EXHIBIT 2.3
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
By and Among
AMERICAN RADIO SYSTEMS CORPORATION,
CBS CORPORATION
and
R ACQUISITION CORP.
Dated as of
December 18, 1997
TABLE OF CONTENTS
ARTICLE 1 DEFINED TERMS...................................................................................1
ARTICLE 2 THE MERGER......................................................................................2
2.1 The Merger.............................................................................2
2.2 Closing................................................................................2
2.3 Effective Time.........................................................................2
2.4 Effect of the Merger...................................................................2
2.5 Certificate of Incorporation...........................................................2
2.6 Bylaws.................................................................................2
2.7 Directors and Officers.................................................................2
ARTICLE 3 CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES..................................................3
3.1 Conversion of Capital Stock............................................................3
3.2 Exchange of Certificates. ............................................................4
3.3 Closing of American's Transfer Books...................................................5
3.4 Dissenting Shares......................................................................6
3.5 Tower Merger...........................................................................6
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF AMERICAN......................................................8
4.1 Organization and Business; Power and Authority; Effect of Transaction..................8
4.2 Financial and Other Information. ....................................................11
4.3 Changes in Condition..................................................................11
4.4 Properties............................................................................11
4.5 Compliance with Private Authorizations................................................11
4.6 Compliance with Governmental Authorizations and Applicable Law;
Litigation............................................................................12
4.7 Related Transactions..................................................................13
4.8 Taxes and Tax Matters.................................................................13
4.9 Employee Retirement Income Security Act of 1974.......................................14
4.10 Insurance.............................................................................17
4.11 Authorized Capital Stock..............................................................17
4.12 Employment Arrangements...............................................................18
4.14 Brokers...............................................................................18
4.15 Information Supplied..................................................................18
4.16 Ordinary Course of Business...........................................................19
4.17 Environmental Matters.................................................................19
4.18 Opinion of Financial Advisor..........................................................20
4.19 Contracts; Debt Instruments...........................................................20
4.20 State Takeover Statutes...............................................................21
4.21 Appraisal Rights......................................................................21
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF MERGEPARTY...................................................21
5.1 Organization and Business; Power and Authority; Effect of Transaction.................21
5.2 Compliance with Governmental Authorizations and Applicable Law;
Litigation............................................................................22
5.3 Mergeparty Financing..................................................................23
ARTICLE 6 COVENANTS......................................................................................23
6.1 Access to Information; Confidentiality................................................23
6.2 Agreement to Cooperate................................................................23
6.3 Public Announcements..................................................................26
6.4 Notification of Certain Matters.......................................................26
6.5 Stockholder Approval. ................................................................26
6.6 Proxy Statement; Registration Statement. ............................................26
6.7 Miscellaneous.........................................................................27
6.8 Option Plans..........................................................................27
6.9 Conduct of Business by Mergeparty Pending the Merger..................................29
6.10 Conduct of Business by American Pending the Merger....................................29
6.11 Control of Operations.................................................................31
6.12 Directors', Officers' and Employees' Indemnification and Insurance....................31
6.13 Solicitation of Employees.............................................................32
6.14 Change of Name........................................................................33
6.15 Benefit Plans.........................................................................33
6.16 American Cumulative Preferred Stock...................................................33
6.17 American Tower Transaction............................................................33
6.18 Purchase Price Adjustment.............................................................39
6.19 Tower Leases..........................................................................41
6.20 Affiliates of American................................................................42
ARTICLE 7 CLOSING CONDITIONS.............................................................................42
7.1 Conditions to Obligations of Each Party to Effect the Merger..........................42
7.2 Conditions to Obligations of Mergeparty...............................................43
7.3 Conditions to Obligations of American.................................................44
ARTICLE 8 TERMINATION, AMENDMENT AND WAIVER..............................................................44
8.1 Termination...........................................................................44
8.2 Effect of Termination.
..............................................................................................45
ARTICLE 9 GENERAL PROVISIONS.............................................................................46
9.1 Amendment.............................................................................46
9.2 Waiver................................................................................46
9.3 Fees, Expenses and Other Payments.....................................................46
9.4 Notices...............................................................................47
9.5 Specific Performance; Other Rights and Remedies.......................................47
9.6 Survival of Representations, Warranties, Covenants and Agreements.....................48
9.7 Severability..........................................................................48
9.8 Counterparts..........................................................................48
9.9 Section Headings......................................................................48
9.10 Governing Law.........................................................................48
9.11 Further Acts..........................................................................48
9.12 Entire Agreement; No Other Representations or Agreements..............................49
9.13 Assignment............................................................................49
9.14 Parties in Interest...................................................................49
9.15 Mutual Drafting.......................................................................49
9.16 Obligations of American and of Mergeparty.............................................50
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9.17 Mergeparty Agent for Mergeparty Subsidiary............................................50
APPENDIX A: Definitions
EXHIBITS:
EXHIBIT A: Restated Certificate of Incorporation
EXHIBIT B: Market Fee Schedule
EXHIBIT C: Form of Opinion of FCC Counsel to American
EXHIBIT D: Tower Merger Agreement
SCHEDULES: Schedule 4.1(e)
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AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
Amended and Restated Agreement and Plan of Merger, dated as of December
18, 1997, by and among American Radio Systems Corporation, a Delaware
corporation ("American"), CBS Corporation (formerly, Westinghouse Electric
Corporation), a Pennsylvania corporation ("Mergeparty"), and R Acquisition
Corp., a Delaware corporation ("Mergeparty Subsidiary").
W I T N E S S E T H:
WHEREAS, American, Mergeparty and Mergeparty Subsidiary are parties to
an Agreement and Plan of Merger, dated as of September 19, 1997 (the "Original
Merger Agreement"), providing for the merger of Mergeparty Subsidiary with and
into American on the terms and conditions set forth therein; and
WHEREAS, American, Mergeparty and Mergeparty Subsidiary desire to amend
and restate the Original Merger Agreement in its entirety to make certain
changes to the Original Merger Agreement; and
WHEREAS, American, Mergeparty and Mergeparty Subsidiary have entered
into this Amended and Restated Agreement and Plan of Merger (this "Agreement")
providing that Mergeparty Subsidiary shall be merged with and into American,
which shall be the surviving corporation, on the terms and conditions set forth
in this Agreement (the "Merger").
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained and other
valuable consideration, the receipt and adequacy whereof are hereby
acknowledged, the parties hereto hereby, intending to be legally bound,
represent, warrant, covenant and agree as follows:
ARTICLE 1
DEFINED TERMS
As used herein, unless the context otherwise requires, the terms
defined in Appendix A shall have the respective meanings set forth therein.
Terms defined in the singular shall have a comparable meaning when used in the
plural, and vice versa, and the reference to any gender shall be deemed to
include all genders. Unless otherwise defined or the context otherwise clearly
requires, terms for which meanings are provided in this Agreement shall have
such meanings when used in either Disclosure Schedule and each Collateral
Document executed or required to be executed pursuant hereto or thereto or
otherwise delivered, from time to time, pursuant hereto or thereto. References
to "hereof," "herein" or similar terms are intended to refer to the Agreement as
a whole and not a particular section, and references to "this Section" or "this
Article" are intended to refer to the entire section or article and not a
particular subsection thereof. The term "either party" shall, unless the context
otherwise requires, refer to American, on the one hand, and Mergeparty and
Mergeparty Subsidiary, on the other hand.
ARTICLE 2
THE MERGER
2.1 The Merger. (a) Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DCL"), at the Effective Time, Mergeparty Subsidiary shall be merged
with and into American. As a result of the Merger, the separate corporate
existence of Mergeparty Subsidiary shall cease and American shall continue as
the surviving corporation in the Merger (sometimes referred to, as such, as the
"Surviving Corporation").
2.2 Closing. Unless this Agreement shall have been terminated pursuant
to Section 8.1 and subject to the satisfaction or, to the extent permitted by
Applicable Law, waiver of the conditions set forth in Article 7, the closing of
the Merger (the "Closing") will take place, at 10:00 a.m., on the Closing Date,
at the offices of Cravath, Swaine & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, on the date that is the second (2nd) day after the date on which all of
the conditions set forth in Article 7 (other than those which require delivery
of opinions or documents at the Closing) shall have been satisfied or waived,
unless another date, time or place is agreed to in writing by the parties. The
date on which the Closing occurs is herein referred to as the "Closing Date."
2.3 Effective Time. Subject to the provisions of this Agreement, as
promptly as practicable after the Closing, the parties hereto shall cause the
Merger to be consummated by filing a certificate of merger (the "Certificate of
Merger") and any related filings required under the DCL with the Secretary of
State of the State of Delaware. The Merger shall become effective at such time
as such documents are duly filed with the Secretary of State of the State of
Delaware, or at such later time as is specified in such documents (the
"Effective Time").
2.4 Effect of the Merger. The Merger shall have the effects provided
for under the DCL.
2.5 Certificate of Incorporation. The Certificate of Incorporation of
American, as in effect immediately prior to the Effective Time, shall be amended
as of the Effective Time to read in its entirety as set forth in Exhibit A and,
as so amended, such Certificate of Incorporation, together with the Certificates
of Designation of (i) 113/8% Series B Cumulative Exchangeable Preferred Stock,
par value $.01 per share, of American ("American Cumulative Preferred Stock")
and (ii) 7% Convertible Exchangeable Preferred Stock, par value $.01 per share,
of American ("American Convertible Preferred Stock" and, collectively with
American Cumulative Preferred Stock, "American Preferred Stock"), shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by Applicable Law. Such amendment
shall not be deemed to affect in any manner the Certificates of Designation of
American Preferred Stock.
2.6 Bylaws. The bylaws of American in effect at the Effective Time
shall be the bylaws of the Surviving Corporation until amended in accordance
with Applicable Law and the Organic Documents of the Surviving Corporation.
2.7 Directors and Officers. From and after the Effective Time, until
successors are duly elected or appointed and qualified, or upon their earlier
resignation or removal, in accordance with Applicable Law and the Organic
Documents of the Surviving Corporation, (a) the directors of Mergeparty
Subsidiary at the Effective Time shall be the directors of the Surviving
Corporation, and (b) the officers of American at the Effective Time shall be the
officers of the Surviving Corporation.
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ARTICLE 3
CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
3.1 Conversion of Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of Mergeparty, Mergeparty
Subsidiary or American or their respective stockholders:
(a) Each share of Common Stock, par value $1.00 per share, of
Mergeparty Subsidiary 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;
(b) Each share of American Cumulative Preferred Stock issued and
outstanding immediately prior to the Effective Time shall remain outstanding;
(c) Each share of American Convertible Preferred Stock issued and
outstanding immediately prior to the Effective Time shall remain outstanding;
(d) Subject to paragraph (e) below, each share of Class A Common Stock,
par value $.01 per share ("American Class A Common"), each share of Class B
Common Stock, par value $.01 per share ("American Class B Common"), and each
share of Class C Common Stock, par value $.01 per share ("American Class C
Common" and, collectively with American Class A Common and American Class B
Common, "American Common Stock"), of American issued and outstanding immediately
prior to the Effective Time (other than Dissenting Shares) shall be converted
into the right to receive the following:
(i) if the Tower Merger Effective Time shall not have
occurred, (A) $44.00 in cash and (B) one share of Tower Common Stock,
with (x) each share of American Class A Common being converted into the
right to receive one share of Class A Common Stock, par value $.01 per
share ("Tower Class A Common"), of American Tower Systems Corporation,
a Delaware corporation and a wholly-owned Subsidiary of American
("American Tower"), (y) each share of American Class B Common being
converted into the right to receive one share of Class B Common Stock,
par value $.01 per share ("Tower Class B Common"), of American Tower,
and (z) each share of American Class C Common being converted into the
right to receive one share of Class C Common Stock, par value $.01 per
share ("Tower Class C Common" and, collectively with Tower Class A
Common and Tower Class B Common, "Tower Common Stock"), of American
Tower (collectively, the "Tower Stock Consideration"); or
(ii) if the Tower Merger Effective Time shall have occurred,
an amount in cash determined by dividing $44.00 by the American
Conversion Fraction.
The term "Cash Consideration" shall mean the following: (x) if the Tower Merger
Effective Time shall not have occurred, $44.00, and (y) if the Tower Merger
Effective Time shall have occurred, the amount of cash determined pursuant to
the provisions of clause (ii) preceding. The term "Merger Consideration" shall
mean the Cash Consideration and, if the Tower Merger Effective Time shall not
have occurred, the Tower Stock Consideration.
(e) Each share of American Common Stock owned by American or any of its
Subsidiaries or Mergeparty or any of its Subsidiaries immediately prior to the
Effective Time shall automatically be canceled and extinguished without any
conversion thereof and no payment shall be made with respect thereto.
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As a result of the Merger and without any action on the part of the
holder thereof, at the Effective Time all shares of American Common Stock shall
cease to be outstanding and shall be canceled and retired and shall cease to
exist, and each holder of any certificates formerly representing such shares
shall thereafter cease to have any rights with respect to such shares, except,
subject to paragraph (e) above, the right to receive, without interest, the
Merger Consideration, or, in the case of a holder of Dissenting Shares, the
right to perfect the right to receive payment for Dissenting Shares pursuant to
Section 262 of the DCL.
3.2 Exchange of Certificates.
(a) From time to time, on or prior to or after the Effective Time,
Mergeparty shall deposit or cause to be deposited with an exchange agent
selected by Mergeparty and not reasonably disapproved of by American (the
"Exchange Agent") in trust for the benefit of the holders of American Common
Stock cash in amounts and at times necessary for the prompt payment of the Cash
Consideration, and American shall deposit or cause to be deposited with the
Exchange Agent in trust for the benefit of the holders of American Common Stock
shares of Tower Common Stock in amounts and at times necessary for the prompt
delivery of the Tower Stock Consideration, if any, upon the surrender of
Certificates.
(b) Not more than five (5) business days subsequent to the Effective
Time, the Exchange Agent shall mail to each holder of record of a certificate or
certificates that immediately prior to the Effective Time represented
outstanding shares of American Common Stock (the "Certificates") (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon actual delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as American and Mergeparty may agree) and (ii) instructions for use
in effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of Certificates for cancellation to the Exchange
Agent, together with a duly executed letter of transmittal and such other
documents as the Exchange Agent shall reasonably require, the holder of such
Certificate shall receive in exchange therefor the Merger Consideration
multiplied by the number of shares of American Common Stock formerly represented
by such Certificates. The amount of Cash Consideration paid to the holder of
Certificates shall be in the form of a wire transfer of immediately available
funds if so requested by any holder entitled to receive not less than $500,000
in cash, and the cost of such wire transfers shall be borne by the Surviving
Corporation. Such letter of transmittal and instructions shall be available at
the Closing for holders of American Common Stock. Notwithstanding the foregoing,
neither the Exchange Agent nor any party hereto shall be liable to a holder of
shares of American Common Stock for any Merger Consideration delivered to a
public official pursuant to applicable abandoned property, escheat or similar
Laws.
(c) Promptly following the date which is six (6) months after the
Closing Date, the Exchange Agent shall deliver to Mergeparty all cash and any
shares of Tower Common Stock in its possession relating to the transactions
described in this Agreement that remain unclaimed, and the Exchange Agent's
duties shall terminate. Thereafter, each holder of a Certificate may surrender
such Certificate to the Surviving Corporation and (subject to applicable
abandoned property, escheat and similar Laws) receive in exchange therefor the
aggregate Merger Consideration to which such holder is entitled, without any
interest thereon, but together with dividends and distributions, if any, paid by
American Tower on or with respect to the Tower Common Stock in accordance with
the provisions of Section 3.2(d).
(d) Notwithstanding any other provisions of this Agreement, no
dividends or other distributions declared after the earlier to occur of the
Tower Merger Effective Time or the Effective Time on Tower Common Stock shall be
paid with respect to any shares of Tower Common Stock represented by a
Certificate until such Certificate is surrendered for exchange as provided
herein or, if the Tower Merger Effective Time shall have occurred, as provided
in the Tower Merger Agreement. Subject to the effect of Applicable Laws,
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following surrender of any such Certificate, there shall be paid to the holder
of the shares of Tower Common Stock issued in exchange therefor, without
interest, (i) at the time of such surrender, the amount of dividends or other
distributions with a record date after the earlier to occur of the Tower Merger
Effective Time or the Effective Time theretofore payable with respect to such
shares of Tower Common Stock and not paid, less the amount of any withholding
taxes which may be required thereon, and (ii) at the appropriate payment date,
the amount of dividends or other distributions with a record date after the
earlier to occur of the Tower Merger Effective Time or the Effective Time but
prior to surrender and a payment date subsequent to surrender payable with
respect to such shares of Tower Common Stock, less the amount of any withholding
taxes which may be required thereon.
(e) If the Merger Consideration (or any portion thereof) is to be
delivered to a Person other than the Person in whose name the Certificate
surrendered in exchange therefor is registered, it shall be a condition to the
delivery of the Merger Consideration that the Certificate so surrendered shall
be properly endorsed or accompanied by appropriate stock powers (with signatures
guaranteed in accordance with the transmittal letter) and otherwise in proper
form for transfer, that such transfer otherwise be proper and that the Person
requesting such transfer pay to the Exchange Agent any transfer or other Taxes
payable by reason of the foregoing or establish to the satisfaction of the
Exchange Agent that such Taxes have been paid or are not required to be paid.
(f) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and subject to such other
reasonable conditions as the Exchange Agent may impose, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration (to the extent applicable) deliverable in respect thereof as
determined in accordance with this Article. When authorizing such issue of the
Merger Consideration in exchange therefor, the Exchange Agent may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed Certificate (if other than a recognized
financial institution) to give the Exchange Agent a bond or other surety in such
sum as it may reasonably direct as indemnity against any Claim that may be made
against the Exchange Agent with respect to the Certificate alleged to have been
lost, stolen or destroyed.
(g) At and after the Effective Time, the holder of a Certificate shall
cease to have any rights as a holder of shares of American Common Stock, except
for the right to surrender Certificates in the manner prescribed by Section 3.2
in exchange for delivery of the Merger Consideration, or, in the case of a
holder of Dissenting Shares, the right to perfect the right to receive payment
for Dissenting Shares pursuant to Section 262 of the DCL.
(h) The Surviving Corporation shall be entitled to, or shall be
entitled to cause the Exchange Agent to, deduct and withhold from the
consideration otherwise deliverable pursuant to this Agreement to any holder of
shares of American Common Stock such amounts as are required to be deducted and
withheld with respect to the making of such payment under the Code, or any
provision of state, local or foreign Tax Law. To the extent that amounts are so
withheld by the Surviving Corporation or the Exchange Agent, as the case may be,
such withheld amounts shall be treated for all purposes of this Agreement as
having been delivered to the holder of the shares of American Common Stock in
respect of which such deduction and withholding was made by the Surviving
Corporation or the Exchange Agent.
(i) The Exchange Agent shall invest any funds held by it for purposes
of this Section 3.2 as directed by Mergeparty, on a daily basis. Any interest
and other income resulting from such investments shall be paid to Mergeparty and
any risk of loss resulting from such investments shall be borne by Mergeparty.
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3.3 Closing of American's Transfer Books. At the Effective Time, the
stock transfer books of American relating to American Common Stock shall be
closed and no transfer of shares of American Common Stock which were outstanding
immediately prior to the Effective Time shall thereafter be made. If, after the
Effective Time, subject to the terms and conditions of this Agreement,
Certificates formerly representing American Common Stock are presented to the
Surviving Corporation, they shall be canceled and exchanged for the Merger
Consideration in accordance with the provisions of this Article.
3.4 Dissenting Shares.
(a) Notwithstanding any other provision of this Agreement to the
contrary, shares of American Common Stock that are outstanding immediately prior
to the Effective Time and which are held by American stockholders who shall have
not voted in favor of the Merger or consented thereto in writing and who shall
be entitled to and shall have demanded properly in writing appraisal rights for
such shares of American Common Stock in accordance with Section 262 of the DCL
and who shall not have withdrawn such demand or otherwise have forfeited
appraisal rights (collectively, the "Dissenting Shares"), shall not be converted
into or represent the right to receive the Merger Consideration payable in
respect of each share of American Common Stock represented thereby. Such
American stockholders shall be entitled to receive payment of the appraised
value of such shares of American Common Stock held by them in accordance with
the provisions of the DCL; provided, however, that all Dissenting Shares held by
American stockholders who shall have failed to perfect or who effectively shall
have withdrawn, forfeited or lost their appraisal rights with respect to such
shares of American Common Stock under the DCL shall thereupon be deemed to have
been converted into and to have become exchangeable for, as of the Effective
Time, the right to receive, without any interest thereon, the Merger
Consideration upon surrender, in the manner provided in Section 3.2, of the
Certificates with respect to such shares.
(b) American shall give Mergeparty prompt notice of any demands for
appraisal rights received by it, withdrawals of such demands, and any other
instruments served pursuant to the DCL and received by American and relating
thereto. American shall give Mergeparty the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal rights under
the provisions of the DCL. American shall not, except with the prior written
consent of Mergeparty, make any payment with respect to any demands for
appraisal rights, or offer to settle, or settle, any such demands.
(c) If the Tower Merger Effective Time shall not have occurred and the
Delaware Court of Chancery (the "Court") conducts an appraisal proceeding
pursuant to Section 262 of the DCL relating to an obligation to pay the
appraised value per share of American Common Stock ("Appraised Total Value") to
the holders of the Dissenting Shares, American Tower shall promptly pay to
American the portion of the Appraised Total Value attributable to the Tower
Stock Consideration (the "Tower Stock Payment") and American shall contribute
(without the payment of any amount or the issuance of any securities by American
Tower) to the capital of American Tower such shares of Tower Common Stock owned
by American that the holders of the Dissenting Shares would have been entitled
to receive had they not exercised their appraisal rights. The Tower Stock
Payment shall be determined pursuant to the following provisions:
(i) American shall request the Court to determine in writing
the Tower Stock Payment. If the Court shall make such determination the
Tower Stock Payment shall be the amount so determined; and
(ii) If the Court shall not make such determination within a
30-day period following such request (at which time such request shall
be withdrawn) (the "Determination Deadline"), American, American Tower
and Mergeparty shall submit to an arbitrator (the "Arbitrator") for
review
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and resolution the determination of the Tower Stock Payment. The
Arbitrator shall be a nationally recognized investment banking firm
which shall be agreed upon by American, Mergeparty and American Tower
in writing. The Arbitrator shall be requested to render a decision
resolving the amount of the Tower Stock Payment within 30 days
following the date of its selection. If the parties cannot agree on the
firm to be selected as Arbitrator within 15 days following the
Determination Deadline, then American and Mergeparty, on the one hand,
and American Tower, on the other hand, shall each choose one such firm
within 10 days following the expiration of such 15-day period to
review, resolve and agree on the determination of the Tower Stock
Payment, which determination, once agreed to in writing by both such
firms, shall be final, conclusive and binding on the parties. If such
two firms cannot agree on the amount of the Tower Stock Payment within
30 days following the date on which the second of such firms is
selected, then such two firms shall promptly select a third such firm
to make such determination, which determination shall be made by such
third firm within 30 days of the date on which such third firm is
selected. The determination of such third firm of the amount of the
Tower Stock Payment shall be final, conclusive and binding on the
parties. The cost of any such arbitration (including the fees of the
Arbitrator and any other firm selected hereunder) shall be borne 50% by
American and 50% by American Tower. American Tower shall promptly pay
to American the amount of the Tower Stock Payment once such amount is
determined in accordance with this clause (ii).
3.5 Tower Merger. Anything in this Agreement to the contrary
notwithstanding, if the Effective Time shall not have occurred by May 31, 1998
(as such date may be extended by American with the written consent of
Mergeparty, such consent not to be unreasonably withheld, delayed or
conditioned), on June 1, 1998 (or the date following the date, if any, to which
the May 31, 1998 date shall have been so extended), the Board of Directors of
American shall, in its sole discretion, either (i) consummate the merger of ATS
Merger Corporation, a Delaware corporation and a wholly-owned subsidiary of
American ("ATS Mergercorp"), with and into American, which will be the surviving
corporation (the "Tower Merger"), pursuant to the agreement and plan of merger
between American and ATS Mergercorp dated as of the date hereof and set forth as
Exhibit D hereto (the "Tower Merger Agreement"), or (ii) irrevocably elect to
abandon the Tower Merger. Pursuant to the Tower Merger Agreement, each share of
ATS Mergercorp Common Stock issued and outstanding immediately prior to the
effective time of the Tower Merger (the "Tower Merger Effective Time") shall, by
virtue of the Tower Merger and without any action on the part of the holder
thereof, be automatically canceled and extinguished and each share of American
Common Stock issued and outstanding immediately prior to the Tower Merger
Effective Time shall be converted into the right to receive:
(a) one share of Tower Common Stock, with (i) each share of
American Class A Common being converted into the right to receive one
share of Tower Class A Common, (ii) each share of American Class B
Common being converted into the right to receive one share of Tower
Class B Common, and (iii) each share of American Class C Common being
converted into the right to receive one share of Tower Class C Common
(collectively, the "Tower Merger Tower Consideration"); and
(b) a fraction (the "American Conversion Fraction") of a share
of American Common Stock of the same class as the class of American
Common Stock being converted, (i) the numerator of which is the
difference between (A) the denominator and (B) the value (determined as
set forth below) of one share of Tower Class A Common immediately prior
to the Tower Merger Effective Time, and (ii) the denominator of which
is the value (determined as set forth below) of one share of American
Class A Common immediately prior to the Tower Merger Effective Time
(collectively with the Tower Merger Tower Consideration, the "Tower
Merger Consideration").
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For purposes of determining the value of the American Class A Common and the
Tower Class A Common immediately prior to the Tower Merger Effective Time the
following principles shall apply:
(x) each share of American Class A Common shall be valued at
an amount equal to the average closing sales price of the American
Class A Common on the NYSE, as reported by the Wall Street Journal, for
the ten (10) consecutive trading days immediately preceding the second
trading date prior to the Tower Merger Effective Time; and
(y) each share of Tower Class A Common shall be valued at the
amount determined in good faith by the American Radio Board of
Directors to be its fair market value immediately prior to the Tower
Merger Effective Time.
No certificates in respect of fractional shares of American Common Stock shall
be issued in the Tower Merger, and cash shall be paid in lieu thereof as
provided in the Tower Merger Agreement. The certificates that immediately prior
to the Tower Merger Effective Time represented outstanding shares of American
Common Stock shall be deemed, without any action of the holders thereof, to
represent that number of shares of American Common Stock that the holder thereof
has the right to receive pursuant to clause 3.5(b), together with cash in lieu
of fractional shares as provided in the Tower Merger Agreement.
Immediately prior to the Tower Merger Effective Time, American shall
contribute to ATS Mergercorp a number of shares of Tower Common Stock equal to
the Tower Merger Tower Consideration.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF AMERICAN
Except as set forth with respect to specifically identified
representations and warranties in the American Disclosure Schedule or as
otherwise contemplated by this Agreement, American hereby represents and
warrants to Mergeparty and Mergeparty Subsidiary as follows:
4.1 Organization and Business; Power and Authority; Effect of
Transaction.
(a) American is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware and has all requisite
power and authority (corporate and other) to own or hold under lease its
properties and to conduct its business as now conducted and as presently
proposed to be conducted. American is duly qualified and in good standing as a
foreign corporation in each other jurisdiction (as shown on Section 4.1(a) of
the American Disclosure Schedule) in which the character of the property owned
or leased by it or the nature of its business or operations requires such
qualification, with full power and authority (corporate and other) to carry on
the business in which it is engaged, except in such jurisdictions where the
failure to be so qualified or in good standing, individually or in the
aggregate, is not reasonably likely to have a Material Adverse Effect on
American.
(b) Each of American and its Subsidiaries has all requisite power and
authority (corporate and other) to execute, deliver and perform its obligations
under this Agreement and each Collateral Document executed or required to be
executed by such party pursuant hereto or thereto and to consummate the Merger
and the other transactions contemplated hereby and thereby, and the execution,
delivery and performance of this Agreement and each Collateral Document executed
or required to be executed pursuant hereto or thereto have been duly authorized
by all requisite corporate or other action on the part of American and its
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Subsidiaries, other than the approval of the holders of shares of American
Common Stock contemplated by Section 4.13, and no other corporate proceedings on
the part of American or any of its Subsidiaries are necessary to authorize this
Agreement or the transactions contemplated hereby or to consummate the Merger or
the other transactions so contemplated (other than, with respect to the Merger,
the Required Vote and with respect to the Tower Merger, the Required Tower
Vote). This Agreement has been duly executed and delivered by American and
constitutes, and each Collateral Document executed or required to be executed by
American and its Subsidiaries pursuant hereto or to consummate the Merger when
executed and delivered by American and its Subsidiaries, as applicable, will
constitute, a valid and binding obligation of American and its Subsidiaries, as
applicable, enforceable in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, moratorium, insolvency and
similar laws affecting the rights and remedies of creditors and obligations of
debtors generally and by general principles of equity. As of the date hereof,
the Board of Directors of American, at a meeting duly called and held at which a
quorum was present throughout, has approved the Merger and this Agreement, and
the Tower Merger and the Tower Merger Agreement, and has recommended that the
holders of shares of American Common Stock approve and adopt this Agreement, the
Tower Merger Agreement and the transactions contemplated hereby and thereby,
including without limitation the Merger and the Tower Merger.
