1
EXHIBIT 2.1
AMENDED AND RESTATED
AGREEMENT OF MERGER AND PLAN
OF REORGANIZATION
dated as of
December 3, 1996
by and between
NEXTEL COMMUNICATIONS, INC.,
NEXTEL FINANCE COMPANY,
DCI MERGER INC.
and
PITTENCRIEFF COMMUNICATIONS, INC.
2
AMENDED AND RESTATED
AGREEMENT OF MERGER AND PLAN OF REORGANIZATION
TABLE OF CONTENTS
Page
ARTICLE I. CONVERSION OF PCI STOCK INTO NEXTEL COMMON STOCK; TREATMENT OF OPTIONS AND WARRANTS . . . . . . . . . . 3
1.1 Exchange Ratio and Conversion of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.2 Value Cap Adjusted for Channels Not Delivered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.3 Value Cap Adjusted for Negative Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.4 Value Cap Adjusted for Negative Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.5 Value Cap Adjusted for Option/Warrant Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.6 Value Cap Adjusted for Severance Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.6A Settlement with Castle Tower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.7 Value Cap Adjusted if Closing Occurs After 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.8 Asset Value and Dilution Adjustments to Exchange Ratio . . . . . . . . . . . . . . . . . . . . . . . . 12
1.9 Value Cap Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.10 Additional Consideration in Lieu of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.11 Nextel Closing Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.13 Terms of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.14 Effective Time; Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.15 Certificate of Incorporation and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.16 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.17 Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.18 Surrender of Certificates and Delivery of Merger Consideration . . . . . . . . . . . . . . . . . . . . 18
1.19 No Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
1.20 Rights of Holders of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
1.21 Assumption of Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
1.22 Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF PCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.1 Corporate Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.2 Subsidiaries and Other Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.3 Corporate Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.4 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.5 Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.6 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.7 No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.8 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.9 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.10 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.11 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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2.12 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.13 Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.14 Transactions Not in the Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.15 Capital Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.16 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.17 Bank Accounts; Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.18 Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
2.19 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.20 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
2.21 Compliance with Securities Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
2.22 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
2.23 Special Liabilities; Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
2.24 Employee Benefit Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
2.25 Materially Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
2.26 Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
2.27 Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
2.28 Schedule Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
2.29 Information in Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
2.30 Castle Tower Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF NEXTEL AND MERGER SUB . . . . . . . . . . . . . . . . . . . . . . . . 63
3.1 Corporate Organization; Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
3.3 Common Stock; Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
3.4 No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
3.5 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
3.6 Information in Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE IV. COVENANTS OF PCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
4.1 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
4.2 Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
4.3 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
4.4 SEC Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
4.5 Antitrust Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
4.6 Restraint on Solicitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
4.7 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
4.8 Stockholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
4.9 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
4.10 Update Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
ARTICLE V. COVENANTS OF NEXTEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
5.1 Antitrust Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
5.2 Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
5.3 Current Public Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
5.4 Offer to Warrant Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
5.5 Directors and Officers Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
5.6 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
ARTICLE VI. JOINT COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
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Page
6.1 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
6.2 Standstill Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
6.3 Trading Prohibitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
6.4 Substitute of Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
6.6 Cooperation Concerning Extended Implementation Channels . . . . . . . . . . . . . . . . . . . . . . . . 82
6.7 Auction Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
ARTICLE VII. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
7.1 Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
7.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
ARTICLE VIII. CONDITIONS TO OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
8.1 Conditions to Obligations of Nextel and PCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
8.2 Conditions to Obligations of Nextel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
8.3 Conditions to the Obligations of PCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
ARTICLE IX. TERMINATION/EFFECTIVENESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
9.2 Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
ARTICLE X. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
10.1 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
10.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
10.3 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
10.4 Rights of Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
10.5 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
10.6 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
10.7 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
10.8 Captions; Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
10.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
10.10 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
10.11 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
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DEFINITIONS
Page
----
Actual PCI Common Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Adjusted EBITDA Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Adjusted Value Cap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AMI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Asset List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Awarded License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Basic Value Cap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Castle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Castle License Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Castle Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
CERCLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Certificate of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Certificate of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 16
Channel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Communications Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Constituent Corporations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Contaminants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Converted Nextel Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Converted Per Share Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Current Payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
DCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Defined benefit plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Defined contribution plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Delivered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Dilutive PCI Common Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
EA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
EA Auction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Employee Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ESMR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Excess parachute payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Executive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Extended Implementation Channel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
FCC License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Fiduciaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Final Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
First Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
FMR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
GCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Hazardous Substances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
- iv -
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Page
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Immaterial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
July 1 Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
July 1 Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
June 30 Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Market Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 15
Merger Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
MSA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Multiemployer plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Multiple employer plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Nasdaq NM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Nextel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Nextel Closing Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Nextel Cure Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Nextel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Nextel Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Nextel Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Non-core Market Channel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Off the shelf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Overlap EAs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
PCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PCI Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
PCI Cure Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
PCI Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
PCI Management Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
PCI Option Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
PCI Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
PCI Share Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
PCI Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
PCI/PCI Subs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Permitted Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Permitted Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Pollutants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Potentially responsible party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Qualifying Extended Implementation Channel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Qualifying Extended Implementation Channels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Shortfall Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SMR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SMR License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SMR System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SMR Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
- v -
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Page
Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Takeover Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Terminating Nextel Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Terminating PCI Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Third-Party Management Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
To the knowledge of PCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
To the knowledge of the Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Transaction Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Unfavorable FCC Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Value Floor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Voting stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Welfare Benefit Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
- vi -
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ANNEXES
Annex A - Form of Letter Concerning Compliance with Rule 145
Annex B - Blue Sky
Annex C-1 - Form of Opinion of Gardere & ▇▇▇▇▇, L.L.P.
Annex C-2 - Form of Opinion of ▇▇▇▇▇▇▇, Carton & ▇▇▇▇▇▇▇
Annex D - Form of Nextel Warrant
Annex E - Form of Opinion of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
Annex F - Letter Agreement between Nextel Communications, Inc. and Castle
Tower Corporation
- vii -
9
AMENDED AND RESTATED
AGREEMENT OF MERGER AND PLAN
OF REORGANIZATION
Amended and Restated Agreement of Merger and Plan of Reorganization dated
as of December 3, 1996 ("Agreement") by and among NEXTEL COMMUNICATIONS, INC.,
a Delaware corporation ("Nextel"), NEXTEL FINANCE COMPANY, a Delaware
corporation and a wholly owned subsidiary of Nextel formerly known as Dispatch
Communications, Inc. ("NFC"), DCI MERGER INC., a Delaware corporation and a
wholly owned subsidiary of NFC ("Merger Sub") and PITTENCRIEFF COMMUNICATIONS,
INC., a Delaware corporation ("PCI").
PLAN OF REORGANIZATION
Nextel, through NFC and Merger Sub, and PCI intend to enter into a
tax-free plan of reorganization under the Internal Revenue Code of 1986, as
amended (the "Code").
The plan of reorganization will consist of the merger of Merger Sub with
and into PCI, with PCI being the surviving corporation. This merger ("Merger")
will be consummated in accordance with the terms and conditions hereof and will
be consummated at the "Effective Time of the Merger" as defined herein.
Nextel has caused NFC to form Merger Sub solely for the purpose of
consummating the Merger.
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2
Nextel, NFC, Merger Sub and PCI entered into an Agreement of Merger and
Plan of Reorganization dated as of October 2, 1996 (the "First Agreement").
Simultaneously with the execution of the First Agreement, PCI has
delivered to Nextel (i) an executed letter agreement from Castle Tower
Corporation, (ii) a waiver of preemptive rights from Advanced MobileComm, Inc.
("AMI") pursuant to that certain Contribution Agreement, dated as of September
5, 1995, as subsequently amended, among PCI, Pittencrieff Communications, Inc.,
a Texas corporation, AMI and each of the other sellers named therein, which
waiver shall be effective at the Effective Time of the Merger, and (iii) a
confirmation from AMI that the Voting Agreement and Proxy dated January 16,
1996 shall terminate in accordance with its terms pursuant to Section 4(ii)
thereof effective at the Effective Time of the Merger.
Simultaneously with the execution of the First Agreement, FMR Corp., a
Massachusetts corporation ("FMR"), has agreed that, among other things, at the
Effective Time of the Merger, FMR will exchange its warrants to purchase
capital stock of PCI for a warrant to purchase Class A (Voting) Common Stock of
Nextel, par value $.001 per share ("Nextel Common Stock"), in the form of Annex
D.
The parties to the First Agreement desire to amend certain provisions and
restate the First Agreement and, accordingly, the parties have entered into
this Agreement. All schedules to this Agreement set forth information as of
October 2, 1996.
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3
AGREEMENT
In order to consummate the plan of reorganization, and in consideration of
the mutual agreements hereinafter contained, Nextel, NFC, Merger Sub and PCI
agree as follows:
ARTICLE I. CONVERSION OF PCI STOCK INTO NEXTEL COMMON STOCK; TREATMENT
OF OPTIONS AND WARRANTS
1.1 Exchange Ratio and Conversion of Shares. At the Effective Time of
the Merger (as defined herein), all the outstanding shares of common stock of
PCI, par value $.01 per share ("PCI Common Stock") shall be converted into
shares of Nextel Common Stock using an exchange ratio of 3.17:1.0, so that
three and seventeen one hundredths shares of PCI Common Stock are converted
into one share of Nextel Common Stock (the "Basic Exchange Ratio"), subject to
the adjustments described in this Article I. As of July 1, 1996, (i) the total
number of shares of PCI Common Stock outstanding ("July 1 Shares"), plus (ii)
the total number of shares of PCI Common Stock issuable upon exercise of
warrants or options, or upon exchange or conversion of convertible instruments
(regardless of whether they were on July 1 or are at the Effective Time of the
Merger "in the money") as set forth on Schedule 2.5(a) ("July 1 Derivatives"),
and excluding (y) all treasury shares, and (z) all other shares, rights to
acquire shares or other issuance commitments for shares of PCI Common Stock
that are not July 1 Shares or July 1 Derivatives, was 27,840,219 (the "PCI
Share Base"). The maximum value of Nextel Common Stock to be issued hereunder
at the Effective Time of the Merger with respect to (a) the PCI Share
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4
Base (without adjustment for any instrument that may have expired without
exercise, exchange or conversion into PCI Common Stock), and (b) any PCI Common
Stock, or options, warrants, convertible or exchangeable instruments or other
commitments to issue PCI Common Stock outstanding at the Effective Time of the
Merger that are not July 1 Shares or July 1 Derivatives (such additional PCI
Common Stock or issuance commitments, the "Dilutive PCI Common Equivalents";
and together with the PCI Share Base (without adjustment for any instrument
that may have expired without exercise, exchange or conversion into PCI Common
Stock), the "Actual PCI Common Equivalents") shall be $170,000,000 (the "Basic
Value Cap"). The maximum number of shares of Nextel Common Stock to be issued
hereunder at the Effective Time of the Merger shall be 8,782,403, subject to
adjustment only in the event Nextel elects to deliver additional shares to
avert a termination of this Agreement pursuant to Section 1.10, or for changes
to the capitalization of Nextel pursuant to Section 1.12.
1.2 Value Cap Adjusted for Channels Not Delivered. (a) If at the time of
the Closing (as defined herein) the number of Channels Delivered by PCI is (i)
less than 95% of the number of Channels set forth on Schedule 1.2 in any
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ("▇▇▇") identified on Schedule 1.2 (each such
MSA, a "Shortfall Market"), or (ii) fewer than 3,000 Channels with regard to
the market areas not listed on Schedule 1.2 (each such Channel, a "Non-core
Market Channel"), then (A) for each Shortfall Market the Channel value set
forth on Schedule 1.2 for that Shortfall Market shall be multiplied by the
difference
13
5
between the number of Channels set forth on Schedule 1.2 for that Shortfall
Market minus the number of Channels Delivered in that Shortfall Market and (B)
except as provided in Section 1.2(b)(iii), for the Non-core Market Channels,
the shortfall, if any, between 3,000 and the number of Non-core Market Channels
Delivered shall be multiplied by $3,000 (the product of each calculation, a
"Market Adjustment"). The sum of all such Market Adjustments shall be
subtracted from the Basic Value Cap.
(b) If the FCC (as defined herein) responds to PCI's filings for
rejustification of its extended implementation authority by granting PCI less
than twenty four (24) months from the date of such FCC response to construct
any Channel that had extended implementation authority (an "Unfavorable FCC
Response") then (i) each extended implementation channel identified on Schedule
2.27 ("Extended Implementation Channel") that received an Unfavorable FCC
Response and is located within 25 miles of an MSA will be deemed constructed as
required by clause 1.2(d)(iii) for purposes of determining whether such
Extended Implementation Channels are Delivered, and if all other criteria set
forth in Section 1.2(d) for that Channel to be Delivered have been met, such
Extended Implementation Channel (the "Qualifying Extended Implementation
Channel") will be counted toward the Channel targets set forth on Schedule
1.2(a), provided, however, that the total number of Qualifying Extended
Implementation Channels in any MSA shall not exceed the number of Extended
Implementation Channels for such MSA identified on Schedule 1.2, (ii) an amount
14
6
equal to the lesser of (A) $3,000,000, or (B) the product of $3,658 multiplied
by the number of Extended Implementation Channels receiving an Unfavorable FCC
Response, will be subtracted from the Basic Value Cap, and (iii) the target for
Non-core Market Channels shall be reduced from 3,000 to 1,800 and the
shortfall, if any, between 1,800 and the number of Non-core Market Channels
Delivered shall be multiplied by $5,000 to determine the Market Adjustment, if
any, for the Non-core Market Channels.
(c) If the FCC responds to PCI's filings for rejustification of its
extended implementation authority by granting PCI twenty-four (24) months or
more from the date of such response to construct any Extended Implementation
Channel, that Extended Implementation Channel will be deemed constructed as
required by clause 1.2(d)(iii) for purposes of determining whether such
Extended Implementation Channel is Delivered regardless of when the date of the
Closing occurs, so long as any postponements of the date of the Closing are not
caused by the action or inaction of PCI.
(d) A "Channel" shall be "Delivered" by PCI if at the Effective Time
of the Merger: (i) the FCC license for such channel has been granted to PCI or
a PCI Subsidiary by a Final Order (as defined herein); (ii) there is a Final
Order approving a transfer of control of that license to Nextel; (iii) if
unconstructed or deconstructed, there are at least 180 days remaining before
the construction or reconstruction deadline applicable to that channel; (iv) in
the case of a channel counted
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7
towards or applicable to an MSA market target, such channel is located within
25 miles of the core of the applicable MSA, except as otherwise provided on
Schedule 1.2; (v) in the case of a channel counted towards or applicable to an
MSA market target, there is no co-channel license located within 55 miles of
the channel, except for co-channel licenses that are PCI, PCI Subsidiaries, or
licenses controlled by Nextel, except as otherwise provided on Schedule 1.2;
(vi) the channel is either (x) a land mobile 800 MHz frequency, being one of
the 430 frequencies allocated for specialized mobile radio ("SMR"), or (y) a
frequency in an MSA identified on Schedule 1.2 and allocated for public safety,
industrial land transportation or business where the radio service
classification has been converted to commercial service classification (i.e.,
YX or GX radio service type) or (z) a frequency in a Non-core Market allocated
for public safety, industrial land transportation or business; (vii) the
channel is granted pursuant to a primary license; (viii) in the case of a
channel counted towards or applicable to an MSA market target, such channel is
a discrete frequency within the applicable market and not subject to any cross
border frequency sharing or channel coordination or similar arrangement, taking
into account all frequencies deemed Delivered pursuant to this Agreement in
that market; (ix) the license for or including the channel is not subject to
(A) any agreement to be sold to a third party, or (B) any option or right of
first refusal in favor of any third party; (x) there is no contract right of
any third party or FCC order otherwise encumbering or
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8
limiting the use of the license; (xi) no consideration is due to any person in
connection with the channel; and (xii) the channel is not subject to any
finders' preference action (other than the pending appeal of a favorable FCC
ruling) or otherwise included within any proceeding commenced or assessed by a
third party (other than Nextel) or any regulatory agency, including, without
limitation, the FCC, that could result in a take-back, termination,
cancellation or nonrenewal of the relevant licenses.
