arising out of the employment
of or any relationship or arrangement with, any officer, director,
employee, sales representative, contractor, consultant or other agent.
There are no citations, investigations, administrative proceedings or
formal complaints of violations of any federal or state wage and hour laws
pending or, to the knowledge of the Company, threatened before the
Department of Labor or any federal, state or administrative agency or court
against or involving the Company or any of its Subsidiaries.
(d) The Company and each of its Subsidiaries are in compliance
in all material respects with all immigration laws relating to employment
and have properly completed and maintained all applicable forms (including
but not limited to I-9 forms) and, to the knowledge of the Company, there
are no citations, investigations, administrative proceedings or formal
complaints of violations of the immigration laws pending or threatened
before the Immigration and Naturalization Service or any federal, state or
administrative agency or court against or involving the Company or any of
its Subsidiaries.
(e) There are no investigations, administrative proceedings,
charges or formal complaints of discrimination (including discrimination
based upon sex, age, marital status, race, national origin, sexual
preference, disability, handicap or veteran status) pending or, to the
knowledge of the Company, threatened before the Equal Employment
Opportunity Commission or any federal, state or local agency or court
against or involving the Company or any of its Subsidiaries. No
discrimination and/or retaliation claim is pending or, to the knowledge of
the Company, threatened against the Company or any of its Subsidiaries
under the 1866, 1877, 1964 or 1991 Civil Rights Acts, the Equal Pay Act,
the Age Discrimination in Employment Act, as amended, the Americans with
Disabilities Act, the Family and Medical Leave Act, the Fair Labor
Standards Act, ERISA, or any other federal law relating to employment or
any comparable state or local fair employment practices act regulating
discrimination in the workplace, and no wrongful discharge, libel, slander,
invasion of privacy or other claim (including but not limited to violations
of the Fair Credit Reporting Act, as amended, and any applicable
whistleblower statutes) under any state or federal law is pending or, to
the knowledge of the Company, threatened against the Company or any of its
Subsidiaries.
(f) If the Company or any of its Subsidiaries is a Federal,
State or local contractor obligated to develop and maintain an affirmative
action plan, no discrimination claim, show-cause notice, conciliation
proceeding, sanctions or debarment proceedings is pending or, to the
knowledge of the Company, has been threatened against the Company or any of
it Subsidiaries with the Office of Federal Contract Compliance Programs or
any other Federal agency or any comparable state or local agency or court
and no desk audit or on-site review is in progress.
(g) There are no citations, investigations, administrative
proceedings or formal complaints of violations of local, state or federal
occupational safety and health laws pending or, to the knowledge of the
Company, threatened before the Occupational Safety and Health Review
Commission or any federal, state or local agency or court against or
involving the Company or any of its Subsidiaries.
(h) No workers' compensation or retaliation claim is pending
against the Company or any of its Subsidiaries in excess of $250,000 in the
aggregate and the Company maintains adequate insurance with respect to
workers' compensation claims pursuant to insurance policies that are
currently in force, or has accrued an adequate liability for such
obligations, including, without limitation, adequate accruals with respect
to accrued but unreported claims and retroactive insurance premiums.
Section 3.18 Environmental Compliance and Disclosure.
Except as disclosed in the Recent SEC Reports or in the Company Disclosure
Letter:
(a) The Company possesses, and is in compliance in all material
respects with, all permits, licenses and government authorizations and has
filed all notices that are required under local, state and federal Laws and
regulations relating to protection of the environment, pollution control,
product registration and hazardous materials ("Environmental Laws")
applicable to the Company, and the Company is in compliance in all material
respects with all applicable limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and
timetables contained in those laws or contained in any Law, regulation,
code, plan, order, decree, judgment, notice, permit or demand letter
issued, entered, promulgated or approved thereunder;
(b) The Company has not received notice of actual or threatened
liability under the Federal Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") or any similar state or local
statute or ordinance from any governmental agency or any third party and,
to the knowledge of the Company, there are no facts or circumstances which
could form the basis for the assertion of any claim against the Company
under any Environmental Laws including, without limitation, CERCLA or any
similar local, state or foreign Law with respect to any on-site or off-site
location;
(c) The Company has neither entered into or agreed to,
nor does it contemplate entering into any consent decree or order, and is
not subject to any judgment, decree or judicial or administrative order
relating to compliance with, or the cleanup of hazardous materials under,
any applicable Environmental Laws;
(d) The Company has not been subject to any administrative or
judicial proceeding pursuant to and, to the knowledge of the Company, has
not been alleged to be in violation of, applicable Environmental Laws or
regulations either now or any time during the past five years;
(e) The Company has not received notice that it is subject to
any claim, obligation, liability, loss, damage or expense of whatever kind
or nature, contingent or otherwise, incurred or imposed or based upon any
provision of any Environmental Law and arising out of any act or omission
of the Company, its employees, agents or representatives or, to the
knowledge of the Company, arising out of the ownership, use, control or
operation by the Company of any plant, facility, site, area or property
(including, without limitation, any plant, facility, site, area or property
currently or previously owned or leased by the Company) from which any
hazardous materials were released into the environment (the term "release"
meaning any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping or disposing into the
environment, and the term "environment" meaning any surface or ground
water, drinking water supply, soil, surface or subsurface strata or medium,
or the ambient air);
(f) The Company has heretofore furnished or made available to
Parent true, correct and complete copies of all files of the Company
relating to environmental matters (or an opportunity to review such files).
The Company has not paid any fines, penalties or assessments within the
last five years with respect to environmental matters; and
(g) To the Company's knowledge, none of the assets owned by the
Company or any real property leased by the Company contain any friable
asbestos, regulated PCBs or underground storage tanks.
(h) As used in this Section 3.18, the term "Hazardous Materials"
means any waste, pollutant, hazardous substance, toxic, ignitable, reactive
or corrosive substance, hazardous waste, special waste, industrial
substance, by-product, process intermediate product or waste, petroleum or
petroleum-derived substance or waste, chemical liquids or solids, liquid
or gaseous products, or any constituent of any such substance or waste, the
use, handling or disposal of which by the Company is in any way governed by
or subject to any applicable Law, rule or regulation of any Governmental
Entity.
Section 3.19 Intellectual Property.
(a) The Company Disclosure Letter sets forth a true and complete
list of (i) all United States and foreign patents, trademark, service ▇▇▇▇
and copyright registrations and applications therefor, and material
trademarks, trade names, service marks and copyrights owned by the Company
and its Subsidiaries (the "Intellectual Property Rights") and (ii) all
United States and foreign patents, trademarks, trade names, service marks
and copyrights licensed to the Company or any of its Subsidiaries (the
"Licensed Rights"). The Company represents and warrants that, except as
set forth in the Company Disclosure Letter, (i) the Intellectual Property
Rights are free and clear of any liens, claims or encumbrances, are not
subject to any license (royalty bearing or royalty free) and are not
subject to any other arrangement requiring any payment to any person or the
obligation to grant rights to any person in exchange; (ii) to the knowledge
of the Company, the Licensed Rights are free and clear of any liens,
claims, encumbrances, royalties or other obligations; and (iii) the
Intellectual Property Rights and the Licensed Rights are all those material
rights necessary to the conduct of the business of each of the Company, its
Subsidiaries and the Company's affiliates as presently conducted. Except
as set forth in the Company Disclosure Letter, the validity of the
Intellectual Property Rights and title thereto, (i) have not been
questioned in any prior Litigation; (ii) are not being questioned in any
pending Litigation; and (iii) to the knowledge of the Company, are not the
subject(s) of any threatened or proposed Litigation. The business of each
of the Company and its Subsidiaries, as presently conducted, does not
conflict with and, to the knowledge of the Company, has not been alleged
to conflict with any patents, trademarks, trade names, service marks,
copyrights or other intellectual property rights of others. The
consummation of the transactions contemplated hereby will not result in the
loss or impairment of any of the Intellectual Property Rights or the
Company's or its Subsidiaries' right to use any of the Licensed Rights. To
the knowledge of the Company, there are no third parties using any of the
Intellectual Property Rights material to the business of the Company or its
Subsidiaries as presently conducted.