(c) The execution, delivery and performance by American and its
Subsidiaries, as applicable, of this Agreement and any Collateral Document
executed or required to be executed by such parties pursuant hereto or thereto
do not, and the consummation by American of the Merger and the other
transactions contemplated hereby and thereby, and compliance with the terms,
conditions and provisions hereof or thereof by such parties will not:
(i) (A) Except as set forth in Section 4.1(c) of the American
Disclosure Schedule, conflict with, or result in a breach or violation
of, or constitute a default under, any Organic Document of American or
its Subsidiaries, as applicable, or (B) conflict with, or result in a
breach or violation of, or constitute a default under, or permit the
termination, cancellation or acceleration of any obligation or
liability in, or but for any requirement of the giving of notice or
passage of time or both would constitute such a conflict with, breach
or violation of, or default under, or permit any such termination,
cancellation or acceleration of, any agreement, arrangement, contract,
undertaking, understanding, Applicable Law or other obligation or
Private Authorization of American or its Subsidiaries, as applicable,
except, in the case of clause (B), for such conflicts, breaches,
violations, terminations, cancellations, defaults or accelerations that
would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect on American; or
(ii) result in or permit the creation or imposition of any
Lien upon any property now owned or leased by American except for such
Liens that would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect on American; or
(iii) require any Governmental Authorization or Governmental
Filing except for (A) the FCC Consents, (B) filings under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, (C) the filing with the Commission of (I) the
Proxy Statement, (II) the Tower Proxy Statement, (III) the Registration
Statement and (IV) such reports under Section 13(a) or 15(d) of the
Exchange Act as may be required in connection with this Agreement and
the transactions contemplated by this Agreement, (D) the filing of the
Certificate of Merger and a certificate of merger relating to the Tower
Merger with the Delaware Secretary of State and appropriate documents
with the relevant authorities of other states in which American is
qualified to do business and (E) such other Governmental Authorizations
and Governmental Filings the failure of which to be made or obtained
would not be individually or in the aggregate, reasonably likely to
have a Material Adverse Effect on American.
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(d) American does not have any direct or indirect Subsidiaries other
than those set forth on Section 4.1(d) of the American Disclosure Schedule (read
without the last three lines of the first page thereof) (and other than ATS
Mergercorp, American Tower, American Tower Systems (Delaware), Inc., ATS
▇▇▇▇▇▇▇, LLC, Tower, LLC and Communications Systems Development, LLC). Each
direct or indirect Subsidiary of American (and other than ATS Mergercorp,
American Tower, American Tower Systems (Delaware), Inc., ATS ▇▇▇▇▇▇▇, LLC,
Tower, LLC and Communications Systems Development, LLC) is (i) wholly-owned
unless noted otherwise in Section 4.1(d) of the American Disclosure Schedule,
(ii) a corporation which is duly organized, validly existing and in good
standing under the laws of the respective state of incorporation set forth
opposite its name on Section 4.1(d) of the American Disclosure Schedule, and
(iii) duly qualified and in good standing as a foreign corporation in each other
jurisdiction (as shown on Section 4.1(d) of the American Disclosure Schedule) in
which the character of the property owned or leased by it or the nature of its
business or operations requires such qualification, with full power and
authority (corporate and other) to carry on the business in which it is engaged,
except where the failure to be so qualified or in good standing, individually or
in the aggregate, would not be reasonably likely to have a Material Adverse
Effect on American. American owns, directly or indirectly, all of the
outstanding capital stock and equity interests (as shown in Section 4.1(d) of
the American Disclosure Schedule) of such Subsidiaries, free and clear of all
Liens (except as set forth in the American Financial Statements or Section
4.1(d) of the American Disclosure Schedule), and all such stock has been duly
authorized and validly issued and is fully paid and nonassessable. There are no
outstanding Option Securities or Convertible Securities, or agreements or
understandings of any nature whatsoever, relating to the authorized and unissued
or outstanding capital stock of such Subsidiaries (except as set forth in the
American Financial Statements or Section 4.1(d) of the American Disclosure
Schedule.
(e) Each of ATS Mergercorp and American Tower is (i) a wholly-owned
subsidiary of American (in the case of American Tower, as of the date hereof)
and (ii) a corporation which is duly organized, validly existing and in good
standing under the DCL. American owns, directly or indirectly, all of the
outstanding capital stock and equity interests of each of ATS Mergercorp and
American Tower, free and clear of all Liens, subject, in the case of ATS
Mergercorp, to the receipt of Amendment No. 2 to American's Credit Agreements
referred to in Section 4.1(d) of the American Disclosure Schedule, a copy of
which has been delivered to Mergeparty prior to the date hereof, and all such
stock has been duly authorized and validly issued, is fully paid and
nonassessable and is not subject to any preemptive or similar rights. There are
no outstanding Option Securities or Convertible Securities, or agreements or
understandings of any nature whatsoever, relating to the authorized and unissued
outstanding capital stock of such Subsidiaries (except, with respect to American
Tower, pursuant to the following: (i) the Agreement and Plan of Merger, dated as
of December 12, 1997 (the "ATC Merger Agreement"), by and between American Tower
and American Tower Corporation, an unaffiliated Delaware corporation, a copy of
which has been delivered to Mergeparty prior to the date hereof, (ii) the
Agreement and Plan of Merger, dated as of November 21, 1997, by and among
American Tower, American Tower Systems (Delaware), Inc., Gearon & Co., Inc., and
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇., a copy of which has been delivered to Mergeparty prior
to the date hereof, (iii) the proposed issue and sale of shares of Tower Common
Stock to certain officers and directors of American Tower (and their affiliates)
for an aggregate consideration of approximately $80,000,000, (iv) employee stock
options outstanding to purchase shares of American Tower Systems (Delaware),
Inc. which will be converted into options to acquire Tower Common Stock, and (v)
as contemplated by Section 6.8(b)). The authorized capital stock of (i) ATS
Mergercorp consists of 3,000 shares of common stock, par value $.01 per share
(the "ATS Mergercorp Common Stock"), and (ii) American Tower consists of
20,000,000 shares of preferred stock, 200,000,000 shares of Tower Class A
Common, 50,000,000 shares of Tower Class B Common, and 10,000,000 shares of
Tower Class C Common, and the terms of the Restated Certificate of Incorporation
of American Tower, a copy of which has been delivered to Mergeparty prior to the
date hereof, relating to each of the shares of Tower Class A Common,
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Tower Class B Common and Tower Class C Common (other than those relating to the
number of authorized shares) are identical to the terms of the Restated
Certificate of Incorporation of American as in effect on the date of the
Original Merger Agreement relating to the shares of American Class A Common,
American Class B Common and American Class C Common, respectively, except for
the following terms: (i) terms which permit dividends and other distributions of
securities of Persons other than American Tower (including Subsidiaries of
American Tower) to be made in the form of different classes of securities of
such Persons, (ii) terms which provide that if a holder of Tower Common Stock
grants a proxy, whether revocable or irrevocable, and whether general or
specific to a particular transaction, the granting of such proxy does not
constitute a transfer for purposes of requiring conversion of Tower Class B
Common to Tower Class A Common, (iii) terms which permit any CEA Holder (as
defined in the Restated Certificate of Incorporation of American Tower) to
convert shares of Tower Class C Common Stock into shares of Tower Class A Common
Stock upon approval of the Board of Directors of American Tower, and (iv) terms
clarifying the fact that holders of Tower Class A Common Stock and Tower Class B
Common Stock vote as a single class on all matters submitted for a stockholder
vote, including, notwithstanding the first sentence of Section 242(b)(2) of the
DCL, any amendment of the Restated Certificate of Incorporation of American
Tower which would increase or decrease the number of authorized shares of any
class of Tower Common Stock. The number of shares of American Tower which are
authorized and outstanding and owned by American is equal to the number of
authorized and outstanding shares of American Common Stock and the number of
shares of American Common Stock issuable upon the exercise of Option Securities
and upon the conversion of Convertible Securities (except with respect to shares
of American Common Stock subject to American Options set forth on Schedule
4.1(e) to this Agreement which are held by Tower Employees who have stated that
they will enter into definitive agreements to have such American Options assumed
by American Tower and converted into options to acquire Tower Common Stock in
accordance with Section 6.8(b)).
4.2 Financial and Other Information. American has heretofore furnished
to Mergeparty copies of the audited consolidated financial statements of
American and its Subsidiaries set forth in its Annual Report on Form 10-K (the
"American 10-K") for the fiscal year ended December 31, 1996 and the unaudited
consolidated financial statements of American and its Subsidiaries set forth in
its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1997 and
its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30,
1997 (the "American September 10-Q") (collectively, the "American Financial
Statements"). The American Financial Statements, including in each case the
notes thereto, comply as to form, in all material respects, with applicable
accounting requirements and the published rules and regulations of the
Commission with respect thereto, have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby, except as
otherwise noted therein, and fairly present in all material respects the
financial condition, results of operations and cash flows of American and its
Subsidiaries on the bases therein stated, as of the respective dates thereof,
and for the respective periods covered thereby subject, in the case of unaudited
financial statements, to normal year-end audit adjustments and accruals.
American has filed all required reports and other documents with the Commission
since July 1, 1995 (the "American SEC Documents"). Except as set forth in the
American SEC Documents filed and publicly available prior to the date of the
Original Merger Agreement (the "Filed American SEC Documents"), neither American
nor any of its Subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) which, individually or in
the aggregate, would be reasonably likely to have a Material Adverse Effect on
American. None of the American Disclosure Schedule or the American SEC Documents
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact required to be stated herein or therein or
necessary in order to make the statements contained herein or therein, in light
of the circumstances under which they were made, not misleading.
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4.3 Changes in Condition. Except as set forth in Section 4.3 of the
American Disclosure Schedule, between June 30, 1997 and the date of the Original
Merger Agreement, there has been no Material Adverse Change in American.
4.4 Properties. (a) American and each of its Subsidiaries (other than
the Tower Subsidiaries) has good and marketable title to all material parcels of
real property owned by it and good and merchantable title to all material items
of property and assets, tangible and intangible, (i) reflected in the financial
statements of American as of June 30, 1997, and (ii) acquired after June 30,
1997, except in each case for those sold or otherwise disposed of since June 30,
1997, in each case free and clear of all Liens, except (x) Permitted Liens and
(y) Liens set forth in the American Financial Statements or Section 4.4 of the
American Disclosure Schedule.
(b) All of the assets of American and its Subsidiaries material to the
continued operation of their respective businesses are in good operating
condition, reasonable wear and tear excepted, and usable in the ordinary course
of business, except where the failure to be in such condition or so usable would
not, individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect on American.
4.5 Compliance with Private Authorizations. American and each of its
Subsidiaries (other than the Tower Subsidiaries) has obtained all Private
Authorizations which are necessary for the ownership and operation by American
or its Subsidiaries of the business of American and its Subsidiaries, taken as a
whole, and the conduct of business thereof as now conducted and which, if not
obtained and maintained, would, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect on American. All such Private
Authorizations are, to American's knowledge, in full force and effect, and
neither American nor any of its Subsidiaries (other than the Tower Subsidiaries)
is, to American's knowledge, in breach or violation of, or in default in the
performance, observance or fulfillment of, any such Private Authorization, and,
to American's knowledge, no Event exists or has occurred, which constitutes, or
but for any requirement of the giving of notice or passage of time or both would
constitute, such a breach, violation or default, under any such Private
Authorization, except for such defaults, breaches or violations as would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect on American.
4.6 Compliance with Governmental Authorizations and Applicable Law;
Litigation.
(a) Section 4.6(a) of the American Disclosure Schedule contains a list
of each material Governmental Authorization (including without limitation all
material American FCC Licenses) required under Applicable Laws to own and
operate the business of American and its Subsidiaries (other than the Tower
Subsidiaries), including without limitation each of the American Stations, as
currently operated, all of which are in full force and effect, subject to such
qualifications and exceptions as may be set forth in Section 4.6(a) of the
American Disclosure Schedule. Certain of the Subsidiaries of American (other
than any of the Tower Subsidiaries) are the authorized legal holders of the
American FCC Licenses listed in Section 4.6(a) of the American Disclosure
Schedule, none of which is subject to any restriction or condition which would
limit in any material respect the operations of any of the American Stations as
currently conducted except as noted in Section 4.6(a) of the American Disclosure
Schedule. The American FCC Licenses listed in Section 4.6(a) of the American
Disclosure Schedule are valid and in full force and effect and are not impaired
in any material respect by any act or omission of American or any of its
Subsidiaries, subject to such qualifications and exceptions as may be set forth
in Section 4.6(a) of the American Disclosure Schedule; and the operation of each
of the American Stations is in accordance with such American FCC Licenses in all
material respects, except to the extent so listed in Sections 4.6(a) and (b) of
the American Disclosure Schedule. American is fully qualified to be the
transferor of control of the American FCC Licenses. All material reports, forms
and statements required to be filed by American or any of its Subsidiaries with
the FCC with respect to each of
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the American Stations have been filed and are true, complete and accurate in all
material respects. American or one of its Subsidiaries (other than the Tower
Subsidiaries) has obtained all Governmental Authorizations in addition to the
American FCC Licenses listed in Section 4.6(a) of the American Disclosure
Schedule which are necessary for the ownership or operations or the conduct of
the business of American and its Subsidiaries, taken as a whole (except with
respect to the American Brokered Stations), as now conducted and which, if not
obtained and maintained, would, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect on American and American's performance
with respect thereto, and the operation of the American Brokered Stations is in
accordance with all applicable Governmental Authorizations except where the
failure to be so in accordance would not be reasonably likely to have a Material
Adverse Effect on American. As of the date of the Original Merger Agreement,
except as noted in Section 4.6(a) of the American Disclosure Schedule, no
application, action or proceeding is pending for the renewal or material
modification of any of the American FCC Licenses and, to American's knowledge,
except as noted in Section 4.6(b) of the American Disclosure Schedule, there was
not as of the date of the Original Merger Agreement before the FCC any material
investigation, proceeding, notice of violation, order of forfeiture or complaint
against American or any of its Subsidiaries relating to any of the American
Stations or other FCC licensed facilities that, if adversely decided, would be
reasonably likely to have a Material Adverse Effect on American (and as of the
date of the Original Merger Agreement American did not have knowledge of any
basis that would cause the FCC not to renew any of the American FCC Licenses).
Except as noted in Schedule 4.6(b) of the American Disclosure Schedule, as of
the date of the Original Merger Agreement, there was not then pending and, to
American's knowledge, there was not threatened, any action by or before the FCC
to revoke, suspend, cancel, rescind or modify in any material respect any of the
American FCC Licenses that, if adversely decided, would be reasonably likely to
have a Material Adverse Effect on American (other than proceedings to amend FCC
rules of general applicability to the radio industry).
(b) Except as otherwise specifically set forth in Section 4.6(b) of the
American Disclosure Schedule, since January 1, 1996, American and its
Subsidiaries (other than the Tower Subsidiaries) have conducted its and each of
their respective businesses and owned and operated its and each of their
respective properties in accordance with all Applicable Laws (excluding
Environmental Laws) and Governmental Authorizations, except for such breaches,
violations and defaults as, individually or in the aggregate, have not had and
are not reasonably likely to have a Material Adverse Effect on American. Except
as otherwise specifically described in Section 4.6(b) of the American Disclosure
Schedule and except with respect to Environmental Laws, neither American nor any
of its Subsidiaries is in or is charged in writing by any Authority with, or, to
American's knowledge, is threatened or under investigation by any Authority with
respect to, any breach or violation of, or default in the performance,
observance or fulfillment of, any Applicable Law relating to the ownership and
operation of American's and its Subsidiaries' properties or the conduct of
American's and its Subsidiaries' business which will, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on American.
Except as otherwise specifically described in Section 4.6(b) of the American
Disclosure Schedule and except with respect to Environmental Laws, no Event
exists or has occurred, which constitutes, or but for any requirement of giving
of notice or passage of time or both would constitute, such a breach, violation
or default, under any Governmental Authorization or any Applicable Law, except
for such breaches, violations or defaults as, individually or in the aggregate,
have not had and would not be reasonably likely to have a Material Adverse
Effect on American. With respect to matters, if any, of a nature referred to in
Section 4.6(b) of the American Disclosure Schedule, except as otherwise
specifically described in Section 4.6(b) of the American Disclosure Schedule,
all such information and matters set forth in the American Disclosure Schedule,
if adversely determined against American or one of its Subsidiaries (other than
the Tower Subsidiaries), individually or in the aggregate, would not be
reasonably likely to have a Material Adverse Effect on American.
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(c) Except as disclosed in the Filed American SEC Documents or in
Section 4.6(c) of the American Disclosure Schedule, there are no Legal Actions
pending or, to the knowledge of American, threatened against or affecting
American or any of its Subsidiaries (other than the Tower Subsidiaries)
including any action by or before the FCC to revoke, suspend, cancel, rescind or
modify in any material respect any of the American FCC Licenses, except for
Legal Actions that, individually or in the aggregate, would not be reasonably
likely to have a Material Adverse Effect on American.
4.7 Related Transactions. Except as set forth in Section 4.7 of the
American Disclosure Schedule, as contemplated herein or as disclosed in the
Filed American SEC Documents, no director, officer, Affiliate or "associate" (as
such term is defined in Rule 12b-2 under the Exchange Act) of American or any of
its Subsidiaries is currently a party to any transaction which would be required
to be disclosed under Item 404 of Regulation S-K of the Securities Act.
4.8 Taxes and Tax Matters. Except as provided in Section 4.8 of the
American Disclosure Schedule:
(a) American has filed completely and correctly in all
material respects all Tax Returns which are required by all Applicable
Laws to be filed by it, and has paid, or made adequate provision for
the payment of, all material Taxes which have or may become due and
payable pursuant to said Tax Returns and all other Taxes, governmental
charges and assessments received to date other than those Taxes being
contested in good faith for which adequate provision has been made on
the most recent balance sheet forming part of the American Financial
Statements. The Tax Returns of American have been prepared, in all
material respects, in accordance with all Applicable Laws and generally
accepted principles applicable to taxation consistently applied;
(b) all material Taxes which American is required by law to
withhold and collect have been duly withheld and collected, and have
been paid over, in a timely manner, to the proper Taxing Authorities to
the extent due and payable;
(c) American has not executed any waiver to extend, or
otherwise taken or failed to take any action that would have the effect
of extending, the applicable statute of limitations in respect of any
Tax liabilities of American for the fiscal years prior to and including
the most recent fiscal year;
(d) American is not a "consenting corporation" within the
meaning of Section 341(f) of the Code. American has at all times been
taxable as a Subchapter C corporation under the Code;
(e) American has never been a member of any consolidated group
(other than with American and its Subsidiaries) for Tax purposes.
American is not a party to any tax sharing agreement or arrangement,
other than with its Subsidiaries;
(f) no Liens for Taxes exist with respect to any of the assets
or properties of American, except for statutory Liens for Taxes not yet
due or payable or that are being contested in good faith;
(g) all of the U.S. Federal income Tax Returns filed by or on
behalf of each of American and its Subsidiaries have been examined by
and settled with the Internal Revenue Service, or the statute of
limitations with respect to the relevant Tax liability expired, for all
taxable periods through and including the period ending on the date on
which the Effective Time occurs;
(h) all Taxes due with respect to any completed and settled
audit, examination or deficiency litigation with any Taxing Authority
have been paid in full;
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(i) there is no audit, examination, deficiency, or refund
litigation pending with respect to any Taxes and during the past three
years no Taxing Authority has given written notice of the commencement
of any audit, examination or deficiency litigation, with respect to any
Taxes;
(j) American is not bound by any currently effective private
ruling, closing agreement or similar agreement with any Taxing
Authority relating to a material amount of Taxes;
(k) except with respect to like-kind exchanges pursuant to
Section 1031 of the Code, American shall not be required to include in
a taxable period ending after the Effective Time, any taxable income
attributable to income that economically accrued in a prior taxable
period as a result of Section 481 of the Code, the installment method
of accounting or any comparable provision of state or local Tax law;
(l) (A) no material amount of property of American is "tax
exempt property" within the meaning of Section 168(h) of the Code, (B)
no material amount of assets of American is subject to a lease under
Section 7701(h) of the Code, and (C) American is not a party to any
material lease made pursuant to Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended and in effect prior to the date of
enactment of the Tax Equity and Fiscal Responsibility Act of 1982; and
(m) immediately following the Merger, American will not have
any material amount of income or gain that has been deferred under
Treasury Regulation Section 1.1502-13, or any material excess loss
account in a Subsidiary under Treasury Regulation Section 1.1502-19.
4.9 Employee Retirement Income Security Act of 1974.
(a) American (which for purposes of this Section 4.9 shall include any
ERISA Affiliate) currently sponsors, maintains and contributes only to the Plans
and Benefit Arrangements set forth in Section 4.9(a) of the American Disclosure
Schedule. American has delivered or made available to Mergeparty true, complete
and correct copies of (1) each Plan and Benefit Arrangement (or, in the case of
any unwritten Plans or Benefit Arrangements, reasonable descriptions thereof),
(2) the two most recent annual reports on Form 5500 (including all schedules and
attachments thereto) filed with the Internal Revenue Service with respect to
each Plan (if any such report was required by Applicable Law), (3) the most
recent summary plan description (or similar document) for each Plan for which
such a summary plan description is required by Applicable Law or was otherwise
provided to plan participants or beneficiaries and (4) each trust agreement and
insurance or annuity contract or other funding or financing arrangement relating
to any Plan. To the knowledge of American, each such Form 5500 and each such
summary plan description (or similar document) does not, as of the date hereof,
contain any material misstatements. Except as set forth in Section 4.9(a) of the
American Disclosure Schedule, as to all Plans and Benefit Arrangements listed in
Section 4.9(a) of the American Disclosure Schedule:
(i) all such Plans and Benefit Arrangements comply and have
been administered in form and in operation in accordance with their
respective terms, and with all Applicable Laws, in all material
respects, and American has not received any notice from any Authority
disputing or investigating such compliance;
(ii) all such Plans maintained by American that are intended
to comply with Sections 401 and 501 of the Code comply in all material
respects with all applicable requirements of such sections, and no
Event has occurred which is known to American which will give rise to
disqualification of any such Plan under such sections or to a tax under
Section 511 of the Code and each such Plan has been
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the subject of a determination letter from the Internal Revenue Service
to the effect that such Plan and related trust is qualified and exempt
from Federal income Taxes under Sections 401(a) and 501(a),
respectively, of the Code; no such determination letter has been
revoked, and, to the knowledge of American, revocation has not been
threatened. American has delivered or made available to Mergeparty a
copy of the most recent determination letter received with respect to
each Plan for which such a letter has been issued, as well as a copy of
any pending application for a determination letter. American has also
provided or made available to Mergeparty a list of all Plan amendments
as to which a favorable determination letter has not yet been received;
(iii) none of the assets of any such Plan are invested in
employer securities or employer real property;
(iv) there are no Claims (other than routine Claims for
benefits or actions seeking qualified domestic relations orders)
pending or, to American's knowledge, threatened involving such Plans or
the assets of such Plans, and, to American's knowledge, no facts exist
which are reasonably likely to give rise to any such Claims (other than
routine Claims for benefits or actions seeking qualified domestic
relations orders);
(v) no such Plan is subject to Title IV of ERISA, and American
has no actual or potential liability thereunder;
(vi) all group health Plans of American have been operated in
compliance in all material respects with the group health plan
continuation coverage requirements of COBRA;
(vii) neither American nor, to its knowledge, any of its
directors, officers, employees or any other fiduciary has committed any
breach of fiduciary responsibility imposed by ERISA or any similar
Applicable Law that would subject American or any of its respective
directors, officers or employees to liability under ERISA or any
similar Applicable Law;
(viii) American is not and never has been a party to any
Multiemployer Plan or made contributions to any such Plan;
(ix) except as set forth in the American Financial Statements
and pursuant to the provisions of COBRA, American does not maintain any
Plan that provides for post-retirement medical or life insurance
benefits, and American does not have any obligation or liability with
respect to any such Plan previously maintained by it, except as the
provisions of COBRA may apply to any former employees or retirees of
American;
(x) all material contributions to, and material payments from,
the Plans and Benefit Arrangements that may have been required to be
made in accordance with the terms of the Plans and Benefit
Arrangements, and any applicable collective bargaining agreement, have
been made. All such contributions to, and payments from, the Plans and
Benefit Arrangements, except those payments to be made from a trust
qualified under Section 401(a) of the Code, for any period ending
before the Closing Date that are not yet, but will be, required to be
made, will be properly accrued and reflected in the Closing Balance
Sheet;
(xi) (1) no "prohibited transaction" (as defined in Section
4975 of the Code or Section 406 of ERISA) has occurred that involves
the assets of any Plan; (2) no prohibited transaction has occurred that
could subject American, any of its employees, or, to the knowledge of
American, a trustee, administrator or other fiduciary of any trust
created under any Plan to the tax or sanctions on
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prohibited transactions imposed by Section 4975 of the Code or Title I
of ERISA; (3) none of American, any of its ERISA Affiliates or, to the
knowledge of American, any trustee, administrator or other fiduciary of
any Plan or any agent of any of the foregoing has engaged in any
transaction or acted in a manner that could, or has failed to act so as
to, subject American or any trustee, administrator or other fiduciary
to any liability for breach of fiduciary duty under ERISA or any other
Applicable Law;
(xii) American has not incurred any material liability to a
Plan (other than for contributions not yet due) which liability has not
been fully paid or accrued for payment as of the date of the Original
Merger Agreement;
(xiii) except as otherwise contemplated by this Agreement, no
current or former employee of American will be entitled to any
additional benefits or any acceleration of the time of payment or
vesting of any benefits under any Plan or Benefit Arrangement as a
result of the transactions contemplated by this Agreement;
(xiv) no compensation payable by American to any of its
employees under any existing Plan, Benefit Arrangement (including by
reason of the transactions contemplated hereby) will be subject to
disallowance under Section 162(m) of the Code;
(xv) any amount that could be received (whether in cash or
property or the vesting of property) as a result of any of the
transactions contemplated by this Agreement by any employee, officer,
director or independent contractor of American who is a "disqualified
individual" (as such term is defined in proposed Treasury Regulation
Section 1.280G-1) under any employment arrangement would not be
characterized as an "excess parachute payment" (as such term is defined
in Section 280G(b)(1) of the Code);
(xvi) no Plan which is an employee stock ownership plan (an
"ESOP") constitutes a leveraged employee stock ownership plan within
the meaning of Section 4975(e)(7) of the Code and there are no
unallocated shares of stock of American currently held under any such
ESOP in a suspense account; and
(xvii) there are no outstanding options (or contractual
obligations to issue options) to acquire American Common Stock or other
American securities other than options held by employees or directors
of American and issued under Benefit Arrangements (the aggregate number
of which are as set forth in Section 4.11 of the American Disclosure
Schedule).
(b) The execution, delivery and performance by American of this
Agreement and the Collateral Documents executed or required to be executed by
American pursuant hereto and thereto will not involve any prohibited transaction
within the meaning of ERISA or Section 4975 of the Code.
4.10 Insurance. All material fire and casualty, general liability,
business interruption, product liability, and sprinkler and water damage
insurance policies maintained by American or any of its Subsidiaries (other than
the Tower Subsidiaries) are with reputable insurance carriers, provide full and
adequate coverage, for American and such Subsidiaries (other than the Tower
Subsidiaries) and their respective properties and assets, and are in character
and amount at least equivalent to that carried by Persons engaged in similar
businesses and subject to the same or similar perils or hazards, except where
the failure to maintain such insurance policies, either individually or in the
aggregate, would not be reasonably likely to have a Material Adverse Effect on
American.
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4.11 Authorized Capital Stock. The authorized and outstanding capital
stock, Option Securities and Convertible Securities of American, as of September
18, 1997, are as set forth in Section 4.11 of the American Disclosure Schedule.
Except as set forth in Section 4.11 of the American Disclosure Schedule, since
September 18, 1997, American has not issued any shares of capital stock of any
class, any Option Securities or any Convertible Securities, except for the issue
of American Common Stock pursuant to the conversion of Convertible Securities or
the exercise of Option Securities outstanding on September 18, 1997 and in each
case in accordance with their present terms or as otherwise described or
contemplated by the Filed American SEC Documents. All of such outstanding
capital stock has been duly authorized and validly issued, is fully paid and
nonassessable and is not subject to any preemptive or similar rights. American
had, prior to the date of the Original Merger Agreement, made available to
Mergeparty a true and correct copy of the Restated Certificate of Incorporation
of American (the "Restated Certificate") as in effect on the date of the
Original Merger Agreement. Except as set forth in Section 4.11 of the American
Disclosure Schedule, there are no bonds, debentures, notes or other indebtedness
of American outstanding having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
stockholders of American may vote. Except as set forth in Section 4.11 of the
American Disclosure Schedule, or, except as set forth in the Restated
Certificate, there are no contractual obligations of American or any of its
Subsidiaries outstanding to repurchase, redeem or otherwise acquire any shares
of capital stock of American or any of its Subsidiaries. Except as otherwise
contemplated by this Agreement or as set forth in Section 4.11 of the American
Disclosure Schedule, there are no contractual obligations of American to vote or
to dispose of any shares of the capital stock of any of its Subsidiaries. No
adjustment in either the conversion price or the amount or nature of the
securities or other property issuable upon conversion of the shares of American
Convertible Preferred Stock is required as a result of (i) the Tower Merger,
other than an adjustment to the effect that, upon conversion, the holders
thereof shall have the right to receive the Tower Merger Consideration upon any
conversion following the Tower Merger Effective Time, as if such conversion had
been effected immediately prior to the Tower Merger Effective Time, and (ii) the
Merger, other than an adjustment to the effect that, upon conversion, the
holders thereof shall have the right to receive the Merger Consideration upon
any conversion following the Effective Time as if such conversion had been
effected immediately prior to the Effective Time. No adjustment in the exercise
price or the number of shares of American Common Stock or the amount or nature
of any other securities or property issuable upon the exercise of the American
Options is required as result of (i) the Tower Merger, other than an adjustment
to the effect that, upon exercise, the holders thereof shall have the right to
receive the Tower Merger Consideration upon any exercise following the Tower
Merger Effective Time, as if such exercise had been effected immediately prior
to the Tower Merger Effective Time and (ii) the Merger, other than an adjustment
to the effect that, upon exercise, the holders thereof shall have the right to
receive the Merger Consideration upon any exercise following the Effective Time
as if such exercise had been effected immediately prior to the Effective Time.