1.3 Value Cap Adjusted for Negative Cash Flow. If Adjusted EBITDA
Earnings for the period from April 1, 1996 to the last day of the calendar
quarter most recently ended before the Effective Time of the Merger is
negative, that amount shall be annualized (i.e. adjusted) to equal the loss
that PCI would have experienced in a 12-month period at that rate of loss, and
that annualized amount shall be subtracted from the Basic Value Cap. In the
event the Effective Time of the Merger is more than one year from the date of
the First Agreement, so long as any postponements of the date of the Closing
are not caused by the action or inaction of PCI, there shall be no value cap
adjustment pursuant to this Section 1.3. "Adjusted EBITDA Earnings" means
PCI's earnings from continuing operations as shown on the unaudited
consolidated financial statements that are prepared by PCI in the ordinary
course of business consistent with past practice, (a) before interest expense,
taxes, depreciation, amortization, other income and expense, all determined in
accordance with past practices, to the extent consistent with GAAP (as herein
defined), and (b) without reduction for reasonable accounting, legal, printing
17
9
and financial advisory fees, special employee incentive bonuses (as agreed to
by Nextel from time to time) and expenses associated with the Agreement and the
transactions contemplated hereby (the "Transaction Costs") so long as the
Transaction Costs in the aggregate for the period through and including the
Closing (regardless whether GAAP would reflect them in that period) do not
exceed $1,500,000, all determined in accordance with past practices, to the
extent consistent with GAAP.
1.4 Value Cap Adjusted for Negative Working Capital. (a) Based on the
unaudited consolidated balance sheet of PCI as of the month-end preceding the
Effective Time of the Merger prepared by PCI in the ordinary course of
business, consistent with past practices, if the working capital (herein
defined) of PCI is negative, the negative amount of such working capital shall
be subtracted from the Basic Value Cap. The terms used in this Section shall
have the meaning given to those terms in current use in the accounting
profession in the United States under Generally Accepted Accounting Principles
("GAAP"). For the purposes of this Section, with the exceptions herein listed,
working capital shall mean the result obtained by subtracting current
liabilities from current assets.
(b) For purposes of calculating working capital pursuant to this
Section, (i) the long term portion of the long term debt of PCI shall be
included in the current liabilities; (ii) all accounts and/or notes receivable
from the five executive officers of PCI shall be excluded from the current
assets; (iii) discounts on notes payable shall be excluded from the current
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liabilities (thus increasing current liabilities); (iv) both (A) the
Transaction Costs that were paid on or before the period reflected on the
balance sheet, and (B) the Transaction Costs that have not been paid on or
before the period reflected on the balance sheet (regardless whether GAAP would
reflect them as current liabilities as of that date) shall, up to an aggregate
maximum for all amounts under this clause (iv) of $1,500,000, be excluded from
the current liabilities; (v) all severance costs that have been incurred or are
estimated to be incurred as a result of the Merger and change of control
effected thereby shall be included in the current liabilities of PCI under the
provisions of this Section (regardless whether GAAP would reflect them as
current liabilities as of that date); (vi) any cash advanced by Nextel pursuant
to Section 6.6 and any expenditures of those funds shall be excluded from
either current assets or current liabilities, as applicable; and (vii) any cash
that was received upon the exercise of any July 1 Derivatives (as those
instruments were in effect on July 1, 1996) prior to the Effective Time of the
Merger will be excluded from current assets.
1.5 Value Cap Adjusted for Option/Warrant Exercise. If at the Effective
Time of the Merger, PCI (on a consolidated basis) does not have cash in an
amount equal to the aggregate exercise price or other consideration due upon
exercise, exchange or conversion under the terms of the July 1 Derivatives (as
those instruments were in effect on July 1, 1996) exercised prior to the
Effective Time of the Merger, or has issued any shares of PCI
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11
Common Stock in respect of any July 1 Derivatives in any cashless exercise
transaction, the Basic Value Cap shall be reduced by the difference between the
amount of cash that should have been received upon such exercise and the actual
amount of cash received upon such exercise and held at the Effective Time of
the Merger.
1.6 Value Cap Adjusted for Severance Amounts. If the aggregate amount
paid or to be paid or other value given to the five executives identified in
Section 5.6(b) as described therein whether pursuant to existing commitments or
otherwise, excluding (i) bonuses earned in 1996 or debt forgiven in 1996 up to
an aggregate of $222,871, and (ii) bonuses earned in 1997 up to 35% of the
salary of each such executive as in effect on the date of the First Agreement,
prorated through the date of the Closing, exceeds $1,260,000, then the amount
of such excess shall be subtracted from the Basic Value Cap.
1.6A Settlement with Castle Tower. Prior to Closing, PCI shall enter
into a settlement and release agreement with Castle (as defined below) pursuant
to which Castle shall settle and release all claims arising under the Castle
Purchase Agreement (as defined below).
1.7 Value Cap Adjusted if Closing Occurs After 1997. For purposes of the
exchange ratio adjustments, if any, to be made pursuant to Sections 1.8 and
1.9, if the date of the Closing occurs after December 31, 1997, then, so long
as any
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postponements of the date of the Closing are not caused by the action or
inaction of PCI, any adjustments made to the Basic Value Cap pursuant to
Sections 1.2, 1.4, 1.5 and 1.6 shall be reduced to equal one half of the
adjustments otherwise calculated pursuant to those Sections.
1.8 Asset Value and Dilution Adjustments to Exchange Ratio. If there are
any reductions to the Basic Value Cap under Section 1.2, 1.3, 1.4, 1.5, 1.6 or
1.7 or if there are any Dilutive PCI Common Equivalents at the Effective Time
of the Merger then, in lieu of the Basic Exchange Ratio set forth in Section
1.1, the exchange ratio shall equal:
(i) 3.17; multiplied by
(ii) the quotient of (A) the Basic Value Cap of $170,000,000,
divided by (B) the Basic Value Cap minus the sum of any
reductions pursuant to Sections 1.2, 1.3, 1.4, 1.5 and 1.6,
or, if Section 1.7 is applicable, one-half of such sum (the
"Adjusted Value Cap"); multiplied by
(iii) the quotient of (Y) the Actual PCI Common Equivalents,
divided by (Z) the PCI Share Base.
1.9 Value Cap Adjustment. If, at the Effective Time of the Merger:
(a) (i) the PCI Share Base, or, if higher, (ii) the Actual PCI
Common Equivalents; divided by
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(b) (i) the Basic Exchange Ratio of 3.17 or, if Section 1.8 applies,
(ii) the exchange ratio calculated under Section 1.8; multiplied
by
(c) the Nextel Closing Price,
is greater than the lower of (y) the Basic Value Cap, or (z) the Adjusted Value
Cap, then the exchange ratio shall be further adjusted to equal:
(A) (i) the PCI Share Base, or, if higher, (ii) the Actual PCI
Common Equivalents; multiplied by
(B) the Nextel Closing Price; divided by
(C) (i) the Basic Value Cap, or, if lower, (ii) the Adjusted Value
Cap.
1.10 Additional Consideration in Lieu of Termination. (a) If the Board of
Directors of PCI has elected (as contemplated by Section 9.1(d)(iv)) to
terminate this Agreement because the Nextel Closing Price on the day before the
scheduled date of the Closing is less than $14.00, Nextel may elect to deliver
shares of Nextel Common Stock with an aggregate value, based on the Nextel
Closing Price on the day of the Closing equal to the product of (i) $14,
multiplied by (ii) the total number of shares of Nextel Common Stock that would
be issued or issuable with respect to Actual PCI Common Equivalents as
otherwise determined under this Article I (the "Value Floor").
(b) If Nextel makes the election contemplated by Section 1.10(a),
then: (i) the termination election made by the PCI Board of Directors under
Section 9.1(d)(iv) shall be automatically rescinded and cancelled; (ii) the
Merger shall
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proceed pursuant to this Agreement; and (iii) in lieu of the exchange ratio set
forth in Section 1.1 or calculated and adjusted under Section 1.8 or 1.9, the
Actual PCI Common Equivalents shall be converted into shares of Nextel Common
Stock in the ratio that (i) Actual PCI Common Equivalents, bears to (ii) the
quotient of the Value Floor divided by the Nextel Closing Price on the date of
the Closing.
1.11 Nextel Closing Price. As used in this Agreement, the "Nextel Closing
Price" shall be the arithmetic average of the closing sales price for Nextel
Common Stock on the Nasdaq National Market (the "Nasdaq NM") for the 20 trading
days immediately preceding the date on which the Nextel Closing Price is to be
determined.
1.12 Other Adjustments. Nextel and PCI agree that in the event of any
change in the terms of the authorized capital stock of Nextel (other than a
change solely in the number of shares), or the declaration or payment of any
share dividend or share distribution by Nextel to its stockholders, or any
distribution of cash, property or securities by Nextel to its stockholders
(other than regular quarterly cash dividends payable out of earnings), or any
split, reclassification, recapitalization, subdivision or exchange in respect
of the outstanding stock of Nextel, then appropriate adjustments shall be made
to the number of shares of Nextel Common Stock issuable in the Merger, as set
forth in Section 1.1, to place each of Nextel, NFC, and Merger Sub, PCI and the
holders of PCI Common Stock in the same posture as if the Effective Time of the
Merger had occurred immediately
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prior to the occurrence of the event giving rise to such adjustment. Further,
Nextel and PCI agree that in the event of any change in the terms of the
authorized capital stock of PCI, or any distribution of securities by PCI to
its stockholders, or any split, reclassification, recapitalization, subdivision
or exchange in respect of the outstanding stock of PCI, appropriate adjustments
shall be made to place each of Nextel, Merger Sub, PCI and the holders of PCI
Common Stock in the same posture as if the Effective Time of the Merger had
occurred immediately prior to the occurrence of the event giving rise to such
adjustment. No adjustment shall be made pursuant to the preceding sentence for
redemptions, repurchases or other cancellation or retirement of outstanding
shares of PCI Common Stock or rights to acquire shares of PCI Common Stock.
1.13 Terms of the Merger. Upon the terms and subject to the conditions
set forth herein, and in accordance with the General Corporation Law of the
State of Delaware ("GCL"), as soon as practicable following the satisfaction
(or, to the extent permitted, the waiver) of the conditions set forth in
Article VIII, Merger Sub and PCI shall cause a Certificate of Merger (the
"Certificate of Merger") to be executed and filed with the Secretary of State
of Delaware as provided in Section 251 of the GCL. The Certificate of Merger
shall provide that Merger Sub shall be merged with and into PCI (the "Merger").
Following the Merger, PCI shall continue as the surviving corporation (the
"Surviving Corporation").
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1.14 Effective Time; Effects of the Merger. The Merger shall become
effective when both (a) this Agreement shall be adopted and approved by the
stockholders of PCI in accordance with the applicable provisions of the GCL and
(b) the Certificate of Merger, executed in accordance with the relevant
provisions of the GCL, is filed with the Secretary of State of Delaware (the
time the Merger becomes effective being referred to as the "Effective Time of
the Merger"). Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time of the Merger: the separate existence of Merger
Sub shall cease; the Surviving Corporation shall possess all assets and
property of every description, and all interests therein, wherever located, and
the rights, privileges, immunities, powers, franchises and authority, of a
public as well as of a private nature, of each of Merger Sub and PCI (the
"Constituent Corporations"); all obligations belonging to or due each of the
Constituent Corporations shall be vested in, and become the obligations of, the
Surviving Corporation without further act or deed; title to any real estate or
any interest therein vested in either of the Constituent Corporations shall not
revert or in any way be impaired by reason of the Merger; all rights of
creditors and all liens upon any property of any of the Constituent
Corporations shall be preserved unimpaired, and the Surviving Corporation shall
be liable for all of the obligations of each of the Constituent Corporations;
and any claim existing, or action or proceeding pending, by or against either
of the Constituent
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Corporations may be prosecuted to judgment with right of appeal, as if the
Merger had not taken place.
1.15 Certificate of Incorporation and Bylaws. The Certificate of
Incorporation of Merger Sub as in effect immediately preceding the Effective
Time of the Merger shall constitute the Certificate of Incorporation of the
Surviving Corporation (the "Certificate of Incorporation") within the meaning
of the GCL Section 104. The By-Laws of Merger Sub as in effect immediately
preceding the Effective Time of the Merger shall constitute the By-Laws of the
Surviving Corporation (the "By-Laws") until amended in accordance with
applicable law and the Certificate of Incorporation.
1.16 Directors and Officers. The directors and officers of Merger Sub
immediately prior to the Effective Time of the Merger shall be the directors
and officers of the Surviving Corporation at the Effective Time of the Merger
and shall hold office from the Effective Time of the Merger until their
respective successors are duly elected or appointed and qualified in the
manner provided in the Certificate of Incorporation and By-Laws of the
Surviving Corporation, or as otherwise provided by law.
1.17 Exchange Agent. Prior to the Effective Time of the Merger, Nextel
shall designate a bank or trust company to act as exchange agent in the Merger
(the "Exchange Agent"). Prior to the Effective Time of the Merger, Nextel
shall contribute to NFC the shares of Nextel Common Stock necessary to make
payment for each share of the capital stock of PCI being converted by reason of
the Merger. Immediately thereafter, NFC shall contribute such
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18
shares of Nextel Common Stock to Merger Sub and Merger Sub will immediately
prior to or at the Effective Time of the Merger deliver to the Exchange Agent
such shares of Nextel Common Stock.
1.18 Surrender of Certificates and Delivery of Merger Consideration.
(a) Promptly after the Effective Time of the Merger, Nextel shall
cause the Exchange Agent to mail to each holder of record of a certificate or
certificates that immediately prior to the Effective Time of the Merger
represented outstanding shares of PCI 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 proper
delivery of the Certificates to the Exchange Agent and shall be in form
approved by Nextel and the Exchange Agent) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for certificates
representing shares of Nextel Common Stock and cash for fractional shares.
Upon surrender to the Exchange Agent of a Certificate or Certificates, together
with a letter of transmittal duly executed (in the approved form), and such
other documents as the Surviving Corporation or the Exchange Agent may
reasonably request, a holder of a Certificate shall be entitled to receive in
exchange therefor a portion of Nextel Common Stock as set forth in Section 1.1,
as adjusted pursuant to this Article I (the "Merger Consideration").
(b) The stock transfer books of PCI shall be closed at the Effective
Time of the Merger and no transfer of capital stock
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of PCI outstanding prior to the Effective Time of the Merger shall be
registered on the stock transfer books of the Surviving Corporation. If Nextel
Common Stock is to be issued to a person other than the person in whose name
the Certificates are registered, it shall be a condition of issuance that the
Certificates surrendered shall be properly endorsed or otherwise in proper form
for transfer and that the person requesting such issuance shall pay all
transfer and other taxes required by reason of the receipt by a person other
than the registered holder of the Certificates surrendered, or establish to the
reasonable satisfaction of the Surviving Corporation or the Exchange Agent that
such tax has been paid or is not applicable.