(b) Except as identified in the Company Disclosure Letter, each
of the Company and its Subsidiaries owns, or possesses valid rights to, all
computer software programs that are material to the conduct of the business
of the Company and its Subsidiaries. To the Company's knowledge, there are
no infringement suits, actions or proceedings pending or threatened against
the Company or any Subsidiary with respect to any software owned or
licensed by the Company or any Subsidiary.
Section 3.20 Year 2000 Compliance.
(a) The Company has made available to Parent the Company's plan
to ensure that it will be Year 2000 Compliant (the "Year 2000 Plan"). To
the Company's knowledge, the Year 2000 Plan will enable the Company to be
Year 2000 Compliant in a timely manner except as to matters which are not
reasonably likely to result in a Company Material Adverse Effect and the
cost for the Company to become Year 2000 Compliant is estimated to be $1.2
million.
(b) "Year 2000 Compliant" means that (i) the products, services,
or other item(s) at issue accurately process, provide and/or receive
date/time data (including calculating, comparing, and sequencing), within,
from, into, and between centuries (including the twentieth and twenty-first
centuries and the years 1999 and 2000), including leap year calculations,
and (ii) neither the performance nor the functionality nor the supply of
the products, services, and other item at issue will be affected by
dates/times prior to, on, after, or spanning January 1, 2000. The design
of the products, services, and other item at issue to ensure compliance
with the foregoing warranties and representations includes proper date/time
data century recognition and recognition of 1999 and 2000, calculations
that accommodate same century and multicentury formulae and date/time
values before, on, after, and spanning January 1, 2000, and date/time data
interface values that reflect the century, 1999, and 2000. In particular,
but without limitation, (A) no value for current date/time will cause any
error, interruption, or decreased performance in or for such product,
service, and other item, (B) all manipulations of date and time related
data (including calculating, comparing, sequencing, processing, and
outputting) will produce correct results for all valid dates and times,
including when used in combination with other products, services, or items,
(C) all date/time elements in interfaces and data storage will specify the
century to eliminate date ambiguity without human intervention, including
leap year calculations, (D) where any date/time element is represented
without a century, the correct century will be unambiguous for all
manipulations involving that element, (E) authorization codes, passwords,
and zaps (purge functions) will function normally and in the same manner
during prior to, on, and after January 1, 2000, including the manner in
which they function with respect to expiration dates and CPU serial
numbers, and (F) the Company's and its Subsidiaries' supply of the product,
service, and other item will not be interrupted, delayed, decreased, or
otherwise affected by the advent of the year 2000.
Section 3.21 Brokers. Except for Lazard Freres & Co. LLC, no
broker, finder or investment banker is entitled to any brokerage, finder's
or other fee or commission in connection with this Agreement, the Merger or
the other transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. The Company Disclosure
Letter includes a complete and correct copy of the agreement between the
Company and Lazard Freres & Co. LLC to which such firm would be entitled to
any payment relating to this Agreement, the Merger or the other
transactions contemplated by this Agreement.
Section 3.22 Insurance Policies. The Company has furnished or
made available to Parent prior to the date hereof a complete and accurate
list of all insurance policies in force naming the Company, any of its
Subsidiaries or employees thereof as an insured or beneficiary or as a loss
payable payee or for which the Company or any Subsidiary has paid or is
obligated to pay all or part of the premiums. Neither the Company nor any
Subsidiary has received notice of any pending or threatened cancellation or
premium increase (retroactive or otherwise) with respect thereto, and each
of the Company and the Subsidiaries is in compliance in all material
respects with all conditions contained therein. There are no material
pending claims against such insurance policies by the Company or any
Subsidiary as to which insurers are defending under reservation of rights
or have denied liability, and there exists no material claim under such
insurance policies that has not been properly filed by the Company or any
Subsidiary. Except for the self-insurance retentions or deductibles set
forth in the policies contained in the aforementioned list, the policies
are adequate in scope and amount to cover all prudent and reasonably
foreseeable risks which may arise in the conduct of the business of the
Company and the Subsidiaries that would reasonably be expected to have a
Company Material Adverse Effect.
Section 3.23 Notes and Accounts Receivable.
(a) Except as disclosed in the Company Disclosure Letter, there
are no notes receivable of the Company or any Subsidiary owing by any
director, officer, stockholder or employee of the Company or any
Subsidiary.
(b) Except as disclosed in the Company Disclosure Letter, all
accounts receivable of the Company and any Subsidiary are current or
covered by adequate reserves for uncollectability, and there are no
material disputes regarding the collectibility of any such accounts
receivable that would reasonably be expected to have a Company Material
Adverse Effect.
Section 3.24 Transactions with Affiliates. Except as set forth
in the Company Disclosure Letter (other than compensation and benefits
received in the ordinary course of business as an employee or director of
the Company or its Subsidiaries), no director, officer or other "affiliate"
or "associate" (as such terms are defined in Rule 12b-2 under the Exchange
Act) of the Company or any Subsidiary or any entity in which, to the
knowledge of the Company, any such director, officer or other affiliate or
associate, owns any beneficial interest (other than a publicly held
corporation whose stock is traded on a national securities exchange or in
the over-the-counter market and less than 1% of the stock of which is
beneficially owned by any such persons) has any interest in: (i) any
contract, arrangement or understanding with, or relating to the business or
operations of Company or any Subsidiary; (ii) any loan, arrangement,
understanding, agreement or contract for or relating to indebtedness of the
Company or any Subsidiary; or (iii) any property (real, personal or mixed),
tangible, or intangible, used or currently intended to be used in, the
business or operations of the Company or any Subsidiary.
Section 3.25 Company Warrants. Upon the consummation of the
Merger, each of the Company's then outstanding warrants to acquire shares
of Company Common Stock shall, pursuant to their terms, become exercisable,
upon payment of the applicable exercise price thereof, into the right to
receive an amount in cash determined by multiplying (A) the Merger
Consideration by (B) the number of shares of Company Common Stock such
holder could have purchased had such holder exercised such warrant in full
immediately prior to the consummation of the Merger.
Section 3.26 No Existing Discussions. As of the execution of
this Agreement, the Company is not engaged, directly or indirectly, in any
negotiations or discussions with any other party with respect to an
Acquisition Proposal (as defined in Section 5.10).
Section 3.27 Disclosure. No representation, warranty or
covenant made by the Company in this Agreement or in the Company Disclosure
Letter contains an untrue statement of a material fact or omits to state a
material fact required to be stated herein or therein or necessary to make
the statements contained herein or therein not misleading. Any matter
expressly disclosed in the Company Disclosure Letter shall be deemed to be
disclosed as to such matter so long as such disclosure being made states
clearly the matter being disclosed and the context for which it is being
disclosed.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND PURCHASER
Each of Parent and Purchaser represents and warrants to the
Company as follows:
Section 4.1 Organization and Standing. Such person (a) is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, (b) has full corporate power and
authority to own, lease and operate it properties and assets and to conduct
its business as presently conducted and (c) is duly qualified or licensed
to do business as a foreign corporation and is in good standing in each
jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such qualification or
licensing necessary, except where the failure to be so qualified or
licensed would not, individually or in the aggregate, have a material
adverse effect on Parent or Purchaser.