4.12 Employment Arrangements. Except as described in the Filed American
SEC Documents or in Section 4.12 of the American Disclosure Schedule, as of the
date of the Original Merger Agreement (i) none of the employees of American or
any of its Subsidiaries (other than the Tower Subsidiaries) was, or, to
American's knowledge, since November 1, 1993 and while an employee of American
or any of its Subsidiaries had been, represented by any labor union or other
employee collective bargaining organization, or were, as of the date of the
Original Merger Agreement, or, to American's knowledge, since
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November 1, 1993 to such date had been, parties to any labor or other collective
bargaining agreement, (ii) there are, to American's knowledge, no pending labor
strikes, work stoppages, lockouts, slow downs, grievances (including unfair
labor charges), disputes or controversies with any union or any other employee
or collective bargaining organization of such employees, or threats of such
labor strikes, work stoppages, lockouts or slowdowns or any pending demands for
collective bargaining by any union or other such organization, and (iii) neither
American nor any of its Subsidiaries (other than the Tower Subsidiaries) nor any
of its or any of their employees was, as of the date of the Original Merger
Agreement, or, to American's knowledge, since November 1, 1993 to such date had
been, subject to or involved in or, to American's knowledge, threatened with,
any union elections, petitions therefor or other organizational or recruiting
activities. American and its Subsidiaries (other than the Tower Subsidiaries)
have performed all obligations required to be performed under all Employment
Arrangements and none of them is in breach or violation of or in default or
arrears under any of the terms, provisions or conditions thereof, except for
such breaches, violations, defaults and arrears, which either individually or in
the aggregate, have not had and are not reasonably likely to have a Material
Adverse Effect on American.
4.13 Voting Requirements. The affirmative vote of the holders of shares
of American Common Stock, representing a majority of the outstanding voting
power of American Common Stock, voting as a single class, is (i) the only vote
necessary to approve and adopt this Agreement and the transactions contemplated
by this Agreement (other than the Tower Merger Agreement) (the "Required Vote")
and (ii) the only vote necessary to approve and adopt the Tower Merger Agreement
and the transactions contemplated by the Tower Merger Agreement (the "Required
Tower Vote").
4.14 Brokers. No broker, investment banker, financial advisor or other
person, other than Credit Suisse First Boston Corporation ("CSFB"), the fees and
expenses of which will be paid by American, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated, the fees and expenses of which will be paid by American
Tower (or reimbursed to American by American Tower) following the Effective Time
in accordance with the provisions of Section 9.3(b), is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated or permitted by this Agreement.
American has furnished to Mergeparty true and complete copies of all agreements
under which any such fees or expenses may be payable and all indemnification and
other agreements related to the engagement of the persons to whom such fees may
be payable.
4.15 Information Supplied.
(a) Each of the Proxy Statement and the Tower Proxy Statement will not,
at the date it is first mailed to the holders of American Common Stock and at
the time of the American Stockholders Meeting (in the case of the Proxy
Statement) and the American Stockholders Tower Meeting (in the case of the Tower
Proxy Statement), contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. For purposes of the foregoing, the truth of any
information or the existence of any omissions at the time of the American
Stockholders Meeting and the American Stockholders Tower Meeting shall be
determined with reference to the Proxy Statement and the Tower Proxy Statement,
respectively, as then amended or supplemented. The Proxy Statement and the Tower
Proxy Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder.
Notwithstanding the foregoing, no representation or warranty is made by American
with respect to statements made or incorporated by reference therein based on
information specifically supplied by Mergeparty or Mergeparty Subsidiary for
inclusion or incorporation by reference in the Proxy Statement or the Tower
Proxy Statement.
(b) The Registration Statement to be filed with the Commission by
American Tower pursuant to the provisions of Section 6.6(b) will not (except to
the extent revised or superseded by amendments or supplements contemplated
hereby), at the time such Registration Statement is filed with the Commission,
at the time such Registration Statement is amended or supplemented or at the
time such Registration Statement becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
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4.16 Ordinary Course of Business. Except as may be described in the
Filed American SEC Documents or in Section 4.9(a) or Section 4.16 of the
American Disclosure Schedule, since June 30, 1997 to the date of the Original
Merger Agreement, (i) each of American and its Subsidiaries (other than the
Tower Subsidiaries) has operated its business in the normal, usual and customary
manner in the ordinary and regular course of business, consistent with prior
practice (it being understood and agreed for purposes of this Section 4.16 by
the parties that the acquisition, disposition and exchange of radio stations is
in the ordinary course of business) and (ii) there has not been by American and
its Subsidiaries (other than the Tower Subsidiaries) (a) any declaration,
setting aside or payment of any dividend or other distribution payable in cash,
stock, property or otherwise except for (x) the payment of dividends or the
making of distributions by a direct or indirect wholly-owned Subsidiary of
American and (y) the payment of dividends on shares of American Preferred Stock
in accordance with their terms, (b) any split, combination or reclassification
of any of its capital stock or any issuance or the authorization of any issuance
of any other securities in respect of, in lieu of or in substitution for shares
of its capital stock, (c) (I) any granting to any executive officer or other key
employee of American or any of its Subsidiaries of any increase in compensation,
except for normal increases in the ordinary course of business consistent with
past practice or as required under Benefit Arrangements, (II) any granting to
any such executive officer of any increase in severance or termination pay,
except as was required under any Benefit Arrangement, (III) except in the
ordinary course, any entering into, amendment in any material respect or
termination of any Governmental Authorization, Private Authorization or material
agreement, arrangement, contract, undertaking, understanding or other
obligation, or (IV) any adoption or amendment of any Plan or Benefit Arrangement
(including changing any actuarial or other assumption used to calculate funding
obligations with respect to any Plan, or changing the manner in which
contributions to any Plan are made or the basis on which such contributions are
determined) except as required to comply with changes in Applicable Law, (d)
except insofar as may have been disclosed in the Filed American SEC Documents or
required by a change in GAAP, any change in accounting methods, principles or
practices by American materially affecting its assets, liabilities or business,
(e) any sale, disposition or contract to dispose of any of its properties or
assets having a value in excess of $1,000,000 other than in the ordinary course,
and (f) any damage, destruction or loss, whether or not covered by insurance,
that has had a Material Adverse Effect on American.
4.17 Environmental Matters. Except as set forth in the American SEC
Documents or Section 4.17 of the American Disclosure Schedule, American:
(a) (i) has not been notified in writing that it is
potentially liable and, has not received any written request for
information or other correspondence concerning its potential liability
with respect to any site or facility, under or pursuant to any
Environmental Law, (ii) to the knowledge of American, is not a
potentially "responsible party" under, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the
Resource Conservation and Recovery Act, as amended, or any similar
state Law, and (iii) to the knowledge of American, is not the subject
of or, to the knowledge of American, threatened with any Legal Action
involving a demand for damages or other potential liability, including
any Lien, with respect to violations or breaches of any Environmental
Law;
(b) to the knowledge of American, is in compliance with all
Environmental Laws and has obtained all Environmental Permits required
under Environmental Laws, except for such noncompliances and failures
to obtain Environmental Permits as, individually or in the aggregate,
have not had and would not be reasonably likely to have a Material
Adverse Affect on American;
(c) (i) has not entered into or received any consent decree,
compliance order or administrative order issued pursuant to any
Environmental Law, and (ii) is not a party in interest or
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in default under any judgment, order, writ, injunction or decree of any
Final Order issued pursuant to any Environmental Law; and
(d) to the knowledge of American, there have not been any
releases, spills or disposal activities of or involving Hazardous
Materials, including without limitation from underground storage tanks,
on or from any property owned, operated or leased by American which
releases, spills or disposal activities resulted or could reasonably be
expected to result in investigation and cleanup expenditures which upon
payment of such expenditures would be reasonably likely to have a
Material Adverse Effect on American.
Notwithstanding anything to the contrary contained in this Agreement,
American makes no representation or warranty with respect to its compliance with
Environmental Laws or environmental matters generally, except as specifically
set forth in this Section 4.17.
4.18 Opinion of Financial Advisor. American has received the opinion of
CSFB, dated the date of the Original Merger Agreement, to the effect that, as of
such date, the Merger Consideration (as defined in the Original Merger
Agreement) to be received by the holders of American Common Stock in the Merger
is fair from a financial point of view to the holders of American Common Stock.
4.19 Contracts; Debt Instruments.
(a) Except as set forth in Section 4.20 of the American Disclosure
Schedule, neither American nor any of its Subsidiaries is in violation of or in
default under (nor does there exist any condition which upon the passage of time
or the giving of notice, or both, would cause such a violation of or default
under) any material agreement, arrangement, contract, undertaking, understanding
or other obligation, including the American Preferred Stock ("Contracts"), to
which it is a party or by which it or any of its properties or assets is bound,
except for violations or defaults, that individually or in the aggregate, would
not be reasonably likely to have a Material Adverse Effect on American, and none
of the Contracts prohibits American from incurring an additional $1.00 of
indebtedness.
(b) American has made available to Mergeparty (i) true and correct
copies of all Contracts to which any indebtedness of American or any of its
Subsidiaries (other than the Tower Subsidiaries) in an aggregate principal
amount in excess of $1,000,000 is outstanding or may be incurred and (ii)
accurate information regarding the respective principal amounts currently
outstanding as of the date of the Original Merger Agreement thereunder.
4.20 State Takeover Statutes. Except for Section 203 of the DCL, to
American's knowledge, no other state takeover Law, statute or similar statute or
regulation applies or purports to apply to the Merger, this Agreement or any of
the transactions contemplated by this Agreement.
4.21 Appraisal Rights. No appraisal rights under Section 262 of the DCL
are applicable to the Tower Merger or the Tower Merger Consideration.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF MERGEPARTY
Except as set forth with respect to specifically identified
representations and warranties in the Mergeparty Disclosure Schedule, Mergeparty
represents and warrants to American as follows:
5.1 Organization and Business; Power and Authority; Effect of
Transaction.
(a) Each of Mergeparty and Mergeparty Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of organization and has all requisite power and authority
(corporate and other) to own or hold under lease its properties and to conduct
its business as now conducted and as presently proposed to be conducted. Each of
Mergeparty and Mergeparty Subsidiary is duly qualified and in good standing as a
foreign corporation in each other jurisdiction (as shown on Section 5.1(a) of
the Mergeparty Disclosure Schedule) in which the character of the property owned
or leased by it or the nature of its business or operations requires such
qualification, with full power and authority (corporate and other) to carry on
the business in which it is engaged, except in such jurisdictions where the
failure to be so qualified and in good standing, individually or in the
aggregate, is not reasonably likely to have a Material Adverse Effect on
Mergeparty.
(b) Each of Mergeparty and Mergeparty Subsidiary has all requisite
power and authority (corporate and other) to execute, deliver and perform its
obligations under this Agreement and each Collateral Document executed or
required to be executed by Mergeparty and/or Mergeparty Subsidiary pursuant
hereto or thereto or to consummate the Merger and the other transactions
contemplated hereby and thereby, and the execution, delivery and performance of
this Agreement and each Collateral Document executed or required to be executed
pursuant hereto have been duly authorized by all requisite corporate or other
action on the part of Mergeparty and/or Mergeparty Subsidiary, and no other
corporate proceedings on the part of Mergeparty and/or Mergeparty Subsidiary are
necessary to authorize this Agreement or the transactions contemplated hereby or
to consummate the Merger or the other transactions so contemplated. This
Agreement has been duly executed and delivered by each of Mergeparty and
Mergeparty Subsidiary and constitutes, and each Collateral Document executed or
required to be executed pursuant hereto or to consummate the Merger when
executed and delivered by Mergeparty and/or Mergeparty Subsidiary will
constitute, a valid and binding obligation of Mergeparty and/or Mergeparty
Subsidiary, enforceable in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, moratorium, insolvency and
similar laws affecting the rights and remedies of creditors and obligations of
debtors generally and by general principles of equity.
(c) At the time of execution of this Agreement, Mergeparty and all of
its Affiliates or "associates" (as defined in the Exchange Act) collectively
beneficially own less than 5% of the outstanding shares of American Common
Stock.
(d) The execution, delivery and performance by each of Mergeparty
and/or Mergeparty Subsidiary of this Agreement and any Collateral Document
executed or required to be executed by such party pursuant hereto or thereto, do
not, and the consummation by Mergeparty Subsidiary of the Merger and the other
transactions hereby and thereby and compliance with the terms, conditions and
provisions hereof or thereof by Mergeparty and/or Mergeparty Subsidiary will
not:
(i) (A) conflict with, or result in a breach or violation of,
or constitute a default under, any Organic Document of Mergeparty or
Mergeparty Subsidiary or (B) any Applicable Law applicable to
Mergeparty or Mergeparty Subsidiary, or conflict with, or result in a
breach or violation of, or constitute a default under, or permit the
termination, cancellation or acceleration of any
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obligation or liability in, or but for any requirement of the giving of
notice or passage of time or both would constitute such a conflict
with, breach or violation of, or default under, or permit any such
termination, cancellation or acceleration of, any Contract or Private
Authorization of Mergeparty or Mergeparty Subsidiary, except, in the
case of clause (B), for such conflicts, breaches, violations,
terminations, cancellations or accelerations that would not,
individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect on Mergeparty; or
(ii) result in or permit the creation or imposition of any
Lien upon any property now owned or leased by Mergeparty or Mergeparty
Subsidiary except for such Liens that would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on
Mergeparty or Mergeparty Subsidiary; or
(iii) require any Governmental Authorization or Governmental
Filing except for (A) the FCC Consents, (B) filings under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, (C) the filing with the Commission of such
reports under Section 13(a) or 15(d) of the Exchange Act as may be
required in connection with this Agreement and the transactions
contemplated by this Agreement, (D) the filing of the Certificate of
Merger with the Delaware Secretary of State and appropriate documents
with the relevant authorities of other states in which American is
qualified to do business and (E) such other Governmental Authorizations
and Governmental Filings the failure of which to be made or obtained
would, individually or in the aggregate, not be reasonably likely to
have a Material Adverse Effect on American.
(e) Mergeparty Subsidiary was formed solely for the purpose of engaging
in the transactions contemplated by this Agreement and has not engaged in any
business activities or conducted any operations other than in connection with
the transactions contemplated by this Agreement.
5.2 Compliance with Governmental Authorizations and Applicable Law;
Litigation. Except as disclosed in any report or other document filed by
Mergeparty with the SEC prior to the date of the Original Merger Agreement or in
Section 5.2 of the Mergeparty Disclosure Schedule, there are no Legal Actions
pending or, to the knowledge of Mergeparty, threatened against Mergeparty or any
of its Subsidiaries, except for Legal Actions that, individually or in the
aggregate, would not be reasonably likely to have a Material Adverse Effect on
Mergeparty or prevent or materially burden or materially impair the ability of
Mergeparty to consummate the transactions contemplated by this Agreement. Except
as set forth in Section 5.2 of the Mergeparty Disclosure Schedule, there are not
facts relating to Mergeparty (or any Affiliate thereof) under the FCA that would
disqualify it (or any Affiliate or assignee) from obtaining control of the
American FCC Licenses or that would prevent it (or any Affiliate or assignee)
from consummating the transactions contemplated by this Agreement or, to
Mergeparty's knowledge, materially delay the grant of the FCC Consents. Except
as may be set forth in Section 5.2 of the Mergeparty Disclosure Schedule, it is
not necessary for Mergeparty or any of its Subsidiaries or other Affiliates (or
assigns) to (a) seek or obtain any waiver from the FCC, (b) dispose of any
interest in any media or communications property or interest (including without
limitation any of the American Stations or the American Brokered Stations), (c)
terminate any venture or arrangement, or (d) effectuate any change or
restructuring of ownership (including without limitation the removal or
withdrawal of officers or directors or the conversion or repurchase of equity
securities in Mergeparty or any Affiliate) to obtain, or to avoid any delay in
obtaining, the FCC Consents. Mergeparty is able to certify on an FCC Form 315
that it is financially qualified.
5.3 Mergeparty Financing. On the Closing Date, Mergeparty will have
sufficient funds to consummate the transactions contemplated by this Agreement,
including without limitation the Merger, and to pay all related fees and
expenses.
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ARTICLE 6
COVENANTS
6.1 Access to Information; Confidentiality. American shall afford to
Mergeparty and its accountants, counsel, investment bankers, financial advisors
and other agents and representatives (the "Representatives") full access during
normal business hours throughout the period prior to the Closing Date to all of
its (and its Subsidiaries', other than those of the Tower Subsidiaries)
properties, books, contracts, commitments and records (including without
limitation Tax Returns) and, during such period, shall furnish promptly upon
request (i) a copy of each report, schedule and other document filed or received
by it pursuant to the requirements of any Applicable Law (including without
limitation the FCA) or filed by it or any of its Subsidiaries (other than the
Tower Subsidiaries) with any Authority in connection with the Merger or which
may have a material effect on it or its business, financial condition or results
of operations, and (ii) such other information concerning any of the foregoing
as Mergeparty shall reasonably request; provided, however, that the foregoing
shall not require American to permit any disclosure or to disclose any
information, that in the reasonable judgment of American would result in the
disclosure of any trade secrets of third parties or violate any of its
obligations with respect to confidentiality if American shall have used its best
efforts to obtain the consent of such third party to such inspections or
disclosure. All requests for information shall be directed to an executive
officer of American or such other Persons as may be designated by American. All
information disclosed pursuant to this Section or otherwise shall be governed by
the terms of the Confidentiality Agreement, the terms and provisions of which
are incorporated herein by reference with the same force and effect as though
set forth here in their entirety. No investigation pursuant to this Section or
otherwise shall affect any representation or warranty of American in this
Agreement or any condition to the obligations of Mergeparty hereto.
6.2 Agreement to Cooperate.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties hereto shall use best efforts (x) to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate the Merger and (y) to refrain from
taking, or cause to be taken, any action and to refrain from doing or causing to
be done, any thing which could impede or impair the consummation of the Merger,
including, in all cases, without limitation using its best efforts (i) to
prepare and file with the applicable Authorities as promptly as practicable
after the execution of this Agreement all requisite applications and amendments
thereto, together with related information, data and exhibits, necessary to
request issuance of orders approving the Merger by all such applicable
Authorities, (ii) to obtain all necessary or appropriate waivers, consents and
approvals, (iii) to effect all necessary registrations, filings and submissions,
(iv) to defend any suit, action or proceeding, whether judicial or
administrative, challenging the Merger or any of the transactions contemplated
by the Merger Agreement, including seeking to lift any injunction or other legal
bar to the Merger (and, in such case, to proceed with the Merger as
expeditiously as possible), and (v) to obtain the satisfaction of the conditions
specified in Article 7, including without limitation the securing of all
authorizations, consents, waivers, modifications, order or approvals referred to
in Sections 7.1(b) and 7.1(d) and, without limiting the generality of the
foregoing, and notwithstanding any provision contained in this Agreement to the
contrary, including without limitation the last sentence of Section 6.10,
American shall not, and shall not permit any Tower Subsidiary to, take any
action or enter into any agreement, plan or arrangement to take any action (a
"Prohibited Transaction") which could reasonably be expected to materially delay
the date of the American Stockholders Meeting or the Effective Time (it being
understood that any delay in excess of fifteen (15) business days which would
arise as a result of any such action shall be deemed "material" for purposes
hereof). American hereby agrees to provide Mergeparty with prior written
notification of any proposed action which could reasonably be expected to
constitute a Prohibited Transaction.
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(b) Without limiting the generality of the foregoing, the parties
acknowledge and agree that the transfer of control of the American FCC Licenses
as contemplated by this Agreement is subject to the prior consent and approval
of the FCC. American and Mergeparty acknowledge that they have heretofore filed
with the FCC appropriate applications requesting the FCC's written consent to
the transfer of control of the American FCC Licenses pursuant to this Agreement
and have caused all necessary persons to join in one or more such applications
filed with the FCC (the "Applications"). American and Mergeparty will use their
best efforts to take such steps as may be necessary (i) diligently to prosecute
the Applications and to prepare and file any further Applications or amendments
as may be necessary to obtain the consent for the transfer of control to
Mergeparty of the licenses held by the American Brokered Stations to be acquired
by American and (ii) to obtain the FCC Consents, including action by Mergeparty,
at its sole cost and expense (except as provided elsewhere in this Agreement),
to satisfy or cause to be removed all Divestiture Conditions, if any. The
failure by American or Mergeparty to use its best efforts to timely file or
diligently prosecute its portion of any Application or, in the case of
Mergeparty, the failure to use its best efforts to make any Required Divestiture
or otherwise satisfy or cause to be removed all Divestiture Conditions on or
before the Termination Date, shall be a material breach by American or
Mergeparty, as the case may be, of this Agreement. American agrees that any
delay in prosecuting the Applications or obtaining the FCC Consents resulting
from Mergeparty's good faith negotiations, subject to Applicable Law, with the
FCC, Antitrust Division or FTC with respect to the imposition of a Divestiture
Condition shall not constitute a failure by Mergeparty to use its best efforts
diligently to prosecute the Applications or obtain the FCC Consents and so long
as such negotiations do not interfere with satisfaction of all conditions to
Closing prior to the Termination Date. If reconsideration or judicial review is
sought with respect to any FCC Consent, American and Mergeparty shall (promptly
and with all due efforts) oppose such efforts to obtain reconsideration or
judicial review.
(c) Without limiting the generality of Section 6.2(a), the parties
undertake and agree to file as soon as practicable after the date hereof, and in
any event within sufficient time to be able to consummate the Merger prior to
the Termination Date, a Notification and Report Form under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Act with the Federal Trade Commission (the "FTC") and the Antitrust Division of
the Department of Justice (the "Antitrust Division"). Each of the parties shall
(i) use its best efforts to comply as expeditiously as possible with all lawful
requests of the FTC or the Antitrust Division for additional information and
documents and (ii) not extend any waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act
or enter into any agreement with the FTC or the Antitrust Division not to
consummate the transactions contemplated by this Agreement, except with the
prior written consent of the other party hereto; provided, however, that nothing
shall limit the ability of Mergeparty to extend the 20-day waiting period under
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act following substantial compliance with any request for
additional information that may be forthcoming, if such extension is reasonably
necessary to allow the continuation of good-faith negotiations intended to
remove any objection to the transaction that the FTC or Antitrust Division may
have asserted, and if such extension will expire not less than 30 days prior to
the Termination Date.
(d) Anything in this Agreement, including without limitation Section
6.2(b), to the contrary notwithstanding, Mergeparty shall obtain the FCC
Consents and clearances under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act and the grant of any
waivers in connection therewith prior to the Termination Date in accordance with
this Agreement unless the failure to obtain such FCC Consents, clearances and
waivers is primarily the result of one or more Uncontrollable Events. For
purposes of this Agreement, the term "Uncontrollable Events" shall mean (i) acts
or omissions on the part of American or any of its Subsidiaries in conducting
its respective operations other than those relating to the number of American
FCC Licenses or amount of revenues in a particular market, (ii) an unremedied or
unwaived material breach by American of its obligations under this Agreement, or
(iii) any change in or enactment of Applicable Law by Congress and signed by the
President and which (A) has the effect of decreasing the number of radio
licenses which a Person may own nationally or locally or (B) materially and
adversely relates to the concentration of radio licenses which a Person may
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own in a market, and as a result of the change or enactment referred to in
either clause (A) or (B) above, Mergeparty's performance of its obligations
under this Agreement would have a Material Adverse Effect on Mergeparty's radio
and television broadcasting business. Mergeparty shall file with the FCC, within
sufficient time to permit timely grant of the Applications, applications for
consent to assign or transfer, pursuant to trust arrangements satisfying the
FCC's local multiple ownership rules and policies, such radio broadcast stations
as Mergeparty may designate, so that the radio broadcast stations of Mergeparty
and American not designated for such trust arrangements may be held by the
Surviving Corporation in compliance with the FCC's local multiple ownership
rules and policies. Mergeparty shall, to the extent necessary to obtain grant of
the trust applications, thereafter promptly file or cause to be filed any
further applications (including applications to assign radio broadcast stations
to third party purchasers for value) that may be required by the FCC.
Notwithstanding the two preceding sentences, with regard to stations located in
the San ▇▇▇▇ market, the obligations of Mergeparty to submit trust or sale
applications shall be excused for such stations to the extent and for the
duration of the period that Mergeparty is unable to identify the stations to be
placed in trust or sold because of the failure of American to notify Mergeparty
of the resolution of the Antitrust Division impediment impacting the American
transactions pending in the San ▇▇▇▇ market.
(e) If Mergeparty or any of its Affiliates receives an administrative
or other order or notification relating to any violation or claimed violation of
the rules and regulations of the FCC, or of any other Authority (including
without limitation seeking or relating to a Divestiture Condition), that could
affect Mergeparty's or Mergeparty Subsidiary's ability to consummate the
transactions contemplated hereby, or if Mergeparty or any other Affiliate of
Mergeparty should become aware of any fact relating to the qualifications of
Mergeparty or any of its Affiliates that reasonably could be expected to cause
the FCC to withhold its consent to the assignment of the American FCC Licenses,
Mergeparty shall promptly notify American thereof and American shall do likewise
with Mergeparty and Mergeparty shall use its best efforts, and take such steps
as are necessary, in order to satisfy or remove the Divestiture Conditions to
enable the Closing to occur prior to the Termination Date. Mergeparty covenants
and agrees to keep American fully informed as to all matters concerning all
Required Divestitures and shall promptly notify American in writing of any and
all significant developments relating thereto and American agrees to do likewise
with Mergeparty.
(f) Mergeparty acknowledges and agrees that certain of the American
Stations and American Brokered Stations may file applications for renewal of
license during the time that an application for the FCC Consents is pending
before the FCC. To the extent any such application for renewal may be filed,
Mergeparty agrees to amend the transferee's portion of any application for the
FCC Consents and, as may be required, to amend any license renewal applications
for all of the American Stations or American Brokered Stations, to confirm
Mergeparty's intention to consummate this Agreement during the pendency of such
license renewal application, and to agree to assume the consequences associated
with succeeding to the place of American in such license renewal applications.
The making of this statement shall not be deemed to limit or waive any other
rights that Mergeparty may otherwise have under this Agreement.
(g) The parties shall cooperate with one another in the preparation,
execution and filing of all Tax Returns, questionnaires, applications, or other
documents regarding any real property transfer or gains, sales, use, transfer,
value added, stock transfer and stamp Taxes, any transfer, recording,
registration and other fees, and any similar Taxes which become payable in
connection with the Merger that are required or permitted to be filed on or
before the Closing Date.
(h) Subject to Applicable Laws relating to the exchange of information,
American, on the one hand, and Mergeparty, on the other hand, shall have the
right to review in advance, and to the extent practicable each will consult the
other with respect to, all the information relating to American or Mergeparty,
as the case may be, and any of their respective Subsidiaries, that appear in any
filing made with, or written materials submitted to, any Authority and/or other
Person in connection with the Merger and the other
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transactions contemplated by this Agreement. In exercising the foregoing right,
each of American and Mergeparty shall act reasonably and as promptly as
practicable.
6.3 Public Announcements. Until the Closing, or in the event of
termination of this Agreement, each party shall consult with the other before
issuing any press release or otherwise making any public statements with respect
to this Agreement or the Merger and shall not issue any such press release or
make any such public statement without the prior consent of the other.
Notwithstanding the foregoing, the parties acknowledge and agree that they may,
without each other's prior consent, issue such press releases or make such
public statements as may be required by Applicable Law, in which case, to the
extent practicable, they will consult with the other regarding the nature,
content and form of such press release or public statement.
6.4 Notification of Certain Matters. Each party shall give prompt
notice to the other, of the occurrence or non-occurrence of any Event the
occurrence or non-occurrence of which would be reasonably likely to cause (i)
any representation or warranty made by it contained in this Agreement to be
untrue or inaccurate in any material respect or (ii) any failure made by it to
comply with or satisfy, or be able to comply with or satisfy, in any material
respect, any covenant, condition or agreement to be complied with or satisfied
by it under this Agreement in any material respect, such that, in any such case,
one or more of the conditions of Closing would not be satisfied; provided,
however, that the delivery of any notice pursuant to this Section shall not
limit or otherwise affect the rights and remedies available hereunder to the
party receiving such notice or the obligations of the party delivering such
notice and shall not, in any event, affect the representations, warranties,
covenants and agreements of the parties or the conditions to their respective
obligations under this Agreement.
6.5 Stockholder Approval. American will, as soon as practicable
following the date thereof, establish separate record dates (which will be as
soon as practicable following the date hereof) for, duly call, give notice of,
convene and hold (on separate dates) (i) a meeting (the "American Stockholders
Meeting") of the holders of shares of American Common Stock for the purpose of
obtaining the Required Vote and (ii) a meeting (the "American Stockholders Tower
Meeting") of holders of shares of American Common Stock for the purpose of
obtaining the Required Tower Vote. American will, through its Board of
Directors, recommend to the holders of shares of American Common Stock approval
and adoption of this Agreement and the Tower Merger Agreement, subject, with
respect to approval and adoption of this Agreement, to the fiduciary duties of
the Board of Directors of American under Applicable Law.
6.6 Proxy Statement; Registration Statement.
(a) American shall prepare and file with the Commission as soon as is
reasonably practicable after the date hereof a proxy statement in connection
with the American Stockholders Meeting (the "Proxy Statement") and a proxy
statement in connection with the American Stockholders Tower Meeting (the "Tower
Proxy Statement"), in each case complying with applicable rules and regulations
of the Commission and the DCL.