(c) At any time following ninety days after the Effective Time of
the Merger, Nextel shall be entitled to require the Exchange Agent to deliver
to Nextel any Nextel Common Stock which had been made available to the Exchange
Agent by or on behalf of Nextel or the Surviving Corporation and which has not
been disbursed to holders of Certificates, and thereafter such holders shall be
entitled to look to Nextel (subject to abandoned property, escheat or other
similar laws) only as general creditors thereof with respect to the Nextel
Common Stock payable upon due surrender of their Certificates. Notwithstanding
the foregoing, Nextel shall not be liable to a holder of Certificates for
amounts delivered to a public official pursuant to any applicable abandoned
property, escheat or similar laws. Nextel shall pay all charges and expenses,
including those of the Exchange Agent, in connection with the exchange of
shares.
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(d) If any Certificates shall not have been surrendered prior to one
year after the Effective Time of the Merger (or immediately prior to such
earlier date on which any payment in respect thereof would otherwise escheat to
or become the property of any governmental unit or agency), the payment in
respect of such Certificates shall, to the extent permitted by applicable law,
become the property of Nextel, free and clear of all claims of interest of any
person previously entitled thereto.
(e) Certificates, if and when presented to the Exchange Agent or the
Surviving Corporation after the Effective Time of the Merger, shall be
cancelled and exchanged for the consideration provided for, and in accordance
with, the procedures set forth in this Section.
1.19 No Fractional Shares. Notwithstanding any other provision of this
Agreement (but subject to the final sentence of this Section 1.19), no
fractional share of Nextel Common Stock or certificates or scrip therefor shall
be issued as a result of the conversion of issued and outstanding capital stock
of PCI into Nextel Common Stock, but in lieu of each fractional interest there
shall be made a payment in cash therefor, without interest, at a pro rata price
based on the Nextel Closing Price. The Surviving Corporation shall provide (or
shall cause one or more of its Affiliates to provide) the Exchange Agent with
sufficient cash to make such payments, and, thereafter, the Surviving
Corporation shall cause the Exchange Agent to make such payments to the holders
of Certificates in cash, without interest, on the surrender of their
Certificates. Wherever in this Agreement it
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21
is contemplated that, in connection with the Merger, cash payment shall be made
in lieu of fractional share interests to persons otherwise entitled to receive
such fractional share interests, Nextel may (in its sole and absolute
discretion) deliver to such persons a number of whole shares, determined by
rounding up to the nearest whole share, and thereupon shall be relieved of any
obligation hereunder to make cash payments to such persons in lieu of any
fractional share interests.
1.20 Rights of Holders of Certificates.
(a) At the Effective Time of the Merger, the holders of Certificates
for shares of capital stock of PCI (other than certificates representing shares
held in PCI's treasury, which shall be automatically cancelled pursuant to the
Merger) shall cease to have any rights as stockholders of PCI, and their sole
rights shall pertain to the shares of Nextel Common Stock into which their
shares of PCI capital stock shall have been converted by the Merger. After the
Effective Time of the Merger, each holder of outstanding Certificates for
shares of capital stock of PCI shall be entitled upon surrender of the same
duly transmitted to the Exchange Agent to receive in exchange therefor
certificates representing the number of whole shares of Nextel Common Stock
into which such holder's shares of capital stock of PCI shall have been
converted by the Merger, plus (if applicable) cash in lieu of fractional
shares.
(b) Pending surrender and exchange under this Agreement, a holder's
Certificates for capital stock of PCI shall be deemed for all corporate
purposes, other than the payment of
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dividends, to evidence the number of whole shares of Nextel Common Stock into
which such shares have been converted by the Merger and, subject to the last
sentence of Section 1.19, the right to receive cash for any fractional
interests resulting therefrom. Subject to Section 1.18(d), unless and until
any outstanding Certificates for shares of PCI capital stock are surrendered,
no dividend (stock or cash) payable to holders of record of Nextel Common Stock
as of any date subsequent to the Effective Time of the Merger shall be paid to
the holder of any such Certificate, but upon such surrender of such
Certificates there shall be paid to the record holder of the certificate for
Nextel Common Stock issued in exchange therefor the amount of dividends, if
any, but without interest, that have theretofore become payable subsequent to
the Effective Time of the Merger with respect to the number of whole shares of
Nextel Common Stock represented by the certificate issued upon such surrender
and exchange.
1.21 Assumption of Stock Options.
(a) Schedules 2.5(a) and 2.5(b) set forth a list of each director
and employee stock option outstanding on the date of the First Agreement,
whether or not fully exercisable (collectively, the "PCI Stock Options"), to
purchase PCI Common Stock heretofore granted or assumed by PCI pursuant to any
stock option, stock purchase or similar plan adopted, assumed or maintained at
any time by PCI, any of its controlled Affiliates or any of their respective
predecessors in interest, including but not limited to the PCI 1993 Stock
Option Plan, the PCI 1994
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Non-Employee Director Stock Option Plan, the PCI 1996 Stock Option Plan, and
the PCI 1996 Non-Employee Director Stock Option Plan, each as amended and in
effect on the date of the First Agreement (collectively the "PCI Option
Plans"). Schedules 2.5(a) and 2.5(b) also set forth with respect to each PCI
Stock Option the option exercise price, the number of shares subject to the
option, any related stock appreciation rights, the dates of grant, vesting,
exercisability and expiration of the option and whether the option is an
incentive stock option or a non-qualified stock option. All rights under the
PCI Stock Options shall be treated as provided in this Section 1.21, and to the
extent the terms of the PCI Option Plans and/or of any related agreements are
inconsistent with the treatment to be accorded to the PCI Stock Options
pursuant to this Section 1.21, then PCI shall cause the PCI Option Plans and/or
any related agreements with affected participants to be amended, and all
required third party, governmental and regulatory body consents or approvals to
such amendments to be procured, such that all such inconsistencies shall be
eliminated by the Effective Time of the Merger.
(b) Each PCI Stock Option outstanding immediately prior to the
Effective Time of the Merger shall be converted at the Effective Time of the
Merger into an issued and outstanding option of Nextel in accordance with the
terms of the PCI Option Plans, so that (i) from and after the Effective Time of
the Merger, each such PCI Stock Option may be exercised only for shares of
Nextel Common Stock notwithstanding any contrary
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provision of the PCI Option Plans or stock option agreements executed in
connection therewith, (ii) each such PCI Stock Option shall at the Effective
Time of the Merger become an option to purchase a number of shares of Nextel
Common Stock equal to the quotient arrived at by dividing the number of shares
of PCI Common Stock subject to such option immediately prior to the Effective
Time, by the Basic Exchange Ratio, as adjusted pursuant to Article I
("Converted Nextel Shares"), and (iii) the exercise price per share of Nextel
Common Stock at which each such PCI Stock Option is exercisable shall be the
amount (rounded up to the next whole cent) arrived at by multiplying the
exercise price per share of PCI Common Stock at which such PCI Stock Option is
exercisable immediately prior to the Effective Time by the Basic Exchange
Ratio, as adjusted pursuant to Article I (the "Converted Per Share Price");
provided, however, that, notwithstanding the foregoing, Nextel shall not issue
or pay for any fractional share otherwise issuable upon any exercise by any
holder of PCI Stock Options that are so converted, and provided further,
however, that in the case of each PCI Stock Option which is an incentive stock
option, the Basic Exchange Ratio shall be adjusted for such option, if
necessary, so as not to constitute a modification, extension or renewal of the
option, within the meaning of Section 424(h) of the Code. All PCI Stock
Options converted into issued and outstanding options of Nextel pursuant to the
preceding sentence, except those PCI Stock Options held by directors who are
not also employees or consultants of PCI or any of its subsidiaries, shall be
so converted into issued and outstanding
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options under Nextel's Amended and Restated Incentive Equity Plan, as amended
May 13, 1996 (the "Nextel Plan").
(c) The Board of Directors of PCI and/or of the Surviving Corporation,
as appropriate, shall take such action as may be required under the PCI Option
Plans and the Compensation Committee of the Board of Directors of Nextel shall
take such action as may be required under the Nextel Plan to effectuate the
foregoing. Prior to the Effective Time of the Merger, Nextel shall reserve for
issuance the number of shares of Nextel Common Stock necessary to satisfy the
obligations of Nextel under this Section 1.21, and within five (5) business
days after the Effective Time of the Merger, Nextel shall register such shares
pursuant to the Securities Act of 1933, as amended (the "Securities Act").
Prior to the Effective Time of the Merger, PCI, and thereafter the Surviving
Corporation, as may be appropriate, shall take such actions as are necessary to
effect the provisions of this Section 1.21 and to preserve for the holders of
PCI Stock Options the benefits to be provided pursuant to this Section 1.21.
Notwithstanding anything in this Section 1.21(c), neither PCI nor Nextel shall
have any liability for failing to take (or to cause to be taken) actions in
respect of any stock option plan or related agreement that would violate (in
any material respect) the terms thereof or would be prohibited by applicable
law.
1.22 Warrants. At the Effective Time of the Merger, PCI's outstanding
warrants (the "Warrants") to purchase shares of PCI Common Stock shall be
assumed by Nextel. Each Warrant shall
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thereafter evidence a warrant to purchase the number of shares of Nextel Common
Stock into which the number of shares of PCI Common Stock issuable pursuant to
such Warrant would have been converted in the Merger at an exercise price per
share equal to the amount (rounded up to the next whole cent) arrived at by
dividing the aggregate exercise price under such Warrant by the number of
shares of Nextel Common Stock purchasable thereunder, unless exchanged at the
Closing for warrants of Nextel pursuant to agreements with the warrant holders
as described in the Recitals or as contemplated by Section 5.4.
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF PCI
PCI represents and warrants to Nextel that:
2.1 Corporate Organization.
(a) PCI has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware and has
the corporate power and authority to own or lease its properties and to conduct
its business as it has been and is now being conducted. The copies of the
Certificate of Incorporation of PCI, certified by the Secretary of the State of
Delaware, and its By-Laws, certified by the Secretary of PCI, previously
delivered by PCI to Nextel, are true, correct and complete.
(b) The subsidiaries of PCI are listed on the Schedules with
reference to this Section (collectively, the "Subsidiaries"). Each of the
Subsidiaries has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of its incorporation,
as set
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forth on the Schedules with reference to this Section and has the corporate
power and authority to own or lease its properties and to conduct its business
as it has been and is now being conducted. The copies of the Certificate of
Incorporation of each Subsidiary, certified by the Secretary of State of the
state of its incorporation, and its By-Laws, certified by such Subsidiary's
Secretary, previously delivered by PCI to Nextel, are true, correct and
complete.
(c) PCI and each Subsidiary are duly licensed or qualified and in
good standing as a foreign corporation in all jurisdictions identified on the
Schedules with reference to this Section and such jurisdictions are the only
ones in which their ownership of property or the character of their activities
is such as to require them to be so licensed or qualified.
2.2 Subsidiaries and Other Entities.
(a) All the outstanding capital stock of each Subsidiary is duly
authorized, validly issued, fully paid and nonassessable. PCI owns all the
issued and outstanding capital stock of each Subsidiary. Except as set forth
on the Schedules with reference to this Section, PCI holds all the issued and
outstanding capital stock of each Subsidiary free and clear of any mortgage,
pledge, security interest, encumbrance, lien, claim or charge of any kind. As
of the Closing, PCI shall hold all the issued and outstanding capital stock of
each Subsidiary free and clear of any mortgage, pledge, security interest,
encumbrance, lien, claim or charge of any kind.
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(b) There are no warrants, options, subscriptions, other convertible
instruments, and no commitments, obligations, or agreement (whether firm or
conditional) pursuant to which PCI or any Subsidiary is or may be obligated to
issue, transfer, deliver or sell shares of capital stock of any Subsidiary or
other securities of any Subsidiary.
(c) Except for the Subsidiaries, and except as set forth in the
Schedules with reference to this Section, none of PCI or the Subsidiaries has
any direct or indirect subsidiaries, nor do any of them own, directly or
indirectly, any partnership, equity, profit, participation or similar ownership
interest in any corporations, partnerships, joint ventures, trusts,
unincorporated organizations, associations or similar entities.
2.3 Corporate Authorization.
(a) The Board of Directors of PCI, by unanimous vote of all
directors at a meeting duly called and held, has (i) determined that the Merger
is fair to and in the best interests of the stockholders of PCI and (ii)
resolved to submit this Agreement to and recommend approval of this Agreement
by the stockholders of PCI.
(b) PCI has all necessary corporate power and authority to enter
into this Agreement and to perform all of the obligations to be performed by it
hereunder. The execution, delivery and performance of this Agreement by PCI
has been duly authorized by PCI, and, upon the execution and delivery hereof
by, respectively, Nextel, NFC and Merger Sub, this Agreement will constitute
the valid and legally binding obligations of PCI,
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enforceable against PCI in accordance with its terms, except as enforceability
thereof may be limited by applicable bankruptcy, reorganization, insolvency or
other similar laws affecting creditors' rights generally, by equitable
principles of general applicability with respect to the availability of
equitable remedies, or by public policies applicable to securities laws.
(c) The Board of Directors of PCI received an opinion of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), its financial advisor, at or
before the Board meeting (prior to the approval vote) described in Section
2.3(a) above, to the effect that the consideration to be received by PCI's
stockholders in the Merger is fair to the stockholders from a financial point
of view. PCI has provided Nextel with a correct and complete copy of the
engagement letter between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and PCI.
2.4 Capital Stock. The entire authorized capital stock of PCI consists
solely of 50,000,000 shares of PCI Common Stock, of which 26,162,225 shares are
issued and outstanding as of the date of the First Agreement, and 1,000,000
shares of preferred stock, par value $.01 per share, none of which are issued
or outstanding. All of the outstanding shares of PCI Common Stock (and any
shares issuable pursuant to presently outstanding options, if exercised and
purchased at the applicable exercise price) were duly authorized and will be,
when issued and the option price paid (if applicable), validly issued, fully
paid and nonassessable. Except as set forth in the Schedules with reference to
this Section, none of the capital stock or other securities of PCI is entitled
or subject to preemptive rights or
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registration rights. Other than the requisite vote of PCI stockholders to
consummate the Merger, the authorization or consent of no person is required in
order to consummate the transactions contemplated herein by virtue of any such
person having an equitable or beneficial interest in the PCI Common Stock.
Except as set forth on the Schedules with reference to this Section, there are
not now, and at the Effective Time of the Merger there will not be, any voting
trusts or other agreements or understandings to which PCI is a party or is
bound with respect to the voting of PCI Common Stock. To the knowledge of PCI,
all outstanding shares of PCI Common Stock were offered, sold and issued in
compliance with all applicable laws and regulations.
2.5 Options. (a) PCI has set forth on the Schedules with reference to
this Section all warrants, options, subscriptions and other convertible
instruments or agreements pursuant to which PCI was obligated as of July 1,
1996 to issue, transfer, deliver or sell shares of PCI Common Stock and the
exercise or purchase price of each such warrant, option, subscription,
convertible instrument or agreement. Except as set forth in the Schedules with
reference to this Section, as of July 1, 1996, no options or warrants to
purchase shares of PCI Common Stock have ever been granted, except for employee
options that have been exercised or have terminated without exercise prior to
July 1, 1996, pursuant to the terms of the respective PCI Option Plans. Except
as set forth in the Schedules with reference to this Section, as of July 1,
1996, there were no commitments or obligations of PCI, either
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firm or conditional, to issue, deliver or sell, whether under offers, stock
option agreements, stock bonus agreements, stock purchase plans, incentive
compensation plans, warrants, conversion rights or otherwise, any authorized
but unissued shares, or treasury shares, of PCI Common Stock or other
securities of PCI.