Section 4.2 Authority for Agreement. Such person has all
necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
Merger and the other transactions contemplated by this Agreement. The
execution, delivery and performance by such person of this Agreement, and
the consummation by each such person of the Merger and the other
transactions contemplated by this Agreement, have been duly authorized by
all necessary corporate action and no other corporate proceedings on the
part of such person are necessary to authorize this Agreement or to
consummate the Merger or the other transactions contemplated by this
Agreement (other than, with respect to the Merger, the filing and
recordation of appropriate merger documents as required by the DGCL). This
Agreement has been duly executed and delivered by such person and, assuming
due authorization, execution and delivery by the Company, constitutes a
legal, valid and binding obligation of each of such person enforceable
against such person in accordance with its terms.
Section 4.3 No Conflict. The execution and delivery of this
Agreement by such person do not, and the performance of this Agreement by
such person and the consummation of the Merger and the other transactions
contemplated by this Agreement will not, (i) conflict with or violate the
certificate of incorporation or bylaws of such person, (ii) conflict with
or violate any Law applicable to such person or by which any property or
asset of such person is bound or affected, or (iii) result in any breach of
or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of such
person pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which such person is a party or by which such person or any
property or asset of either of them is bound or affected, except in the
case of clauses (ii) and (iii) for any such conflicts, violations,
breaches, defaults or other occurrences which would not, individually or in
the aggregate, prevent or materially delay the performance by such person
of its respective obligations under this Agreement or the consummation of
the Merger or the other transactions contemplated by this Agreement.
Section 4.4 Required Filings and Consents. The execution and
delivery of this Agreement by such person do not, and the performance of
this Agreement by such person will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any
Governmental Entity, except (i) for applicable requirements, if any, of the
Exchange Act, Blue Sky Laws and filing and recordation of appropriate
merger documents as required by the DGCL, (ii) for those required by the
HSR Act, (iii) for the FCC Filings, (iv) for filings contemplated by
Section 3.15 and (v) where failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would
not, individually or in the aggregate, prevent or materially delay the
performance by such person of any of its respective obligations under this
Agreement or the consummation of the Merger or the other transactions
contemplated by this Agreement.
Section 4.5 Information Supplied. None of the information
supplied or to be supplied by Parent or Purchaser for inclusion or
incorporation by reference in the Proxy Statement will, at the date such
document is first published, sent or delivered to Company's stockholders
or, unless promptly corrected, at any time during the pendency of the
Stockholders' Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. Notwithstanding the foregoing,
no representation or warranty is made by such person with respect to
statements made or incorporated by reference therein based on information
supplied by the Company for inclusion or incorporation by reference in the
foregoing document.
Section 4.6 Brokers. No broker, finder or investment banker
(other than Warburg Dillon Read LLC) is entitled to any brokerage,
finder's or other fee or commission payable by such person in connection
with this Agreement, the Merger or the other transactions contemplated by
this Agreement based upon arrangements made by or on behalf of Parent or
Purchaser.
Section 4.7 No Prior Activities. Except for obligations or
liabilities incurred in connection with its incorporation or organization
or the negotiation and consummation of this Agreement, the Merger and the
transactions contemplated hereby, Purchaser has not incurred any
obligations or liabilities, and has not engaged in any business or
activities of any type or kind whatsoever or entered into any agreements or
arrangements with any person or entity.
Section 4.8 Sufficient Funds. Either Parent or Purchaser has
available, or has made arrangements to obtain (through existing credit
arrangements or otherwise), sufficient funds to acquire all of the shares
of Company Common Stock outstanding on a fully diluted basis for the Merger
Consideration and to pay all fees and expenses related to the transactions
contemplated by this Agreement.
Section 4.9 Share Ownership. Except for the transactions
contemplated by this Agreement, none of Parent, Purchaser or any of their
respective affiliates or associates beneficially owns any shares of Company
Common Stock.
ARTICLE V
COVENANTS
Section 5.1 Conduct of the Business Pending the Merger.
(a) The Company covenants and agrees that, except for actions
taken to implement this Agreement and the transactions contemplated hereby
and except as set forth in the Company Disclosure Letter, between the date
of this Agreement and the Effective Time, unless Parent shall otherwise
agree in writing, (i) the business of the Company and its Subsidiaries
shall be conducted only in, and the Company and its Subsidiaries shall not
take any action except in, the ordinary course of business and in a manner
consistent with prior practice, (ii) the Company and its Subsidiaries shall
use all commercially reasonable efforts to maintain and protect the FCC
Licenses and Channel Leases, to preserve substantially intact their
business organizations, to keep available the services of their current
officers and employees and to preserve the current relationships of the
Company and its Subsidiaries with suppliers and other persons with which
the Company or its Subsidiaries has significant business relations, (iii)
the Company and its Subsidiaries shall use all commercially reasonable
efforts on a basis consistent with past practice to continue to provide
wireless cable television services to the Company's subscriber base and
(iv) the Company will comply in all material respects with all applicable
Laws and regulations wherever its business is conducted, including, without
limitation, the timely filing of all reports, forms or other documents with
the FCC and with the SEC required pursuant to the Securities Act or the
Exchange Act.
(b) The Company covenants and agrees that, except for actions
taken to implement this Agreement and the transactions contemplated hereby,
between the date of this Agreement and the Effective Time, the Company
shall not, nor shall the Company permit any of its Subsidiaries to, (i)
declare or pay any dividends on or make other distributions (whether in
cash, stock or property) in respect of any of its capital stock, except for
dividends by a wholly owned Subsidiary of the Company to the Company or
another wholly owned Subsidiary of the Company, (ii) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, (iii) except as set forth in
the Company Disclosure Letter, repurchase or otherwise acquire any shares
of its capital stock, (iv) issue, deliver or sell, or authorize or propose
the issuance, delivery or sale of, any shares of its capital stock or any
securities convertible into any such shares of its capital stock, or any
rights, warrants or options to acquire any such shares or convertible
securities or any stock appreciation rights, phantom stock plans or stock
equivalents, other than the issuance of shares of Company Common Stock upon
the exercise of Company Options or Company Warrants outstanding as of the
date of this Agreement, (v) willfully take any action that would make the
Company's representations and warranties set forth in Article III not true
and correct in all material respects, or (vi) take any action that would,
or could reasonably be expected to, result in any of the conditions set
forth in Article VI not being satisfied.