(b) American shall cause American Tower to prepare and file with the
Commission as soon as is reasonably practicable after the date hereof a
registration statement on Form S-4 (the "Registration Statement") complying with
applicable rules and regulations of the Commission. The Registration Statement
shall cover the registration under the Securities Act of the shares of Tower
Common Stock to be delivered as the Tower Stock Consideration or Tower Merger
Tower Consideration to the holders of shares of American Common Stock at the
Effective Time or the Tower Merger Effective Time, as the case may be.
(c) Mergeparty and American shall, and American shall cause American
Tower to, promptly furnish to the other all information, and take such other
actions, as may reasonably be requested in connection
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with any action taken to comply with the provisions of this Section 6.6. Each of
American and Mergeparty shall, and American shall cause American Tower to,
correct promptly any information provided by it to be used specifically in the
Proxy Statement, the Tower Proxy Statement or the Registration Statement that
shall have become false or misleading in any material respect and shall take all
steps necessary to file with the Commission and have cleared by the Commission
any amendment or supplement to the Proxy Statement, the Tower Proxy Statement or
the Registration Statement so as to correct such Proxy Statement, such Tower
Proxy Statement or such Registration Statement and cause it to be disseminated
to the stockholders of American, to the extent required by Applicable Law.
Without limiting the generality of the foregoing, American shall, and American
shall cause American Tower to, notify Mergeparty promptly of the receipt of the
comments of the Commission and of any request by the Commission for amendments
or supplements to the Proxy Statement, the Tower Proxy Statement or the
Registration Statement, or for additional information, and shall supply
Mergeparty with copies of all correspondence between it or its representatives,
on the one hand, and the Commission or members of its staff, on the other hand,
with respect to the Proxy Statement, the Tower Proxy Statement or the
Registration Statement. Whenever any event occurs which should be described in
an amendment or a supplement to the Proxy Statement, the Tower Proxy Statement
or the Registration Statement, American shall, and American shall cause American
Tower to, upon learning of such event, promptly prepare, file and clear with the
Commission and, if prior to the Effective Time, mail to the holders of shares of
American Common Stock such amendment or supplement; provided, however, that,
prior to such mailing, (i) American shall, and American shall cause American
Tower to, consult with Mergeparty with respect to such amendment or supplement,
(ii) shall afford Mergeparty reasonable opportunity to comment thereon, and
(iii) each such amendment or supplement shall be reasonably satisfactory to
Mergeparty.
6.7 Miscellaneous. Nothing contained in this Agreement shall prohibit
American from (a) taking and disclosing to its stockholders a position
contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or
(b) making any disclosure to American's stockholders if, in the good faith
judgment of the majority of the members of the Board of Directors of American,
after consultation with independent counsel, failure to so disclose would be
inconsistent with Applicable Laws.
6.8 Option Plans.
(a) All unexpired options to purchase American Common Stock that are
outstanding immediately prior to the Effective Time (each, an "American
Option"), except as provided otherwise in this Section 6.8, will be canceled by
American immediately prior to the Effective Time. Each employee or director of
American or any of its Subsidiaries immediately prior to the Effective Time
(each, an "Optionholder") shall receive, with respect to each share of American
Common Stock subject to an unexpired American Option of the Optionholder so
canceled by American, the Merger Consideration, or, if the Tower Merger
Effective Time shall have occurred, the cash that the Optionholder would have
received pursuant to the Merger and shares of American Tower Common Stock that
the Optionholder would have received pursuant to the Tower Merger, in each case
with respect to each share of American Common Stock subject to an unexpired
American Option of the Optionholder had such American Option been exercised
immediately prior to the Tower Merger Effective Time, in all cases reduced by an
amount of cash (and, to the extent necessary, Tower Common Stock) equal to the
exercise price per share of American Common Stock subject to such American
Option. Except as provided in the preceding sentence, no other consideration
will be paid by American to an Optionholder in respect of his or her canceled
American Options. If the Merger is not consummated, the cancellation of the
Optionholder's American Options shall be rescinded and the Optionholder shall
continue to hold such American Options upon their original terms and conditions.
At the election of any Optionholder who is a "disqualified individual" (as such
term is defined in proposed Treasury Regulation Section 1.280G-1), this Section
6.8(a) will be inoperative with respect to such American Options as he or she
may specify to the extent that the acceleration, vesting cancellation and
cash-out of American Options at the Effective Time as provided herein would
constitute an "excess parachute payment" (as such term is defined in Section
280G(b)(1) of the
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Code). Any Optionholder who makes such election shall forfeit the American
Options which are subject to such election and shall receive no consideration
therefor.
(b) With respect to American Options held by Tower Employees,
notwithstanding the foregoing provisions of this Section 6.8 and in lieu
thereof, and subject to the approval of the provisions of this Section 6.8 by
the Board of Directors of American and the Compensation Committee thereof, such
Tower Employees may elect to have their American Options assumed by American
Tower and converted into options to acquire Tower Common Stock as of the earlier
to occur of the Tower Merger Effective Time and the Effective Time, such
conversion to be effectuated in a manner that will preserve the spread in such
American Options between the option exercise price and the fair market value of
American Common Stock at the time of such conversion, and the ratio of the
spread to the exercise price prior to such conversion and, to the extent
applicable, otherwise in conformity with the rules under Section 424(a) of the
Code and the regulations promulgated thereunder. To the extent that Tower
Employees elect to so convert their American Options into options to acquire
Tower Common Stock, American shall contribute (without the payment of any amount
or the issuance of any securities by American Tower) to the capital of American
Tower at the time of such conversion a number of shares of Tower Common Stock
equal to the excess, if any, of (i) the number of shares of Tower Common Stock
owned by American immediately prior to the Tower Merger Effective Time or the
Effective Time, as the case may be, over (ii) the number of shares of Tower
Common Stock required to be delivered (x) to the holders of shares of American
Common Stock, (y) to holders of American Options pursuant to the provisions of
Section 6.8(a), and (z) upon conversion of American Convertible Preferred Stock.
If the Tower Employees set forth on Schedule 4.1(e) do not enter into definitive
agreements prior to the earlier to occur of the Tower Merger Effective Time and
the Effective Time to convert the American Options which are held by such Tower
Employees and set forth on such Schedule into options to acquire Tower Common
Stock in accordance with this Section 6.8(b), American shall, prior to the
earlier to occur of the Tower Merger Effective Time and the Effective Time,
cause American Tower to issue to American in exchange for payment of the par
value thereof a number of shares of Tower Common Stock equal to the aggregate
number of shares of American Common Stock subject to such American Options set
forth on such Schedule. American shall cause American Tower to file with, and
cause to be declared effective prior to the earlier to occur of the Tower Merger
Effective Time or the Effective Time under the Securities Act by, the
Commission, a registration statement on Form S-8 to register the shares of Tower
Common Stock subject to such converted American Options under the Securities
Act.
(c) American will use its best efforts (including best efforts to
obtain any consents of Optionholders, if required) to cause the cancellation of
all of the American Options immediately prior to the Effective Time.
(d) Notwithstanding the foregoing provisions of this Section 6.8, in
the event that any amount payable under Section 6.8(a) to an Optionholder in
respect of his American Options would fail to be deductible by American (or any
successor thereto) solely by reason of ss.162(m) of the Code (after taking into
account all amounts paid or reasonably expected to be payable to the
Optionholder in the same taxable year in which the payments under Section 6.8(a)
are made to the Optionholder and which are not otherwise exempt from Code
ss.162(m) in determining whether any amount payable to the Optionholder will
fail to be deductible thereunder), then, with respect to such portion of the
Optionholder's American Options the cancellation and cash-out of which would be
nondeductible under said ss.162(m) (the "ss.162(m) Options"), such ss.162(m)
Options shall be canceled in accordance with the foregoing provisions of this
Section 6.8, but the payments contemplated in Section 6.8(a) in respect of the
Optionholder's ss.162(m) Options shall be made to the Optionholder on the 110th
day following the Effective Time. American shall use its best efforts to obtain
the written consent of each Optionholder affected by this Section 6.8(e) to the
foregoing provisions hereof.
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(e) All amounts payable hereunder to an Optionholder shall be reduced
by any applicable withholding taxes.
Notwithstanding anything to the contrary in this Agreement, American
shall have the right, in its sole and absolute discretion, to accelerate, on
such terms and conditions as it shall determine, in whole or in part, the
vesting of any or all of the American Options outstanding on the date hereof
(other than the ss.162(m) Options) so that such American Options are exercisable
in full prior to the Effective Time.
6.9 Conduct of Business by Mergeparty Pending the Merger. Except as
otherwise contemplated by this Agreement, or as has been publicly disclosed
prior to the date of the Original Merger Agreement, after the date of the
Original Merger Agreement and prior to the Closing Date or earlier termination
of this Agreement unless American shall otherwise agree in writing, with respect
to Mergeparty's media business, Mergeparty shall, and shall cause its
Subsidiaries, to:
(i) conduct their respective businesses in the ordinary and
usual course of business and consistent with past practice, which
includes the acquisition of other radio broadcasting stations;
(ii) not amend or propose to amend its Organic Documents in
any manner materially adverse to the holders of the American Preferred
Stock;
(iii) use all best efforts to preserve intact their respective
business organizations and goodwill, keep available the services of
their respective present officers and key employees, and preserve the
goodwill and business relationships with customers and others having
business relationships with them and not engage in any action, directly
or indirectly, with the intent to adversely affect the transactions
contemplated by this Agreement; and
(iv) not authorize or enter into any agreement that would
violate any of the foregoing.
6.10 Conduct of Business by American Pending the Merger. Except as set
forth in Section 6.10 of the American Disclosure Schedule or as otherwise
contemplated by this Agreement, including without limitation the transactions
contemplated by the Tower Documentation and Section 6.19 hereof, after the date
of the Original Merger Agreement and prior to the Closing Date or earlier
termination of this Agreement, unless Mergeparty shall otherwise consent in
writing, American shall, and shall cause its Subsidiaries, to:
(i) conduct their respective businesses in the ordinary and
usual course of business and consistent with past practice;
(ii) not (A) amend or propose to amend their respective
Organic Documents, (B) split, combine or reclassify (whether by stock
dividend or otherwise) their outstanding capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu
of, or in substitution for shares of its capital stock, or (C) declare,
set aside or pay any dividend or distribution payable in cash, stock,
property or otherwise, except for (x) the payment of dividends or the
making of distributions by a direct or indirect wholly-owned Subsidiary
of American and (y) the payment of dividends on shares of the American
Preferred Stock in accordance with their terms;
(iii) not issue, sell, pledge or dispose of, or agree to
issue, sell, pledge or dispose of, any shares of its capital stock,
Convertible Securities or Option Securities, except that American may
issue shares of American Common Stock upon conversion of Convertible
Securities and exercise of Option Securities outstanding on the date
hereof and in accordance with their present terms;
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(iv) not (A) incur or become contingently liable with respect
to any indebtedness other than (x) short-term borrowings not to exceed
$25 million in the aggregate outstanding at any one time, (y)
borrowings to finance pending acquisitions of radio stations set forth
in Section 6.10 of the American Disclosure Schedule and, pursuant to
agreements in effect on the date of the Original Merger Agreement and
(z) borrowings not to exceed $120 million to finance a capital
contribution by American to Tower, (B) redeem, purchase, acquire or
offer to purchase or acquire any shares of its capital stock,
Convertible Securities or Option Securities, except pursuant to the
conversion or exercise thereof, as the case may be, or except to the
extent required by the present terms thereof, (C) sell, lease, license,
pledge, dispose of or encumber any properties or assets or sell any
businesses other than pursuant to agreements in effect on the date of
the Original Merger Agreement and set forth in Section 6.10 of the
American Disclosure Schedule or Liens arising in accordance with the
provisions of indebtedness in effect on the date of the Original Merger
Agreement and in accordance with their present terms, or (D) make any
loans, advances or capital contributions to, or investments in, any
other Person, other than to any direct or indirect wholly owned
Subsidiary of American (other than the Tower Subsidiaries) and, except
as provided in clause (z) above, or to officers and employees of
American or any of its Subsidiaries for travel, business or relocation
expenses in the ordinary course of business;
(v) use all reasonable efforts to preserve intact their
respective business organizations and goodwill, keep available the
services of their respective present officers and key employees, and
preserve the goodwill and business relationships with customers and
others having business relationships with them and not engage in any
action, directly or indirectly, with the intent to adversely impact the
transactions contemplated by this Agreement;
(vi) confer on a regular and frequent basis with one or more
representatives of Mergeparty to report material operational matters
and the general status of ongoing operations;
(vii) not adopt, enter into, amend or terminate any
employment, severance, special pay arrangement with respect to
termination of employment or other similar arrangements or agreements
with any directors, officers or key employees;
(viii) maintain with financially responsible insurance
companies insurance on their respective tangible assets and their
respective businesses in such amounts and against such risks and losses
as are consistent with past practice;
(ix) not make any Tax election that could reasonably be likely
to have a Material Adverse Effect on American or settle or compromise
any material income Tax liability;
(x) except in the ordinary course of business or except as
would not reasonably be likely to have a Material Adverse Effect on
American, not modify, amend or terminate any Material Agreement to
which American or any Subsidiary is a party or waive, release or assign
any material rights or claims thereunder;
(xi) not make any material change to its accounting methods,
principles or practices, except as may be required by GAAP;
(xii) not acquire or agree to acquire (x) by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any Person or other
business organization or division thereof or (y) any assets that,
individually or in the aggregate, are material to American and its
Subsidiaries taken as a whole, in each case, other than pursuant to
-31-
agreements in effect on the date of the Original Merger Agreement and
set forth in the Section 6.10 of the American Disclosure Schedule
(Mergeparty agrees not to unreasonably withhold, delay or condition a
consent to any matters described in this paragraph);
(xiii) except as set forth in Section 4.9(a) or Section 4.16
of the American Disclosure Schedule, (a) not grant to any executive
officer or other key employee of American or any of its Subsidiaries
any increase in compensation, except for normal increases in the
ordinary course of business consistent with past practice or as
required under Benefit Arrangements in effect as of June 30, 1997, (b)
not grant to any such executive officer any increase in severance or
termination pay, except as was required under any Benefit Arrangements
in effect as of June 30, 1997, (c) not adopt or amend any Plan or
Benefit Arrangement (including change any actuarial or other assumption
used to calculate funding obligations with respect to any Plan, or
change the manner in which contributions to any Plan are made or the
basis on which such contributions are determined) and (d) except in the
ordinary course, not enter into, amend in any material respect or
terminate any Governmental Authorization (except as would not be
reasonably likely to have a Material Adverse Effect on American),
material Private Authorization or Contract; and
(xiv) not authorize or enter into any agreement that would
violate any of the foregoing.
Anything in this Section to the contrary notwithstanding, the provisions of this
Section (other than clause (ii) hereof) shall not apply to any of the Tower
Subsidiaries.
6.11 Control of Operations. Nothing contained in this Agreement shall
give to Mergeparty, directly or indirectly, rights to control or direct
American's operations prior to the Effective Time. Prior to the Effective Time,
American shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision of its operations. Nothing contained
in this Agreement shall give to American, directly or indirectly, rights to
control or direct Mergeparty's operations prior to the Effective Time. Prior to
the Effective Time, Mergeparty shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision of its
operations.
6.12 Directors', Officers' and Employees' Indemnification and
Insurance.
(a) The Organic Documents of the Surviving Corporation shall contain
provisions no less favorable with respect to indemnification than are set forth
in the Organic Documents of American, as in effect on the date of the Original
Merger Agreement, which provisions shall not be amended, repealed or otherwise
modified for a period of six (6) years from the Effective Time in any manner
that would affect adversely the rights thereunder of individuals who at any time
prior to the Effective Time were directors, officers or employees of American or
any of its Subsidiaries, unless such modification shall be required by
Applicable Law.
(b) From and after the Effective Time, Mergeparty shall indemnify,
defend and hold harmless the present and former officers, directors and
employees of American or any of its Subsidiaries (collectively, the "Indemnified
Parties") against all losses, expenses, claims, damages, liabilities or amounts
that are paid in settlement of, or otherwise in connection with any claim,
action, suit, proceeding or investigation (as used in this Section, a "claim")
(including, without limitation, in connection with this Agreement, the Merger
and the transactions contemplated hereby), based in whole or in part on the fact
that the Indemnified Party (or the Person controlled by the Indemnified Party)
is or was a director, officer or employee of American or any of its Subsidiaries
and arising out of actions or omissions occurring at or prior to the Effective
Time whether asserted or claimed prior to, at or after the Effective Time, in
each case to the fullest extent permitted under
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the DCL (and shall pay any
expenses, as incurred, in advance of the final disposition of any such action or
proceeding to each Indemnified Party to the fullest extent permitted under the
DCL). Without limiting the foregoing, in the event any such claim is brought
against any of the Indemnified Parties, (i) such Indemnified Parties may retain
counsel (including local counsel) satisfactory to them and which shall be
reasonably satisfactory to Mergeparty and they shall pay all reasonable fees and
expenses of such counsel for such Indemnified Parties; and (ii) Mergeparty shall
use its best efforts to assist in the defense of any such claim; provided,
however, that Mergeparty shall not be liable for any settlement effected without
its written consent, which consent shall not be unreasonably withheld, delayed
or conditioned. Notwithstanding the foregoing, nothing contained in this Section
shall be deemed to grant any right to any Indemnified Party which is not
permitted to be granted to an officer, director or employee of Mergeparty under
the DCL, assuming for such purposes that Mergeparty's Organic Documents provide
for the maximum indemnification permitted by the DCL.
(c) Mergeparty will cause to be maintained for a period of not less
than six (6) years from the Effective Time American's current directors' and
officers' insurance and indemnification policy to the extent that it provides
coverage for events occurring prior to the Effective Time ("D&O Insurance") for
all Persons who are directors and officers of American on the date of this
Agreement, so long as the annual premium therefor would not be in excess of 200%
of the last annual premium therefor paid prior to the date of the Original
Merger Agreement (the "Maximum Premium"); provided, however, that if the annual
premiums of such insurance coverage exceed such amount, Mergeparty shall only be
obligated to obtain the greatest coverage available under such policy for a cost
not exceeding such amount, provided further, however, that Mergeparty may, in
lieu of maintaining such existing D&O Insurance as provided above, cause
coverage to be provided under any policy maintained for the benefit of
Mergeparty or any of its Subsidiaries, so long as the terms thereof are no less
advantageous to the intended beneficiaries thereof than the existing D&O
Insurance. If the existing D&O Insurance expires, is terminated or canceled
during such six-year period, Mergeparty will use its best efforts to cause to be
obtained as much D&O Insurance as can be obtained for the remainder of such
period for an annualized premium not in excess of the Maximum Premium, on terms
and conditions no less advantageous to the covered Persons than the existing D&O
Insurance. American represents to Mergeparty that the Maximum Premium is not
greater than $500,000.
(d) In the event Mergeparty or Mergeparty Subsidiary or any of their
respective successors or assigns (i) consolidates with or merges into any other
person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, then and in each such case, proper
provisions shall be made so that the successors and assigns of Mergeparty or
Mergeparty Subsidiary, as the case may be, shall assume the obligations set
forth in this Section.
(e) This Section is intended to be for the benefit of, and shall be
enforceable by, the Indemnified Parties, their heirs and personal
representatives and shall be binding on Mergeparty, Mergeparty Subsidiary and
their respective successors and assigns.
6.13 Solicitation of Employees. If this Agreement is terminated,
Mergeparty agrees that neither it nor any of its Subsidiaries or other
Affiliates will, for a period of eighteen (18) months from the date of such
termination, solicit or actively seek to hire any key employees (including
without limitation any station manager, sales manager, program director or any
individual senior to any of such individuals) who during such period is employed
by American or any of its Subsidiaries, whether or not such individual would
commit breach of such individual's employment agreement or contract in leaving
such employment; provided, however, that the foregoing shall not prevent
Mergeparty from taking any action permitted by the Confidentiality Agreement.
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6.14 Change of Name. Within ten (10) days after the Closing, Mergeparty
shall cause each of its Subsidiaries, if necessary, to file certificates of
amendment with the appropriate Secretary of State, amending such company's
Organic Documents to change the name of such company to any name which does not
include the words "American Radio". Immediately prior to the Closing, American
will assign to American Tower or its designee all right, title and interest,
including all the goodwill related thereto, in and for past infringements of the
name "American Radio" and related trademarks, service marks, logos and the like.
As soon as commercially practicable, but in no event later than six (6) months
from the Closing Date, Mergeparty Subsidiary and its Subsidiaries shall cease
all use of the name "American Radio" in all modes.
6.15 Benefit Plans. Mergeparty shall take such action as may be
necessary so that on and after the Effective Time and for one (1) year
thereafter, officers and employees of American and its Subsidiaries (other than
Tower Employees) shall be provided employee benefits, plans and programs
(excluding equity incentive arrangements) which are no less favorable in the
aggregate than those generally available pursuant to those employee benefit
plans and programs in effect for such officers and employees immediately prior
to the Effective Time; it being understood that Mergeparty shall determine the
types and levels of specific benefits to be so provided. For purposes of
eligibility to participate and vesting in all benefits provided to officers and
employees of American and its Subsidiaries (other than Tower Employees), such
officers and employees of American and its Subsidiaries will be credited with
their years of service with American and its Subsidiaries and prior employers to
the extent service with American and its Subsidiaries and prior employers is
taken into account under the applicable plans of American and its Subsidiaries
as in effect as of the date of the Original Merger Agreement. Upon termination
of any health plan of American or any of its Subsidiaries, individuals who were
officers or employees of American or its Subsidiaries at the Effective Time
(other than Tower Employees) shall if employed by Mergeparty or its Subsidiaries
become eligible to participate in such health plans as may be established or
maintained by Mergeparty or its Subsidiaries to the extent that such individuals
were eligible to participate in the applicable health plan of American or its
Subsidiaries immediately prior to the Effective Time. Amounts paid during the
calendar year in which the Effective Time occurs, but before the Effective Time,
by officers and employees of American and its Subsidiaries (other than Tower
Employees) under any health plans of American shall after the Effective Time be
taken into account in applying deductible and out-of-pocket limits applicable
under the health plans of Mergeparty or its Subsidiaries provided during such
calendar year to the same extent as if such amounts had been paid under such
health plans of Mergeparty or its Subsidiaries and Mergeparty shall cause to be
waived under its health plans any pre-existing conditions as of the date of
termination of the American health plan and eligibility to participate in such
health plan to the extent such conditions would be waived under the applicable
plans of American and its Subsidiaries as in effect on the date of the Original
Merger Agreement. Nothing in this Agreement shall be construed as granting to
any employee of American or its Subsidiaries any rights of continuing
employment.
6.16 American Cumulative Preferred Stock. To the extent permitted under
Contracts, pursuant to which any indebtedness for money borrowed of American or
any of its Subsidiaries is outstanding as of the date of the Original Merger
Agreement, and by the American Preferred Stock, American shall pay all dividends
in respect of the American Cumulative Preferred Stock in cash.
6.17 American Tower Transaction. As soon as practicable following the
execution of the Original Merger Agreement and in any event prior to the
consummation of the Merger, American shall prepare, in consultation with
Mergeparty and its counsel, the definitive documentation to be executed by
American and American Tower to effect the delivery of the shares of Tower Common
Stock as part of the Tower Merger Consideration or the Merger Consideration, as
the case may be (the "Tower Separation"), and submit such documentation to
Mergeparty for its approval, which approval shall not be unreasonably withheld,
delayed
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or conditioned (as approved, the "Tower Documentation"), and American and
American Tower shall execute and deliver the Tower Documentation in the form so
approved. Mergeparty and American agree that the Tower Documentation shall
include or be prepared on a basis consistent with the following:
(a) American Tower shall indemnify, defend and hold
Mergeparty, American and Subsidiaries of American (other than the Tower
Subsidiaries, collectively in this Section the "American Tower Group")
harmless from and against any liabilities to which American or any of
its Subsidiaries (other than the American Tower Group or, in the case
of clauses (B) and (C) below of this paragraph (a), any of their
officers or directors) may be or become subject that relate to or arise
from the assets, business, operations, debts or liabilities of ATS
Mergercorp or the American Tower Group (other than, in the case of the
American Tower Group, income tax liabilities), including without
limitation (i) the assets to be transferred to American Tower pursuant
to Section 6.17(f), (ii) liabilities (A) in connection with the
distribution of the shares of Tower Common Stock as part of the Tower
Merger Consideration or the Merger Consideration, as the case may be,
(B) relating to or arising from any agreement, arrangement or
understanding (other than the Tower Documentation) entered into by
American, ATS Mergercorp or any member of the American Tower Group (x)
for the benefit of any member of the American Tower Group, (y) in
contemplation of the Tower Separation, or (z) with respect to the sale,
assignment, transfer or other disposition of shares of American Tower
Common Stock, (C) relating to or arising from any untrue statement or
alleged untrue statements of a material fact contained in the Proxy
Statement, the Tower Proxy Statement, the Registration Statement or in
any document filed or required to be filed in connection with the
Merger, or in any document filed or required to be filed by American,
ATS Mergercorp or any member of the American Tower Group in connection
with the preceding clause (B) or any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, except with respect to
information provided by or relating solely to American (excluding ATS
Mergercorp and the American Tower Group) which is contained in or
expressly consistent with the Filed American SEC Documents or the
American September 10-Q, (iii) any economic impact related to or
arising from the failure to obtain any Governmental Authorizations,
Private Authorizations or other third party consents, or to make any
Governmental Filings, necessary to consummate the Tower Separation, and
(iv) the rental and related expenses for the relevant portion of the
leased premises located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
in the event of the failure to obtain the landlord's consent to the
assignment of the obligations relating to, or sublease of, such
relevant portion of such premises.
(b) American shall indemnify, defend and hold the American
Tower Group harmless from and against any liabilities (other than
income tax liabilities) to which the American Tower Group may be or
become subject that relate to or arise from the assets, business,
operations, debts or liabilities of American or its Subsidiaries (other
than the American Tower Group) whether arising prior to, concurrent
with or after the Merger.
(c) The Tower Documentation shall include an agreement that
addresses issues of the allocation of Tax liabilities and
deconsolidation of American and the American Tower Group which shall
contain principles to the following effect:
(i) The tax sharing agreement among members of the
American Tower Group and American and its other Subsidiaries
shall be terminated as of the earlier of (x) the effective
date of the Merger, and (y) the date (the "Tower
Deconsolidation Date") that the American Tower Group is no
long eligible to be included in the consolidated tax returns
of American and its other Subsidiaries under Sections 1501 to
1504 of the Code (the "Tower
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Deconsolidation") and will have no further effect for any
taxable year (whether the current year, a future year, or a
past year).
(ii) American shall include the income of the
American Tower Group (including any deferred income triggered
into income by Reg. ss.1.1502-13 and Reg. ss.1.1502-14 and any
excess loss accounts taken into income under Reg.
ss.1.1502-19) on American's consolidated federal income Tax
returns and consolidated or combined state and local income
Tax returns to the extent such income is properly includible
thereon for all periods through the Tower Deconsolidation
Date, and pay any income Taxes attributable to such income.
American Tower shall reimburse American for any such federal,
state and local income Taxes payable by the American Tax Group
attributable to such income, as determined on a separate
company basis; provided, however, that American Tower shall
have no reimbursement obligation if American has no income Tax
liability on a consolidated basis as a result of a net
operating loss or to the extent that the income of the
American Tower Group is offset by a net operating loss under
the principles of clause 6.17(c)(v). The American Tower Group
will furnish Tax information to American for inclusion in
American's federal consolidated income Tax return for the
period through the Tower Deconsolidation Date in accordance
with American Tower's past custom and practice. The income of
the American Tower Group will be apportioned to the period up
to and including the Tower Deconsolidation Date and the period
after the Tower Deconsolidation Date by closing the books of
the American Tower Group as of the end of such date.
(iii) American Tower shall indemnify the American Tax
Group and Mergeparty for all Taxes imposed by any Taxing
Authority on any member of the American Tax Group or on
Mergeparty (or on any member of its consolidated tax group) as
a result of or in connection with the sale or transfer of
assets to the American Tower Group pursuant to Section 6.17(g)
(or between members of the American Tax Group prior to the
final transfer to a member of the American Tower Group or
between members of the American Tower Group), the Merger, the
Tower Merger, the Tower Separation, any other disposition or
issuance of stock of American Tower contemplated or permitted
hereby, or the merger of American Tower with any other Person,
as the case may be, including without limitation any Taxes on
any gain to any member of the American Tax Group arising under
Section 311 of the Code, any Taxes on any deferred gain to any
member of the American Tax Group triggered as a result of or
upon any such event, any gain attributable to any excess loss
account triggered upon any such event, any Taxes arising as a
result of the election or other transactions contemplated by
clause 6.17(c)(xii), income or gain arising as a result of
transactions described in Section 3.4(c) or the second
sentence of Section 6.8(a), and gain on the conversion of
American Convertible Preferred Stock into Tower Common Stock
and any transfer Taxes arising from any such event; provided,
however, that such indemnity shall only apply to the extent
that the additional liability for such Taxes payable by the
American Tax Group as a consequence of such events (on a "but
for" basis) exceeds $20,000,000.
(iv) If, as a result of any payment by American Tower
to any member of the American Tax Group or to Mergeparty
pursuant to this Section 6.17(c) (including this clause (iv)),
Mergeparty (or any member of its consolidated group for
Federal income tax purposes) or any member of the American Tax
Group becomes liable in any taxable year to pay any Taxes in
excess of the Taxes they would have owed in the absence of any
such payment by American Tower, American Tower will indemnify
such Person for such Tax liability and make such Person whole
on an after-tax basis for such Tax liability.