(b) PCI has set forth on the Schedules with reference to this
Section all warrants, options, subscriptions and other convertible instruments
or agreements pursuant to which PCI was or is obligated as of July 1, 1996, as
of the date hereof, and as of the Closing to issue, transfer, deliver or sell
shares of PCI Common Stock, which are not set forth on Schedule 2.5(a).
Additionally, set forth on such Schedule with reference to this Section are the
exercise or purchase price of each warrant, option, subscription, convertible
instrument or agreement set forth thereon.
2.6 Compliance with Laws. Except for matters that individually and in
the aggregate will not have a material adverse effect on the business,
financial condition, results of operations, liabilities or assets of PCI and
its Subsidiaries, taken as a whole, and that will not impair PCI's ability to
perform, in any material respect, its obligations under this Agreement or any
other document or instrument to which PCI is a party in connection with the
transactions contemplated herein, or as set forth in the Schedules with
reference to this Section, to the knowledge of PCI, (i) neither PCI nor any
Subsidiary is currently in violation (nor is any of them currently liable or
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otherwise currently responsible with respect to prior violations) of any
statute, law or regulation applicable to any of their presently or formerly
owned properties or to the conduct of their current or past businesses; (ii)
none of the processes followed, results obtained, services provided or products
made, modified or installed by any of them (in the ordinary course of their
businesses or otherwise), or by any managers with respect to SMR Licenses (as
defined herein) held by any of PCI or its Subsidiaries (pursuant to Third Party
Management Agreements (as defined herein) or otherwise) or by PCI or its
Subsidiaries in the management or operation of SMR Licenses managed by any of
them (pursuant to PCI Management Agreements or otherwise), violate any statute,
law or regulation applicable thereto; (iii) none of (a) the businesses of PCI
or any Subsidiary, (b) the processes, results, services or products performed,
sold or otherwise made available by PCI or any Subsidiary, (c) the processes,
results, services or products performed, sold or otherwise made available by
any manager with respect to SMR Licenses held by PCI or any Subsidiary
(pursuant to Third Party Management Agreements or otherwise) or (d) the
processes, results, services or products performed, sold or otherwise made
available by PCI or any Subsidiary in the management or operation of SMR
Licenses managed by any of them (pursuant to PCI Management Agreements or
otherwise) violates any applicable law or regulation relating to air, water or
noise pollution or employee health and safety or the production, storage,
labeling, transportation or disposition of solid waste or hazardous or
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toxic substances; (iv) PCI, its Subsidiaries, each of the managers with respect
to SMR Licenses held by PCI or a Subsidiary, and PCI and its Subsidiaries in
their capacities as managers under PCI Management Agreements, has each timely
obtained all licenses and permits and timely filed all reports required to be
filed under any such applicable laws or regulations; (v) neither PCI, its
Subsidiaries nor any other person has stored, dumped or otherwise disposed of
any chemical substances, including any "Hazardous Substances," "Pollutants" or
"Contaminants" (as such terms are defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA")) on,
beneath or about any of the properties of PCI or its Subsidiaries; (vi) none of
PCI, its Subsidiaries or any of their respective managers (with respect to SMR
Licenses held by PCI or a Subsidiary) has received written notice that it is a
"potentially responsible party" under any environmental law or of any violation
of any environmental, zoning or other land use ordinance, law or regulation
relating to the operation of its or their businesses, or to any of the
processes followed, results obtained, services provided or products made,
modified or installed (in the ordinary course of its or their businesses or
otherwise), including, but not limited to, the Toxic Substances Control Act of
1976, as amended, the Resource Conservation Recovery Act of 1976, as amended,
the Clean Air Act, as amended, the Federal Water Pollution Control Act, as
amended, CERCLA or the Occupational Safety and Health Act of 1970, as amended,
nor are PCI and any Subsidiary aware of any such violation. PCI has
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listed in the Schedules with reference to this Section all environmental
reports known to PCI or its Subsidiaries relating to any owned or leased real
property of PCI or its Subsidiaries and has previously delivered to Nextel a
true, correct and complete copy of each report so listed.
2.7 No Conflict. Except as set forth in the Schedules with reference to
this Section and subject to the adoption and approval of this Agreement by the
stockholders of PCI, the execution and delivery of this Agreement by PCI and
the consummation of the transactions contemplated hereby do not, and will not
constitute an event which, after notice or lapse of time or both would (a)
violate any provision of, or result in the breach of, or accelerate or permit
the acceleration of the performance required by: (i) the terms of, any
applicable law, rule or regulation of any governmental body, except where any
such violation, breach, acceleration, termination or creation, individually or
in the aggregate, would not have a material adverse effect upon the business,
financial condition, results of operation, liabilities or assets of PCI and the
Subsidiaries, taken as a whole, and would not impair PCI's ability to perform,
in any material respect, its obligations under this Agreement or any other
document or instrument to which PCI is a party in connection with the
transactions contemplated herein, (ii) the Certificate of Incorporation or
By-Laws of PCI or any Subsidiary; (iii) any indenture, material agreement, or
other material instrument to which PCI or any Subsidiary is a party or by which
PCI or any Subsidiary may be bound; or (iv) any order, judgment
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or decree applicable to any of them, except where any such violation, breach,
acceleration, termination, creation or order, individually or in the aggregate,
would not have a material adverse effect upon the business, financial
condition, results of operation, liabilities or assets of PCI and the
Subsidiaries, taken as a whole, and would not impair PCI's ability to perform,
in any material respect, its obligations under this Agreement or any other
document or instrument to which PCI is a party in connection with the
transactions contemplated herein, or (b) terminate or result in the termination
of any indenture, material agreement or other material instrument, or result in
the creation of any lien, charge or encumbrance upon any of the properties or
assets of PCI or any Subsidiary under any agreement to which any of them is a
party, except where any such violation, breach, acceleration, termination or
creation, individually or in the aggregate, would not have a material adverse
effect upon the business, financial condition, results of operation,
liabilities or assets of PCI and the Subsidiaries, taken as a whole, and would
not impair PCI's ability to perform, in any material respect, its obligations
under this Agreement or any other document or instrument to which PCI is a
party in connection with the transactions contemplated herein.
2.8 Litigation. Except as set forth in the Schedules with reference to
this Section, there are no actions, suits, proceedings, claims or
investigations formally instituted and pending or, to the knowledge of PCI and
its Subsidiaries, threatened against or specifically affecting PCI or any
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36
Subsidiary or involving any of their properties or assets, at law or in equity,
or before or by any Federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, or
any arbitration panel or alternative dispute resolution body, except where the
outcome of any such actions, suits, proceedings, claims or investigations,
individually or in the aggregate, would not have a material adverse effect upon
the business, financial condition, results of operation, liabilities or assets
of PCI and the Subsidiaries, taken as a whole, and would not impair PCI's
ability to perform, in any material respect, its obligations under this
Agreement or any other document or instrument to which PCI is a party in
connection with the transactions contemplated herein. Except as set forth in
such Schedule, neither PCI nor any Subsidiary is subject to or is in default
under, any order, writ, injunction or decree of any court or Federal, state,
municipal or other governmental department, commission, board, bureau, agency
or instrumentality, or any arbitration panel or alternative dispute resolution
body.
2.9 Insurance. Set forth in the Schedules with reference to this Section
is a list of (a) all insurance policies held by PCI or any Subsidiary
(indicating the insurer, type, amount and term of coverage, deductible,
description of vehicles, latest property insurable values by location (100%
replacement value), workers' compensation payroll (separately for clerical,
sales and technical employees), and additional named insureds with respect to
each such policy); and (b) to the knowledge of PCI, all
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claims pending under any of such insurance policies. Except as set forth in
such Schedule, all of these policies are in full force and effect and all
premiums due thereon have been paid or accrued and there are no retroactive
experience-based premium adjustment features in any policy.
2.10 Intellectual Property. Except for the name of PCI and except as set
forth in the Schedules with reference to this Section, to the knowledge of PCI,
there are no patents or patent applications; trademarks, service marks, trade
dress, trade names, corporate names or any applications to register any of the
foregoing marks or names; copyrights or copyright registrations; or any
licenses, other than software licenses acquired solely through the purchase of
the underlying software, to or from third parties with respect to any of the
foregoing (including, without limiting the generality of the foregoing, all
computer software, data and documentation) relating to PCI's or the
Subsidiaries' business as now conducted or as presently proposed to be
conducted. To the knowledge of PCI, except as set forth in the Schedules with
reference to this Section, (i) neither of PCI nor any Subsidiary has infringed,
misappropriated or otherwise conflicted with any proprietary rights of any
third parties; (ii) PCI is not aware of any infringement, misappropriation or
conflict which will occur as a result of the continued operation of PCI's or
the Subsidiaries' business as now conducted or as presently proposed to be
conducted; and (iii) neither PCI nor any Subsidiary has received any notices of
any infringement or misappropriation from any third party.
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2.11 Assets. PCI has delivered to Nextel a Schedule (which makes
reference to this Section) that lists all fixed capital assets owned by PCI
(including, without limitation, all repeater and ancillary equipment necessary
for the operation of the business of PCI, all assets located at each site, all
office equipment and furniture owned by PCI and all other material tangible
assets owned by PCI) (the "Asset List"). The assets on the Asset List include
substantially all of the tangible assets presently used by PCI in the conduct
of its business in Arizona, California, Colorado, New Mexico, North Dakota,
Oklahoma, South Dakota and Texas (collectively, the "States").
2.12 Financial Statements. PCI has previously delivered to Nextel the
following financial statements (including any notes thereto), all of which have
been prepared in accordance with GAAP consistently applied throughout the
periods involved and present fairly in all material respects the consolidated
financial position of PCI and its Subsidiaries, at the dates stated in such
financial statements and the results of their operations for the periods stated
therein (subject in the case of the financial statements referenced in
paragraph (b) to the absence of notes and to normal year-end adjustments):
(a) a Consolidated Balance Sheet at December 31, 1995, and a
Consolidated Statement of Operations, Statement of Stockholders' Equity and
Consolidated Statement of Cash Flows for the year ended December 31, 1995 which
have been audited by and that are accompanied by the report of KPMG Peat
Marwick LLP; and
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(b) a Consolidated Balance Sheet at June 30, 1996 and a Consolidated
Statement of Operations, and a Consolidated Statement of Cash Flows for the six
months ended June 30, 1996.
2.13 Liabilities. PCI and its Subsidiaries do not have any liability or
obligation, secured or unsecured (whether accrued, absolute, contingent or
otherwise), except:
(i) trade payables and accrued expenses incurred in the
ordinary course of business and consistent with past practices for which
the stated due date has not passed ("Current Payables");
(ii) those liabilities or obligations (for which the stated due
date has not passed) relating to operating contracts or leases entered
into in the ordinary course of business consistent with past practice;
(iii) liabilities and obligations of the type shown on PCI's
balance sheet at June 30, 1996 that was previously delivered to Nextel
(the "June 30 Balance Sheet") and any increase in the amount of such
liabilities after June 30, 1996 was either (1) consented to in writing by
Nextel, or (2) incurred by PCI or any Subsidiary in the ordinary course of
business after such date;
(iv) the Transaction Costs which shall not exceed $1,500,000; and
(v) other liabilities or obligations that do not exceed $10,000
individually and do not exceed $100,000 in the aggregate or that are set
forth in the Schedules with reference to this Section specifically
identified and agreed
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to by Nextel as Permitted Liabilities for purposes of this Agreement (and,
to the extent reasonably ascertainable, have been identified by type,
source and dollar amount) (the liabilities and obligations described in
this clause and clauses (i) through (iv) above, collectively, the
"Permitted Liabilities").
2.14 Transactions Not in the Ordinary Course. Except as set forth on the
Schedules with reference to this Section, since July 1, 1996 until the date of
the First Agreement neither PCI nor any Subsidiary has (a) incurred any
liability or obligation not in the ordinary course of business or entered into
any transaction other than in the ordinary course of business the value of
which did not exceed $10,000 individually and did not exceed $100,000 in the
aggregate; (b) declared or made any payment or distribution to stockholders or
other holders of equity or other similar ownership or participation interests,
including stock splits, stock dividends and profit distributions, or purchased
or redeemed any shares or other equity or other similar ownership or
participation interests except as provided for in this Agreement; (c)
mortgaged, pledged or subjected to lien, charge or any other encumbrance, any
of its assets, tangible or intangible; (d) sold or transferred, or agreed to
sell or transfer, or acquired or agreed to acquire any SMR Licenses; (e) sold
or transferred any of its other assets, tangible or intangible, the value of
which did not exceed $10,000 individually and did not exceed $100,000 in the
aggregate except, in each case, in the ordinary course of business; (f)
cancelled any debts or claims except in each case
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in the ordinary course of business; (g) increased the rate of compensation of
any officer or of any employee receiving (giving effect to such increase) more
than $50,000 per annum or paid or declared any bonus (excluding fixed-formula
compensation incentive payments such as may be paid to certain sales employees
from time to time), except as set forth in the Schedules with reference to this
Section; (h) agreed to or amended or instituted any employment contract, bonus
plan, stock option plan, profit sharing plan, pension plan, retirement plan or
other similar arrangement or plan, except as set forth in the Schedules with
reference to this Section.
2.15 Capital Projects. Set forth in the Schedules with reference to this
Section is a description of all capital projects currently committed for or
authorized by PCI for (i) SMR Systems (as defined herein) and (ii) all other
capital projects involving the expenditure of more than $50,000 in any single
case or more than $200,000 in the aggregate.
2.16 Taxes. Except as set forth in the Schedules with reference to this
Section, the Subsidiaries have been included in a consolidated Federal income
tax return filed by PCI. Except as set forth in the Schedules with reference
to this Section, (i) PCI, on behalf of itself and its Subsidiaries
(collectively, "PCI/PCI Subs"), has accurately prepared and has duly and timely
filed with all appropriate Federal, foreign, state and local governmental
agencies, all tax returns and reports required to be filed by it; (ii) all
taxes owed or withheld, or which may be claimed to be owed or required to be
withheld, to or for the
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benefit of any governmental agency for or with respect to the periods covered
by such returns and reports or with respect to any period (or portions thereof)
ending at or before the Closing, and all interest, penalties, assessments and
deficiencies connected therewith, have been or will be timely paid in full or
provided for in full; (iii) PCI/PCI Subs has not executed or filed with any
taxing authority any agreement extending the period for assessment or
collection of any taxes; (iv) PCI/PCI Subs is not a party to any pending audit,
inquiry, action or proceeding, nor has PCI/PCI Subs been notified of the
inception of any such audit, inquiry, action or proceeding by any Federal,
foreign, state or local governmental entity or municipality or subdivision
thereof or any authority, department, commission, board, bureau, agency, court
or instrumentality for the assessment or collection of taxes; (v) no deficiency
or assessment notices or reports or statements of tax due have been received by
PCI/PCI Subs in respect of any of its tax returns; and (vi) to the best of
PCI's knowledge, the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will have no material
effect upon the tax treatment of any previously consummated transaction in
which PCI acquired all or any part of the assets or capital stock of another
entity.