(c) The Company covenants and agrees that, except for actions
taken to implement this Agreement and the transactions contemplated hereby,
between the date of this Agreement and the Effective Time, the Company
shall not, nor shall the Company permit any of its Subsidiaries to, (i)
amend its certificate of incorporation (including any certificate of
designations attached thereto) or bylaws or other equivalent organizational
documents; (ii) except as set forth in the Company Disclosure Letter, incur
any indebtedness for borrowed money or guaranty any such indebtedness of
another person, other than (A) borrowings under existing lines of credit
(or under any refinancing of such existing lines) or (B) indebtedness owing
to, or guaranties of indebtedness owing to, the Company (iii) make any
loans or advances to any other person other than loans or advances between
any Subsidiaries of the Company or between the Company and any of its
Subsidiaries (other than loans or advances less than $50,000 made in the
ordinary course of business consistent with past practice); (iv) except as
set forth in the Company Disclosure Letter, merge or consolidate with any
other entity in any transaction, or sell any business or assets in a single
transaction or series of transactions in which the aggregate consideration
is $100,000 or greater; (v) change its accounting policies except as
required by GAAP; (vi) make any change in employment terms for any of its
directors or officers; (vii) alter, amend or create any obligations with
respect to compensation, severance, benefits, change of control payments or
any other payments to employees, directors or affiliates of the Company or
its Subsidiaries, other than with respect to alterations or amendments made
with respect to non-officers and non-directors in the ordinary course of
business consistent with past practice or as expressly contemplated by this
Agreement or consented to in writing by Parent; (viii) make any change to
the Company Benefit Plans; (ix) enter into any leasing or licensing
agreements, take-or-pay arrangements or other affiliations, alignments or
agreements with respect to the FCC Licenses, provided, the Company may
renegotiate any Channel Leases in the ordinary course of business; or (x)
commit or agree to take any of the actions described in this Section 5.1.
Section 5.2 Access to Information; Confidentiality.
(a) From the date hereof to the Effective Time, the Company
shall, and shall cause the officers, directors, employees, auditors,
attorneys, financial advisors, lenders and other agents (collectively, the
"Representatives") of the Company to, afford the Representatives of Parent
and Purchaser reasonable access at all reasonable times to the officers,
employees, agents, properties, offices and other facilities, books and
records of the Company and its Subsidiaries, and shall furnish Parent and
Purchaser with all financial, operating and other data and information as
Parent or Purchaser, through its Representatives, may reasonably request.
Parent will remain subject to the terms of the Seller and Non-Disclosure of
Proprietary Information Agreement with the Company dated June 4, 1998 (the
"Confidentiality Agreement").
(b) No investigation pursuant to this Section 5.2 shall affect
any representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.
Section 5.3 Notification of Certain Matters. The Company shall
give prompt notice to Parent, and Parent shall give prompt notice to the
Company, of (i) the occurrence, or nonoccurrence, of any event which would
be likely to cause any representation or warranty contained in this
Agreement to be untrue or inaccurate in any material respect and (ii) any
failure by such party (or Purchaser, in the case of Parent) to comply with
or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that the delivery of any
notice pursuant to this Section 5.3 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice. If any
event or matter arises after the date of this Agreement which, if existing
or occurring at the date of this Agreement, would have been required to be
set forth or described in the Company Disclosure Letter or which is
necessary to correct any information in the Company Disclosure Letter which
has been rendered inaccurate thereby, then from time to time prior to the
Closing the Company shall supplement, or amend, and deliver to Parent the
Company Disclosure Letter which it has delivered pursuant to this
Agreement.
Section 5.4 Further Assurances.
(a) Upon the terms and subject to the conditions hereof, each of
the parties hereto shall use all commercially reasonable efforts to take,
or cause to be taken, all appropriate action, and to do, or cause to be
done, all things necessary, proper or advisable under Law to consummate and
make effective the Merger and the other transactions contemplated by this
Agreement, including, without limitation, using all commercially reasonable
efforts to obtain all licenses, permits, consents, approvals,
authorizations, qualifications and orders of each Governmental Entity and
parties to contracts with the Company and its Subsidiaries as are necessary
for the consummation of the Merger and the other transactions contemplated
by this Agreement and to fulfill the conditions set forth in Article VI. If
at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers
of each party to this Agreement and the Surviving Corporation shall use all
commercially reasonable efforts to take all such action.
(b) In connection with, and without limiting the foregoing, the
Company shall (i) take all actions necessary to ensure that no state
antitakeover statute or similar statute or regulation is or becomes
operative with respect to this Agreement, the Merger or any other
transactions contemplated by this Agreement and (ii) if any state
antitakeover statute or similar statute or regulation is or becomes
operative with respect to this Agreement, the Merger or any other
transaction contemplated by this Agreement, take all actions necessary to
ensure that this Agreement, the Merger and any other transactions
contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger and the
other transactions contemplated by this Agreement.
(c) The parties hereto shall use their best efforts to secure
promptly all necessary approvals from the FCC that are required to
consummate this Agreement. Without limitation to the foregoing, promptly
after the date of this Agreement, the parties shall file with the FCC
applications seeking authorization for the transfer of control of the
Company to Purchaser at the Closing. The parties shall use their best
efforts to prosecute such applications with diligence and shall diligently
oppose any objections to such applications to the end that each
application, as soon as practicable, shall be granted by the FCC and such
grants shall no longer be subject to any further administrative or judicial
review.
Section 5.5 Stockholders' Meeting.
(a) In order to consummate the Merger, the Company, acting
through the Company Board of Directors, shall, in accordance with
applicable law:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Stockholders' Meeting") as promptly
as practicable after the date of this Agreement for the purpose of
voting on the approval and adoption of this Agreement and the Merger
(the "Company Stockholder Approval");
(ii) prepare and file with the SEC a preliminary proxy
statement relating to the Merger and this Agreement (the "Proxy
Statement") and use its best efforts to obtain and furnish the
information required to be included by the SEC in the Proxy Statement
and, after consultation with Parent, to respond promptly to any
comments made by the SEC with respect to the preliminary Proxy
Statement and cause a definitive Proxy Statement to be mailed to its
stockholders at the earliest practicable time;
(iii) each party to this Agreement will notify the other
parties promptly of the receipt of the comments of the SEC, if any,
and of any request by the SEC for amendments or supplements to the
Proxy Statement or for additional information with respect thereto,
and will supply the other parties with copies of all correspondence
between such party or its representatives, on the one hand, and the
SEC or members of its staff, on the other hand, with respect to the
Proxy Statement or the Merger. If (A) at any time prior to the
Stockholders' Meeting, any event should occur relating to the Company
or any of its Subsidiaries which should be set forth in an amendment
of, or a supplement to, the Proxy Statement, the Company will promptly
inform Parent and (B) if at any time prior to the Stockholders'
Meeting, any event should occur relating to Parent or Purchaser or any
of their respective subsidiaries or affiliates, or relating to the
plans of any such persons for the Company after the Effective Time,
that should be set forth in an amendment of, or a supplement to, the
Proxy Statement, Parent will promptly inform the Company, and in the
case of (A) or (B) the Company and Parent, will, upon learning of such
event, promptly prepare, and the Company shall file and, if required,
mail such amendment or supplement to the Company's stockholders;
provided, prior to such filing or mailing, the Company and Parent
shall consult with each other with respect to such amendment or
supplement. The Company and its counsel shall permit Parent and its
counsel to participate in all communications with the SEC and its
staff, including any meetings and telephone conferences, relating to
the Proxy Statement, the Merger or this Agreement;
(iv) subject to Section 5.6, include in the Proxy Statement
the recommendation of the Board that stockholders of the Company vote
in favor of the approval of the Merger and the adoption of this
Agreement; and
(v) use all commercially reasonable efforts to solicit from
holders of shares of Company Common Stock proxies in favor of the
Merger and shall take all other action necessary or, in the reasonable
opinion of Parent, advisable to secure any vote or consent of
stockholders required by the DGCL to effect the Merger.