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(v) For the purposes of clauses 6.17(c)(ii) and
(iii), net operating losses of the American Tax Group shall be
reduced and deemed absorbed in the following order for each
taxable year of the American Tax Group: first, by all income
unrelated to the transactions contemplated by this Agreement
of members of the American Tax Group other than members of the
American Tower Group for the entire applicable taxable year of
the American Tax Group; second, by income of the American
Tower Group described in clause 6.17(c)(ii); and third, by
income of the American Tax Group described in Section
6.17(c)(iii). Neither the American Tax Group nor Mergeparty
(or any member of its consolidated group for Federal income
tax purposes) shall have any claim under either Section
6.17(c)(ii) or (iii) for additional Tax liability arising in
subsequent taxable years solely as a result of the absorption
of net operating losses of the American Tax Group in this
manner.
(vi) American shall control any audit or contest
relating to Taxes attributable to the American Tax Group. To
the extent such audit or contest relates to Taxes that
American Tower is obligated to reimburse or indemnify American
under this agreement, American shall (x) regularly consult
with American Tower in connection with such audit or contest;
(y) provide American Tower with periodic reports on the status
of such audit or contest; and (z) not enter into a settlement
agreement relating to such audit or contest that materially
prejudices American Tower without American Tower's consent.
(vii) If pursuant to any Tax audit or contest there
is an adjustment to any Taxes that are reimbursable or
indemnifiable by the American Tower Group to any member of the
American Tax Group under this Agreement, including clauses
6.17(c)(ii), (iii) and (iv), then (x) any additional Taxes
imposed on the American Tax Group as a result of such
adjustment shall be indemnified by the American Tower Group;
and (y) any refund of Taxes paid to the American Tax Group as
a result of such adjustment of amounts previously indemnified
by American Tower shall be promptly paid over to American
Tower (including additional amounts to make American Tower
whole on an after-Tax basis, not exceeding amounts previously
paid by American Tower Group with regard to such Taxes).
(viii) American Tower shall not have the right to any
refund, credit (or other reduction) of Taxes realized by the
American Tax Group resulting from a carry back of a
post-acquisition Tax attribute of any of the American Tower
Group into a Tax Return filed by the American Tax Group.
(ix) American Tower, American and Mergeparty agree to
attempt in good faith to mutually agree on such terms as
promptly as practicable after the date hereof. If American
Tower, American and Mergeparty cannot agree on such terms,
then any disagreement shall be resolved by an arbitrator
jointly selected by American Tower, American and Mergeparty.
The arbitrator shall be a law or accounting firm nationally
recognized in tax matters. The costs of such arbitration shall
be shared equally by American Tower and American. The decision
of the arbitrator shall be binding on all parties.
(x) American shall not elect to retain any net
operating loss carryovers or capital loss carryovers of the
American Tower Group.
(xi) The indemnities of the American Tower Group
described in this Section 6.17(c) shall apply to all
applicable Taxes whenever they shall arise.
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(xii) At the request of any member of the American
Tower Group, American agrees that it shall, and shall cause
its Subsidiaries or other appropriate Affiliates to, make
and/or cooperate with members of the American Tower Group (x)
in making an election under Section 336(e) of the Code with
respect to the Tower Separation, or (y) in effecting
intercompany sales or exchanges of assets designed to achieve
a comparable effect whereby deferred intercompany gains are
recognized immediately prior to the Tower Deconsolidation.
(d) The Tower Documentation shall provide that American shall
obtain all Governmental Authorizations, Private Authorizations or other
third party consents, and make any necessary Governmental Filings,
necessary to consummate the Tower Separation, except where the failure
to obtain such consents, in the aggregate, would not (i) be reasonably
likely to have any adverse effect on American, (ii) materially impair
the ability of American to perform its obligations under this Agreement
or the Tower Documentation, or (iii) materially delay or prevent the
consummation of the Merger. The Tower Documentation shall provide that
the Tower Separation shall be done in compliance with American's
certificate of incorporation and by-laws and in material compliance
with all Applicable Laws.
(e) At the Effective Time, a member of the American Tower
Group shall assume (i) to the extent permitted by the landlord, the
obligations under the lease of ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇, with respect to the relevant portion of such leased
premises or, if such permission is not obtained, sublease such relevant
portion, and (ii) all liabilities with respect to which indemnification
is provided under Section 6.17(a). American shall cause all members of
the American Tower Group to be released from all other liabilities;
provided, however, that American Tower agrees to reimburse American for
any expenses incurred in obtaining such release. American and its
Subsidiaries (other than the American Tower Group) shall release the
American Tower Group from all Claims by American or its Subsidiaries
(other than the American Tower Group), and the American Tower Group
shall release American and its other Subsidiaries from all Claims by
the American Tower Group, in each case except for Claims arising from
or attributable to the transactions contemplated by this Agreement or
any Collateral Document or otherwise asserted prior to the Effective
Time.
(f) Except as otherwise provided by Section 6.19, American
shall, or shall cause its Subsidiaries to, as applicable, contribute,
transfer or convey to American Tower the assets described in Section
6.17 of the American Disclosure Schedule, and American Tower shall
assume all of American's and such Subsidiaries' obligations with
respect to such assets to the extent so set forth.
(g) The Tower Documentation shall not include any
representations or warranties by American or American Tower relating to
the business, operations, assets, debts or liabilities of American and
its Subsidiaries (other than the American Tower Group) or the American
Tower Group.
(h) On the Closing Date, the employees of American listed in
Section 6.17 of the American Disclosure Schedule (the "Tower
Employees") shall be offered full-time employment by American Tower or
one of its Subsidiaries. Effective immediately prior to the Effective
Time, American Tower shall assume all obligations arising under any
Plan or Benefit Arrangement between American or any of its Subsidiaries
and the Tower Employees other than the rights, if any, of the Tower
Employees with respect to the American Options (which are being
satisfied by American as provided in Section 6.8) and all existing
rights to indemnification. Such assumption agreement shall provide that
American and its Subsidiaries, effective as of the Effective Time shall
be indemnified by
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American Tower from all obligations arising under such employment
agreements or arrangements (except in respect of any American Option
which is not converted into an option to acquire Tower Common Stock in
accordance with the provisions of Section 6.8(b) and all existing
rights to indemnification). For a period of eighteen (18) months
following the consummation of the Merger, members of the American Tower
Group shall not actively solicit or seek to hire any employees of
American or its Subsidiaries not currently engaged in the Tower
Business, other than the Tower Employees, it being understood and
agreed that such agreement shall not be deemed to prevent members of
the American Tower Group from placing general advertisements in
publications or on the Internet or soliciting any such employee who (i)
initiates employment discussions with a member of the American Tower
Group or (ii) is not employed by American or Mergeparty or any of their
respective Subsidiaries on the date such a member first solicits such
employee.
(i) At the request of American Tower and subject to the
requirements and restrictions imposed on American by any of its
financing documents (as from time to time amended), American shall,
from time to time after the date of the Original Merger Agreement and
prior to the Effective Time, permit American Tower to (i) acquire
(whether by merger, stock or asset acquisition or otherwise) additional
businesses engaged in the business in which American Tower is engaged,
(ii) construct additional communication towers, or (iii) make other
capital improvements on assets owned or leased by American Tower or its
Subsidiaries, and in each such case make additional capital
contributions in American Tower, or make loans to American Tower, of
the funds.
(j) The indemnification and other obligations referred to in
this Section shall survive the consummation of the Merger.
(k) The Tower Documentation shall provide that prior to the
Effective Time, American shall amend (i) its Section 401(k) Plan to
permit a transfer of the assets held thereunder for the benefit of the
Tower Employees to a Section 401(k) Plan to be established by American
Tower and, prior to the Effective Time, such assets will be so
transferred (along with any outstanding qualified domestic relations
orders and loans) and (ii) any other Benefit Plan arrangements with
respect to Tower Employees to reflect the Merger.
(l) The Tower Documentation shall provide that prior to the
Effective Time American shall, to the extent requested by Mergeparty,
cause the American Tower Group to perform its obligations under the
Tower Documentation.
(m) Mergeparty shall, at the written request of American in
its sole and absolute discretion, immediately prior to the Merger, and
subject to the satisfaction of all of the conditions to the
consummation of the transactions contemplated hereby, purchase, at
their then fair market value, shares of a new class of American
preferred stock that constitutes "Junior Securities" (as defined in the
American Cumulative Preferred Stock) in an amount (which shall not in
the aggregate exceed $200,000,000) necessary to enable (i) the Tower
Stock Consideration to be delivered to the holders of shares of
American Common Stock and holders of American Options pursuant to the
Merger, and (ii) Tower Common Stock to be delivered upon conversion of
the American Convertible Preferred Stock, without causing any conflict
with, or breach or violation of, or default under, or creating any
right to accelerate any obligation or liability in, or causing or
creating any of the foregoing after the giving of notice or passage of
time or both with, of, under or in any indebtedness of American or the
American Cumulative Preferred Stock; provided, however, that anything
in this Section or elsewhere in this Agreement to the contrary
notwithstanding, in such event such new class of American preferred
stock shall remain outstanding immediately following the Effective
Time.
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(n) The Tower Documentation shall provide that American shall
cause American Tower to file with, and cause to be declared effective
under the Securities Act prior to the Effective Time by, the Commission
a registration statement to permit the delivery of shares of Tower
Common Stock by American upon conversion of American Convertible
Preferred Stock following the Effective Time under the Securities Act.
Such Tower Documentation shall further provide that American Tower
shall maintain, on customary terms, the effectiveness of such
registration statement under the Securities Act until such time as
American Tower shall deliver to American an opinion of legal counsel
reasonably satisfactory to American and Mergeparty that such
registration statement is no longer required to permit such delivery in
accordance with the Securities Act.
6.18 Purchase Price Adjustment. (a) Within 90 days after the Closing
Date, Mergeparty shall prepare and deliver to American Tower (i) a consolidated
balance sheet (the "Closing Balance Sheet") of American and its Subsidiaries
(other than the Tower Subsidiaries) (the "Post-Closing American Group"),
prepared from the books and records of the Post-Closing American Group, and (ii)
a statement (the "Closing Statement") setting forth (A) Working Capital (as
defined below) as of the Effective Time ("Closing Working Capital") and (B) Net
Debt (as defined below) as of the Effective Time ("Closing Net Debt"), together
with a certificate of Mergeparty's chief financial officer that the Closing
Statement has been prepared in accordance with this Section 6.18.
During the 45-day period following American Tower's receipt of the
Closing Statement, American Tower shall be permitted to review (and make copies
of) the working papers of Mergeparty relating to the Closing Statement. The
Closing Statement shall become final and binding upon the parties on the
forty-sixth day following delivery thereof, unless American Tower gives written
notice of its disagreement with the Closing Statement ("Notice of Disagreement")
to Mergeparty prior to such date. Any Notice of Disagreement shall (i) specify
in reasonable detail the nature of any disagreement so asserted, (ii) only
include disagreements based on Closing Working Capital or Closing Net Debt (or
the components thereof) not being calculated in accordance with this Section
6.18 and (iii) be accompanied by a certificate of American Tower's chief
financial officer that he or she concurs with each of the positions taken by
American Tower in the Notice of Disagreement. If a Notice of Disagreement is
received by Mergeparty in a timely manner, then the Closing Statement (as
revised in accordance with clause (A) or (B) immediately following) shall become
final and binding on the earlier of (A) the date Mergeparty and American Tower
resolve in writing any differences they have with respect to the matters
specified in the Notice of Disagreement or (B) the date any disputed matters are
finally resolved in writing by the Accounting Firm (as defined below).
During the 30-day period following delivery of a Notice of
Disagreement, Mergeparty and American Tower shall seek in good faith to resolve
in writing any differences which they may have with respect to the matters
specified in the Notice of Disagreement. During such period Mergeparty shall
have access to (and shall be permitted to make copies of) the working papers of
American Tower prepared in connection with the Notice of Disagreement. At the
end of such 30-day period, Mergeparty and American Tower shall submit to an
independent accounting firm (the "Accounting Firm") for review and resolution
any and all matters which remain in dispute and which were properly included in
the Notice of Disagreement and each of Mergeparty and American Tower shall
submit a memorandum setting forth in reasonable detail the basis for its
positions. The Accounting Firm shall be a nationally recognized independent
public accounting firm agreed upon by Mergeparty and American Tower in writing.
Mergeparty and American Tower shall jointly use all reasonable efforts to cause
the Accounting Firm to render a decision within thirty (30) days following
submission or as promptly thereafter as is practicable. Mergeparty and American
Tower agree that judgment may be entered upon the determination of the
Accounting Firm in any court having jurisdiction over the party against which
such determination is to be enforced. The cost of any dispute resolution
(including the fees and expenses of
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the Accounting Firm and reasonable attorney fees and expenses of the parties)
pursuant to this Section 6.18 shall be borne by Mergeparty and American Tower in
inverse proportion as they may prevail on matters resolved by the Accounting
Firm, which proportionate allocations shall also be determined by the Accounting
Firm at the time the determination of the Accounting Firm is rendered on the
merits of the matters submitted.
(b) Subject to Section 6.18(d), if Closing Working Capital is less than
(i) $60,000,000 in the event the Closing Date is on or prior to March 31, 1998
or (ii) $70,000,000 in the event the Closing Date is after March 31, 1998 (the
"WC Amount"), American Tower shall, and if Closing Working Capital is greater
than the WC Amount, Mergeparty shall, owe the other the amount of such
difference. The term "Working Capital" shall mean Current Assets minus
Liabilities (in each case as defined below). The terms "Current Assets" and
"Liabilities" shall mean the current assets and liabilities of the Post-Closing
American Group calculated in accordance with GAAP except that (i) outstanding
principal amount of indebtedness and liquidation preference of preferred stock
shall be excluded, (ii) cash shall be excluded, (iii) accruals for Taxes shall
be included, except that (A) Tax liabilities which American Tower is obligated
to indemnify American and its Subsidiaries (other than the American Tower Group)
pursuant to the provisions of the Tower Documentation, and deferred income Tax
assets and liabilities that exist or arise from differences in basis for Tax and
financial reporting purposes attributable to acquisitions, exchanges and
dispositions or attributable to depreciation and amortization, shall not be
taken into account, (B) Tax benefits arising from the exercise or cancellation
of options between the date of the Original Merger Agreement and the Effective
Time shall not be taken into account, and (C) accruals for Taxes relating to
acquisitions, exchanges or dispositions shall be determined in accordance with
American's past accounting practices, (iv) Current Assets shall be increased by
an amount equal to the sum of (x) the amount derived by multiplying the Cash
Consideration by the number of shares of American Common Stock held in its
treasury as of the Effective Date and (y) the aggregate amount of the spread of
$44.00 over the exercise price of each American Option outstanding on the date
of the Original Merger Agreement terminated or cancelled prior to the Effective
Time or for which the holder has elected to receive an option to acquire Tower
Common Stock in lieu thereof, less the Tax benefit that would have been received
with respect to the exercise of such options, (v) Current Assets shall be (A)
increased (if the number of shares of American Common Stock issuable upon
conversion of the American Convertible Preferred Stock is fewer than 3,750,000
(or if the Tower Merger Effective Time shall have occurred, 3,750,000 multiplied
by the American Conversion Fraction)) by an amount equal to the amount derived
by multiplying the Cash Consideration by the excess of (I) 3,750,000 (or if the
Tower Merger Effective Time shall have occurred, 3,750,000 multiplied by the
American Conversion Fraction) less (II) the number of shares of American Common
Stock issuable upon conversion of the American Convertible Preferred Stock or
(B) decreased (if the number of shares of American Common Stock issuable upon
conversion of the American Convertible Preferred Stock is greater than 3,750,000
(or if the Tower Merger Effective Time shall have occurred, 3,750,000 multiplied
by the American Conversion Fraction) by an amount equal to the amount derived by
multiplying the Cash Contribution by the excess of (I) the number of shares of
American Common Stock issuable upon conversion of the American Convertible
Preferred Stock less (II) 3,750,000 (or if the Tower Merger Effective Time shall
have occurred, 3,750,000 multiplied by the American Conversion Fraction), (vi)
liabilities from the radio broadcasting rights contracts for St. Louis Rams
games shall be limited to $3,300,000 and (vii) amounts owed by American Tower to
American pursuant to Section 9.3(b) shall be excluded from Current Assets, and
liabilities of American, if any, with respect to such amounts shall be excluded
from Liabilities (it being understood that neither American nor Mergeparty shall
be responsible for any such liabilities).
(c) Subject to Section 6.18(d), if Closing Net Debt is greater than the
Debt Amount (as defined below) minus $50,419,000, minus cash received by the
Post-Closing American Group in respect of options exercised between the date of
the Original Merger Agreement and the Effective Time (the "CD Amount"), American
Tower shall, and if Closing Net Debt is less than the CD Amount, Mergeparty
shall, owe the other the amount of such difference. "Debt Amount" shall mean
$1,066,721,000, minus the consideration that was
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expected to be paid (as set forth on Section 6.10(a) of the American Disclosure
Schedule) with respect to all acquisitions set forth in Section 6.10(a) of the
American Disclosure Schedule which were not consummated prior to the Closing
Date, plus the consideration that was expected to be received (as set forth in
Section 6.10(a) of the American Disclosure Schedule) with respect to all
dispositions set forth in Section 6.10(a) of the American Disclosure Schedule
which were not consummated prior to the Closing Date, plus the consideration
paid in connection with acquisitions consummated prior to the Closing Date which
were not listed in Section 6.10(a) of the American Disclosure Schedule, minus
the consideration received in connection with dispositions consummated prior to
the Closing Date which were not listed in Section 6.10(a) of the American
Disclosure Schedule. The term "Net Debt" shall mean outstanding principal amount
of indebtedness (including, without duplication, guarantees of indebtedness)
plus outstanding liquidation preference of all preferred stock (other than the
American Convertible Preferred Stock) minus cash.
(d) Amounts owed pursuant to the first sentence of Section 6.18(b) and
the first sentence of 6.18(c) shall be aggregated or netted, as appropriate (the
resulting amount, the "Adjustment Amount"). In the event that the Adjustment
Amount minus $10,000,000 is greater than $0 (the "Final Adjustment Amount"), the
party that owes the Final Adjustment Amount shall make payment by wire transfer
of immediately available funds of the Final Adjustment Amount together with
interest thereon at a rate of interest equal to the lesser of (i) 10% per annum
and (ii) if American Tower is being charged a rate of interest by a financial
institution, such rate, but in not event lower than the prime rate as reported
in the Wall Street Journal on the date the Closing Statement becomes final and
binding on the parties, calculated on the basis of the actual number of days
elapsed divided by 365, from the date of the Effective Time to the date of
actual payment.
(e) The scope of the disputes to be resolved by the Accounting Firm is
limited to whether the Closing Statement was prepared in compliance with the
requirements of this Section 6.18 and the allocation of the costs of dispute
resolution, and the Accounting Firm is not to make any other determination.
(f) During the period of time from and after the delivery of the
Closing Statement to American Tower through the date the Closing Statement
becomes final and binding on Mergeparty, American and American Tower, Mergeparty
shall cause the Post-Closing American Group to afford to American Tower and any
accountants, counsel or financial advisors retained by American Tower in
connection with the adjustment contemplated by this Section 6.18 reasonable
access (with the right to make copies) during normal business hours to the books
and records of the Post-Closing American Group to the extent relevant to the
adjustment contemplated by this Section 6.18.
(g) Any adjustment pursuant to this Section 6.18 shall be taken into
account in the calculation of Tax liability pursuant to clause 6.17(c)(iii), and
any increase or decrease in the amount of Taxes that are reimbursable or
indemnifiable by the American Tower Group as a result of any such adjustment
shall be treated as an adjustment to Taxes for purposes of clause 6.17(c)(vii)
6.19 Tower Leases. In connection with the Tower Separation, Mergeparty
and American shall agree on the definitive documentation ("Tower Leases") to be
executed by American and American Tower with respect to certain broadcasting
towers set forth in Section 6.17(i) of the American Disclosure Schedules
("Towers"). The markets in which such Towers are located and the annual "market
price" for each antenna are set forth in Exhibit "B." Except as set forth in
Section 6.17(i) of the American Disclosure Schedule, such Towers are now owned
or leased by American and shall become the property of American Tower. Each of
the Tower Leases shall contain standard and customary terms and conditions and
Mergeparty and American specifically agree to the inclusion of the following in
each of the Tower Leases:
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(a) except as provided in clause (b) below with respect to
those Tower Leases set forth in Section 6.19 of the American Disclosure
Schedule, each Tower Lease shall be for a term of twenty (20) years
with four (4) renewal periods of five (5) years each, each such renewal
to be upon the same terms and conditions as the original Tower Lease;
(b) Prior to the Effective time, American shall use its best
efforts to extend the term of each lease set forth in Section 6.19 of
the American Disclosure Schedule ("Land Leases") to a minimum duration
of twenty (20) years, inclusive of renewal periods, if any, and provide
Mergeparty with respect to the Towers subject to the extended Land
Leases, tower leases with the equivalent benefits set forth in clauses
(c), (d) and (e) and for a minimum duration of twenty (20) years
("Extended Tower Leases"). With respect to any such Land Lease that is
not so extended (except with respect to the Land Lease for KUFX(FM),
which present term of approximately eighteen (18) remaining years shall
be deemed to satisfy the foregoing requirement of a minimum duration of
twenty (20) years), American, American Tower and Mergeparty shall
negotiate in good faith to agree upon definitive documentation to
provide Mergeparty with respect to the Towers subject to such Land
Leases, tower leases with the benefits equivalent of such Extended
Tower Leases or mutually agreed to alternative arrangements providing
equivalent value to Mergeparty;
(c) each Tower Lease shall provide that no payments shall be
payable by Mergeparty for a period of three (3) years from the
Effective Time; for the next three (3) years the payments shall be as
follows: one-third (1/3) of the market price as set forth in Exhibit B
corresponding to each FM antenna (or AM/FM antenna) for year four (4);
two-thirds (2/3) for year five (5) and full market price for year six
(6); thereafter, for the balance of the term and any renewals thereof,
the payments shall be the market price, together with an annual
increase every year, beginning for year seven (7), of the lesser of
five percent (5%) or the Consumer Price Index for all Urban Consumers
over the previous year's payments (except with respect to San ▇▇▇▇
(KUFX) and Boston (WNFT) which such payments shall begin at the
Effective Time, with respect to Mergeparty, and will begin on January
1, 1998 as between American and American Tower). Notwithstanding the
foregoing, Mergeparty acknowledges that Tower Lease payments at the
full "market price" indicated on Exhibit B by American to American
tower may commence upon such leases becoming the property of American
Tower and shall continue until the Effective Time;
(d) all expenses for taxes, insurance, maintenance and
utilities in respect of each Tower shall be paid by American Tower; and
(e) American Tower will assume the obligation and
responsibility for complying with all Applicable Law with respect to
the Towers.
6.20 Affiliates of American. American shall use its best efforts to
cause each principal executive officer, each director and each other person who
is an "affiliate" of American for purposes of Rule 145 under the Securities Act
at the times each of this Agreement and the Tower Merger Agreement is submitted
for a vote of the holders of shares of American Common Stock to deliver to
American Tower on or prior to the Effective Time and the Tower Merger Effective
Time, respectively, a written agreement (an "Affiliate Agreement"), reasonably
satisfactory in form, scope and substance to American and Mergeparty, to the
effect that such Person will not offer to sell, assign, transfer or otherwise
dispose of any shares of Tower Common Stock issued in the Merger or the Tower
Merger, as the case may be, except, in each case, pursuant to an effective
registration statement or in compliance with Rule 145, or in a transaction
which, in the opinion of legal counsel reasonably satisfactory to American and
Mergeparty, is exempt from the registration requirements of the Securities Act.
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ARTICLE 7
CLOSING CONDITIONS
7.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to effect the Merger shall, except as
hereinafter provided in this Section, be subject to the satisfaction at or prior
to the Closing Date of the following conditions, any or all of which may be
waived, in whole or in part, to the extent permitted by Applicable Law:
(a) the Required Vote shall have been obtained;
(b) the FCC shall have issued the FCC Order (as defined below)
approving the applications for transfer of control of American's FCC
Licenses in connection with the transactions contemplated herein, and
the FCC Order shall have been obtained without the imposition of
conditions that would have a Material Adverse Effect on Mergeparty's
television and radio broadcasting business; provided that without
triggering Mergeparty's right to approve such conditions or
restrictions, the FCC Order (i) may condition consummation of the
Merger on Mergeparty complying with the numerical limits on local
multiple radio ownership imposed by 47 C.F.R. ss. 73.3555(a) by
affording Mergeparty a period of at least six (6) months following the
Effective Time within which to comply with such rule through the use of
divestiture trusts on terms and conditions required by the FCC,
provided further, however, that to the extent that the FCC authority
for such divestiture trusts provides for a period of less than six (6)
months, (A) American has the right to postpone the Effective Time (and,
to the extent necessary, the Termination Date), so that Mergeparty is
afforded the six (6) month divestiture period, whether before or after
the Effective Time and (B) if American exercises such right,
Mergeparty's right to approve such condition shall not be triggered,
and (ii) may grant Mergeparty temporary, rather than permanent, waivers
of the "one-to-a-market" rule, 47 C.F.R. ss. 73.3555(c), so long as
such temporary waivers shall remain in effect until at least six (6)
months following the effective date of FCC action concluding the
ongoing rulemaking proceeding in MM Docket Nos. 91-221, 87-8 (FCC
94-322) or a successor rulemaking proceeding pending at the time of the
grant of the FCC Order, that considers the "one-to-a-market" rule. The
"FCC Order" shall be an action by the FCC approving the transfer of the
American FCC Licenses with respect to which, except as may be waived in
writing by Mergeparty in its sole discretion, (i) no timely request for
stay, petition for reconsideration or appeal or sua sponte action of
the FCC with comparable effect is pending, or (ii) if any of the
foregoing is pending, in the judgment of Mergeparty it lacks any
substantial merit or is contrary to established FCC precedent, or (iii)
if it were to be so granted, it would not have a Material Adverse
Effect on Mergeparty's television and radio broadcasting business; and
as to which the thirty (30) day time period specified in 47 U.S.C. ss.
405(a) for initiating a petition for reconsideration of the grant of
the FCC Order has expired;
(c) no Authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any Law (whether temporary,
preliminary or permanent) that remains in effect and restrains, enjoins
or otherwise prohibits consummation of the Merger; and
(d) the waiting period applicable to the consummation of the
Merger under the ▇▇▇▇- ▇▇▇▇▇-▇▇▇▇▇▇ Act shall have expired or been
terminated.
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7.2 Conditions to Obligations of Mergeparty. The obligation of
Mergeparty and Mergeparty Subsidiary to effect the Merger shall be subject to
the satisfaction of the following conditions, any or all of which may be waived,
in whole or in part, to the extent permitted by Applicable Law:
(a) American shall have furnished Mergeparty, with an opinion,
dated the Closing Date of Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, FCC counsel for
American, substantially in the form attached hereto as Exhibit C;
(b) (i) the representations and warranties of American set
forth in this Agreement (other than in Sections 4.1(e), 4.11 and 4.13)
shall be true and correct as of the date of the Original Merger
Agreement and as of the Closing Date as though made on and as of the
Closing Date except (x) to the extent such representations and
warranties expressly speak as of an earlier date (in which case such
representations and warranties shall be true and correct as of such
earlier date) and (y) to the extent that the failure of such
representations and warranties to be true and correct, individually or
in the aggregate, would not have a Material Adverse Effect on American;
provided, however, that for the purpose of this clause (y),
representations and warranties that are qualified as to materiality
(including by reference to "Material Adverse Effect") shall not be
deemed to be so qualified, and (ii) the representations and warranties
of American set forth in Sections 4.1(e), 4.11 and 4.13 of this
Agreement shall be true and correct in all material respects as of the
date of the Original Merger Agreement and as of the Closing Date; and
(c) American shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or
prior to the Closing Date;
(d) between the date of the Original Merger Agreement and the
Closing Date, except as contemplated by this Agreement, and except as
set forth in Section 4.3 of the American Disclosure Schedule, there
shall not have occurred and be continuing any Material Adverse Change
in American.
7.3 Conditions to Obligations of American. The obligation of American
to effect the Merger shall be subject to the satisfaction of the following
conditions, any or all of which may be waived, in whole or in part, to the
extent permitted by Applicable Law:
(a) the representations and warranties of Mergeparty set forth
in this Agreement shall be true and correct as of the date of the
Original Merger Agreement and as of the Closing Date as though made on
and as of the Closing Date except (x) to the extent such
representations and warranties expressly speak as of an earlier date
(in which case such representations and warranties shall be true and
correct as of such earlier date) and (y) to the extent that the failure
of such representations and warranties to be true and correct,
individually or in the aggregate, would not have a Material Adverse
Effect on Mergeparty; provided, however, that for the purpose of this
clause (y), representations and warranties that are qualified as to
materiality (including by reference to "Material Adverse Effect") shall
not be deemed to be so qualified.; and
(b) Mergeparty shall have performed in all material respects
all obligations required to be performed by it under this Agreement at
or prior to the Closing Date.
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ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date, whether before or after receipt by American of the Required
Vote:
(a) by mutual written consent of American, Mergeparty and
Mergeparty Subsidiary;
(b) by either Mergeparty or American if any Authority of
competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any Law that shall have become final and
nonappealable and that restrains, enjoins or otherwise prohibits
consummation of the Merger, unless the party seeking such restraint,
injunction or prohibition or any Affiliate thereof was the terminating
party;
(c) by either Mergeparty or American if the Merger shall not
have been consummated by the Termination Date for any reason; provided,
however, that the right to terminate this Agreement under this Section
8.1(c) shall not be available to any party whose action or failure to
act (or the action or failure to act of any Affiliate) has been a
principal cause of or resulted in the failure of the Merger to occur on
or before such date and such action or failure to act constitutes a
breach of this Agreement;
(d) by either Mergeparty or American if the Required Vote
shall not have been obtained at the American Stockholders Meeting duly
convened therefor or at any adjournment or postponement thereof or by
written consent;
(e) by American in the event (i) American is not in material
breach of this Agreement and none of its representations or warranties
shall have been or become and continue to be untrue in any material
respect, and (ii) Mergeparty is in material breach of this Agreement or
any of its representations or warranties shall have become and continue
to be untrue in any manner that would cause the condition in Section
7.3(a) not to be satisfied, and such a breach or untruth exists and is
not capable of being cured by and will prevent or delay consummation of
the Merger by or beyond the Termination Date; or
(f) by Mergeparty in the event (i) Mergeparty is not in
material breach of this Agreement and none of its representations or
warranties shall have been or become and continue to be untrue in any
material respect, and (ii) American is in material breach of this
Agreement or any of its representations or warranties shall have become
and continue to be untrue in any manner that would cause the condition
in Section 7.2(b) not to be satisfied, and such a breach or untruth
exists and is not capable of being cured by and will prevent or delay
consummation of the Merger by or beyond the Termination Date.