2.17 Bank Accounts; Employees. Set forth in the Schedules with reference
to this Section is a complete list of (a) all banks in which PCI or any
Subsidiary has an account or safe deposit box and the names of all persons
authorized to draw
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thereon or have access thereto; (b) the current fixed annual rate of
compensation (plus total cash compensation broken down between fixed and bonus
components for fiscal year 1995) as of the date of such list for each of the
five (5) then highest paid employees of PCI and each Subsidiary for the current
fiscal year and a summary of the basis on which each such person is compensated
if such basis is other than exclusively a fixed salary rate; (c) the names of
all persons holding powers of attorney from PCI and each Subsidiary and a
summary statement of the terms thereof; and (d) the name of each person who is
an "affiliate" of PCI for purposes of Rule 145 under the Securities Act.
2.18 Real Estate. The Schedules with reference to this Section list all
real estate, real estate options and leaseholds owned or held by PCI or any
Subsidiary. Except for matters that individually and in the aggregate will not
have a material adverse effect on the business, financial condition, results of
operations, liabilities or assets of PCI and its Subsidiaries, taken as a
whole, and that will not impair PCI's or the Subsidiaries' ability to perform,
in any material respect, its or their obligations under this Agreement or any
other document or instrument to which PCI or a Subsidiary is a party in
connection with the transactions contemplated herein, or as set forth on the
Schedules with reference to this Section, there are no title defects, issues of
validity or enforceability, deficiencies in rights of possession or use or
similar matters relating to or affecting any real estate owned or leased, or
which is subject to an option to buy, sell or lease, of or by PCI or any
Subsidiary.
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Except for Permitted Liens (as defined herein), for matters that individually
and in the aggregate will not have a material adverse effect on the business,
financial condition, results of operations, liabilities or assets of PCI and
its Subsidiaries, taken as a whole, and that will not impair PCI's or the
Subsidiaries' ability to perform, in any material respect, its or their
obligations under this Agreement or any other document or instrument to which
PCI or a Subsidiary is a party in connection with the transactions contemplated
herein, or as set forth in the Schedules with reference to this Section, PCI or
a Subsidiary, as the case may be, has good and marketable title in fee simple
to all real estate owned by it and good leasehold interests in all of its
leaseholds, none of which interests will be materially and adversely affected
by the transactions contemplated hereby, and each lease with an initial term of
more than one year is, to the knowledge of PCI and its Subsidiaries,
enforceable against the lessor thereunder and PCI or its Subsidiary, as the
case may be, enjoys quiet possession of all leaseholds.
2.19 Title to Properties. Except for matters that individually and in the
aggregate will not have a material adverse effect on the business, financial
condition, results of operations, liabilities or assets of PCI and its
Subsidiaries, taken as a whole, and that will not impair PCI's or the
Subsidiaries' ability to perform, in any material respect, its or their
obligations under this Agreement or any other document or instrument to which
PCI or a Subsidiary is a party in connection with the transactions contemplated
herein, or as set forth on the
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Schedules with reference to this Section, each of PCI and its Subsidiaries has
good title to all of its personal properties and assets, tangible and
intangible (including, without limitation, those on the Asset List). Except
for liens or encumbrances set forth in the Schedules with reference to this
Section (which identifies those that will be removed prior to the Closing),
none of such properties or assets is subject to any lien or encumbrance other
than (a) any liens securing Current Payables, (b) any liens or encumbrances
connected with operating leases entered into in the ordinary course of business
consistent with past practice, (c) such other encumbrances that do not secure
indebtedness and do not materially detract from the value of, or interfere with
the present or future use of, the property subject thereto and affected thereby
or otherwise materially impair the business, financial condition, results of
operations or operations of PCI and its Subsidiaries, taken as a whole, or (d)
as otherwise disclosed to and approved by Nextel in writing (collectively,
"Permitted Liens").
2.20 Contracts. Except as set forth in the Schedules with reference to
this Section, neither PCI nor any Subsidiary (nor any of their properties) is a
party to or bound by any (a) agreement or other arrangement not made in the
ordinary course of business, involving payments or receipts in excess of
$25,000 individually or more than $100,000 in the aggregate; (b) employment or
consulting contract; (c) contract with any labor union; (d) employee bonus,
pension, profit-sharing, retirement, stock purchase or other benefit or welfare
plan or
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agreement; (e) lease or management agreement relating to the use or operation
of an SMR Channel; (f) other lease with respect to real or personal property,
whether as lessor or lessee, involving lease payments in excess of $50,000 per
annum or $200,000 in the aggregate; (g) contract or commitment for the purchase
of raw materials or supplies or the sale of products involving more than
$50,000 per annum or $200,000 in the aggregate; (h) indenture, agreement, note,
mortgage, guaranty or other writing which evidences or relates to any loan of
money to, or indebtedness for money borrowed by, PCI or any Subsidiary; (i)
license agreement or other contract or agreement relating to patents,
trademarks, trade names, techniques or copyrights or applications for any
thereof, inventions, trade secrets or other proprietary know-how or technical
assistance; (j) any loan to officers, directors or employees of PCI or any
Subsidiary (all of which loans will be repaid in full by the Closing); or (k)
any agreement relating to any direct or indirect acquisition of SMR Licenses in
the case of any of the foregoing, whether written or oral (and, in the case of
oral commitments, with PCI providing an accurate written summary of all
material terms to Nextel). Except for matters that individually and in the
aggregate will not have a material adverse effect on the business, financial
condition, results of operations, liabilities or assets of PCI and its
Subsidiaries, taken as a whole, and that will not impair PCI's or the
Subsidiaries' ability to perform, in any material respect, its or their
obligations under this Agreement or any other document or instrument to which
PCI or a Subsidiary is a party in connection
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with the transactions contemplated herein, or as set forth in such Schedule, to
the knowledge of PCI, neither PCI nor any Subsidiary, nor any other party
thereto, is in default under the terms of any commitments described in
Subsections (a) through (k) of this Section.
2.21 Compliance with Securities Laws. PCI has complied with all
applicable Federal and state securities laws and regulations with regard to the
registration, offer and sale of the PCI Common Stock registered under the shelf
registration statement on Form S-4 (Registration No. 33-83810).
2.22 Brokers. Except for fees paid to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, neither PCI nor any
Subsidiary has directly or indirectly dealt with anyone acting in the capacity
of a finder or broker and none of them has incurred nor will they incur any
obligation for any finder's or broker's fee or commission in connection with
this Agreement or the Merger.
2.23 Special Liabilities; Warranties. Except for matters that
individually and in the aggregate will not have a material adverse effect on
the business, financial condition, results of operations, liabilities, or
assets of PCI and its Subsidiaries, taken as a whole, and that will not impair
PCI's or its Subsidiaries' ability to perform, in any material respect, its or
their obligations under this Agreement or any other document or instrument to
which PCI or a Subsidiary is a party in connection with the transactions
contemplated herein, or as set forth on the Schedules with reference to this
Section, (i) neither PCI nor any Subsidiary has any liability under any
contracts under which the
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consideration to be paid or received by PCI or a Subsidiary is determined in
whole or in part based on profits or operating results, nor are there any
contingent payments owing to any person in connection with the acquisition of
any business, entity, frequency or channel by PCI or a Subsidiary; (ii) neither
PCI nor any Subsidiary has extended any warranties to their respective
customers, except those that each of them is authorized to extend on behalf of
product manufacturers; (iii) neither PCI nor any Subsidiary is now subject to
any outstanding, pending or, to the knowledge of PCI, threatened claims based
on warranty coverage; and (iv) there are no pending or threatened claims by any
manufacturer or vendor of equipment to disallow or invalidate manufacturers'
warranty coverage.
2.24 Employee Benefit Matters. Except as set forth on the Schedules with
reference to any particular subsection of this Section, to the knowledge of
PCI:
(a) PCI does not have and never has had any obligation to contribute
to any "multiemployer plan" (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) or any "multiple
employer plan" described in Section 210(a) of ERISA or Section 413(c) of the
Code. PCI does not maintain, contribute to, or have any liability under or
with respect to any plan or arrangement, whether or not terminated, which
provides or provided medical, health, life insurance of other welfare-type
benefits for current or future retired or terminated employees (except for
limited continued medical benefit coverage required to be provided under
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Section 4980B of the Code or as required under applicable state law). PCI does
not maintain, contribute to or have any liability under or with respect to any
employee plan which is a "defined benefit plan" (as defined in Section 3(35) of
ERISA), whether or not terminated. PCI does not maintain, contribute to or
have any liability under or with respect to any employee plan which is a
"defined contribution plan" (as defined in Section 3(34) of ERISA), whether or
not terminated.
(b) PCI does not maintain, contribute to or have any liability under
or with respect to any plan or arrangement providing benefits to current or
former employees or directors, including any bonus plan, plan for deferred
compensation, employee health or other welfare benefit plan or other
arrangement, whether or not terminated (any such plan or arrangement, an
"Employee Plan"). For purposes of this Section 2.24, "PCI" includes all
organizations that now are or that have been, within the past six years, under
common control with PCI pursuant to Section 414(b) or (c) of the Code. PCI
previously has delivered to Nextel true, complete and correct copies of each of
the Employee Plans, including all amendments thereto, and any other documents
or other instruments relating thereto reasonably requested by Nextel.
(c) All Employee Plans are being, and have been, maintained,
operated and administered in all material respects in accordance with their
respective terms and in compliance with all applicable laws.
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(d) No Employee Plan is funded through a "welfare benefit fund" as
defined in Section 419(e) of the Code.
(e) There have been no prohibited transactions or breaches of any of
the duties imposed on "fiduciaries" (within the meaning of Section 3(21) of
ERISA) by ERISA with respect to any Employee Plan that could reasonably be
expected to result in PCI or any Subsidiary becoming liable directly or
indirectly (by indemnification or otherwise) for any material excise tax,
penalty or other liability under ERISA or the Code.
(f) There are no actions or claims pending or, to the knowledge of
PCI or any Subsidiary, threatened, with respect to any Employee Plan (other
than routine claims for benefits), and there are no investigations or audits of
any Employee Plan by any governmental authority currently pending and there
have been no such investigations or audits that have been concluded that
resulted in any liability of PCI and its Subsidiaries that has not been fully
discharged.
(g) All (i) insurance premiums required to be paid with respect to,
(ii) benefits, expenses, and other amounts due and payable under, and (iii)
contributions, transfers, or payments required to be made to, any Employee Plan
have been paid. With respect to any insurance policy providing funding for
benefits under any Employee Plan, (x) there is no liability of PCI and its
Subsidiaries, in the nature of a retroactive or retrospective rate adjustment,
loss sharing arrangement, or other actual or contingent liability, nor would
there be any such liability if such insurance policy was terminated on the date
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hereof, and (y) no insurance company issuing any such policy is in
receivership, conservatorship, liquidation or similar proceeding and, to the
knowledge of PCI and its Subsidiaries, no such proceedings with respect to any
insurer are imminent.
(h) Each Employee Plan that is a group health plan subject to
Section 4980B of the Code (or which was subject to Section 162(k) of the Code)
has been operated in material compliance with the continuation coverage
requirements of Section 4980B of the Code and Section 162(k) of the Code, as
applicable, and Part 6 of Subtitle B of Title I of ERISA.
(i) Each Employee Plan that is subject to Section 1862(b)(1) of the
Social Security Act has been operated in compliance with the secondary payer
requirements of Section 1862(b)(1) of such Act.
(j) The execution, delivery and performance of this Agreement will
not, solely in and of itself, (i) constitute a stated triggering event under
any Employee Plan that will result in any payment (whether of severance pay or
otherwise) becoming due from PCI or any Subsidiary to any present or former
officer, employee, director, shareholder or consultant, or former employee (or
dependents of any thereof), or (ii) accelerate the time of payment or vesting,
or increase the amount, of compensation due to any employee, officer, director,
shareholder or consultant of PCI or any Subsidiary.
(k) Neither PCI nor any Subsidiary has agreed or committed to make
any amendments to any of the Employee Plans not
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already embodied in the documents comprising any such Employee Plan, other than
any amendments required by law.
(l) All contributions, transfers, and payments by PCI or any
Subsidiary in respect of any Employee Plan have been or are fully deductible
under the Code.
(m) PCI's financial statements at and for the six months ended June
30, 1996 contain and, at and for the period ending on the Closing, will contain
adequate accruals for (i) bonuses, sales commissions and vacation pay earned
but not received as of such dates and (ii) incurred or continuing but unpaid
claims under Employee Plans not funded by insurance.
(n) No Employee Plan provides benefits to any individual who is not
a current or former employee of PCI or a Subsidiary, or the dependents or other
beneficiaries of any such individual.
(o) Except as set forth on Schedule 2.24(o), no "excess parachute
payments" within the meaning of Section 280G of the Code will be made in
connection with or as a result of the Merger (without regard to whether any
such payment might be reasonable compensation for personal services performed
or to be performed in the future).
2.25 Materially Correct. Article II of this Agreement together with the
Schedules referenced herein does not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
disclosures contained therein in the light of the circumstances under which
they are made, not misleading.
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2.26 Information. PCI has made available to Nextel each registration
statement, schedule, report, proxy statement or information statement it has
filed with the Securities and Exchange Commission (the "SEC") since January 1,
1994, including, without limitation, (a) PCI's Annual Report on Form 10-K for
the years ended December 31, 1994 and December 31, 1995, including all
documents incorporated by reference therein, and (b) PCI's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1996 and any Report on Form 8-K filed
since December 31, 1995 (collectively, the "PCI Reports"). The PCI Reports,
taken as a whole and taken together with information previously furnished by
PCI to Nextel, did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were made,
not misleading. As used in this Section 2.26, "material" means material to the
business, financial condition, results of operations, liabilities or assets of
PCI and its Subsidiaries taken as a whole. PCI has delivered to Nextel on or
prior to the date of the First Agreement all private placement, confidential
offering or similar memoranda and other offering or solicitation materials used
at any time by PCI or anyone acting on its behalf in connection with any offer
or sale of securities of PCI.
2.27 Regulatory Matters.
(a) Definitions. For purposes of this Agreement, the following
terms shall have the indicated meanings:
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"FCC" shall mean the Federal Communications Commission or any
successor thereto.
"FCC License" shall mean any paging, mobile telephone, SMR or
other license, permit, consent, certificate of compliance, franchise, approval
or authorization of any type granted or issued by the FCC, including, without
limitation, any of the foregoing authorizing the acquisition, construction or
operation of an SMR System (as defined herein), radio paging system or other
radio communications system.
"PCI Management Agreement" shall mean any management or other
agreement (other than a loading agreement) pursuant to which PCI or a
Subsidiary agrees to manage or to perform other services (other than loading)
with respect to SMR Licenses held by another person in exchange for either the
right to receive a portion of the revenues derived from such SMR Licenses or
the right to purchase such SMR Licenses or any loading agreement pursuant to
which such Subsidiary is loading SMR Licenses held by another person in
exchange for either the right to receive a portion of the revenues derived from
such SMR Licenses in excess of 25% of the aggregate revenues derived from such
SMR Licenses or the right to purchase such SMR Licenses.
A fact or circumstance shall be "Immaterial" for purposes of
this Section if such fact or circumstance would not result in the cancellation,
revocation, termination, adverse modification or any other material adverse
effect on any 800 MHz FCC license; the cancellation, revocation, termination,
adverse modification or any other material adverse effect on 5% or more
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of the frequencies in any category of service set forth on Schedule 2.27; or
any other material adverse effect on any other right granted or enjoyed by PCI,
with respect to the FCC frequencies.