(b) The Company hereby represents that Lazard Freres & Co. LLC,
the Company's independent financial advisor, has, subject to the terms of
its engagement letter with the Company, consented to the inclusion of
references to its opinion in the Proxy Statement.
(c) Parent will provide the Company with the information
concerning Parent and Purchaser required to be included in the Proxy
Statement.
(d) Parent shall vote, or cause to be voted, in favor of the
approval of the Merger and the approval and adoption of this Agreement all
shares of Company Common Stock owned by Parent, Purchaser or any of
Parent's other Subsidiaries.
Section 5.6 Board Recommendations.
(a) In connection with the Merger and Stockholders' Meeting, the
Company Board of Directors shall (i) subject to Section 5.6(b) hereof,
recommend to the holders of shares of Company Common Stock to vote in favor
of the Merger and use all commercially reasonable efforts to obtain the
necessary approvals by the Company's stockholders of this Agreement and
(ii) otherwise comply with all legal requirements applicable to such
meeting.
(b) Neither the Company Board of Directors nor any committee
thereof shall, except as expressly permitted by this Section 5.6 (b), (i)
withdraw, qualify or modify, or propose publicly to withdraw, qualify or
modify, in a manner adverse to Parent, the approval or recommendation of
the Company Board of Directors or such committee of the Merger or this
Agreement, (ii) approve or recommend, or propose publicly to approve or
recommend, any transaction involving an Acquisition Proposal (as defined in
Section 5.10) from a third party (an "Alternative Transaction"), or (iii)
cause the Company to enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement (each, an
"Acquisition Agreement") related to any Alternative Transaction.
Notwithstanding the foregoing, if during the 20-day period commencing on
the date hereof (the "Initial Period"), the Company Board of Directors
determines in good faith, after it has received a Superior Proposal (as
hereinafter defined) in compliance with Section 5.10 and after receiving
advice from outside counsel as to its fiduciary duties to the Company's
stockholders under applicable Law, the Company Board of Directors may
(subject to this and the following sentences) inform the Company's
stockholders that it no longer believes that the Merger is advisable and no
longer recommends approval of the Merger (a "Subsequent Determination") and
enter into an Acquisition Agreement with respect to a Superior Proposal,
but only at a time that is after the third business day following Parent's
receipt of written notice advising Parent that the Company Board of
Directors has received a Superior Proposal. Such written notice shall
specify the material terms and conditions of such Superior Proposal,
identify the person making such Superior Proposal and state that the
Company Board of Directors intends to make a Subsequent Determination.
During such three business day period, the Company shall provide an
opportunity for Parent to propose such adjustments to the terms and
conditions of this Agreement as would enable the Company to proceed with
its recommendation to its stockholders without a Subsequent Determination;
provided, however, that the acceptance of any such proposed adjustment
shall be at the sole discretion of the Company Board of Directors,
exercised in good faith, and this Agreement shall be amended to reflect any
such accepted adjustments; provided, further, however, that any such
proposed adjustment, the sole effect of which is to (i) increase the amount
of the Merger Consideration, (ii) waive one or more conditions to the
obligations of Parent or Purchaser to effect the Merger or (iii) modify the
terms and conditions of this Agreement to reflect identical terms and
conditions contained in such Superior Proposal, shall be automatically
accepted, and this Agreement shall be amended to reflect any such
automatically accepted adjustments. Parent and Purchaser hereby
acknowledge and agree that the Company may enter into an Acquisition
Agreement with respect to a Superior Proposal in accordance with this
Section 5.6, whether or not this Agreement is terminated, and that, in the
event that the Company enters into an Acquisition Agreement with respect to
a Superior Proposal in accordance with this Section 5.6, neither Parent nor
the parties to such Acquisition Agreement may propose or enter into any
adjustments to the terms and conditions of this Agreement or such
Acquisition Agreement, respectively. Notwithstanding the foregoing, unless
this Agreement is earlier terminated in accordance with its terms, this
Agreement and the Merger shall be submitted to the stockholders of the
Company whether or not the Company Board of Directors has made a Subsequent
Determination. For purposes of this Agreement, a "Superior Proposal" means
any proposal (on its most recently amended or modified terms, if amended or
modified) made by a third party to enter into an Alternative Transaction
which the Company Board of Directors determines in its good faith judgment
(based on, among other things, the written advice of an independent
financial advisor) to be more favorable to the Company's stockholders than
the Merger, taking into account all relevant factors (including whether, in
the good faith judgment of the Company Board of Directors, after obtaining
the advice of such independent financial advisor, the third party is
reasonably able to finance the transaction, and any proposed changes to
this Agreement that may be proposed by Parent in response to such
Alternative Transaction). Nothing contained in this Section 5.6 or any
other provision hereof shall prohibit the Company or the Company Board of
Directors from (x) taking and disclosing to the Company's stockholders
pursuant to Rules 14d-9 and 14e-2 promulgated under the Exchange Act a
position with respect to a tender or exchange offer by a third party, which
is consistent with its obligations hereunder or (y) making such disclosure
to the Company's stockholders as, in the good faith judgment of the Company
Board of Directors after receiving advice from outside counsel, is
consistent with its obligations hereunder and is required by applicable
law; provided, that the Company may not, except as provided by this Section
5.6, withdraw, qualify or modify, in a manner adverse to Parent, the
approval or recommendation of the Company Board of Directors of the Merger
or this Agreement.
Section 5.7 Stockholder Litigation. The Company shall give
Parent the opportunity to participate in the defense or settlement of any
stockholder Litigation against the Company and its directors relating to
the transactions contemplated by this Agreement or the Merger; provided,
however, that no such settlement shall be agreed to without Parent's
consent which consent will not be unreasonably withheld.
Section 5.8 Indemnification.
(a) It is understood and agreed that all rights to
indemnification by the Company now existing in favor of each present and
former director, officer, employee and agent of the Company or its
Subsidiaries (the "Indemnified Parties") as provided in the Company
Certificate of Incorporation or the Company Bylaws and the certificate of
incorporation and bylaws (or equivalent organizational documents) of each
Subsidiary, in each case as in effect on the date of this Agreement, or
pursuant to any other agreements in effect on the date hereof, copies of
which have been furnished or made available to Parent, shall survive the
Merger and Parent shall (i) cause the Surviving Corporation to continue in
full force and effect for a period of at least six years from the Effective
Time and (ii) perform, or cause the Surviving Corporation to perform, in a
timely manner, the Surviving Corporation's obligation with respect thereto.
Parent and Purchaser agree that any claims for indemnification hereunder as
to which they have received written notice prior to the sixth anniversary
of the Effective Time shall survive, whether or not such claims shall have
been finally adjudicated or settled.
(b) Parent shall cause the Surviving Corporation to, and the
Surviving Corporation shall, maintain in effect for six years from the
Effective Time, if available, the current directors' and officers'
liability insurance policies ("D&O Insurance") covered by such policies
(provided that the Surviving Corporation may substitute therefor policies
of at least the same coverage containing terms and conditions which are not
materially less favorable) with respect to matters occurring prior to the
Effective Time; provided, however, that in no event shall the Surviving
Corporation be required to expend pursuant to this Section 5.8(b) more than
an amount per year equal to 150% of current annual premiums paid by the
Company for such insurance. In the event that, but for the proviso to the
immediately preceding sentence, the Surviving Corporation would be required
to expend more than 150% of current annual premiums, the Surviving
Corporation shall obtain the maximum amount of such insurance obtainable by
payment of annual premiums equal to 150% of current annual premiums. If
the Surviving Corporation elects to reduce the amount of insurance coverage
pursuant to the preceding sentence, it will furnish to the officers and
directors currently covered by such D&O Insurance reasonable notice of such
reduction in coverage and shall, to the extent additional coverage is
available, afford such persons the opportunity to pay such additional
premiums as may be necessary to maintain the existing level of D&O
Insurance coverage.