The term "Termination Date" shall mean December 31, 1998, as such date may from
time to time be extended pursuant to the provisions of Section 7.1(b) or by
mutual agreement of the parties.
The right of Mergeparty or American to terminate this Agreement
pursuant to this Section shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of either party, any Person
controlling any such party or any of their respective Representatives, whether
prior to or after the execution of this Agreement.
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8.2 Effect of Termination.
Except as provided in Sections 6.1 (Access to Information;
Confidentiality), 6.3 (Public Announcements), and 9.3 (Fees, Expenses and other
Payments) and this Section, in the event of the termination of this Agreement
pursuant to Section 8.1, or in the event the Merger shall not have become
effective prior to the end of business on the day prior to the Termination Date,
this Agreement shall forthwith become void and have no effect, without any
liability on the part of any party, or any of its respective stockholders,
officers or directors, to the other; provided, however, that such termination
shall not relieve any party from liability for any breach of any of its
warranties, covenants or agreements set forth in this Agreement and, provided,
however that such termination will not terminate the Confidentiality Agreement.
ARTICLE 9
GENERAL PROVISIONS
9.1 Amendment. This Agreement may be amended from time to time by the
parties hereto at any time prior to the Closing Date but only by an instrument
in writing signed by the parties hereto and, after receipt of the Required Vote,
subject, in the case of American, to Applicable Law.
9.2 Waiver. At any time prior to the Closing Date, except to the extent
not permitted by Applicable Law, Mergeparty or American may, either generally or
in a particular instance and either retroactively or prospectively, extend the
time for the performance of any of the obligations or other acts of the other,
subject, however, to the provisions of Section 8.1, waive any inaccuracies in
the representations and warranties of the other contained herein or in any
document delivered pursuant hereto, and waive compliance by the other with any
of the agreements, covenants, conditions or other provision contained herein.
Any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party or parties to be bound thereby.
9.3 Fees, Expenses and Other Payments. (a) Subject to the provisions of
paragraph (b) of this Section 9.3, all costs and expenses incurred in connection
with any filing fees (including without limitation ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act filings
and FCC filing fees), transfer Taxes, sales Taxes, document stamps or other
charges levied by any Authority in connection with this Agreement and the Merger
shall be borne equally by Mergeparty and American. Subject as aforesaid, all
other costs and expenses incurred in connection with the negotiation,
preparation, performance and enforcement of this Agreement (including all fees
and expenses of counsel, financial advisors, accountants, and other consultants,
advisors and representatives for all activities of such persons undertaken
pursuant to this Agreement) incurred by the parties hereto, shall be borne
solely and entirely by the party which has incurred such costs and expenses,
except to the extent, if any, otherwise specifically set forth in this
Agreement.
(b) Promptly following the Effective Time, American Tower shall pay to
American in immediately available funds (and make American whole on an after-tax
basis under the principles set forth in Section 6.17(c)(iv)) an amount equal to
the aggregate costs and expenses incurred by American in connection with any
agreement, arrangement or understanding (other than the Tower Documentation)
entered into by American, ATS Mergercorp or any member of the American Tower
Group following the date of the Original Merger Agreement (x) for the benefit of
any member of the American Tower Group, (y) in contemplation of the Tower
Separation or (z) in connection with the sale, assignment, transfer or other
disposition of shares of American Tower Common Stock, including without
limitation such costs and expenses incurred by American to ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and any such costs and expenses
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incurred by American
to CSFB in excess of those set forth in the engagement letter between American
and CSFB provided by American to Mergeparty in accordance with Section 4.14 of
the Original Merger Agreement.
(c) In the event that this Agreement is terminated by any party
pursuant to 8.1(d), American shall promptly, but in no event later than two (2)
days after the date of such termination, pay Mergeparty a fee equal to $35
million in immediately available funds, plus Expenses. "Expenses" shall mean
reasonable and reasonably documented out-of-pocket fees and expenses incurred or
paid by or on behalf of Mergeparty in connection with the Merger or the
consummation of any of the transactions contemplated by this Agreement,
including all fees and expenses of counsel, commercial banks, investment banking
firms, accountants, experts and consultants to Mergeparty in an aggregate amount
not to exceed $5 million.
9.4 Notices. All notices and other communications which by any
provision of this Agreement are required or permitted to be given shall be given
in writing and shall be (a) mailed by first-class or express mail, postage
prepaid, or by recognized courier service, (b) sent by telecopy or other form of
rapid transmission, confirmed by mailing (by first class or express mail,
postage prepaid, or by recognized courier service) written confirmation at
substantially the same time as such rapid transmission, or (c) personally
delivered to the receiving party (which if, other than an individual, shall be
an officer or other responsible party of the receiving party). All such notices
and communications shall be mailed, sent or delivered as follows:
(a) If to Mergeparty:
CBS Corporation
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Cravath, Swaine & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to American:
American Radio Systems Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President and Chief Executive Officer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇▇▇ & Worcester LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other person(s), telex or facsimile number(s) or address(es) as the
party to receive any such communication or notice may have designated by written
notice to the other party.
9.5 Specific Performance; Other Rights and Remedies. Each party
recognizes and agrees that in the event the other party should refuse to perform
any of its obligations under this Agreement or any Collateral Document, the
remedy at law would be inadequate and agrees that for breach of such provisions,
each party shall, in addition to such other remedies as may be available to it
at law or in equity or as provided in Article 8, be entitled to injunctive
relief and to enforce its rights by an action for specific performance to the
extent permitted by Applicable Law. Each party hereby waives any requirement for
security or the posting of any bond or other surety in connection with any
temporary or permanent award of injunctive, mandatory or other equitable relief.
Nothing herein contained shall be construed as prohibiting each party from
pursuing any other remedies available to it under Applicable Law or pursuant to
the provisions of this Agreement for such breach or threatened breach, including
without limitation the recovery of damages, including, to the extent awarded in
any Legal Action, punitive, incidental and consequential damages (including
without limitation damages for diminution in value and loss of anticipated
profits) or any other measure of damages permitted by Applicable Law.
9.6 Survival of Representations, Warranties, Covenants and Agreements.
None of the representations and warranties in this Agreement shall survive the
Merger, and after effectiveness of the Merger neither Mergeparty, American or
their respective officers, directors or shareholders shall have any further
obligation with respect thereto. This Section 9.6 shall not limit any covenant
or agreement of the parties which by its terms contemplates performance after
the Effective Time.
9.7 Severability. If any term or provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative, illegal or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the
conflicting of any provision with any constitution or statute or rule of public
policy or for any other reason, such circumstance shall not have the effect of
rendering the provision or provisions in question invalid, inoperative, illegal
or unenforceable in any other jurisdiction or in any other case or circumstance
or of rendering any other provision or provisions herein contained invalid,
inoperative, illegal or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative, illegal or unenforceable
provision had never been contained herein and such provision reformed so that it
would be valid, operative and enforceable to the maximum extent permitted in
such jurisdiction or in such case. Notwithstanding the foregoing, in the event
of any such determination, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by Applicable Law in an acceptable
manner to the end that the Merger is fulfilled and consummated to the maximum
extent possible.
9.8 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, binding upon
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all of the parties. In pleading or proving any provision of this Agreement, it
shall not be necessary to produce more than one of such counterparts.
9.9 Section Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
9.10 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by, and construed in accordance
with, the Applicable Laws of the United States of America and the laws of the
State of New York applicable to contracts made and performed in such State and,
in any event, without giving effect to any choice or conflict of laws provision
or rule that would cause the application of domestic substantive laws of any
other jurisdiction, except to the extent the corporate laws of the State of
Delaware are applicable. Anything in this Agreement to the contrary
notwithstanding, in the event of any dispute between the parties which results
in a Legal Action, the prevailing party shall be entitled to receive from the
non-prevailing party reimbursement for reasonable legal fees and expenses
incurred by such prevailing party in such Legal Action.
9.11 Further Acts. Each party agrees that at any time, and from time to
time, before and after the consummation of the transactions contemplated by this
Agreement, it will do all such things and execute and deliver all such
Collateral Documents and other assurances, as the other party or its counsel
reasonably deems necessary or desirable in order to carry out the terms and
conditions of this Agreement and the transactions contemplated hereby or to
facilitate the enjoyment of any of the rights created hereby or to be created
hereunder.
9.12 Entire Agreement; No Other Representations or Agreements. This
Agreement (together with the Disclosure Schedules and the Exhibits and the other
Collateral Documents delivered or to be delivered in connection herewith)
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes all prior agreements, arrangements, covenants,
promises, conditions, undertakings, inducements, representations, warranties and
negotiations, expressed or implied, oral or written, between the parties, with
respect to the subject matter hereof. Each of the parties is a sophisticated
legal entity that was advised by experienced counsel and, to the extent it
deemed necessary, other advisors in connection with this Agreement. Each of the
parties hereby acknowledges that (a) neither party has relied or will rely in
respect of this Agreement or the transactions contemplated hereby upon any
document or written or oral information previously furnished to or discovered by
it or its representatives, other than this Agreement (including the Exhibits and
the Disclosure Schedules and the other Collateral Documents) or such of the
foregoing as are delivered at the Closing, (b) there are no covenants or
agreements by or on behalf of either party hereto or any of its respective
Affiliates or representatives other than those expressly set forth in this
Agreement and the Collateral Documents, and (c) the parties' respective rights
and obligations with respect to this Agreement and the events giving rise
thereto will be solely as set forth in this Agreement and the Collateral
Documents. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH PARTY HERETO
AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
AGREEMENT, NEITHER AMERICAN NOR MERGEPARTY MAKES ANY OTHER REPRESENTATIONS OR
WARRANTIES, AND EACH HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES
MADE BY ITSELF OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL
AND LEGAL ADVISORS OR OTHER REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND
DELIVERY OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY,
NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR THE OTHER'S
REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY
ONE OR MORE OF THE FOREGOING.
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9.13 Assignment. This Agreement shall not be assignable by any party
and any such assignment shall be null and void, except that it shall inure to
the benefit of and be binding upon any successor to each party by operation of
Law, including by way of merger, consolidation or sale of all or substantially
all of its assets, and each party may assign its rights and remedies hereunder
to any bank or other financial institution which has loaned funds or otherwise
extended credit to it.
9.14 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party and their permitted successors and
assigns, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, except as otherwise provided in
Articles 2 and 3 and Sections 6.8(d), 6.12 and 9.13.
9.15 Mutual Drafting. This Agreement is the result of the joint efforts
of Mergeparty and American, and each provision hereof has been subject to the
mutual consultation, negotiation and agreement of the parties and there shall be
no construction against either party based on any presumption of that party's
involvement in the drafting thereof.
9.16 Obligations of American and of Mergeparty. Whenever this Agreement
requires a Subsidiary of American to take any action, such requirement shall be
deemed to include an undertaking on the part of American to cause such
Subsidiary to take such action. Whenever this Agreement requires a Subsidiary of
Mergeparty to take any action, such requirement shall be deemed to include an
undertaking on the part of Mergeparty to cause such Subsidiary to take such
action and, after the Effective Time, on the part of the Surviving Corporation
to cause such Subsidiary to take such action.
9.17 Mergeparty Agent for Mergeparty Subsidiary. Anything in this
Agreement to the contrary notwithstanding, Mergeparty Subsidiary hereby grants
Mergeparty an irrevocably power of attorney and hereby irrevocably appoints
Mergeparty its agent for all purposes of this Agreement, including without
limitation for the purpose of executing and delivering extensions of the time
for the performance of any of the obligations or other acts of Mergeparty,
waivers, terminations or amendments, and any action taken by Mergeparty pursuant
to such power of attorney and agency, and any such extension, waiver,
termination or amendment executed and delivered by Mergeparty, shall be binding
upon Mergeparty Subsidiary whether or not it has specifically approved such
action or executed such extension, waiver, termination or amendment.
9.18 Original Merger Agreement. Notwithstanding anything to the
contrary in Section 9.3 of the Original Merger Agreement, this Agreement shall
not amend or restate the Original Merger Agreement, and the Original Merger
Agreement shall continue in full force and effect without any amendment or
modification thereof pursuant to the provisions of this Agreement, until such
time as this Agreement shall have been approved and adopted by the Required
Vote.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, American, Mergeparty and Mergeparty Subsidiary have
caused this Amended and Restated Agreement and Plan of Merger to be executed,
pursuant to the authority and approval of each of their respective Boards of
Directors, as of the date first written above by their respective officers
thereunto duly authorized.
American Radio Systems Corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman of the Board, President and
Chief Executive Officer
CBS Corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name:
Title:
R Acquisition Corp.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name:
Title:
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APPENDIX A
DEFINITIONS
Accounting Firm shall have the meaning given to it in Section 6.18.
Adjustment Amount shall have the meaning given to it in Section
6.18(d).
Adverse, Adversely, when used alone or in conjunction with other terms
(including without limitation "Affect," "Change" and "Effect") shall mean any
Event that has adversely affected or is reasonably likely to adversely affect
(a) the validity or enforceability of this Agreement or the likelihood of
consummation of the Merger, (b) the business, properties, financial condition or
results of operations of American and its Subsidiaries, taken as a whole, or the
Mergeparty and its Subsidiaries, taken as a whole, as the case may be, or (c)
American's or Mergeparty's, as the case may be, ability to fulfill its
obligations under the terms of this Agreement. Notwithstanding the foregoing,
and anything in this Agreement to the contrary notwithstanding, any Event
affecting the radio broadcasting industry or the national or any regional or
market economy generally shall not be deemed to constitute an Adverse Change,
have an Adverse Effect or to Adversely Affect within the meaning of any of the
foregoing clauses (a) through (c).
Affiliate, Affiliated shall mean, with respect to any Person, (a) any
other Person at the time directly or indirectly controlling, controlled by or
under direct or indirect common control with such Person, any other Person of
which such Person at the time owns, or has the right to acquire, directly or
indirectly, twenty percent (20%) or more of any class of the capital stock or
beneficial interest, (c) any other Person which at the time owns, or has the
right to acquire, directly or indirectly, twenty percent (20%) or more of any
class of the capital stock or beneficial interest of such Person, (d) any
executive officer or director of such Person, (e) with respect to any
partnership, joint venture or similar Entity, any general partner thereof, and
(f) when used with respect to an individual, shall include any member of such
individual's immediate family or a family trust.
Affiliate Agreement shall have the meaning given to it in Section 6.20.
Agreement shall have the meaning given to it in the third "Whereas"
paragraph and shall include any amendments executed and delivered by the parties
pursuant to the provisions of Section 9.1.
American shall have the meaning given to it in the Preamble.
American Brokered Stations shall mean the radio broadcast stations
which American has the right to acquire, but which as of the date of the
Original Merger Agreement it is operating pursuant to time brokerage, local
marketing or other similar agreements.
American Class A Common shall have the meaning given to it in Section
3.1(d).
American Class B Common shall have the meaning given to it in Section
3.1(d).
American Class C Common shall have the meaning given to it in Section
3.1(d).
American Common Stock shall have the meaning given to it in Section
3.1(d).
American Conversion Fraction shall have the meaning given to it in
Section 3.5.
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American Convertible Preferred Stock shall have the meaning given to it
in Section 2.5.
American Cumulative Preferred Stock shall have the meaning given to it
in Section 2.5.
American Disclosure Schedule shall mean the American Disclosure
Schedule dated as of the date of the Original Merger Agreement delivered by
American to Mergeparty simultaneously with the execution and delivery of the
Original Merger Agreement.
American FCC Licenses means all FCC Licenses issued to American or any
of its Subsidiaries and used in the business or operations of any of the
American Stations, including those listed on Section 4.6(a) of the American
Disclosure Schedule (other than those relating to the American Brokered
Stations, which shall be deemed American FCC Licenses only upon consummation of
the acquisition of the applicable American Brokered Station), and any additions
thereto between the date of the Original Merger Agreement and the Closing Date.
Auxiliary broadcast licenses issued pursuant to 47 C.F.R. Part 74 shall not be
deemed to be material American FCC Licenses.
American Financial Statements shall have the meaning given to it in
Section 4.2.
American Options shall have the meaning given to it in Section 6.8.
American Preferred Stock shall have the meaning given to it in Section
2.5.
American SEC Documents shall have the meaning given to it in Section
4.2.
American September 10-Q shall have the meaning given to it in Section
4.2.
American Stations means the radio broadcast stations owned by American,
or which it has the right to acquire (and acquires prior to the Closing Date but
only from and after such acquisition) as of the date of the Original Merger
Agreement; provided, however, that American Stations shall not include any
American Station disposed of by American subsequent to the date of the Original
Merger Agreement not in violation of the provisions of this Agreement; further,
provided, that American Stations shall include American Brokered Stations if the
context so requires.
American Stock means the American Common Stock and the American
Preferred stock.
American Stockholders Meeting shall have the meaning given to it in
Section 6.5.
American Stockholders Tower Meeting shall have the meaning given to it
in Section 6.5.
American 10-K shall have the meaning given to it in Section 4.2.
American Tax Group shall mean American and those of its Subsidiaries as
are included in the consolidated Federal Income Tax Returns of American.
American Tower shall have the meaning given to it in Section 3.1(d).
American Tower Group shall have the meaning given to it in Section
6.17.
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American's knowledge (including the term "to the knowledge of
American") means the actual knowledge of the Chief Executive Officer or the
Chief Financial Officer of American, and that such Officer shall have reason to
believe and shall believe that the subject representation or warranty is true
and accurate as stated.
Antitrust Division shall have the meaning given to it in Section
6.2(c).
Applicable Law shall mean, with respect to any Person, any Law of any
Authority, whether domestic or foreign, to which such Person is subject or by
which it or any of its business or operations is subject or any of its property
or assets is bound.
Applications shall have the meaning given to it in Section 6.2(b).
Appraised Total Value shall have the meaning given to it in Section
3.4(c).
Arbitrator shall have the meaning given to it in Section 3.4(c).
ATC Merger Agreement shall have the meaning given to it in Section
4.1(e).
ATS Mergercorp shall have the meaning given to it in Section 3.5.
ATS Mergercorp Common Stock shall have the meaning given to it in
Section 4.1(e).
Authority shall mean any governmental or quasi-governmental authority,
whether administrative, executive, judicial, legislative or other, or any
combination thereof, including without limitation any federal, state,
territorial, county, municipal or other government or governmental or
quasi-governmental agency, arbitrator, authority, board, body, branch, bureau,
central bank or comparable agency or Entity, commission, corporation, court,
department, instrumentality, master, mediator, panel, referee, system or other
political unit or subdivision or other Entity of any of the foregoing, whether
domestic or foreign.
Benefit Arrangement shall mean, with respect to any Person, any benefit
arrangement that is not a Plan, including (a) any employment, severance or
consulting agreement, (b) any arrangement providing for insurance coverage or
workers' compensation benefits, (c) any incentive bonus or deferred bonus
arrangement, (d) any arrangement providing termination allowance, severance or
similar benefits, (e) any equity compensation plan, and (f) any deferred
compensation plan which American or any ERISA Affiliate maintains, contributes
to or is required to contribute to for the benefit of any current or former
officers, employees, agents, directors or independent contractors of American or
any of its ERISA Affiliates.
Cash Consideration shall have the meaning given to it in Section
3.1(d).
Certificate of Merger shall have the meaning given to it in Section
2.3.
Certificates shall have the meaning given to it in Section 3.2(b).
CD Amount shall have the meaning given to it in Section 6.18(c).
Claims shall mean any and all debts, liabilities, obligations, losses,
damages, deficiencies, assessments and penalties, together with all Legal
Actions, pending or threatened, claims and judgments of whatever kind
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and nature relating thereto, and all fees, costs, expenses and disbursements
(including without limitation reasonable attorneys' and other legal fees, costs
and expenses) relating to any of the foregoing.
Closing shall have the meaning given to it in Section 2.2.
Closing Balance Sheet shall have the meaning given to it in Section
6.18.
Closing Date shall have the meaning given to it in Section 2.2.
Closing Net Debt shall have the meaning given to it in Section 6.18.
Closing Statement shall have the meaning given to it in Section 6.18.
Closing Working Capital shall have the meaning given to it in Section
6.18.
COBRA shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, as set forth in Section 4980B of the Code and Part 6 of
Subtitle B of Title I of ERISA.
Code shall mean the Internal Revenue Code of 1986, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
Collateral Document shall mean any agreement, certificate, contract,
instrument, notice, opinion or other document delivered pursuant to the
provisions of this Agreement, including without limitation, the Confidentiality
Agreement, the Tower Documentation and the Tower Merger Agreement.
Commission or SEC shall mean the Securities and Exchange Commission and
shall include any successor Authority.
Contracts shall have the meaning given to it in Section 4.19(a).
Confidentiality Agreement shall mean the letter agreement, dated August
21, 1997 between American and Mergeparty.
Control (including the terms "controlled," "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management or
policies of a Person, or the disposition of such Person's assets or properties,
whether through the ownership of stock, equity or other ownership, by contract,
arrangement or understanding, or as trustee or executor, by contract or credit
arrangement or otherwise.
Convertible Securities shall mean any evidences of indebtedness, shares
of capital stock (other than common stock) or other securities directly or
indirectly convertible into or exchangeable for shares of capital stock, whether
or not the right to convert or exchange thereunder is immediately exercisable or
is conditioned upon the passage of time, the occurrence or non-occurrence or
existence or non-existence of some other Event, or both.
Court shall have the meaning given to it in Section 3.4(c).
CSFB shall have the meaning given to it in Section 4.14.
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Current Assets shall have the meaning given to it in Section 6.18(b).
DCL shall have the meaning given to it in Section 2.1.
Debt Amount shall have the meaning given to it in Section 6.18(c).
Determination Deadline shall have the meaning given to it in Section
3.4(c).
Disclosure Schedule shall mean the Mergeparty Disclosure Schedule, if
any, or the American Disclosure Schedule, as the case may be.
Dissenting Shares shall have the meaning given to it in Section 3.4(a).
Divestiture Condition means any condition imposed or required by the
FCC (including conditions required by the FCC's multiple ownership rules or
policies), the Antitrust Division or the FTC as a condition to its consent to or
approval of the transfer of control of any of the American FCC Licenses or
otherwise to the transactions (or any of them) contemplated by this Agreement,
including without limitation the Merger, or as a condition to its agreement not
to institute any Legal Action to prevent the transfer of control of any of the
American FCC Licenses or otherwise to prevent any of the transactions
contemplated hereby, which would require Mergeparty or any of its Subsidiaries
or any of its other Affiliates to dispose of one or more of the American
Stations or American Brokered Stations, or in Mergeparty's sole discretion, one
or more of the radio broadcast stations owned by Mergeparty and operating in the
same Arbitron Survey area as any of the American Stations or American Brokered
Stations; provided, however, that with respect to compliance with any condition
imposed by the FCC, Mergeparty shall have been afforded a period of six months,
from Closing, through the use of trusts or otherwise, within which to comply
with the radio duopoly overlap rule, 47 C.F.R. ss. 73.3555(a), and Mergeparty
shall have been afforded temporary, rather than permanent, waivers of the
one-to-a-market rule, 47 C.F.R. ss. 73.3555(c), so long as such temporary
waivers shall remain in effect until at least 6 months following the effective
date of FCC action concluding the ongoing proceeding in MM Docket Nos. 91-221,
87-8 (FCC 94-322) or a successor rulemaking proceeding pending at the time of
the grant of the FCC Order, that considers the one-to-a-market rule.
D&O Insurance shall have the meaning given to it in Section 6.12(c).
Effective Time shall have the meaning given to it in Section 2.3.
Entity shall mean any corporation, firm, unincorporated organization,
association, partnership, limited liability company, trust (inter vivos or
testamentary), estate of a deceased, insane or incompetent individual, business
trust, joint stock company, joint venture or other organization, entity or
business, whether acting in an individual, fiduciary or other capacity, or any
Authority.
Environmental Law excluding any regulations issued by the FCC shall
mean any Law relating to or otherwise imposing liability or standards of conduct
concerning pollution or protection of the environment, including without
limitation, Laws relating to emissions, discharges, releases or threatened
releases of Hazardous Materials into the environment (including, without
limitation, ambient air, surface water, ground water, mining or reclamation of
mined land, land surface or subsurface strata) or otherwise that relate to the
manufacture, processing, generation, distribution, use, treatment, storage,
disposal, cleanup, transport or handling of pollutants, contaminants, chemicals
or industrial, toxic or hazardous substances, materials or wastes. Environmental
Laws shall include without limitation the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 6901 et seq.), the Hazardous
Material Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et
A-5
seq.), the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.),
the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control
Act (15 U.S.C. Section 2601 et seq.), the Occupational Safety and Health Act (29
U.S.C. Section 651 et seq.), the Federal Insecticide, Fungicide and Rodenticide
Act (7 U.S.C. Section 136 et seq.), and the Surface Mining Control and
Reclamation Act of 1977 (30 U.S.C. Section 1201 et seq.), and any analogous
federal, state, local or foreign Laws, and the rules and regulations promulgated
thereunder, all as from time to time in effect, and any reference to any such
statutory or regulatory provision shall be deemed to be a reference to any
successor statutory or regulatory provision.
Environmental Permit shall mean, with respect to any Person, any
Governmental Authorization required by or pursuant to any Environmental Law.
ERISA shall mean the Employee Retirement Income Security Act of 1974,
and the rules and regulations thereunder, all as from time to time in effect, or
any successor law, rules or regulations, and any reference to any such statutory
or regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
ERISA Affiliate shall mean any Person that is treated as a single
employer with American under Sections 414(b), (c), (m) or (o) of the Code or
Section 4001(b)(1) of ERISA.
ESOP shall have the meaning given to it in Section 4.9(a)(xvi).
Event shall mean the existence or occurrence of any act, action,
activity, circumstance, condition, event, fact, failure to act, omission,
incident or practice, or any set or combination of any of the foregoing.
Exchange Act shall mean the Securities Exchange Act of 1934, and the
rules and regulations thereunder, all as from time to time in effect, or any
successor law, rules or regulations, and any reference to any such statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
Exchange Agent shall have the meaning given to it in Section 3.2(a).
Expenses shall have the meaning given to it in Section 9.3.
Extended Tower Lease shall have the meaning given to it in Section
6.19(b).
FCA shall mean the Communication Act of 1934, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any such statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
FCC shall mean the Federal Communications Commission and shall include
any successor Authority.
FCC Consents means actions by the FCC (including the Chief, Mass Media
Bureau, acting under delegated authority) granting its consent to the transfer
of control of the American FCC Licenses for each of the American Stations to
Mergeparty as contemplated by this Agreement whether or not such consent has
become a Final Order.
FCC Licenses means all of the licenses, permits and other
authorizations issued by the FCC to an owner and operator of radio broadcast
stations.
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FCC Order shall have the meaning given to it in Section 7.1(b).
Filed American SEC Documents shall have the meaning given to it in
Section 4.2.
Final Adjustment Amount shall have the meaning given to it in Section
6.18(d).
Final Order shall mean, with respect to any Authority, including
without limitation the FCC, a consent or approval with respect to which no
appeal, no stay, no petition or application for rehearing, reconsideration,
review or stay, whether on motion of the applicable Authority or other Person or
otherwise, and no other Legal Action contesting such consent or approval, is in
effect or pending and as to which the time or deadline for filing any such
appeal, petition or application or other Legal Action has expired or, if filed,
has been denied, dismissed or withdrawn, and the time or deadline for
instituting any further Legal Action has expired.
FTC shall have the meaning given to it in Section 6.2(c).
GAAP shall mean generally accepted accounting principles as in effect
from time to time in the United States of America.
Governmental Authorizations shall mean all approvals, concessions,
consents, franchises, licenses, permits, plans, registrations and other
authorizations of all Authorities, including the FCC Licenses, issued by the
FCC, the Federal Aviation Administration and any other Authority in connection
with the conduct of business or operations of any of the Stations.
Governmental Filings shall mean all filings, including franchise and
similar Tax filings, and the payment of all fees, assessments, interest and
penalties associated with such filings, with all Authorities.
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, and the rules and regulations thereunder, all as from
time to time in effect, or any successor law, rules or regulations, and any
reference to any such statutory or regulatory provision shall be deemed to be a
reference to any successor statutory or regulatory provision.
Hazardous Materials shall mean and include any substance, material,
waste, constituent, compound, chemical, natural or man-made element or force (in
whatever state of matter): (a) the presence of which requires investigation or
remediation under any Environmental Law; or (b) that is defined as a "hazardous
waste" or "hazardous substance" under any Environmental Law; or (c) that is
toxic, explosive, corrosive, etiologic, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is regulated by any
applicable Authority or subject to any Environmental Law; or (d) that poses or
threatens to pose a hazard to the health or safety of persons; or (e) that
contains gasoline, diesel fuel or other petroleum hydrocarbons, or any
by-products or fractions thereof, natural gas, polychlorinated biphenyls
("PCBs") and PCB-containing equipment, radon or other radioactive elements,
ionizing radiation, lead, asbestos or asbestos- containing materials, or urea
formaldehyde foam insulation.
indebtedness shall mean, with respect to any Person, without
duplication, (A) all obligations of such Person for borrowed money, or with
respect to deposits or advances of any kind to such Person, (B) all obligations
of such Person evidenced by bonds, debentures, notes or similar instruments, (C)
all obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person, (D) all obligations of
such Person issued or assumed as the deferred purchase price of property or
services (excluding obligations of such Person to creditors for raw materials,
inventory, services and supplies
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incurred in the ordinary course of such Person's business), (E) all capitalized
lease obligations of such Person, (F) all obligations of others secured by any
Lien on property or assets owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (G) all obligations of such
Person under interest rate or currency hedging transactions (valued at the
termination value thereof), (H) all letters of credit issued for the account of
such Person and (I) all guarantees and arrangements having the economic effect
of a guarantee of such Person or any indebtedness of any other Person.