"SMR License" shall mean an FCC License authorizing the
construction, ownership and operation of an SMR system in the 800 or 900 MHz
band issued pursuant to 47 CFR Part 90 of the Rules and Regulations of the FCC.
"SMR System" shall mean an SMR system licensed under 47 CFR Part
90 of the Rules and Regulations of the FCC.
"SMR Units" shall mean the number of mobile and control stations
(within the meaning of 47 CFR Part 90 of the Rules and Regulations of the FCC)
subscribing to SMR Systems licensed to or managed by PCI or a Subsidiary
excluding, however, any such units which are subject to a Third-Party
Management Agreement if the respective third party has a right to purchase the
SMR Licenses which are subject to such Third-Party Management Agreement.
"Third-Party Management Agreement" shall mean any management or
other agreement (other than a loading agreement) pursuant to which a person
(other than PCI or a Subsidiary) is managing SMR Licenses held by PCI or a
Subsidiary or any loading agreement pursuant to which a person (other than PCI
or a Subsidiary) is loading SMR Licenses held by PCI or a Subsidiary in
exchange for the right to receive a portion of the revenues derived from such
SMR Licenses in excess of 25% of the aggregate revenues derived from such SMR
Licenses.
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(b) License Information. Schedule 2.27 sets forth a true and
complete list of the following information, which need not with respect to the
information called for by clause (ii) below include Immaterial information, for
each FCC License issued to or operated by PCI or its Subsidiaries (including
all FCC Licenses subject to a PCI Management Agreement):
(i) for all FCC Licenses (including all SMR Licenses), the name
of the licensee, the name of the seller(s), the call sign, the transmitter
location (by site coordinates and city), the category or type of service
(e.g., paging, SMR, etc.), the frequency or frequencies authorized, and
operating entity;
(ii) in the case of SMR Licenses, the number of channels
authorized, the number of channels constructed, whether the license is for
a conventional or trunked SMR System, the applicable loading date, whether
the SMR License is subject to a Finders Preference, whether the SMR
License is operating under Special Temporary Operating Authority ("STA")
and the applicable STA expiration date, and whether the SMR License is
managed by PCI pursuant to a PCI Management Agreement or by any other
persons pursuant to a Third-Party Management Agreement;
(iii) each holder of any such FCC License that is neither
wholly owned by PCI nor owned entirely by unaffiliated persons and managed
by PCI; and
(iv) for all FCC Licenses (including SMR Licenses), whether such
FCC Licenses are subject to rights
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of first refusal, options and other such rights or obligations in
existence on the date of the First Agreement, including, without
limitation, entitlements to acquire additional ownership interests, which
may affect the ownership interests of PCI.
(c) Condition of Systems. All of the properties, equipment and
systems owned and/or operated by PCI and related to the FCC licenses set forth
on Schedule 2.27 are, and, to the knowledge of PCI, any such properties,
equipment and systems added in connection with any contemplated system
expansion or construction prior to the Closing will be, in compliance with all
standards or rules imposed by any governmental agency or authority (including,
without limitation, the FCC, the Federal Aviation Administration and (if
applicable), any public utilities commission or other state or local
governments or instrumentalities) applicable to PCI or its operation of the
properties, equipment and systems or as imposed under any agreements with
customers, except for any non-compliance that is, individually or in the
aggregate Immaterial. To the knowledge of PCI, all of the equipment and
systems owned and/or operated by PCI are in good repair and working order,
ordinary wear and tear excepted. In addition to the other representations and
warranties set forth herein which are expressly based upon PCI's knowledge,
with regard to the 450 MHz FCC Licenses set forth on Schedule 2.27, the
representations in this Section 2.27(c) are made to the best of PCI's
knowledge.
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(d) Fees; License Compliance. PCI has paid all franchise, license
or other fees and charges which have become due in respect of its business and
has made appropriate provision as is required by generally accepted accounting
principles, consistently applied, for any such fees and charges which have
accrued. Except for Immaterial matters or as set forth in Schedule 2.27, PCI
has duly secured all necessary permits, licenses, consents and authorizations
from, and has filed all required registrations, applications, reports and other
documents with, the FCC and, if applicable, any public utilities commission and
other entity exercising jurisdiction over the SMR businesses, radio paging
businesses and other radio communications businesses of PCI or the construction
of delivery systems therefor, as such businesses are currently conducted. PCI
or a Subsidiary holds or has the contractual right to obtain the FCC Licenses
specified on Schedule 2.27 and, except for matters that are, individually or in
the aggregate Immaterial, or as indicated in such Schedule, all such FCC
Licenses are valid and in full force and effect without conditions except for
such conditions as are stated on the FCC License or as are generally applicable
to holders of similarly situated FCC Licenses. PCI has filed with the FCC
prior to any applicable deadline a complete and accurate application for
rejustification of any unconstructed or deconstructed FCC License related to
previously granted or requested wide area Enhanced Specialized Mobile Radio
("ESMR") licenses. Except as set forth on Schedule 2.27, with regard to FCC
Licenses related to wide area ESMR frequencies, neither PCI
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nor any of its Subsidiaries is subject to a short space agreement or any other
agreement, FCC waiver or otherwise applicable regulations encumbering or
limiting the use of such FCC License. Except for Immaterial matters or as set
forth on Schedule 2.27, all applicable loading requirements with respect to any
SMR Licenses listed on such Schedule have been met and PCI has taken every
reasonable action to cause the same to be loaded in compliance with FCC
regulations. Except matters that are, individually or in the aggregate
Immaterial, or as set forth on Schedule 2.27, to the knowledge of PCI no event
has occurred and is continuing which could (i) result in the revocation,
termination or adverse modification of any FCC License listed on such Schedule
or (ii) adversely affect any rights of PCI thereunder. Except as indicated on
Schedule 2.27, PCI has no reason to believe and no knowledge that all of the
FCC Licenses specified on Schedule 2.27 will not be renewed in the ordinary
course. Except with regard to any planned enhanced SMR Systems of PCI and
except as shown on Schedule 2.27, PCI has sufficient time, materials,
equipment, contract rights and other required resources to complete, in a
timely fashion and in full, construction of all the SMR Systems, radio paging
and other radio communications systems associated with the FCC Licenses listed
on Schedule 2.27 in compliance with all applicable technical standards and
construction requirements and deadlines. Except for matters that are,
individually or in the aggregate Immaterial, or as set forth on Schedule 2.27,
the current ownership and operation by PCI of such SMR Systems, radio paging
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and other radio communications systems comply with the Communications Act of
1934, as amended (the "Communications Act"), and all applicable rules,
regulations and policies of the FCC. In addition to the other representations
and warranties set forth herein which are expressly based upon PCI's knowledge,
with regard to the 450 MHz FCC Licenses set forth on Schedule 2.27, the
representations in this Section 2.27(d) are made to the best of PCI's
knowledge.
(e) Management Agreements. Set forth on Schedule 2.27(e) is a
complete and correct list of all PCI Management Agreements (and associated
option agreements, if any) and Third-Party Management Agreements to which PCI
or any Subsidiary is a party that correctly identifies the manager under each
such agreement and the holder of the SMR Licenses which are the subject of such
agreements, the transmitter locations (by address), and number of channels
covered by such SMR Licenses, the term of such agreements, any options or calls
(and the respective option or call prices as well as the time period in which
any option or call must be exercised or made) in favor of any party to such
agreements to purchase or sell any interest in such SMR Licenses and the
respective fees or revenues payable or receivable under any such agreements.
Except for matters that are, individually or in the aggregate, Immaterial or as
set forth on Schedule 2.27(e) to the knowledge of PCI and its Subsidiaries, the
terms of all such PCI Management Agreements and Third-Party Management
Agreements and the operation of each SMR System pursuant thereto comply with
the Communications Act and all
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applicable rules, regulations and policies of the FCC. Except for matters that
are, individually or in the aggregate Immaterial, or as set forth on Schedule
2.27(e), none of the channels licensed to PCI or its Subsidiaries are subject
to a Third Party Management Agreement. Each PCI Management Agreement includes
an option allowing PCI or a Subsidiary to purchase the channels that are
subject to that agreement and no such option will be adversely affected by the
Merger.
(f) Discrete Frequency Application. PCI has provided Nextel access
to, and prior to December 16, 1996 will have delivered to Nextel a true and
correct copy of, each Request for Rule Waiver and related digital mobile system
application and each general cover letter related to an ESMR application, as
filed with the FCC, and any correspondence relating to any frequency sent to
the FCC and all supplemental or related materials filed or sent in connection
therewith by or on behalf of PCI, all materials submitted to the FCC and/or to
PCI in connection therewith by any third party, and any written communication
issued by the FCC or any FCC staff member in response to, or otherwise in
connection with, any of the foregoing.
2.28 Schedule Disclosure. Regardless of any qualifications or limitations
on the representations and warranties set forth in this Article II regarding
materiality, PCI has used all reasonable best efforts to list and/or describe
on the Schedules all matters required to be listed and/or described by the
representations and warranties set forth herein.
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2.29 Information in Registration Statement. The information, regarding
PCI, its subsidiaries and affiliates, included in the Registration Statement
referred to in Sections 4.4 and 5.2 of this Agreement will not 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.
2.30 Castle Tower Agreements. PCI, a certain PCI Subsidiary and Castle
Tower Corporation, formerly known as Castle Communications Corporation
("Castle"), entered into that certain License Agreement dated as of January 10,
1995, as amended, (the "Castle License Agreement") and that certain Purchase
and Sale Agreement dated as of December 23, 1994, as amended, (the "Castle
Purchase Agreement"). Except as set forth in the Schedules with reference to
this Section, (i) there are no actions, suits or proceedings, formally
instituted, pending or threatened, against PCI or any of its affiliates related
to the Castle Purchase Agreement or the Castle License Agreement, and (ii) all
radio communications equipment, including base stations, antennae, poles,
dishes or masts, cabling or wiring and accessories used therewith, leased to or
owned by PCI and located on property owned by Castle is currently in compliance
with the technical standards relating to frequency compatibility, radio
interference protection, antenna type and location and physical installation
set forth on Exhibit B to the License Agreement.
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ARTICLE III. REPRESENTATIONS AND WARRANTIES OF NEXTEL AND MERGER SUB
Nextel and Merger Sub, jointly and severally, represent and warrant to PCI
that:
3.1 Corporate Organization; Authorization. (a) Each of Nextel and Merger
Sub has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has the corporate power
and authority to own or lease its properties and to conduct its business as it
is now being conducted.
(b) Each of Nextel and Merger Sub has all necessary corporate power and
authority to enter into this Agreement and to perform all of the obligations to
be performed by it hereunder. The execution, delivery and performance of this
Agreement by Nextel and Merger Sub have been duly authorized by Nextel and
Merger Sub, respectively, and upon the execution and delivery hereof by Nextel
and Merger Sub, this Agreement will constitute the valid and legally binding
obligations of Nextel and Merger Sub, enforceable against each of them in
accordance with its terms.
3.2 Capital Stock. The entire authorized capital stock of Nextel
consists solely of (a) 515,000,000 shares of Nextel Common Stock, of which
337,899,220 shares were issued and outstanding as of August 30, 1996, (b)
35,000,000 shares of Class B Non-Voting Common Stock, par value $.001 per
share, of which 17,830,000 shares were issued and outstanding as of August 30,
1996, (c) 10,000,000 shares of preferred stock, par value $.01 per share,
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of which (i) 8,163,265 Class A shares, (ii) 82 Class B shares and (iii) no
other Preferred shares of any other Class were issued and outstanding as of
August 30, 1996. At the Effective Time of the Merger, the shares of Nextel
Common Stock issued by reason of the Merger will be duly authorized, validly
issued, fully paid and nonassessable, and their issuance in connection with the
Merger will be registered under the Securities Act and registered or exempt
from registration under applicable state securities laws and such shares of
Nextel Common Stock will be listed on the Nasdaq NM. At the Effective Time of
the Merger, Nextel will have a sufficient number of authorized but unissued
shares of Nextel Common Stock reserved under the Nextel Plan for issuance upon
conversion and exercise of the PCI Stock Options.
3.3 Common Stock; Registration. At the Closing, the shares of Nextel
Common Stock issued by reason of the Merger will be duly authorized, validly
issued, fully paid and nonassessable, will be registered under the Securities
Act, and will be "voting stock" within the meaning of Section 368(a)(1)(B) of
the Code.
3.4 No Conflict. The execution and delivery of this Agreement by Nextel
and Merger Sub and the consummation of the transactions contemplated hereby do
not and will not violate any provision of, or result in the breach of, or
accelerate or permit the acceleration of the performance required by the terms
of, any applicable law, rule or regulation of any governmental body, the
Amended and Restated Certificate of Incorporation or the Amended and Restated
By-Laws of Nextel, or the Certificate of Incorporation or the By-Laws of Merger
Sub or any agreement,
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indenture or other instrument to which Nextel or Merger Sub is a party or by
which Nextel or Merger Sub may be bound, or of any order, judgment or decree
applicable to it, or terminate or result in the termination of any such
agreement, indenture or instrument, or result in the creation of any lien,
charge or encumbrance upon any of the properties or assets of Nextel or Merger
Sub under any agreement to which either of them is a party, or constitute an
event which, after notice or lapse of time or both, would result in any such
violation, breach, acceleration, termination or creation of a lien, charge or
encumbrance, except where any such violation, breach, acceleration, termination
or creation would not have a material adverse effect on the business, financial
condition, results of operations, liabilities or assets of Nextel and its
subsidiaries, taken as a whole, or would not impair Nextel's or Merger Sub's
ability to perform, in any material respect, its obligations under this
Agreement or any other document or instrument to which Nextel or Merger Sub is
a party in connection with the transactions contemplated herein.
3.5 Information. Nextel has delivered to PCI each registration
statement, schedule, report, proxy statement or information statement it has
filed with the SEC from January 1, 1996 to the date of the First Agreement,
including, without limitation, (a) Nextel's Annual Report on Form 10-K for the
year ended December 31, 1995 and (b) Nextel's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1996, (collectively, the "Nextel Reports"). As of
the date of the First Agreement, the
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Nextel Reports, taken as a whole and taken together with any other information
previously furnished by Nextel to PCI (except for any forecasts or projections
or forward-looking estimates or similar predictive information contained
therein), did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were made,
not misleading. As used in this Section, "material" means material to the
business, financial condition, results of operations, liabilities or assets of
Nextel and its subsidiaries, taken as a whole. The representation made in this
Section shall also be deemed to be made by Nextel to PCI immediately prior to
the Closing, but with reference to all information furnished by Nextel to PCI
prior to the Closing.
3.6 Information in Registration Statement. The information, except
information regarding PCI, its Subsidiaries and affiliates, included in the
Registration Statement referred to in Sections 4.4 and 5.2 of this Agreement
will not 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.