(c) If the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other person and shall not
be the continuing or surviving corporation or entity of such consolidation
or merger or (ii) transfers all or substantially all of its properties and
assets to any person, then, and in each such case, proper provision shall
be made so that the successors and assigns of the Surviving Corporation
shall assume the obligations set forth in this Section 5.8.
(d) The provisions of this Section 5.8 are intended to be for
the benefit of, and shall be enforceable by, each Indemnified Party, his or
her heirs and his or her representatives.
Section 5.9 Public Announcements. Parent and the Company shall
consult with each other before issuing any press release or otherwise
making any public statements with respect to this Agreement, or the Merger
and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by Law or
any listing agreement with a national securities exchange or trading system
to which Parent or the Company is a party.
Section 5.10 Acquisition Proposals. The Company shall not, nor
shall it authorize or permit any of its Subsidiaries or Representatives
to, directly or indirectly, (a) solicit, initiate or encourage the
submission of any Acquisition Proposal or (b) participate in or encourage
any discussion or negotiations regarding, or furnish to any person any
non-public information with respect to, or take any other action to
facilitate any inquiries or the making of, any proposal that constitutes,
or may reasonably be expected to lead to, any Acquisition Proposal;
provided, however, that the foregoing shall not prohibit the Company Board
of Directors from furnishing information to, or entering into discussions
or negotiations with, any person or entity that makes an unsolicited
Acquisition Proposal during the Initial Period, and to the extent that, (A)
the Company Board of Directors, based upon the advice of outside legal
counsel, determines in good faith that such action is required for the
Company Board of Directors to comply with its fiduciary obligations to the
Company Stockholders under applicable Delaware law, (B) prior to taking
such action, the Company receives from such person or entity an executed
agreement in reasonably customary form relating to the confidentiality of
information to be provided to such person or entity and (C) the Company
Board of Directors concludes in good faith, based upon written advice from
its independent financial advisor, that the Acquisition Proposal is a
Superior Proposal. The Company shall provide immediate oral and written
notice to Parent of (a) the receipt of any such Acquisition Proposal or any
inquiry which could reasonably be expected to lead to any Acquisition
Proposal, (b) the material terms and conditions of such Acquisition
Proposal or inquiry, (c) the identity of such person or entity making any
such Acquisition Proposal or inquiry and (d) the Company's intention to
furnish information to, or enter into discussions or negotiations with,
such person or entity. The Company shall continue to keep Parent informed
of the status and details of any such Acquisition Proposal or inquiry. For
purposes of this Agreement, "Acquisition Proposal" means any bona fide
proposal with respect to a merger, consolidation, share exchange, tender
offer or similar transaction involving the Company, or any purchase or
other acquisition of all or any significant portion of the assets of the
Company or any equity interest in the Company.
Section 5.11 FCC Applications. The Company and Parent shall
coordinate efforts and cooperate with each other, to the extent permitted
by the FCC rules, in the preparation and filing of Colocation Applications
and Other Applications with the FCC. Without limitation to the foregoing,
upon the request of Parent, the Company shall use its reasonable efforts to
prepare and file and/or to cause the lessor of a Channel Lease to prepare
and file, at Parent's expense, a Colocation Application or Other
Application to be filed with the FCC, as soon as practicable, and to the
extent applicable, in no event after: (i) the end of the initial one week
filing window in which the FCC will accept Other Applications for the
provision of Two-Way Services pursuant to the newly adopted FCC rules
governing the provision of Two-Way Services; or (ii) the end of a filing
window for ITFS major modification applications established pursuant to
Section 74.911(c) of the FCC rules.
Section 5.12 Undertakings of Parent. Parent shall perform, or
cause to be performed, when due all obligations of Purchaser under this
Agreement.
Section 5.13 Director Resignations. The Company shall cause to
be delivered to Parent resignations of all the directors of the Company's
Subsidiaries to be effective upon the consummation of the Merger. The
Company shall cause such directors, prior to resignation, to appoint new
directors nominated by Parent to fill such vacancies.
Section 5.14 Rights Plan. The Board of Directors of Company
shall as promptly as practicable, and in any event prior to 5:00 p.m., New
York time, on April 30, 1999, adopt a Rights Agreement between the Company
and a rights agent selected by it (the "Rights Plan") and shall approve the
appropriate resolutions so that (i) neither Parent nor Purchaser will
become an "Acquiring Person" (as defined in the Rights Plan) as a result of
the Merger or the Voting Agreements, (ii) no "Stock Acquisition Date" or
"Distribution Date" (as such terms are defined in the Rights Plan) will
occur as a result of the Merger or the Voting Agreements, and (iii) all
outstanding rights to purchase Series A Junior Participating Preferred
Stock issued and outstanding under the Rights Plan will expire at the
Effective Time.
Section 5.15 Year 2000 Plan. The Company shall use all
commercially reasonable efforts to ensure that the Year 2000 Plan shall be
completed in a timely manner. The Company shall (i) allow Parent to
monitor the Company's Year 2000 Compliance issues and Year 2000 Plan, (ii)
provide prompt notice to Parent if the Company does not achieve, or
reasonably expects it shall not achieve, milestones and objectives
identified in the Year 2000 Plan and (iii) cooperate in good faith with
Parent's efforts to ensure that the Company is Year 2000 Compliant.
Section 5.16 Employee Benefits.
(a) Parent and Purchaser agree that, effective as of the
Effective Time and for a three-year period following the Effective Time,
the Surviving Corporation and its Subsidiaries and successors shall provide
to the employees of the Company or any of its Subsidiaries immediately
prior to the Effective Time ("Employees") with employee plans and programs
which provide benefits that are no less favorable in the aggregate to those
provided to such Employees immediately prior to the date hereof. With
respect to such benefits, service accrued by such Employees during
employment with the Company and its Subsidiaries prior to the Effective
Time shall be recognized for all employment and benefit-related purposes as
service rendered to the Surviving Corporation and its Subsidiaries and
successors, except for benefit accruals under the defined benefit pension
plan sponsored by Parent and to the extent necessary to prevent duplication
of benefits.
(b) Parent and Purchaser agree to honor and to cause the
Surviving Corporation to honor, in accordance with their terms, and to make
required payments when due under, all contracts, agreements, arrangements,
policies, plans and commitments of the Company and its Subsidiaries in
effect as of the date hereof (including but not limited to employment,
incentive and severance agreements and arrangements), as amended through
the date hereof, that are applicable with respect to any employee, officer
or director or former employee, officer or director of the Company or any
of its Subsidiaries (the "Plans"); provided, however, that the foregoing
shall not preclude Parent or Purchaser from amending or terminating any
Plan in accordance with its terms. Parent and Purchaser acknowledge that
consummation of the Merger shall constitute a "Change in Control" and a
"Covered Transaction" for purposes of the Plans.