Indemnified Parties shall have the meaning given to it in Section
6.12(b).
Law shall mean any (a) administrative, judicial, legislative or other
action, code, consent decree, constitution, decree, directive, enactment,
finding, guideline, law, injunction, interpretation, judgment, order, ordinance,
proclamation, promulgation, regulation, requirement, rule, rule of law, rule of
public policy, settlement agreement, statute, or writ of any Authority, domestic
or foreign; (b) the common law, or other legal or quasi-legal precedent; or (c)
arbitrator's, mediator's or referee's award, decision, finding or
recommendation.
Legal Action shall mean, with respect to any Person, any and all
litigation or legal or other actions, arbitrations, counterclaims, hearings,
investigations, proceedings or suits, at law or in arbitration, equity or
admiralty, whether or not purported to be brought on behalf of such Person, by
or before any Authority, against such Person or involving any of such Person's
business or assets.
Liabilities shall have the meaning given to it in Section 6.18(b).
Lien shall mean any of the following: mortgage; lien (statutory or
other) or other security agreement, arrangement or interest; hypothecation,
pledge or other deposit arrangement; assignment; charge; levy; executory
seizure; attachment; garnishment; encumbrance (including any easement,
exception, reservation or limitation, right of way, and the like); conditional
sale, title retention or other similar agreement, arrangement, device or
restriction; any financing lease involving substantially the same economic
effect as any of the foregoing; the filing of any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction; or restriction on
sale, transfer, assignment, disposition or other alienation.
Material, Materially or materiality for the purposes of this Agreement,
shall, unless specifically stated to the contrary, be determined without regard
to the fact that various provisions of this Agreement set forth specific dollar
amounts.
Material Agreement shall mean, with respect to any Person, any
agreement, arrangement, contract, undertaking, understanding or other obligation
or liability which (a) was not entered into in the ordinary course of business,
it being understood and agreed by the parties that the acquisition, disposition
or exchange of radio stations is in the ordinary course of business, (b) was
entered into in the ordinary course of business which (i) involved the purchase,
sale or lease of goods or materials, or purchase of services, aggregating more
than $10,000,000 during any of the last three fiscal years of such Person, (ii)
extends for more than six (6) months from the date of the Original Merger
Agreement, or (iii) is not terminable on thirty (30) days or less notice without
material penalty or other payment, (c) involves indebtedness aggregating more
than $10,000,000, (d) is or otherwise constitutes a written agency, broker,
dealer, license, distributorship, sales representative or similar written
agreement, or (e) accounted for more than ten percent (10%) of the revenues of
Mergeparty or American Stations, as the case may be, in the last fiscal year of
such Person or is likely to account for more than ten percent (10%) of revenues
of Mergeparty or American, as the case may be, during the current fiscal year of
such Person.
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Maximum Premium shall have the meaning given to it in Section 6.12(c).
Merger Consideration shall have the meaning given to it in Section
3.1(d).
Mergeparty shall have the meaning given to it in the Preamble.
Mergeparty Brokered Stations shall mean the radio broadcast stations
which Mergeparty has the right to acquire but which as of the date of the
Original Merger Agreement it is operating pursuant to time brokerage, local
marketing or other similar agreements.
Mergeparty Disclosure Schedule shall mean the Mergeparty Disclosure
Schedule dated as of the date of the Original Merger Agreement delivered by
Mergeparty to American simultaneously with the execution and delivery of the
Original Merger Agreement.
Mergeparty Stations means the radio broadcast stations owned by
Mergeparty, or which it has the right to acquire (and acquires prior to the
Closing Date but only from and after such acquisition) as of the date of the
Original Merger Agreement; provided, however, that Mergeparty Stations shall not
include any Mergeparty Station disposed of by Mergeparty subsequent to the date
of the Original Merger Agreement not in violation of the provisions of this
Agreement; provided further, however, that the term Mergeparty Stations shall
include Mergeparty Brokered Stations if the context so requires.
Mergeparty Subsidiary shall have the meaning given to it in the
Preamble.
Mergeparty's knowledge (including the term "to the knowledge of
Mergeparty") means the actual knowledge of the Chief Executive Officer or the
Chief Financial Officer of Mergeparty, and that such Officer shall have reason
to believe and shall believe that the subject representation or warranty is true
and accurate as stated.
Merger shall have the meaning given to it in the third "Whereas"
paragraph.
Merger Consideration shall have the meaning given to it in Section
3.1(d).
Multiemployer Plan shall mean a Plan which is a "multiemployer plan"
within the meaning of Section 4001(a)(3) of ERISA.
Net Debt shall have the meaning given to it in Section 6.18(c).
Notice of Disagreement shall have the meaning given to it in Section
6.18.
NYSE shall mean the New York Stock Exchange.
Option Securities shall mean all rights, options, calls, contracts,
agreements, warrants, understandings, restrictions, arrangements or commitments,
including without limitation, any rights plan or other anti-takeover agreement
or arrangement, evidencing the right to subscribe for, purchase or otherwise
acquire, or otherwise providing for the issuance of shares of capital stock,
voting securities or Convertible Securities, whether or not the right to
subscribe for, purchase or otherwise acquire, or otherwise providing for the
issuance, is immediately exercisable or is conditioned upon the passage of time,
the occurrence or non-occurrence or the existence or non-existence of some other
Event.
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Optionholder shall have the meaning given to it in Section 6.8(a).
Organic Document shall mean, with respect to a Person which is a
corporation, its charter, its by-laws and all stockholder agreements, voting
trusts and similar arrangements applicable to any of its capital stock and, with
respect to a Person which is a partnership, its agreement and certificate of
partnership, any agreements among partners, and any management and similar
agreements between the partnership and any general partners (or any Affiliate
thereof).
Original Merger Agreement shall have the meaning given to it in the
first "Whereas" paragraph.
Permitted Liens shall mean (a) Liens for current Taxes not yet due and
payable, and (b) such imperfections of title, easements, encumbrances and
mortgages or other Liens, if any, as are not, individually or in the aggregate,
substantial in character, amount or extent and do not materially detract from
the value, or materially interfere with the present use, of the property subject
thereto or affected thereby, or otherwise materially impair the business or
operations of the American Stations or the Mergeparty Stations, as the case may
be.
Person shall mean any natural individual or any Entity.
Plan shall mean, with respect to any Person and at a particular time,
any employee benefit plan which is covered by ERISA and in respect of which such
Person or an ERISA Affiliate is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA, which American or any ERISA Affiliate maintains,
contributes to or is required to contribute to for the benefit of any current or
former officers, employees, agents, directors or independent contractors of
American or any of its ERISA Affiliates.
Post-Closing American Group shall have the meaning given to it in
Section 6.18
Private Authorizations shall mean all approvals, concessions, consents,
franchises, licenses, permits, and other authorizations of all Persons (other
than Authorities) including without limitation those with respect to copyrights,
computer software programs, patents, service marks, trademarks, trade names,
technology and know-how.
Prohibited Transaction shall have the meaning given to it in Section
6.2(a).
Proxy Statement shall have the meaning given to it in Section 6.6(a).
Registration Statement shall have the meaning given to it in Section
6.6(b).
Regulations shall mean the federal income tax regulations promulgated
under the Code, as such Regulations may be amended from time to time. All
references herein to specific sections of the Regulations shall be deemed also
to refer to any corresponding provisions of succeeding Regulations, and all
references to temporary Regulations shall be deemed also to refer to any
corresponding provisions of final Regulations.
Representatives shall have the meaning given to it in Section 6.1.
Required Divestitures means all divestitures, terminations,
arrangements and restructurings identified in Section 5.2c) of the Mergeparty
Disclosure Schedule, if any, and all other divestitures, terminations,
arrangements or restructurings, if any, arising after the date of the Original
Merger Agreement that would have
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been required to be listed on Section 5.2c) of
the Mergeparty Disclosure Schedule if known to be in existence as of such date
or that are necessary to satisfy any and all Divestiture Conditions.
Required Tower Vote shall have the meaning given to it in Section 4.13.
Required Vote shall have the meaning given to it in Section 4.13.
Required Divestitures means all divestitures, terminations,
arrangements and restructurings identified in Section 5.2c) of the Mergeparty
Disclosure Schedule, if any, and all other divestitures, terminations,
arrangements or restructurings, if any, arising after the date of the Original
Merger Agreement that would have been required to be listed on Section 5.2c) of
the Mergeparty Disclosure Schedule if known to be in existence as of such date
or that are necessary to satisfy any and all Divestiture Conditions.
Restated Certificate shall have the meaning given to it in Section
4.11.
ss.162(m) Options shall have the meaning given to it in Section 6.8(e).
Securities Act shall mean the Securities Act of 1933, and the rules and
regulations of the Commission thereunder, all as from time to time in effect, or
any successor law, rules or regulations, and any reference to any such statutory
or regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
Stations shall mean, collectively, the American Stations and the
Mergeparty Stations.
Subsidiary shall mean, with respect to a Person, any Entity a majority
of the capital stock ordinarily entitled to vote for the election of directors
of which, or if no such voting stock is outstanding, a majority of the equity
interests of which, is owned directly or indirectly, legally or beneficially, by
such Person or any other Person controlled by such Person.
Surviving Corporation shall have the meaning given to it in Section
2.1.
Tax (and "Taxable," which shall mean subject to Tax), shall mean, with
respect to any Person, (a) all taxes (domestic or foreign), including without
limitation any income (net, gross or other, including recapture of any tax items
such as investment tax credits), alternative or add-on minimum tax, gross
income, gross receipts, gains, sales, use, leasing, lease, user, ad valorem,
transfer, recording, franchise, profits, property (real or personal, tangible or
intangible), fuel, license, withholding on amounts paid to or by such Person,
payroll, employment, unemployment, social security, excise, severance, stamp,
occupation, premium, environmental or windfall profit tax, custom, duty or other
tax, or other like assessment or charge of any kind whatsoever, together with
any interest, levies, assessments, charges, penalties, additions to tax or
additional amounts imposed by any Taxing Authority, (b) any joint or several
liability of such Person with any other Person for the payment of any amounts of
the type described in (a) of this definition, and (c) any liability of such
Person for the payment of any amounts of the type described in (a) as a result
of any express or implied obligation to indemnify any other Person.
Tax Claim shall mean any Claim which relates to Taxes.
Tax Return or Returns shall mean all returns, consolidated or otherwise
(including without limitation information returns), required to be filed with
any Authority with respect to Taxes.
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Taxing Authority shall mean any Authority responsible for the
imposition of any Tax.
Termination Date shall have the meaning given to it in Section 8.1.
Tower Business shall mean the business conducted by the Tower
Subsidiaries.
Tower Common Stock, Tower Class A Common, Tower Class B Common and
Tower Class C Common shall have the meaning given to such terms in Section
3.1(d).
Tower Deconsolidation shall have the meaning given to it in Section
6.17.
Tower Deconsolidation Date shall have the meaning given to it in
Section 6.17.
Tower Documentation shall have the meaning given to it in Section 6.17.
Tower Employees shall have the meaning given to it in Section 6.17.
Tower Leases shall have the meaning given to it in Section 6.19.
Tower Merger shall have the meaning given to it in Section 3.5.
Tower Merger Agreement shall have the meaning given to it in Section
3.5.
Tower Merger Consideration shall have the meaning given to it in
Section 3.5.
Tower Merger Effective Time shall have the meaning given to it in
Section 3.5.
Tower Merger Tower Consideration shall have the meaning given to it in
Section 3.5.
Tower Proxy Statement shall have the meaning given to it in Section
6.6(a).
Tower Separation shall have the meaning given to it in Section 6.17.
Tower Stock Consideration shall have the meaning given to it in Section
3.1(d).
Tower Stock Payment shall have the meaning given to it in Section
3.4(c).
Towers shall have the meaning given to it in Section 6.19.
Tower Subsidiaries shall mean American Tower and its Subsidiaries.
Uncontrollable Events shall have the meaning given to it in Section
6.2(d).
WC Amount shall have the meaning given to it in Section 6.18(b).
Working Capital shall have the meaning given to it in Section 6.18(b).
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EXHIBIT D
AGREEMENT AND PLAN OF MERGER
By and Between
AMERICAN RADIO SYSTEMS CORPORATION
and
ATS MERGER CORPORATION
Dated as of
December 18, 1997
TABLE OF CONTENTS
ARTICLE 1 DEFINED TERMS...................................................................................1
ARTICLE 2 THE TOWER MERGER................................................................................2
2.1 The Tower Merger.......................................................................2
2.2 Closing................................................................................2
2.3 Effective Time.........................................................................2
2.4 Effect of the Merger...................................................................2
2.5 Certificate of Designation.............................................................2
2.6 Bylaws.................................................................................2
2.7 Directors and Officers.................................................................2
ARTICLE 3 CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES..................................................3
3.1 Conversion of Capital Stock............................................................3
3.2 Exchange of Certificates. ............................................................4
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF ATS MERGERCORP................................................6
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF ARS...........................................................8
ARTICLE 6 CLOSING CONDITIONS..............................................................................9
6.1 Conditions to Obligations of Each Party to Effect the Merger...........................9
6.2 Conditions to Obligations of ATS Mergercorp............................................9
6.3 Conditions to Obligations of ARS......................................................10
ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER..............................................................10
7.1 Termination...........................................................................10
7.2 Effect of Termination. ............................................................10
ARTICLE 8 GENERAL PROVISIONS.............................................................................11
8.1 Amendment.............................................................................11
8.2 Waiver................................................................................11
8.3 Fees, Expenses and Other Payments.....................................................11
8.4 Notices...............................................................................11
8.5 Specific Performance; Other Rights and Remedies.......................................12
8.6 Survival of Representations, Warranties, Covenants and Agreements.....................12
8.7 Severability..........................................................................12
8.8 Counterparts..........................................................................13
8.9 Section Headings......................................................................13
8.10 Governing Law.........................................................................13
8.11 Further Acts..........................................................................13
8.12 Entire Agreement; No Other Representations or Agreements..............................13
8.13 Assignment............................................................................14
8.14 Parties in Interest...................................................................14
APPENDIX A: Definitions
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of December 18, 1997, by
and between ATS Merger Corporation., a Delaware corporation ("ATS Mergercorp"),
and American Radio Systems Corporation, a Delaware corporation ("ARS").
W I T N E S S E T H:
WHEREAS, ARS, CBS Corporation (formerly, Westinghouse Electric
Corporation), a Pennsylvania corporation ("CBS") and R Acquisition Corp., a
Delaware corporation ("CBS Sub") are parties to an Agreement and Plan of Merger,
dated as of September 19, 1997 (the "Original Merger Agreement"); and
WHEREAS, ARS, CBS and CBS Sub have simultaneously with the execution
and delivery of this Agreement entered into the Amended and Restated Agreement
and Plan of Merger (the "Restated Merger Agreement") providing for the merger of
CBS Sub with and into ARS on the terms and conditions set forth therein ("CBS
Merger");
WHEREAS, the Restated Merger Agreement provides that, under certain
circumstances, the distribution of ARS' tower business to the holders of ARS
Common Stock may be effect separate and apart from consummation of the CBS
Merger through the merger of ATS Mergercorp with and into ARS (the "Tower
Merger"); and
WHEREAS, the Boards of Directors of ARS and ATS Mergercorp have
determined that the Tower Merger on the terms and conditions set forth in this
Agreement and Plan of Merger (this "Agreement") is consistent with and in
furtherance of the long-term business strategy of each, and is fair to, and in
the best interests of, ATS Mergercorp, ARS and the stockholders of each; and
WHEREAS, ARS and ATS Mergercorp intend that the Tower Merger shall, for
federal income tax purposes, qualify as a tax-free reorganization under the
provisions of Section 368(a) of the Code; and
WHEREAS, the Boards of Directors of ARS and ATS Mergercorp have
approved and adopted this Agreement and the Tower Merger and the Board of
Directors of ARS has directed that this Agreement be submitted to its
stockholders for their adoption and approval; ARS, as the sole stockholder of
ATS Mergercorp has approved and adopted this Agreement;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained and other
valuable consideration, the receipt and adequacy whereof are hereby
acknowledged, the parties hereto hereby, intending to be legally bound,
represent, warrant, covenant and agree as follows:
ARTICLE 1
DEFINED TERMS
As used herein, unless the context otherwise requires, the terms
defined in Appendix A shall have the respective meanings set forth therein.
Terms defined in the singular shall have a comparable meaning when
used in the plural, and vice versa, and the reference to any gender shall be
deemed to include all genders. Unless otherwise defined or the context otherwise
clearly requires, terms for which meanings are provided in this Agreement shall
have such meanings when used in each Collateral Document executed or required to
be executed pursuant hereto or thereto or otherwise delivered, from time to
time, pursuant hereto or thereto. References to "hereof," "herein" or similar
terms are intended to refer to the Agreement as a whole and not a particular
section, and references to "this Section" of "this Article" are intended to
refer to the entire section or article and not a particular subsection thereof.
The term "either party" shall, unless the context otherwise requires, refer to
ARS and ATS Mergercorp.
ARTICLE 2
THE TOWER MERGER
2.1 The Tower Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DCL"), at the Effective Time, ATS Mergercorp shall be merged with and
into ARS. As a result of the Tower Merger, the separate existence of ATS
Mergercorp shall cease and ARS shall continue as the surviving corporation in
the Tower Merger (sometimes referred to, as such, as the "Surviving
Corporation").
2.2 Closing. The closing of the Tower Merger (the "Closing") will take
place, on the Closing Date, at the offices of ▇▇▇▇▇▇▇▇ & Worcester LLP, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, on the date that is the tenth (10th) day
after the date on which all of the conditions set forth in Article 6 (other than
those which require delivery at the Closing) shall have been satisfied or
waived, unless another date, time or place is agreed to in writing by the
parties or provided for herein. The date on which the Closing occurs is herein
referred to as the "Closing Date."
2.3 Effective Time. Subject to the provisions of this Agreement, as
promptly as practicable after the Closing, the parties hereto shall cause the
Tower Merger to be consummated by filing a certificate of merger (the
"Certificate of Merger") and any related filings required under the DCL with the
Secretary of State of the State of Delaware. The Tower Merger shall become
effective at such time as such documents are duly filed with the Secretary of
State of the State of Delaware or at such later time as is specified in such
documents (the "Effective Time").
2.4 Effect of the Tower Merger. From and after the Effective Time, the
Surviving Corporation shall possess all the rights, privileges, powers and
franchises and be subject to all of the restrictions, disabilities and duties of
ATS Mergercorp and ARS, and the Tower Merger shall otherwise have the effects
provided for under the DCL.
2.5 Certificate of Incorporation. The Restated Certificate of
Incorporation of ARS in effect at the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation unless amended in accordance with
Applicable Law.
2.6 Bylaws. The bylaws of ARS in effect at the Effective Time shall be
the bylaws of the Surviving Corporation unless amended in accordance with
Applicable Law.
2.7 Directors and Officers. From and after the Effective Time, until
successors are duly elected or appointed and qualified, or upon their earlier
resignation or removal, in accordance with Applicable Law,
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(a) the directors of ARS at the Effective Time shall be the directors of the
Surviving Corporation, and (b) the officers of ARS at the Effective Time shall
be the officers of the Surviving Corporation.
ARTICLE 3
CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
3.1 Conversion of Capital Stock. At the Effective Time, by virtue of
the Tower Merger and without any action on the part of ATS Mergercorp or ARS or
their respective stockholders:
(a) Each share of the 113/8% Series B Cumulative Exchangeable Preferred
Stock, par value $.01 per share, of ARS (the "ARS Cumulative Preferred Stock")
issued and outstanding immediately prior to the Effective Time shall remain
outstanding;
(b) Each share of the 7% Convertible Exchangeable Preferred Stock, par
value $.01 per share, of ARS (the "ARS Convertible Preferred Stock") issued and
outstanding immediately prior to the Effective Time shall remain outstanding;
(c) Each share of Class A Common Stock, par value $.01 per share ("ARS
Class A Common Stock"), each share of Class B Common Stock, par value $.01 per
share ("ARS Class B Common Stock") and each share of Class C Common Stock, par
value $.01 per share ("ARS Class C Common Stock"), of ARS (collectively, the
"ARS Common Stock"), issued and outstanding immediately prior to the Effective
Time shall, by virtue of the Tower Merger and without any action on the part of
the holder thereof, be converted into the right to receive:
(i) one share of Common Stock, par value $.01 per share
("Tower Common Stock") of American Tower Systems Corporation ("American
Tower Systems"), with (i) each share of ARS Class A Common Stock being
converted into the right to receive one share of Class A Common Stock,
par value $.01 per share ("Tower Class A Common Stock") of American
Tower Systems, (ii) each share of ARS Class B Common Stock being
converted into the right to receive one share of Class B Common Stock,
par value $.01 per share ("Tower Class B Common Stock") of American
Tower Systems, and (iii) each share of ARS Class C Common being
converted into the right to receive one share of Class C Common Stock,
par value $.01 per share ("Tower Class C Common Stock") of American
Tower Systems; and
(ii) a fraction (the "ARS Conversion Fraction") of a share of
ARS Common Stock of the same class as the class of ARS Common Stock
being converted, (i) the numerator of which is the difference between
(A) the denominator and (B) the value (determined as set forth below)
of one share of Tower Class A Common Stock immediately prior to the
Effective Time, and (ii) the denominator of which is the value
(determined as set forth below) of one share of ARS Class A Common
Stock immediately prior to the Effective Time (the consideration set
forth in paragraph (a) above and this paragraph (b) being herein
collectively referred to as the "Merger Consideration").
For purposes of determining the value of the ARS Class A Common Stock and the
Tower Common Stock immediately prior to the Effective Time the following
principles shall apply:
(x) each share of ARS Class A Common Stock shall be valued at
an amount equal to the average closing sales price of the ARS Class A
Common Stock on the New York Stock Exchange (the
-3-
"NYSE"), as reported by the Wall Street Journal, for the ten (10)
consecutive trading days immediately preceding the second trading date
prior to the Effective Time; and
(y) each share of Tower Class A Common Stock shall be valued
at the amount determined in good faith by the ARS Board of Directors to
be its fair market value immediately prior to the Effective Time.
(d) Each share of Common Stock, par value $.01 per share of ATS
Mergercorp (the "ATS Mergercorp Common Stock") owned by ARS immediately prior to
the Effective Time shall automatically be canceled and extinguished without any
conversion thereof and no payment shall be made with respect thereto.
(e) The shares of ARS Common Stock owned by ARS as treasury shares
immediately prior to the Effective Time shall automatically, by virtue of the
Tower Merger and without any action on the part of ARS, be converted into a
number of shares of ARS Common Stock of the same class equal to the number of
shares owned by American immediately prior to the Effective Time multiplied by
the ARS Conversion Fraction.
As a result of the Tower Merger and without any action on the part of
the holder thereof, at the Effective Time all shares of ARS Common Stock issued
and outstanding shall cease to be outstanding and shall be canceled and retired
and shall cease to exist, and each holder of shares of ARS Common Stock shall
thereafter cease to have any rights with respect to such shares of ARS Common
Stock, except the right to receive, without interest, the Merger Consideration
and cash for fractional shares of ARS Common Stock in accordance with the
provisions of Section 3.2(d) upon the surrender of a certificate representing
such shares of ARS Common Stock.
3.2 Exchange of Certificates.
(a) Pursuant to an agreement reasonably satisfactory to ARS and ATS
Mergercorp (the "Exchange Agent Agreement") to be entered into at or prior to
the Closing Date between ARS, ATS Mergercorp and the transfer agent for the ARS
Common Stock (the "Exchange Agent"), at or immediately following the Effective
Time, ARS shall deposit or cause to be deposited in trust for the benefit of the
ARS common stockholders shares of Tower Class A Common Stock, Tower Class B
Common Stock and Tower Class C Common Stock representing the aggregate Merger
Consideration to which holders of ARS Common Stock shall be entitled at the
Effective Time pursuant to the provisions of this Article.
(b) Not less than five (5) business days subsequent to the Effective
Time, the Exchange Agent shall mail to each holder of record of a certificate or
certificates that immediately prior to the Effective Time represented
outstanding shares of ARS Common Stock (the "Certificates") (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon actual delivery of the
Certificates to the Exchange Agent) and (ii) instructions for use in effecting
the surrender of the Certificates in exchange for certificates representing
shares of ARS Common Stock and Tower Class A Common Stock, Tower Class B Common
Stock and Tower Class C Common Stock and cash in lieu of fractional shares as
hereinafter provided. Upon surrender of Certificates for cancellation to the
Exchange Agent, together with a duly executed letter of transmittal and such
other documents as the Exchange Agent shall reasonably require, the holder of
such Certificates shall be entitled to receive in exchange therefor (i) a
certificate representing that number of whole shares of ARS Common Stock to be
received pursuant to the provision of Section 3.1(c)(ii), (ii) cash in lieu of
fractional shares as hereinafter provided and (iii) certificates representing
the number of shares of Tower Class A Common Stock, Tower Class B Common Stock
and
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Tower Class C Common Stock into which the shares of ARS Common Stock,
theretofore represented by the Certificates so surrendered, shall have been
converted pursuant to the provisions of Section 3.1(c)(i), and the Certificates
so surrendered shall be canceled. Notwithstanding the foregoing, neither the
Exchange Agent nor any party hereto shall be liable to a holder of shares of ARS
Common Stock for any shares of ARS Common Stock or Tower Common Stock or
dividends or distributions thereon delivered to a public official pursuant to
applicable abandoned property, escheat or similar Laws.
(c) Promptly following the date which is six (6) months after the
Closing Date, the Exchange Agent shall deliver to ARS all cash, certificates
(including any ARS Common Stock and ATS Mergercorp Class A Common Stock) and
other documents in its possession relating to the transactions described in this
Agreement, and the Exchange Agent's duties shall terminate. Thereafter, each
holder of a Certificate may surrender such Certificate to the Surviving
Corporation and (subject to applicable abandoned property, escheat and similar
Laws) receive in exchange therefor the Tower Merger Consideration to which such
holder is entitled, without any interest thereon. Notwithstanding the foregoing,
neither the Exchange Agent nor any party hereto shall be liable to a holder of
ARS Common Stock for any ARS Common Stock or Tower Common Stock delivered to a
public official pursuant to applicable abandoned property, escheat or similar
Laws.
(d) No certificates or scrip representing fractional shares of ARS
Common Stock shall be issued upon the surrender for exchange of Certificates,
and such fractional share interests shall not entitle the owner thereof to vote
or to any rights of a stockholder of ARS. As promptly as practicable following
the Effective Time, the Exchange Agent shall determine the excess of (i) the
number of shares of ARS Common Stock delivered to the Exchange Agent by ARS
pursuant to Section 3.2(a) over (ii) the aggregate number of whole shares of ARS
Common Stock to be distributed to holders of the Certificates pursuant to
Section 3.2(b) (such excess being herein called the "Excess Shares"). As soon
after the Effective Time as practicable, the Exchange Agent, as agent for the
holders of the Certificates, shall sell the Excess Shares at then prevailing
prices on the NYSE all in the manner provided in this Section 3.2((d). The sale
of the Excess Shares by the Exchange Agent shall be executed on the NYSE through
one or more member firms of the NYSE and shall be executed in round lots to the
extent practicable. The proceeds from such sale or sales available for
distribution to the holders of Certificates shall be reduced by the compensation
payable to the Exchange Agent and the expenses incurred by the Exchange Agent,
in each case, in connection with such sale or sales of the Excess Shares,
including all related commissions, transfer taxes and other out-of-pocket
transaction costs. Until the net proceeds of such sale or sales have been
distributed to the holders of the Certificates, the Exchange Agent shall hold
such proceeds in trust for the holders of the Certificates (the "Common Shares
Trust"). The Exchange Agent shall determine the portion of the Common Shares
Trust to which each holder of a Certificate shall be entitled, if any, by
multiplying the amount of the aggregate net proceeds comprising the Common
Shares Trust by a fraction, the numerator of which is the amount of the
fractional share interest to which such holder of a Certificate is entitled and
the denominator of which is the aggregate amount of fractional share interests
to which all holders of the Certificates are entitled. As soon as practicable
after the determination of the amount of cash, if any, to be paid to holders of
the Certificates in lieu of any fractional share interests, the Exchange Agent
shall make available such amounts, without interest, to such holders of the
Certificates who have surrendered their Certificates in accordance with this
Article III.
(e) If the Tower Merger Consideration (or any portion thereof) is to be
paid to a Person other than the Person in whose name the Certificate surrendered
in exchange therefor is registered, it shall be a condition to the payment of
the Tower Merger Consideration that the Certificate so surrendered shall be
properly endorsed or accompanied by appropriate stock powers (with signatures
guaranteed in accordance with the transmittal form) and otherwise in proper form
for transfer, that such transfer otherwise be proper and that the Person
requesting such transfer pay to the Exchange Agent any transfer or other Taxes
payable by reason of
-5-
the foregoing or establish to the satisfaction of the Exchange Agent that such
Taxes have been paid or are not required to be paid.