ARTICLE IV. COVENANTS OF PCI
4.1 Conduct of Business. (a) From the date of the First Agreement until
the Effective Time of the Merger, PCI shall conduct its business, and shall
cause each Subsidiary to conduct
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such Subsidiary's business, only in the ordinary course and, without limiting
the generality of the foregoing, neither PCI nor any Subsidiary shall, without
the written consent of Nextel: (i) except as permitted by Section 4.1(b),
dispose or contract to dispose of any SMR Channels or FCC Licenses except as
may occur as a result of an FCC enforcement action or otherwise required under
law; (ii) except as set forth on a Schedule that refers to this Section,
dispose of or contract to dispose of any other assets, tangible or intangible,
except in the ordinary course of business, consistent with past practice and,
with respect to capital assets, in connection with the replacement of the asset
being disposed of; (iii) except as set forth in Section 4.7 or as permitted by
Section 4.1(b), acquire or contract to acquire any SMR Channels or FCC Licenses
or any rights to acquire any SMR Channels or FCC Licenses or acquire or
contract to acquire, directly or indirectly, any interest in an entity that has
any interest in SMR Channels or FCC Licenses; (iv) voluntarily incur any
absolute or contingent debt obligation except in the ordinary course of
business under currently existing lines of credit; (v) enter into any lease or
contract for the purchase or sale of real estate or of any interest therein;
(vi) encumber any property or other assets except for encumbrances constituting
Permitted Liens or encumbrances of which Nextel is promptly notified in writing
and which will be removed prior to the Closing; (vii) declare or pay any
dividend or purchase or redeem any of its shares, notes or other securities or
make any other distribution to shareholders; (viii) other than in accordance
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with normal compensation adjustment policies (all of which, including year-end
bonuses, are included in the Schedules), increase the rate of remuneration to
any of its directors, officers, employees or other representatives, or agree to
do so or fail to pay any year-end bonuses then owed included on such Schedule
prior to the Effective Time of the Merger; (ix) except for obtaining
stockholder approval of the 1996 Stock Option Plan and the 1996 Non-Employee
Director Stock Option Plan, amending the 1994 Non-Employee Director Stock
Option Plan to eliminate automatic granting of PCI Options or as permitted by
Section 5.6(a), adopt any new or amend any existing employee benefit plan or
any employment agreement or amend any PCI Stock Option once implemented except
as set forth in Section 1.21(a); (x) form or cause to be formed any subsidiary;
(xi) issue, sell, distribute or dispose of any shares, notes or other
securities of PCI or offer to sell or sell any PCI Common Stock registered
pursuant to PCI's shelf registration statement on Form S-4 (Registration No.
33-83810) or commit itself to do so; (xii) make any commitments for capital
improvements; or (xiii) fail to keep its properties insured substantially to
the same extent as they are currently insured.
(b) PCI may dispose of or contract to dispose of any non-SMR Channel or
FCC License that is within 25 miles of an MSA market identified on Schedule 1.2
but does not meet the criteria set forth in Section 1.2(d)(vi)(y) in exchange
for SMR Channels or FCC Licenses that enable PCI to Deliver additional
Channels. PCI may acquire third-party FCC Licenses that are located within
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55 miles of a PCI controlled license, but PCI may not pay more than $10,000 per
frequency so acquired.
4.2 Reasonable Efforts. PCI shall, and shall cause each Subsidiary to,
use all reasonable efforts to preserve intact its business organization and to
preserve its goodwill as to customers, suppliers and others having business
relations with it.
4.3 Inspection. PCI shall, and shall cause each Subsidiary to, permit
representatives of Nextel, during normal business hours, to examine PCI's and
each Subsidiary's properties, books, contracts, tax returns and other records,
and shall furnish such representatives with all such information concerning
such affairs as they may reasonably request.
4.4 SEC Registration. (a) PCI shall use its reasonable best efforts to,
and shall use its reasonable best efforts to cause each Subsidiary to, furnish
to Nextel such information about PCI and each Subsidiary (including their
respective affiliates) as may be necessary to enable Nextel to prepare and file
with the SEC a Registration Statement on Form S-4 under the Securities Act and
the rules and regulations promulgated thereunder, in respect of the shares of
Nextel Common Stock to be issued by reason of the Merger (such registration
statement, the prospectus included therein and the proxy statement to be
furnished to the holders of PCI Common Stock, in each case together with any
amendments or supplements thereto, the "Registration Statement"). PCI shall
use its reasonable best efforts so that the PCI Information (as defined below)
included
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in the Registration Statement shall not, at the time the Registration Statement
is declared effective, at the time the proxy statement/prospectus contained
therein is first mailed to PCI's stockholders, or at the time of the meeting of
the stockholders of PCI to approve the Merger, contain any untrue statement of
a material fact, omit to state any material fact required to be stated therein,
or omit any material fact necessary in order to make the statements therein not
misleading. If at any time prior to the Effective Time any event or
circumstance should come to the attention of PCI with respect to the PCI
Information which is required to be set forth in an amendment or supplement to
the Registration Statement, PCI will immediately notify Nextel and shall assist
Nextel in appropriately amending or supplementing the Registration Statement in
the manner contemplated in Section 5.2(b). An amendment or supplement may be
accomplished, to the extent permitted by law, rule or regulation, by including
such information in a filing under the Exchange Act that is incorporated by
reference into the Registration Statement. The Registration Statement insofar
as it relates to information concerning PCI, its Subsidiaries, or any of their
respective businesses, assets, directors, affiliates, officers or shareholders
that is supplied by PCI for inclusion in the Registration Statement, including
incorporation by reference to SEC filings (the "PCI Information"), will comply
as to form and substance in all material respects with the applicable
requirements of the Securities Act and the rules and regulations
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thereunder and the Exchange Act and the rules and regulations thereunder;
except that PCI shall have no liability or obligation for any information other
than the PCI Information.
(b) PCI shall instruct its accountants to deliver and shall use its
reasonable best efforts to cause its accountants, KPMG Peat Marwick LLP, to
deliver to Nextel letters dated at the time the Registration Statement becomes
effective and as of the Closing, addressed to Nextel, each containing such
matters as are customarily contained in auditors' letters regarding information
about PCI and its Subsidiaries expressly for inclusion in the Registration
Statement, and in a form and substance reasonably satisfactory to Nextel.
4.5 Antitrust Filing. In connection with the transactions contemplated
by this Agreement, PCI (and, to the extent required, its affiliates) shall
promptly file or cause to be filed any reports, documents, filings or other
data required to be filed by PCI pursuant to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇") and the rules and regulations
promulgated thereunder, and shall use its best efforts to respond as promptly
as practicable to all inquiries received for additional information or
documentation.
4.6 Restraint on Solicitations. From the date of the First Agreement
until the Effective Time of the Merger, neither PCI nor any of its respective
directors, officers, employees, affiliates, representatives or agents, shall
directly or indirectly, encourage (including by way of furnishing information),
solicit, initiate, participate in or otherwise be a party to any
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discussions or negotiations with any corporation, partnership, person or other
entity or group concerning any transaction that constitutes, or may reasonably
be expected to lead to, any Takeover Proposal (as defined herein). Neither the
Board of Directors of PCI nor any committee thereof shall (a) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to Nextel, the
approval or recommendation by the Board of Directors of PCI of the Merger or
this Agreement or (b) approve or recommend, or propose to approve or recommend,
any Takeover Proposal or any other acquisition of outstanding shares of PCI
Common Stock other than pursuant to the Merger or this Agreement.
Notwithstanding the foregoing, nothing contained in this Agreement shall
prevent the Board of Directors of PCI from furnishing information to, or
entering into discussions or negotiations with, any unsolicited corporation,
partnership, person or other entity or group, or taking any action described in
clauses (a) and (b) of the preceding sentence, if and only to the extent that
the Board of Directors of PCI shall have determined in good faith, after
receiving written advice of its outside counsel, that such action would be
required under applicable law in the exercise of its fiduciary duties. PCI
will immediately notify Nextel if any such inquiries or proposals are received
by, any such information is requested from, or any such negotiations or
discussions are sought to be initiated or continued with, PCI. As used in this
Agreement, "Takeover Proposal" shall mean any tender or exchange offer,
proposal, other than a proposal by Nextel or any of its affiliates, for a
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merger, share exchange or other business combination involving PCI or any
proposal or offer to acquire in any manner a substantial equity interest in PCI
or a substantial portion of the assets of PCI.
4.7 Best Efforts. PCI shall, and shall cause each Subsidiary to, use its
reasonable best efforts (i) to obtain prior to Closing all of the SMR licenses
or applications being sought by PCI and/or a Subsidiary that are on file with
and pending approval from the FCC prior to Closing, including all frequencies
or applications pending as of the date of the First Agreement for wide area
ESMR filings and all finder's preference applications, and (ii) to obtain as
promptly as practicable and in any event prior to Closing all FCC approvals or
consents necessary to permit the consummation of the transactions contemplated
by this Agreement. PCI shall obtain the amendments, consents and approvals
regarding the PCI Stock Options and/or any related agreements contemplated by
Section 1.21(a).
4.8 Stockholder Approval. After the Registration Statement has become
effective, PCI shall use its reasonable best efforts to promptly furnish a copy
of the proxy statement/ prospectus included therein to each stockholder of PCI
and to call and convene a special meeting to obtain promptly any approvals of
the PCI stockholders required in connection with the transactions contemplated
by this Agreement.
4.9 Affiliates.
(a) PCI shall use all reasonable efforts to cause each person who is
an "affiliate" of PCI for purposes of Rule 145
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under the Securities Act to deliver to Nextel prior to the date of PCI's
stockholders' meeting a written agreement substantially in the form attached
hereto as Annex A.
4.10 Update Information. Not earlier than ten (10) and not less than five
(5) days before the date scheduled for Closing, PCI shall correct and
supplement in writing any information furnished on Schedules that, to the
knowledge of PCI, is incorrect or incomplete (or otherwise expressly
contemplated by Article II of this Agreement), and shall promptly furnish such
corrected and supplemented information to Nextel, so that such information
shall be correct and complete at the time such updated information is so
provided. Thereafter, to the Closing, PCI shall notify Nextel in writing of
any changes or supplements to the updated information needed, to the knowledge
of PCI, to make such information correct and complete at all times to the
Closing. It is agreed that the furnishing of such corrected and supplemental
information, in and of itself, shall not create any presumption that such
information constitutes or evidences the existence of a material change or any
breach or violation by PCI of any provision of this Agreement.
ARTICLE V. COVENANTS OF NEXTEL
5.1 Antitrust Filing. In connection with the transactions contemplated
by this Agreement, Nextel shall promptly file or cause to be filed any reports,
documents, filings or other data required to be filed by Nextel pursuant to the
HSR Act and the rules and regulations promulgated thereunder, and shall use its
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best efforts to respond as promptly as practicable to all inquiries received
for additional information or documentation.
5.2 Registration Statement.
(a) Nextel shall file the Registration Statement and use its
reasonable best efforts to cause such Registration Statement to become
effective as promptly as practicable, and shall use its reasonable best efforts
to take any action required to be taken to comply in all material respects with
any applicable federal or state securities laws in connection with the issuance
of Nextel Common Stock in the Merger; except that such covenant of Nextel is
made, as to those portions of the Registration Statement containing or required
to contain PCI Information, assuming and relying on timely and full compliance
with Section 4.4.
(b) Nextel shall use its reasonable best efforts so that the
information included in the Registration Statement, shall not, at the time the
Registration Statement is declared effective, at the time the proxy
statement/prospectus contained therein is first mailed to PCI's stockholders,
or at the time of the meeting of the stockholders of PCI to approve the Merger,
contain any untrue statement of a material fact, omit to state any material
fact required to be stated therein, or omit to state any material fact
necessary in order to make the statements therein not misleading; except that
such covenant of Nextel is made, as to those portions of the Registration
Statement containing or required to contain PCI Information, assuming and
relying on timely and full compliance with Section 4.4. If at
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any time prior to the Effective Time any event or circumstance should come to
the attention of Nextel which is required to be set forth in an amendment or
supplement to the Registration Statement, Nextel will use its reasonable best
efforts to appropriately amend or supplement the Registration Statement. An
amendment or supplement may be accomplished, to the extent permitted by law,
rule or regulation, by including such information in a filing under the
Exchange Act that is incorporated by reference into the Registration Statement.
The Registration Statement and all other documents required to be filed by
Nextel with the SEC in connection with the transactions contemplated herein
will comply as to form and substance in all material respects with the
applicable requirements of the Securities Act and the rules and regulations
thereunder and the Exchange Act and the rules and regulations thereunder;
except that Nextel shall have no liability or obligation for any PCI
Information.
5.3 Current Public Information. Nextel shall use all reasonable efforts
to file all reports required to be filed by it under the Securities Act or the
Securities Exchange Act of 1934 and the rules and regulations adopted by the
SEC thereunder and shall use all reasonable efforts to take such further action
as may be necessary to ensure that the requirements of Rule 144(c) under the
Securities Act are satisfied such as to enable any "affiliates" of PCI (for
purposes of Rule 145 under the Securities Act) to offer or sell the shares of
Nextel Common Stock received by them in the Merger pursuant to paragraph (d) of
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Rule 145 (subject to compliance with the provisions of paragraphs (e), (f) and
(g) of Rule 144).
5.4 Offer to Warrant Holders. Nextel shall offer to each holder of a
warrant listed on Schedule 2.5(a) (other than FMR, Corp.) the opportunity to
exchange its warrant at the Closing for a warrant to purchase shares of Nextel
Common Stock in the form attached as Annex D. Any terms and conditions
negotiated by Nextel with any warrant holder shall not give any other warrant
holder the right to comparable terms and conditions. Nextel's offer pursuant
to this Section 5.4 shall expire at the time the Registration Statement is
filed with the SEC.
5.5 Directors and Officers Indemnification. (a) For a period of three
years from and after the Effective Time of the Merger, Nextel shall cause the
Surviving Corporation to indemnify and hold harmless each present and former
director and officer of PCI against any costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or liabilities
incurred in connection with any claim, proceeding, investigation or action,
whether civil, criminal, administrative or investigative, arising out of or
pertaining to matters existing or occurring at or prior to the Effective Time
of the Merger, whether asserted or claimed prior to, at or after the Effective
Time of the Merger, to the fullest extent that PCI would have been permitted
under the Certificate of Incorporation or By-Laws of PCI in effect immediately
prior to the Effective Time of the Merger to indemnify such person (including
the advancing of expenses as incurred to the fullest extent permitted
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under applicable law; provided that the person to whom such expenses are
advanced provides an undertaking to the Surviving Corporation to repay such
advances if it is ultimately determined that such person is not entitled to
indemnification).
(b) For a period of three years from and after the Effective Time of
the Merger, Nextel shall cause the Surviving Corporation to use all reasonable
efforts to maintain director and officer insurance comparable to that
maintained by PCI at the Effective Time of the Merger. After the third
anniversary of the Closing, the Surviving Corporation may terminate such
insurance provided that the Board of Directors of the Surviving Corporation
reasonably determines that the Surviving Corporation has the financial ability
to satisfy its indemnification obligations under this Section 5.5.
5.6 Employee Matters. (a) If any individual who is employed by PCI at
the Effective Time of the Merger whose employment with the Surviving
Corporation (and all affiliates of the Surviving Corporation) is involuntarily
terminated by the Surviving Corporation or an affiliate without cause (as
defined below) during the six-month period immediately after the Effective Time
of the Merger then (y) such individual shall receive a severance payment,
subject to applicable withholding and other taxes, in an amount equal to (i)
three (3) times such employee's monthly salary, plus (ii) an additional week's
salary for each year that such employee had been employed by PCI, plus (iii) an
amount equal to the unvested employer's contributions made or accrued on or
before the date of the Closing to the PCI
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401(k) Plan for the account of that employee and (z) all issued and outstanding
options of Nextel held by such employee shall automatically vest. For purposes
of this Section, termination without cause shall mean the termination of any
employee's employment with the Surviving Corporation and all affiliates of the
Surviving Corporation other than a termination for one or more of the following
reasons: (i) willful, knowing and intentional violation of an express
direction or rule or regulation of general application; (ii) theft,
misappropriation or embezzlement of the employer's funds; (iii) conviction of a
felony; or (iv) repeated and consistent failure to be present at work during
regular hours without a valid reason therefor.