(c) With respect to any welfare plans in which the Employees are
eligible to participate after the Effective Time, Parent and Purchaser
shall cause the Surviving Corporation to (i) waive all limitations as to
preexisting conditions exclusions (to the extent such exclusions are not
currently applicable to Employees) and waiting periods with respect to
participation and coverage requirements (to the extent any such waiting
periods are not currently in effect with respect to Employees) applicable
to the Employees and (ii) provide each Employee with credit for any co-
payments and deductibles paid prior to the Effective Time in satisfying any
applicable deductible or out-of-pocket requirements.
Section 5.17 Matters Relating to BARs. At any time, and from
time to time, prior to the Effective Time, upon the written request of the
Company, Parent shall loan funds to the Company, in an aggregate amount not
to exceed $3.5 million for the purpose of funding the amounts required to
be paid by the Company to the holders of the Company's Bond Appreciation
Rights (relating to the Company's Senior Discount Notes due 2004 (the "2004
Notes")) upon the exercise thereof. Interest will accrue on such loans at
a rate of ten percent (10%) per annum, and the aggregate principal amount
of such loans, together with accrued interest thereon, shall be due and
payable on the first anniversary of any termination of this Agreement;
provided, that, if (i) the Company enters into an Acquisition Agreement
related to an Alternative Transaction and (ii) this Agreement is terminated
pursuant to Section 7.1(d)(i), then the entire principal amount of such
loans, together with accrued interest thereon, shall be due and payable
upon demand as of the date of such termination. All loans made to the
Company by Parent pursuant to this Section 5.17 shall be secured by the
outstanding capital stock of a Subsidiary of the Company, which Subsidiary
will hold rights to use licenses to provide wireless cable services to not
less than 150,000 PSA footprint households.
Section 5.18 Matters Relating to Notes. If on September 30,
1999 the only condition to the Closing remaining unfulfilled is the receipt
of any required approval by the FCC, then Parent shall have the option to
extend the End Date (as defined in Section 7.1(b)(i)) to December 31, 1999
by delivering to the Company on or prior to September 30, 1999 a notice by
which Parent shall agree to loan to the Company up to $13,000,000, in cash,
for the purpose, among other things, of paying interest due in December
1999 on the Company's 2004 Notes. Interest will accrue on such loan at a
rate of ten percent (10%) per annum, and the aggregate principal amount of
such loan, together with accrued interest thereon, shall be due and payable
on the first anniversary of any termination of this Agreement; provided,
that, if (i) this Agreement is terminated in accordance with the terms
hereof (other than as a result of a breach of this Agreement by Parent or
Purchaser) and (ii) the Company enters into an Acquisition Agreement
related to an Alternative Transaction that would, if consummated in
accordance with its terms, provide to the Company or the stockholders of
the Company a per share cash consideration equal to or greater than ninety
percent (90%) of the Merger Consideration, then the entire principal amount
of such loans, together with accrued interest thereon, shall be due and
payable upon demand as of the date of such termination. All loans made to
the Company by Parent pursuant to this Section 5.18 shall be secured by the
outstanding capital stock of a Subsidiary of the Company, which Subsidiary
will hold rights to use licenses to provide wireless cable services to not
less than 500,000 PSA footprint households with at least twenty (20) MDS
and ITFS channels, in the aggregate.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to the Obligation of Each Party. The
respective obligations of Parent, Purchaser and the Company to effect the
Merger are subject to the satisfaction of the following conditions, unless
waived in writing by all parties:
(a) This Agreement and the Merger shall have been approved and
adopted by the requisite vote of the Company's stockholders, as required by
the DGCL, the Company Certificate of Incorporation and the Company Bylaws;
(b) No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or
other legal restraint or prohibition (including, any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to, or any consent or approval
withheld with respect to, the Merger, by any Governmental Entity)
preventing the consummation of the Merger shall be in effect; provided,
however, that the parties invoking this condition shall use all
commercially reasonable efforts to have any such order or injunction
vacated; and
(c) All actions by or in respect of or filings with any
Governmental Entity required to permit the consummation of the Merger shall
have been obtained or made (including any necessary approval by the FCC and
the expiration or termination of any applicable waiting period under the
HSR Act).
Section 6.2 Conditions to Obligations of Parent and Purchaser
to Effect the Merger. The obligations of Parent and Purchaser to effect
the Merger are further subject to satisfaction or waiver at or prior to the
Effective Time of the condition that the representations and warranties of
the Company in this Agreement shall have been true and correct in all
material respects as of the date of this Agreement and the Company shall
have performed in all material respects all obligations required to be
performed by it under this Agreement.
Section 6.3 Conditions to Obligations of the Company to Effect
the Merger. The obligations of the Company to effect the Merger are
further subject to satisfaction or waiver at or prior to the Effective Time
of the condition that the representations and warranties of Parent and
Purchaser in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and Parent and Purchaser shall
have performed in all material respects all obligations required to be
performed by them under this Agreement.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 Termination. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time,
whether before or after approval of matters presented in connection with
the Merger by the Company's stockholders:
(a) By the mutual written consent of Parent and the Company;
(b) By either of the Company or Parent:
(i) if the Effective Date shall not have occurred on or
before September 30, 1999 (or October 31, 1999 if the only condition
to the Closing remaining unfulfilled on September 30, 1999 is any
required approval by the FCC) (the "End Date"); provided, however,
that if Parent delivers to the Company the notice referred to in
Section 5.18, the End Date shall be extended to December 31, 1999;
provided, further, that the right to terminate this Agreement under
this Section 7.1(b)(i) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Effective Date to occur
on or before such date;
(ii) if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action (which order, decree,
ruling or other action the parties hereto shall use their reasonable
efforts to lift), which permanently restrains, enjoins or otherwise
prohibits the Merger and such order, decree, ruling or other action
shall have become final and non-appealable; or
(iii) if, at the Stockholders' Meeting, the Company
Stockholder Approval shall not have been obtained.
(c) By the Company:
(i) in connection with entering into a definitive agreement
as permitted by Section 5.6 related to a Superior Proposal that would,
if consummated in accordance with its terms, provide to the Company or
the stockholders of the Company a per share consideration equal to or
greater than $1.00 per share in excess of the Merger Consideration (as
may be adjusted pursuant to Section 5.6); provided the Company has
complied with all provisions of Section 5.6 and of Section 5.10,
including the notice provisions therein, and that the Company makes
simultaneous payment to Parent of funds as required by Section 7.2(b);
or
(ii) if Parent or Purchaser shall have breached in any
material respect any of their respective representations, warranties,
covenants or other agreements contained in this Agreement, which
breach cannot be or has not been cured within 30 days after the giving
of written notice by the Company to Parent or Purchaser, as
applicable.
(d) By Parent:
(i) if the Company Board of Directors shall have withdrawn,
modified or changed in a manner adverse to Parent or Purchaser its
approval or recommendation of this Agreement or the Merger or shall
have recommended an Acquisition Proposal or shall have executed an
agreement in principle or definitive agreement relating to an
Acquisition Proposal or similar business combination with a person or
entity other than Parent, Purchaser or their affiliates; or
(ii) if the Company shall have breached any representation,
warranty, covenant or other agreement contained in this Agreement
which (x) would give rise to the failure of a condition set forth in
Section 6.2 and (y) cannot be or has not been cured within 30 days
after the giving of written notice to the Company.
Section 7.2 Effect of Termination.
(a) In the event of the termination of this Agreement pursuant
to Section 7.1 hereof, this Agreement shall forthwith be terminated and
have no further effect except as specifically provided herein and, except
as provided in this Section 7.2 and in Section 8.12, there shall be no
liability on the part of any party hereto, provided that nothing herein
shall relieve any party from liability for fraud or any willful breach
hereof.