(f) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and subject to such other
reasonable conditions as the Board of Directors of the Surviving Corporation may
impose, the Surviving Corporation shall issue in exchange for such lost, stolen
or destroyed Certificate the Tower Merger Consideration deliverable in respect
thereof as determined in accordance with this Article. When authorizing such
issue of the Tower Merger Consideration in exchange therefor, the Board of
Directors of the Surviving Corporation may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed Certificate to give the Surviving Corporation a bond or other surety
in such sum as it may reasonably direct as indemnity against any Claim that may
be made against the Surviving Corporation with respect to the Certificate
alleged to have been lost, stolen or destroyed.
(g) Notwithstanding any other provisions of this Agreement, no
dividends or other distributions declared after the Effective Time on ARS Common
Stock shall be paid with respect to any whole shares of ARS Common Stock or
Tower Common Stock represented by a Certificate until such Certificate is
surrendered for exchange as provided herein. Subject to the effect of Applicable
Laws, following surrender of any such Certificate, there shall be paid to the
holder of the shares of ARS Common Stock and Tower Common Stock issued in
exchange therefor, without interest, (i) at the time of such surrender, the
amount of dividends or other distributions with a record date after the
Effective Time theretofore payable with respect to such whole shares of ARS
Common Stock or Tower Common Stock, as the case may be, and not paid, less the
amount of any withholding taxes which may be required thereon, and (ii) at the
appropriate payment date, the amount of dividends or other distributions with a
record date after the Effective Time but prior to surrender and a payment date
subsequent to surrender payable with respect to such whole shares of ARS Common
Stock or Tower Common Stock, as the case may be, less the amount of any
withholding taxes which may be required thereon.
(h) ARS shall be entitled to, or shall be entitled to cause the
Exchange Agent to, deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of ARS Common Stock such
amounts as are required to be deducted and withheld with respect to the making
of such payment under the Code, or any provision of state, local or foreign tax
law. To the extent that amounts are so withheld by ARS or the Exchange Agent, as
the case may be, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the shares of ARS Common Stock in
respect of which such deduction and withholding was made by ARS or the Exchange
Agent.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF ATS MERGERCORP
ATS Mergercorp hereby represents, warrants and covenants to, and agrees
with, ARS as follows:
(a) ATS Mergercorp is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, has all requisite
power and authority (corporate and other) to own or hold under lease its
properties and to conduct its business as now conducted and as presently
proposed to be conducted, with full power and authority (corporate and other) to
carry on the business in which it is
-6-
engaged, except where the failure to be so qualified and in good standing,
individually or in the aggregate, is not reasonably likely to have a Material
Adverse Effect on ATS Mergercorp.
(b) ATS Mergercorp has all requisite power and authority (corporate and
other) to execute, deliver and perform its obligations under this Agreement and
each Collateral Document executed or required to be executed by ATS Mergercorp
pursuant hereto or thereto or to consummate the Tower Merger, and the execution,
delivery and performance of this Agreement and each Collateral Document executed
or required to be executed pursuant hereto or thereto have been duly authorized
by all requisite corporate or other action on the part of ATS Mergercorp, other
than the approval of the sole stockholder of ATS Mergercorp contemplated by this
Agreement. This Agreement has been duly executed and delivered by ATS Mergercorp
and constitutes, and each Collateral Document executed or required to be
executed pursuant hereto or thereto or to consummate the Tower Merger when
executed and delivered by ATS Mergercorp will constitute, valid and binding
obligations of ATS Mergercorp, enforceable in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy, moratorium,
insolvency and similar laws affecting the rights and remedies of creditors and
obligations of debtors generally and by general principles of equity. The
provisions of Section 203 of the DCL will not apply to this Agreement or the
Tower Merger. As of the date hereof, the Board of Directors of ATS Mergercorp,
at a meeting duly called and held at which a quorum was present throughout, has
unanimously (i) determined that this Agreement and the transactions contemplated
hereby, including without limitation the Tower Merger, are fair to and in the
best interests of the holder of the ATS Mergercorp Common Stock and have
approved the same, and (ii) resolved to recommend that the sole stockholder of
ATS Mergercorp approve this Agreement and the transactions contemplated hereby,
including without limitation the Tower Merger.
(c) Except for such consents, the failure of which to obtain would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect on ATS Mergercorp, the execution and delivery by ATS Mergercorp
of this Agreement and any Collateral Document executed or required to be
executed by it pursuant hereto or thereto, do not, and the consummation by ATS
Mergercorp of the Tower Merger and compliance with the terms, conditions and
provisions hereof or thereof by ATS Mergercorp will not:
(i) conflict with, or result in a breach or violation of, or
constitute a default under, any Organic Document of ATS Mergercorp or
any Applicable Law applicable to ATS Mergercorp, or conflict with, or
result in a breach or violation of, or constitute a default under, or
permit the acceleration of any obligation or liability in, or but for
any requirement of the giving of notice or passage of time or both
would constitute such a conflict with, breach or violation of, or
default under, or permit any such acceleration in, any Indebtedness for
Money Borrowed of ATS Mergercorp, except for such conflicts, breaches,
violations or accelerations that would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on
ATS Mergercorp; or
(ii) result in or permit the creation or imposition of any
Lien upon any property now owned or leased by ATS Mergercorp; or
(iii) require any Governmental Authorization or Governmental
Filing or Private Autho rization, except for the FCC Consents, filings
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, and other filing requirements under
Applicable Law in connection with the consummation of the Tower Merger.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF ARS
ARS hereby represents, warrants and covenants to, and agrees with, ATS
Mergercorp as follows:
(a) ARS is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware, has all requisite power
and authority (corporate and other) to own or hold under lease its properties
and to conduct its business as now conducted and as presently proposed to be
conducted, with full power and authority (corporate and other) to carry on the
business in which it is engaged, except where the failure to be so qualified or
in good standing, individually or in the aggregate, is not reasonably likely to
have a Material Adverse Effect on ARS.
(b) ARS has all requisite power and authority (corporate and other) to
execute, deliver and perform its obligations under this Agreement and each
Collateral Document executed or required to be executed by ARS pursuant hereto
or thereto or to consummate the Tower Merger, and the execution, delivery and
performance of this Agreement and each Collateral Document executed or required
to be executed pursuant hereto or thereto have been duly authorized by all
requisite corporate or other action on the part of ARS, other than the approval
of the ARS stockholders contemplated by this Agreement. This Agreement has been
duly executed and delivered by ARS and constitutes, and each Collateral Document
executed or required to be executed pursuant hereto or thereto or to consummate
the Tower Merger when executed and delivered by ARS will constitute, valid and
binding obligations of ARS, enforceable in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy, moratorium,
insolvency and similar laws affecting the rights and remedies of creditors and
obligations of debtors generally and by general principles of equity. The
provisions of Section 203 of the DCL will not apply to this Agreement or the
Tower Merger. As of the date hereof, the Board of Directors of ARS, at a meeting
duly called and held at which a quorum was present throughout, has unanimously
(i) determined that this Agreement and the transactions contemplated hereby,
including without limitation the Tower Merger, are fair to and in the best
interests of the holders of the ARS Common Stock and have approved the same, and
(ii) resolved to recommend that the ARS stockholders approve this Agreement and
the transactions contemplated hereby, including without limitation the Tower
Merger.
(c) Except for consents and authorizations, the failure of which to
obtain, would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect on ARS, the execution and delivery by ARS of this
Agreement and any Collateral Document executed or required to be executed by it
pursuant hereto or thereto do not, and the consummation by ARS of the Tower
Merger, and compliance with the terms, conditions and provisions hereof or
thereof by ARS will not:
(i) conflict with, or result in a breach or violation of, or
constitute a default under, any Organic Document of ARS or any
Applicable Law, or will conflict with, or result in a breach or
violation of, or constitute a default under, or permit the acceleration
of any obligation or liability in, or but for any requirement of the
giving of notice or passage of time or both would constitute such a
conflict with, breach or violation of, or default under, or permit any
such acceleration in, any Indebtedness for Money Borrowed of ARS,
except for such conflicts, breaches, violations or accelerations that
would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect on ARS; or
-8-
(ii) result in or permit the creation or imposition of any
Lien upon any property now owned or leased by ARS; or
(iii) require any Governmental Authorization or Governmental
Filing or Private Autho rization, except for the FCC Consents, filings
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, and other filing requirements under
Applicable Law in connection with the consummation of the Tower Merger.
ARTICLE 6
CLOSING CONDITIONS
6.1 Conditions to Obligations of Each Party to Effect the Tower Merger.
The respective obligations of each party to effect the Tower Merger shall,
except as hereinafter provided in this Section, be subject to the satisfaction
at or prior to the Closing Date of the following conditions, any or all of which
may be waived, in whole or in part, to the extent permitted by Applicable Law:
(a) The CBS Merger shall not have been consummated by 11:59
p.m. on May 31, 1998;
(b) This Agreement and the transactions contemplated hereby
shall have been approved and adopted by the requisite vote of the
stockholders of ARS and ATS Mergercorp under Applicable Law;
(c) The waiting period applicable to the consummation of the
Tower Merger under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act shall have expired or been
terminated; and
(d) No Authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any Law (whether temporary,
preliminary or permanent) that remains in effect and restrains, enjoins
or otherwise prohibits consummation of the Tower Merger.
6.2 Conditions to Obligations of ATS Mergercorp. The obligation of ATS
Mergercorp to effect the Tower Merger shall be subject to the satisfaction of
the following conditions, any or all of which may be waived, in whole or in
part, to the extent permitted by Applicable Law:
(a) The representations and warranties of ARS set forth in
this Agreement shall be true and correct as of the date of this
Agreement and as of the Closing Date as though made on and as of the
Closing Date except (i) to the extent such representations and
warranties expressly speak as of an earlier date (in which case such
representations and warranties shall be true and correct as of such
earlier date) and (ii) to the extent that the failure of such
representations and warranties to be true and correct, individually or
in the aggregate, would not have a Material Adverse Effect on ARS;
provided, however, that for the purpose of this clause (ii),
representations and warranties that are qualified as to materiality
(including by reference to "Material Adverse Effect") shall not be
deemed to be so qualified;
(b) ARS shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or
prior to the Closing Date; and
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(c) Between the date of this Agreement and the Closing Date,
except as contemplated by this Agreement, as the case may be, there
shall not have occurred and be continuing any Material Adverse Change
in ARS.
6.3 Conditions to Obligations of ARS. The obligation of ARS to effect
the Tower Merger shall be subject to the satisfaction of the following
conditions, any or all of which may be waived, in whole or in part, to the
extent permitted by Applicable Law:
(a) The representations and warranties of ATS Mergercorp set
forth in this Agreement shall be true and correct as of the date of
this Agreement and as of the Closing Date as though made on and as of
the Closing Date except (i) to the extent such representations and
warranties expressly speak as of an earlier date (in which case such
representations and warranties shall be true and correct as of such
earlier date) and (ii) to the extent that the failure of such
representations and warranties to be true and correct, individually or
in the aggregate, would not have a Material Adverse Effect on ATS
Mergercorp; provided, however, that for the purpose of this clause
(ii), representations and warranties that are qualified as to
materiality (including by reference to "Material Adverse Effect") shall
not be deemed to be so qualified;
(b) ATS Mergercorp shall have performed in all material
respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date; and
(c) The Board of Directors of ARS shall not have determined to
abandon the Tower Merger.
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement shall terminate automatically, without
any action of either of the parties, upon consummation of the CBS Merger and may
be terminated at any time prior to the Closing Date, whether before or after
approval by the stockholders of ARS:
(a) by mutual written consent of ARS and ATS Mergercorp;
(b) by either ATS Mergercorp or ARS if any Authority of
competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any Law that shall have become final and
nonappealable and that restrains, enjoins or otherwise prohibits
consummation of the Tower Merger, unless the party seeking such
restraint injunction or prohibition or any Affiliate thereof was the
terminating party; and
(c) by ARS in the event it determines to abandon the Tower
Merger as not being in the best interests of the ARS common
stockholders.
The term "Termination Date" shall mean December 31, 1998, as such date may from
time to time be extended by mutual agreement of the parties.
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7.2 Effect of Termination. Except as provided in Section 8.3 (Fees,
Expenses and other Payments), in the event of the termination of this Agreement
pursuant to Section 7.1, or in the event the Tower Merger shall not have become
effective prior to the end of business on the day prior to the Termination Date,
this Agreement shall forthwith become void and have no effect, without any
liability on the part of any party, or any of its respective stockholders,
officers or directors, to the other.
ARTICLE 8
GENERAL PROVISIONS
8.1 Amendment. This Agreement may be amended from time to time by the
parties hereto at any time prior to the Closing Date but only by an instrument
in writing signed by the parties hereto and, subject, to Applicable Law.
8.2 Waiver. At any time prior to the Closing Date, except to the extent
not permitted by Applicable Law, ATS Mergercorp or ARS may, either generally or
in a particular instance and either retroactively or prospectively, extend the
time for the performance of any of the obligations or other acts of the other,
subject, however, to the provisions of Section 7.1, waive any inaccuracies in
the representations and warranties of the other contained herein or in any
document delivered pursuant hereto, and waive compliance by the other with any
of the agreements, covenants, conditions or other provision contained herein.
Any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party or parties to be bound thereby.
8.3 Fees, Expenses and Other Payments. All costs and expenses incurred
in connection with the negotiation, preparation, performance and enforcement of
this Agreement (including all fees and expenses of counsel, financial advisors,
accountants, and other consultants, advisors and representatives for all
activities of such persons undertaken pursuant to this Agreement) incurred by
the parties hereto shall be borne by ARS.
8.4 Notices. All notices and other communications which by any
provision of this Agreement are required or permitted to be given shall be given
in writing and shall be (a) mailed by first-class or express mail, postage
prepaid, or by recognized courier service, (b) sent by telecopy or other form of
rapid transmission, confirmed by mailing (by first class or express mail,
postage prepaid, or by recognized courier service) written confirmation at
substantially the same time as such rapid transmission, or (c) personally
delivered to the receiving party (which if, other than an individual, shall be
an officer or other responsible party of the receiving party). All such notices
and communications shall be mailed, sent or delivered as follows:
(a) If to ATS Mergercorp:
ATS Mergercorp Merger Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President and Chief Executive Officer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇▇▇ & Worcester LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to ARS:
American Radio Systems Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President and Chief Executive Officer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & Worcester LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other person(s), telex or facsimile number(s) or address(es) as the
party to receive any such communication or notice may have designated by written
notice to the other party.
8.5 Specific Performance; Other Rights and Remedies. Each party
recognizes and agrees that in the event the other party should refuse to perform
any of its obligations under this Agreement or any Collateral Document, the
remedy at law would be inadequate and agrees that for breach of such provisions,
each party shall, in addition to such other remedies as may be available to it
at law or in equity or as provided in Article 7, be entitled to injunctive
relief and to enforce its rights by an action for specific performance to the
extent permitted by Applicable Law. Each party hereby waives any requirement for
security or the post ing of any bond or other surety in connection with any
temporary or permanent award of injunctive, mandatory or other equitable relief.
Nothing herein contained shall be construed as prohibiting each party from
pursuing any other remedies available to it under Applicable Law or pursuant to
the provisions of this Agreement for such breach or threatened breach, including
without limitation the recovery of damages, including, to the extent awarded in
any Legal Action, punitive, incidental and consequential damages (including
without limitation damages for diminution in value and loss of anticipated
profits) or any other measure of damages permitted by Applicable Law.
8.6 Survival of Representations, Warranties, Covenants and Agreements.
None of the representations and warranties in this Agreement shall survive the
Tower Merger, and after effectiveness of the Tower Merger neither of the parties
or their respective officers, directors or stockholders shall have any further
obligation with respect thereto.
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8.7 Severability. If any term or provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative, illegal or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the
conflicting of any provision with any constitution or statute or rule of public
policy or for any other reason, such circumstance shall not have the effect of
rendering the provision or provisions in question invalid, inoperative, illegal
or unenforceable in any other jurisdiction or in any other case or circumstance
or of rendering any other provision or provisions herein contained invalid,
inoperative, illegal or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative, illegal or unenforceable
provision had never been contained herein and such provision reformed so that it
would be valid, operative and enforceable to the maximum extent permitted in
such jurisdiction or in such case. Notwithstanding the foregoing, in the event
of any such determination, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by Applicable Law in an acceptable
manner to the end that the Tower Merger is fulfilled and consummated to the
maximum extent possible.
8.8 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, binding upon all of the
parties. In pleading or proving any provision of this Agreement, it shall not be
necessary to produce more than one of such counterparts.
8.9 Section Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
8.10 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by, and construed in accordance
with, the Applicable Laws of the United States of America and the laws of the
State of Delaware applicable to contracts made and performed in such State and,
in any event, without giving effect to any choice or conflict of laws provision
or rule that would cause the application of domestic substantive laws of any
other jurisdiction. Anything in this Agreement to the contrary notwithstanding,
in the event of any dispute between the parties which results in a Legal Action,
the prevailing party shall be entitled to receive from the non-prevailing party
reimbursement for reasonable legal fees and expenses incurred by such prevailing
party in such Legal Action.
8.11 Further Acts. Each party agrees that at any time, and from time to
time, before and after the consummation of the transactions contemplated by this
Agreement, it will do all such things and execute and deliver all such
Collateral Documents and other assurances, as the other party or its counsel
reasonably deems necessary or desirable in order to carry out the terms and
conditions of this Agreement and the transactions contemplated hereby or to
facilitate the enjoyment of any of the rights created hereby or to be created
hereunder.
8.12 Entire Agreement; No Other Representations or Agreements. This
Agreement (together with the other Collateral Documents delivered or to be
delivered in connection herewith) constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior
agreements, arrangements, covenants, promises, conditions, undertakings,
inducements, representations, warranties and negotiations, expressed or implied,
oral or written, between the parties, with respect to the subject matter hereof.
Each of the parties is a sophisticated legal entity that was advised by
experienced counsel and, to the extent it deemed necessary, other advisors in
connection with this Agreement. Each of the parties hereby acknowledges that (a)
neither party has relied or will rely in respect of this Agreement or the
transactions
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contemplated hereby upon any document or written or oral information previously
furnished to or discovered by it or its representatives, other than this
Agreement (including the other Collateral Documents) or such of the foregoing as
are delivered at the Closing, (b) there are no covenants or agreements by or on
behalf of either party hereto or any of its respective Affiliates or
representatives other than those expressly set forth in this Agreement and the
Collateral Documents, and (c) the parties' respective rights and obligations
with respect to this Agreement and the events giving rise thereto will be solely
as set forth in this Agreement and the Collateral Documents. WITHOUT LIMITING
THE GENERALITY OF THE FOREGOING, EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, NEITHER ARS NOR ATS
Mergercorp MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY
DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND LEGAL ADVISORS OR OTHER
REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE
TO THE OTHER OR THE OTHER'S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER
INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING.
8.13 Assignment. This Agreement shall not be assignable by any party
and any such assignment shall be null and void, except that it shall inure to
the benefit of and be binding upon any successor to each party by operation of
Law, including by way of merger, consolidation or sale of all or substantially
all of its assets, and each party may assign its rights and remedies hereunder
to any bank or other financial institution which has loaned funds or otherwise
extended credit to it.
8.14 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party and their permitted successors and
assigns, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, except as otherwise provided in
Section 8.13.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, ARS and ATS Mergercorp have caused this Agreement
and Plan of Merger to be executed, pursuant to the authority and approval of
each of their respective Boards of Directors, as of the date first written above
by their respective officers thereunto duly authorized.
American Radio Systems Corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman of the Board, President and
Chief Executive Officer
ATS Merger Corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman of the Board, President and
Chief Executive Officer
-15-
APPENDIX A
DEFINITIONS
Adverse, Adversely, when used alone or in conjunction with other terms
(including without limitation "Affect," "Change" and "Effect") shall mean any
Event that has adversely affected or is reasonably likely to adversely affect
(a) the validity or enforceability of this Agreement or the likelihood of
consummation of the Tower Merger, or (b) the financial condition or results of
operation of the ATS Mergercorp and its Subsidiaries, taken as a whole, or the
ARS and its Subsidiaries, taken as a whole, as the case may be, or (c) ARS' or
ATS Mergercorp', as the case may be, ability to fulfill its obligations under
the terms of this Agreement. Notwithstanding the foregoing, and anything in this
Agreement to the contrary notwithstanding, neither (i) any Event affecting the
radio broadcasting industry or the national or any regional or market economy
generally.
Affiliate, Affiliated shall mean, with respect to any Person, (a) any
other Person at the time directly or indirectly controlling, controlled by or
under direct or indirect common control with such Person, any other Person of
which such Person at the time owns, or has the right to acquire, directly or
indirectly, twenty percent (20%) or more of any class of the capital stock or
beneficial interest, (c) any other Person which at the time owns, or has the
right to acquire, directly or indirectly, twenty percent (20%) or more of any
class of the capital stock or beneficial interest of such Person, (d) any
executive officer or director of such Person, (e) with respect to any
partnership, joint venture or similar Entity, any general partner thereof, and
(f) when used with respect to an individual, shall include any member of such
individual's immediate family or a family trust.
Agreement shall have the meaning given to it in the third "Whereas"
paragraph and shall include any amendments executed and delivered by the parties
pursuant to the provisions of Section 8.1.
American Tower Systems shall have the meaning given to it in Section
3.1(c)(i).
Applicable Law shall mean, with respect to any Person, any Law of any
Authority, whether domestic or foreign, to which such Person is subject or by
which it or any of its business or operations is subject or any of its property
or assets is bound.
ARS shall have the meaning given to it in the Preamble.
ARS Class A Common Stock shall have the meaning given to it in Section
3.1(c).
ARS Class B Common Stock shall have the meaning given to it in Section
3.1(c).
ARS Class C Common Stock shall have the meaning given to it in Section
3.1(c).
ARS Common Stock shall have the meaning given to it in Section 3.1(c).
ARS Conversion Fraction shall have the meaning given to it in Section
3.1(c)(ii).
ARS Convertible Preferred Stock shall have the meaning given to it in
Section 3.1(b).
ARS Cumulative Preferred Stock shall have the meaning given to it in
Section 3.1(a).
ATS Mergercorp shall have the meaning given to it in the Preamble.
ATS Mergercorp Common Stock shall have the meaning given to it in
Section 3.1(d).
Authority shall mean any governmental or quasi-governmental authority,
whether administrative, executive, judicial, legislative or other, or any
combination thereof, including without limitation any federal, state,
territorial, county, municipal or other government or governmental or
quasi-governmental agency, arbitrator, authority, board, body, branch, bureau,
central bank or comparable agency or Entity, commission, corporation, court,
department, instrumentality, master, mediator, panel, referee, system or other
political unit or subdivision or other Entity of any of the foregoing, whether
domestic or foreign.
CBS shall have the meaning given to it in the first "Whereas"
paragraph.
CBS Merger shall have the meaning given to it in the first "Whereas"
paragraph.
CBS Sub shall have the meaning given to it in the first "Whereas"
paragraph.
Certificate of Merger shall have the meaning given to it in Section
2.3.
Certificates shall have the meaning given to it in Section 3.2(b).
Closing shall have the meaning given to it in Section 2.2.
Closing Date shall have the meaning given to it in Section 2.2.
Code shall mean the Internal Revenue Code of 1986, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
Collateral Document shall mean any agreement, certificate, contract,
instrument, notice, opinion or other document delivered pursuant to the
provisions of this Agreement.
Common Shares Trust shall have the meaning given to it in Section
3.2(d).
Control (including the terms "controlled," "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management or
policies of a Person, or the disposition of such Person's assets or properties,
whether through the ownership of stock, equity or other ownership, by contract,
arrangement or understanding, or as trustee or executor, by contract or credit
arrangement or otherwise.
DCL shall have the meaning given to it in Section 2.1.
Effective Time shall have the meaning given to it in Section 2.3.
Entity shall mean any corporation, firm, unincorporated organization,
association, partnership, limited liability company, trust (inter vivos or
testamentary), estate of a deceased, insane or incompetent individual, business
trust, joint stock company, joint venture or other organization, entity or
business, whether acting in an individual, fiduciary or other capacity, or any
Authority.
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Event shall mean the existence or occurrence of any act, action,
activity, circumstance, condition, event, fact, failure to act, omission,
incident or practice, or any set or combination of any of the foregoing.
Excess Shares shall have the meaning given to it in Section 3.2(d).
Exchange Agent shall have the meaning given to it in Section 3.2(a).
Exchange Agent Agreement shall have the meaning given to it in Section
3.2(a).
FCC Consents means actions by the FCC (including the Chief, Mass Media
Bureau, acting under delegated authority) granting its consent to the transfer
of control of the American FCC Licenses for each of the American Stations to
Mergeparty as contemplated by this Agreement whether or not such consent has
become a Final Order.
Governmental Authorizations shall mean all approvals, concessions,
consents, franchises, licenses, permits, plans, registrations and other
authorizations of all Authorities, including the FCC Licenses, issued by the
FCC, the Federal Aviation Administration and any other Authority in connection
with the conduct of business or operations of any of the Stations.
Governmental Filings shall mean all filings, including franchise and
similar Tax filings, and the payment of all fees, assessments, interest and
penalties associated with such filings, with all Authorities.
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, and the rules and regulations thereunder, all as from
time to time in effect, or any successor law, rules or regulations, and any
reference to any such statutory or regulatory provision shall be deemed to be a
reference to any successor statutory or regulatory provision.
Law shall mean any (a) administrative, judicial, legislative or other
action, code, consent decree, constitution, decree, directive, enactment,
finding, guideline, law, injunction, interpretation, judgment, order, ordinance,
proclamation, promulgation, regulation, requirement, rule, rule of law, rule of
public policy, settlement agreement, statute, or writ of any Authority, domestic
or foreign; (b) the common law, or other legal or quasi-legal precedent; or (c)
arbitrator's, mediator's or referee's award, decision, finding or
recommendation.
Legal Action shall mean, with respect to any Person, any and all
litigation or legal or other actions, arbitrations, counterclaims, hearings,
investigations, proceedings or suits, at law or in arbitration, equity or
admiralty, whether or not purported to be brought on behalf of such Person, by
or before any Authority, against such Person or involving any of such Person's
business or assets.
Lien shall mean any of the following: mortgage; lien (statutory or
other) or other security agreement, arrangement or interest; hypothecation,
pledge or other deposit arrangement; assignment; charge; levy; executory
seizure; attachment; garnishment; encumbrance (including any easement,
exception, reservation or limitation, right of way, and the like); conditional
sale, title retention or other similar agreement, arrangement, device or
restriction; any financing lease involving substantially the same economic
effect as any of the foregoing; the filing of any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction; or restriction on
sale, transfer, assignment, disposition or other alienation.
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Material, Materially or materiality for the purposes of this Agreement,
shall, unless specifically stated to the contrary, be determined without regard
to the fact that various provisions of this Agreement set forth specific dollar
amounts.
Merger shall have the meaning given to it in the third "Whereas"
paragraph.
Merger Consideration shall have the meaning given to it in Section
3.1(e )(ii).
NYSE shall have the meaning given to it in Section 3.1(c).
Organic Document shall mean, with respect to a Person which is a
corporation, its charter, its by-laws and all stockholder agreements, voting
trusts and similar arrangements applicable to any of its capital stock and, with
respect to a Person which is a partnership, its agreement and certificate of
partnership, any agreements among partners, and any management and similar
agreements between the partnership and any general partners (or any Affiliate
thereof).
Person shall mean any natural individual or any Entity.
Private Authorizations shall mean all approvals, concessions, consents,
franchises, licenses, permits, and other authorizations of all Persons (other
than Authorities) including without limitation those with respect to copyrights,
computer software programs, patents, service marks, trademarks, trade names,
technology and know-how.
Regulations shall mean the federal income tax regulations promulgated
under the Code, as such Regulations may be amended from time to time. All
references herein to specific sections of the Regulations shall be deemed also
to refer to any corresponding provisions of succeeding Regulations, and all
references to temporary Regulations shall be deemed also to refer to any
corresponding provisions of final Regulations.
Representatives shall have the meaning given to it in Section 6.1(a).
Restated Merger Agreement shall have the meaning given to it in the
second "Whereas" paragraph.
Subsidiary shall mean, with respect to a Person, any Entity a majority
of the capital stock ordinarily entitled to vote for the election of directors
of which, or if no such voting stock is outstanding, a majority of the equity
interests of which, is owned directly or indirectly, legally or beneficially, by
such Person or any other Person controlled by such Person.
Surviving Corporation shall have the meaning given to it in Section
2.1.
Tax (and "Taxable," which shall mean subject to Tax), shall mean, with
respect to any Person, (a) all taxes (domestic or foreign), including without
limitation any income (net, gross or other, including recapture of any tax items
such as investment tax credits), alternative or add-on minimum tax, gross
income, gross receipts, gains, sales, use, leasing, lease, user, ad valorem,
transfer, recording, franchise, profits, property (real or personal, tangible or
intangible), fuel, license, withholding on amounts paid to or by such Person,
payroll, employment, unemployment, social security, excise, severance, stamp,
occupation, premium, environmental or windfall profit tax, custom, duty or other
tax, or other like assessment or charge of any kind whatsoever, together with
any interest, levies, assessments, charges, penalties, additions to tax or
additional amounts imposed by any Taxing Authority, (b) any joint or several
liability of such Person with any other Person for
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the payment of any amounts of the type described in (a) of this definition, and
(c) any liability of such Person for the payment of any amounts of the type
described in (a) as a result of any express or implied obligation to indemnify
any other Person.
Taxing Authority shall mean any Authority responsible for the
imposition of any Tax.
Termination Date shall have the meaning given to it in Section 7.1.
Tower Class A Common Stock shall have the meaning given to it in
Section 3.1(c)(i).
Tower Class B Common Stock shall have the meaning given to it in
Section 3.1(c)(i).
Tower Class C Common Stock shall have the meaning given to it in
Section 3.1(c)(i).
Tower Common Stock shall have the meaning given to it in Section
3.1(c)(i).
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