(b) If (i) Parent or Purchaser exercises its right to terminate
this Agreement under Section 7.1(d)(i), the Company shall pay to Parent $11
million (the "Termination Fee"), payable in same-day funds, as liquidated
damages and not as a penalty to reimburse Parent for its time, expense and
lost opportunity costs of pursuing the Merger, upon consummation of the
transaction relating to such Acquisition Proposal.
(c) In the event that (i) any person shall have publicly
disclosed an Acquisition Proposal and (ii) following such disclosure, at
the Stockholders' Meeting, the Company Stockholder Approval is not obtained
(other than as a result of a breach of this Agreement by Parent or
Purchaser) and (iii) not later than twelve months after any termination of
this Agreement pursuant to Section 7.1(b)(iii) the Company shall have
entered into a definitive agreement for an Alternative Transaction, or
shall have consummated an Alternative Transaction, then immediately prior
to, and as a condition of, the consummation of such Alternative Transaction
the Company shall pay, or cause to be paid, to Parent the Termination Fee,
payable in same-day funds, as liquidated damages and not as a penalty, to
reimburse Parent for its time, expense and lost opportunity costs of
pursuing the Merger.
(d) Notwithstanding anything to the contrary set forth in this
Agreement, if the Company fails promptly to pay to Parent any amounts due
under this Section 7.2, the Company shall pay the costs and expenses
(including reasonable legal fees and expenses) in connection with any
action, including the filing of any lawsuit or other legal action, taken to
collect payment, together with interest on the amount of any unpaid fee or
obligation at the publicly announced prime rate of Citibank, N.A. in effect
from time to time from the date such fee or obligation was required to be
paid.
Section 7.3 Amendments. Subject to applicable law, this
Agreement may not be amended except by action of the Board of Directors of
each of the parties hereto set forth in an instrument in writing signed on
behalf of each of the parties hereto; provided, however, that after
approval of the Merger by the Company's stockholders, no amendment may be
made without the further approval of the Company's stockholders if the
effect of such amendment would be to reduce the Merger Consideration or
change the form thereof.
Section 7.4 Waiver. At any time prior to the Effective Time,
whether before or after the Stockholders' Meeting, any party hereto, by
action taken by its board of directors, may (i) extend the time for the
performance of any of the covenants, obligations or other acts of any other
party hereto or (ii) waive any inaccuracy of any representations or
warranties or compliance with any of the agreements, covenants or
conditions of any other party or with any conditions to its own
obligations. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party by its duly authorized officer. The
failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise shall not constitute a waiver of such rights.
The waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts
and circumstances and each such right shall be deemed an ongoing right that
may be asserted at any time and from time to time.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 No Third Party Beneficiaries. Other than the
provisions of Article II and Sections 5.7, 5.8 and 5.16 hereof, nothing in
this Agreement shall confer any rights or remedies upon any person other
than the parties hereto.
Section 8.2 Entire Agreement. This Agreement constitutes the
entire Agreement among the parties with respect to the subject matter
hereof and supersedes any prior understandings, agreements, or
representations by or among the parties, written or oral, with respect to
the subject matter hereof.
Section 8.3 Succession and Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties named herein and
their respective successors. No party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior
written approval of the other parties; provided, however, that Purchaser
may freely assign its rights to another wholly owned subsidiary of Parent
without such prior written approval but no such assignment shall relieve
Purchaser of any of its obligations hereunder.
Section 8.4 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
Section 8.5 Headings. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 8.6 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
regard to principles of conflicts of law thereof.
Section 8.7 Severability. Any term or provision of this
Agreement that is invalid or unenforceable in any situation in any
jurisdiction shall not affect the validity or enforceability of the
remaining terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any other
jurisdiction. If the final judgment of a court of competent jurisdiction
declares that any term or provision hereof is invalid or unenforceable, the
parties agree that the court making the determination of invalidity or
unenforceability shall have the power to reduce the scope, duration, or
area of the term or provision, to delete specific words or phrases, or to
replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision,
and this Agreement shall be enforceable as so modified after the expiration
of the time within which the judgment may be appealed.
Section 8.8 Specific Performance. Each of the parties
acknowledges and agrees that the other party would be damaged irreparably
in the event any of the provisions of this Agreement are not performed in
accordance with their specific terms or otherwise are breached.
Accordingly, each of the parties agrees that the other party shall be
entitled to seek an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically this Agreement and
the terms and provisions hereof in any action instituted in any court of
the United States or any state thereof having jurisdiction over the parties
and the matter, in addition to any other remedy to which it may be
entitled, at law or in equity.
Section 8.9 Construction. The language used in this Agreement
shall be deemed to be the language chosen by the parties hereto to express
their mutual intent, and no rule of strict construction shall be applied
against any party. Whenever the words "include," "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by the
words "without limitation."
Section 8.10 Non-Survival of Representations and Warranties and
Agreements. The representations, warranties and agreements in this
Agreement shall terminate at the Effective Time or upon the termination of
this Agreement pursuant to Section 7.1, as the case may be, except that (i)
the agreements set forth in Articles I, II and VIII and Sections 5.4, 5.7,
5.8 and 5.16 shall survive the Effective Time indefinitely and (ii) the
agreements set forth in Sections 5.7, 5.8 and 7.2 and in Article VIII shall
survive the termination of this Agreement indefinitely.
Section 8.11 Certain Definitions. For purposes of this
Agreement, the terms "associate" and "affiliate" shall have the same
meaning as set forth in Rule l2b-2 promulgated under the Exchange Act, and
the term "person" shall mean any individual, corporation, partnership
(general or limited), limited liability company, limited liability
partnership, trust, joint venture, joint-stock company, syndicate,
association, entity, unincorporated organization or government or any
political subdivision, agency or instrumentality thereof. For purposes of
this Agreement, the term "Subsidiary" shall mean, with respect to any
party, any corporation or other organization, whether incorporated or
unincorporated, of which (a) at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority
of the Board of Directors or others performing similar functions with
respect to such corporation or other organization is directly or indirectly
owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its Subsidiaries or (b)
such party or any other Subsidiary of such party is a general partner
(excluding any such partnership where such party or any subsidiary of such
party does not have a majority of the voting interest in such partnership).
Section 8.12 Fees and Expenses. Each party hereto shall pay its
own costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby.
Section 8.13 Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given
(and shall be deemed to have been duly given upon receipt) by delivery in
person, by telecopy or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following
addresses, or at such other address for a party as shall be specified in a
notice given in accordance with this Section 8.13:
If to Parent or Purchaser:
Sprint Corporation
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President and J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
King & Spalding
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Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
If to the Company:
American Telecasting, Inc.
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Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
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Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Section 8.14 Control of the Company. Purchaser has not
exercised and shall not exercise any control of the Company, its
Subsidiaries or the FCC Licenses held by the Company or its Subsidiaries
prior to the Closing and the grant of the necessary approvals by the FCC.
Section 8.15 Matters relating to the Voting Agreements. The
Company acknowledges and agrees that it shall be responsible and held
liable for any and all monetary damages arising out of or relating to any
breach of any Voting Agreement by the stockholder of the Company party
thereto.
IN WITNESS WHEREOF, the Company, Parent and Purchaser and have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
AMERICAN TELECASTING, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President and
Chief Executive Officer
SPRINT CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
DD ACQUISITION, CORP.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President