(b) In accordance with the terms and provisions of the executive
employment agreements dated as of February 22, 1996 and presently in existence
between PCI and each of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇.▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (each, an "Executive"), the employment of
each Executive shall be terminated upon the occurrence of a "change of control"
as defined therein, and, upon such termination, the Surviving Corporation will
pay and make available to each Executive, all of the severance payments and
rights provided for in Section 2.2(e) of each such agreement.
(c) At the Effective Time of the Merger, all issued and outstanding
options of PCI held by non-employee directors of PCI shall automatically vest.
ARTICLE VI. JOINT COVENANTS
6.1 Confidentiality.
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(a) Except (i) for the use of information as required in connection
with Nextel's Registration Statement, (ii) for any other governmental filing
required in order to complete the transactions contemplated herein, and (iii)
as Nextel and PCI may agree or consent in writing, all information received by
PCI and Nextel and their respective representatives pursuant to the terms of
this Agreement shall be kept in strictest confidence by the receiving party and
its representatives. If the transactions contemplated hereby shall fail to be
consummated, all copies of documents or extracts thereof containing information
and data as to one of the other parties, including all information prepared by
the receiving party or such receiving party's representatives, shall be turned
over to the party furnishing same, except that such information prepared by the
receiving party or such receiving party's representatives may be destroyed at
the option of the receiving party, with notice of such destruction (or return)
to be confirmed in writing to the disclosing party. Any information not so
destroyed (or returned) will remain subject to these confidentiality provisions
(notwithstanding any termination of this Agreement) until the second
anniversary of the date of the First Agreement.
(b) The foregoing confidentiality provisions shall not apply to such
portions of the information received which (i) are or become generally
available to the public through no action by the receiving party or by such
party's representatives or (ii) are or become available to the receiving party
on a nonconfidential basis from a source, other than the disclosing
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party or its representatives, which the receiving party believes, after
reasonable inquiry, is not prohibited from disclosing such portions to it by a
contractual, legal or fiduciary obligation, and shall not apply to any
disclosure by Nextel of any information disclosed by PCI, so long as such
disclosure occurs after the Closing.
6.2 Standstill Agreement. From the date of the First Agreement until
the Effective Time of the Merger, neither PCI, nor any representatives of PCI,
acting on its behalf or in concert with it, will directly or indirectly (i)
acquire, or offer, propose or agree to acquire, by purchase or otherwise, any
Nextel Common Stock, or (ii) participate in or encourage the formation of any
partnership, syndicate or other group which owns or seeks or offers to acquire
beneficial ownership of, any Nextel Common Stock.
6.3 Trading Prohibitions. PCI hereby acknowledges that as a result of
disclosures by Nextel contemplated under this Agreement, PCI and its affiliates
may, from time to time, have material, non-public information concerning Nextel
and other companies. PCI confirms that it and its affiliates are aware and PCI
has advised its representatives that (i) the United States securities laws may
prohibit a person who has material, non-public information from purchasing or
selling securities of any company to which such information relates, and (ii)
material non-public information shall not be communicated to any other person
except as permitted herein.
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6.4 Substitute of Subsidiary. Nextel has the option to substitute any
wholly-owned direct or indirect subsidiary of Nextel either for NFC or Merger
Sub in connection with the Merger, provided that such substitution does not
adversely affect the interests of PCI or its stockholders. If Nextel makes
such an election, each reference to NFC or Merger Sub, as applicable, herein
shall be deemed to refer to the new subsidiary.
6.5 Support of Transactions. Nextel, PCI and their respective affiliates
shall each (i) use his or its reasonable best efforts to assemble, prepare and
file any information (and, as needed, to supplement such information) as may be
reasonably necessary to obtain as promptly as practicable all governmental and
regulatory consents required under Article VIII, (ii) exert his or its
reasonable best efforts to obtain all material consents and approvals of third
parties that either of Nextel, PCI or their respective affiliates are
responsible to obtain in order to consummate the Merger, (iii) take such other
action as may reasonably be necessary or as another party may reasonably
request to satisfy the conditions of Article VIII or otherwise to comply with
this Agreement, and (iv) provide the other parties, and such other party's
employees, officers, accountants, lawyers, financial advisors and other
representatives with access to its personnel, properties, business and records
under all reasonable circumstances.
6.6 Cooperation Concerning Extended Implementation Channels. Nextel, PCI
and their respective controlled affiliates agree to cooperate and to use their
respective best efforts to
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achieve the maximum amount of time from the FCC for construction of the
Extended Implementation Channels. Accordingly, PCI agrees to present
reasonably in advance of any proposed filing with the FCC a draft for review by
Nextel and either (i) to make such changes as are proposed by Nextel or (ii) to
discuss any changes proposed by Nextel that will not be made in the filing.
Further, Nextel, PCI and their respective controlled affiliates shall cooperate
with regard to any design, engineering, zoning, equipment selection or
construction efforts to achieve construction of such Extended Implementation
Channels as economically as possible and in full compliance with all applicable
rules and regulations of the FCC. Nextel may, in its sole discretion, advance
cash to PCI to enable PCI to construct channels on which there is at any time
prior to Closing less than six months remaining to construct Extended
Implementation Channels after the FCC has responded to PCI's filings for
rejustification of its extended implementation grants.
6.7 Auction Participation.
(a) Definitions. For purposes of this Section, the following terms
shall have the following indicated meanings:
(i) "EA" means Bureau of Economic Analysis Economic Area, the
defined market-based service areas in which blocks of SMR spectrum are
proposed to be assigned pursuant to the EA Auction.
(ii) "EA Auction" means the 800 MHz SMR block license auction
established by the FCC in the First Report and Order, PR Docket No.
93-144, released December 15, 1995.
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(iii) "Overlap EAs" means the following EAs:
127 (Dallas/Ft. Worth); 128 (Abilene); 129 (San ▇▇▇▇▇▇); 130 (Austin); 131
(Houston); 132 (Corpus Christi); 133 (McAllen); 134 (San Antonio); 135
(Odessa-Midland); 136 (▇▇▇▇▇); 137 (Lubbock); 138 (Amarillo); 157 (El Paso);
and 87 (Beaumont).
(b) Formation of Consortium. In the event that, pursuant to FCC
rules, the filing deadline for eligibility to participate in the EA Auction
occurs prior to the earlier of the Effective Time of the Merger or the
expiration or termination of this Agreement, PCI and Nextel or a designated
subsidiary (hereinafter referred to as "Nextel") shall form a consortium to
participate in bidding in the EA Auction for block licenses in the Overlap EAs.
Nextel shall determine and control all aspects of the consortium's bidding
strategy and participation (including, without limitation, determining the
amount of the joint bids to be submitted by the consortium, the EAs in which to
bid, and whether to top competing bids) and shall be responsible for funding
100% of the consortium's bids. Neither party shall bid for block licenses in
the Overlap EAs except via the consortium and PCI shall not bid for block
licenses in EAs outside of the Overlap EAs. Nextel shall be free to bid for
block licenses outside of the Overlap EAs individually or in consortia formed
with other parties, and without reference to the consortium procedures set
forth herein.
(c) Awarded Channels. Nextel shall be entitled to retain the right
to all channels included in block licenses the consortium is awarded pursuant
to the EA Auction, if any (each,
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an "Awarded License") subject to the PCI purchase option hereinafter described.
In the event of the termination or expiration of this Agreement prior to the
Effective Time of the Merger but after the formation of the consortium, PCI
shall have the right to purchase an aggregate of twenty (20) channels in each
Overlap EA in which an Awarded License is granted (but no more than twenty (20)
channels in any Overlap EA), exercisable by written notice to Nextel within
thirty (30) days after the later of (i) such expiration or termination, and
(ii) the grant of the Awarded License to the consortium; provided that (A) the
consortium is granted Awarded License(s) including more than twenty (20)
channels in the Overlap EA with respect to which PCI wishes to exercise its
purchase option; and (B) if the disaggregation of channels from an Awarded
License would be necessary to permit the assignment and sale of such channels
to PCI, such disaggregation of channels included in licenses granted pursuant
to the EA Auction is permitted under FCC rules. The purchase price payable to
Nextel upon the exercise of such option shall be an amount in cash equal to the
auction bid price paid by the consortium for such channels. The channels sold
to PCI upon an exercise of the purchase option shall be chosen by Nextel and
shall be contiguous channels included in an Awarded License. The parties shall
use all reasonable efforts to effect the assignment to PCI of any channels with
respect to which the purchase option is exercised (including, without
limitation, cooperation in the submission of applications for the assignment or
transfer of control of subject channels required under applicable FCC rules)
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promptly following such exercise. Such purchase option is applicable only to
the rights to use of spectrum in the Overlap EAs which may be obtained by the
consortium in the EA Auction (if any), and shall not apply to existing channel
holdings of Nextel or its subsidiaries or channel holdings that Nextel or its
subsidiaries may acquire other than as an Awarded License in the EA Auction.
(d) Further Assurances; Regulatory Compliance. The provisions of
this Agreement reflect the intention of the parties with respect to their
participation in the EA Auction, but such provisions are based on certain
assumptions regarding the procedures and rules adopted by the FCC pursuant to
which the EA Auction will be conducted (including, without limitation, the
permissibility of parties bidding jointly via a consortium for block licenses
in specified EAs, but individually and without reference to the consortium in
other EAs). If, however, such procedures and rules vary from those assumed by
the parties hereto, such that the provisions of this Agreement are inapposite
or otherwise unworkable, the parties agree to negotiate in good faith to amend
this Agreement in order to provide an alternate manner of cooperating in their
participation in the EA Auction in the Overlap EAs to carry out the intent of
the parties set forth herein. Notwithstanding the foregoing, if any provision
herein does not comport with regulations adopted by the FCC, such provision
will be null and void. The parties will extend all reasonable good faith
efforts to act in conformance with the intent of this Agreement but under no
circumstances will this
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Agreement be interpreted as requiring either party to take any action
prohibited, or fail to take any action required, by FCC regulations.
ARTICLE VII. CLOSING
7.1 Filing. As soon as all of the conditions set forth in Article VIII
of this Agreement have either been fulfilled or waived, the Boards of Directors
of Nextel, NFC, Merger Sub and PCI hereby direct their officers forthwith to
file and record all relevant documents with the appropriate government
officials to effectuate the Merger.
7.2 Closing. The Closing shall, unless another date or place is agreed
to in writing by the parties hereto, take place at a location and time mutually
agreed upon by Nextel and PCI at the earliest practicable date, and such date,
time and location shall be confirmed in writing by such parties not less than
ten (10) days prior to the scheduled date of the Closing. The term "Closing,"
when used in this Agreement, means the Effective Time of the Merger.
ARTICLE VIII. CONDITIONS TO OBLIGATIONS
8.1 Conditions to Obligations of Nextel and PCI. The obligations of
Nextel and PCI to consummate, or cause to be consummated, the Merger are
subject to the satisfaction of the following conditions, any one or more of
which may be waived in writing by such parties:
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(a) The stockholders of PCI shall have taken all necessary action to
authorize, approve and adopt this Agreement and the transactions referred to
herein.
(b) All waiting periods under the HSR Act and the regulations
promulgated thereunder applicable to the Merger shall have expired or been
terminated.
(c) All necessary approvals, clearances and consents of governmental
and regulatory authorities required to be procured by Nextel and PCI in
connection with the Merger (including all required FCC approvals and consents,
which shall be deemed to be obtained for purposes of this Agreement only when
they have become Final Orders), and all material approvals and consents of
third parties that are required to be obtained in connection with the
transactions contemplated by this Agreement or the Merger Agreement, shall have
been procured. Any consent or approval granted or an order entered by the FCC
shall be a "Final Order" when a sufficient number of days shall have elapsed
from the date of entry or grant thereof without the filing of any adverse
request, petition or appeal by any party or third party or by the FCC (on its
own motion) with respect to such consent, approval or order, or any aspect or
portion thereof, or any resubmissions of any applications or requests for any
of such consents, approvals or orders, or, if challenged, that such consent,
approval or order (or affected aspects or portions thereof) shall have been
reaffirmed or upheld and the applicable period for seeking further
administrative or judicial review
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shall have expired without the filing of any action, petition or request for
further review.
(d) There shall not be in force any order or decree, statute, rule
or regulation nor shall there be on file any complaint by a governmental agency
seeking an order or decree, restraining, enjoining or prohibiting the
consummation of the Merger, and neither Nextel nor NFC nor Merger Sub nor PCI
nor any of its Subsidiaries shall have received notice from any governmental
agency that it has determined to institute any suit or proceeding to restrain
or enjoin the consummation of the Merger or to nullify or render ineffective
this Agreement if consummated, or to take any other action which would result
in the prohibition or material change in the Merger.
(e) Nextel's Registration Statement shall have become effective
under the Securities Act and no stop order suspending such effectiveness shall
have been issued or threatened with respect thereto.
(f) The registration statements or other filings as may be required
under applicable blue sky laws pursuant to Annex B shall have become effective,
and no stop order shall be threatened or in effect with respect thereto.
(g) The shares of Nextel Common Stock issuable in the Merger shall
have been listed or approved for listing upon notice of issuance by the Nasdaq
NM.
8.2 Conditions to Obligations of Nextel. The obligation of Nextel to
consummate, or cause to be consummated, the transactions contemplated by this
Agreement is subject to the
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satisfaction of the following additional conditions, any one or more of which
may be waived in writing by Nextel:
(a) Each of the representations and warranties of PCI contained in
this Agreement shall be true and correct both on the date of the First
Agreement and as of the Closing, as if made anew at and as of that time, and
each of the covenants and agreements of PCI and its Subsidiaries to be
performed as of or prior to the Closing shall have been duly performed, except
in each case for changes after the date of the First Agreement which are
contemplated or expressly permitted by this Agreement.
(b) PCI shall have delivered to Nextel a certificate signed by its
President, dated the Closing, certifying, in form reasonably satisfactory to
Nextel and to its counsel that, to the best of the knowledge and belief of such
officer, the conditions specified in Section 8.1 as they relate to PCI and in
subsection 8.2(a), (d), (e), (i) and (j) have been fulfilled.
(c) Nextel shall have received opinions, dated the Closing, from
Gardere & ▇▇▇▇▇, L.L.P. in the form of Annex C-1 and from ▇▇▇▇▇▇▇, Carton &
▇▇▇▇▇▇▇, in the form of Annex C-2.
(d) The FCC shall have acted on PCI's filing(s) for rejustification
of its extended implementation authority.
(e) PCI shall have no liabilities or obligations except Permitted
Liabilities.
(f) Nextel shall have received letters from KPMG Peat Marwick LLP,
dated as of the date the Registration Statement becomes effective and as of the
Closing, addressed to Nextel, containing such matters as are customarily
contained in auditors'
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letters regarding information about PCI and its Subsidiaries expressly for
inclusion in the Registration Statement, and in form and substance reasonably
satisfactory to Nextel.
(g) At the time the Registration Statement becomes effective, and
also at the Closing, PCI and its Subsidiaries shall have furnished to Nextel
certificates, dated as of said times and signed by its President and Secretary,
to the effect that to the best of the knowledge and belief of the signing
persons the material contained in the Registration Statement which relates to
PCI and its Subsidiaries, contains, as of the date of each of such
certificates, no material misstatement of fact and does not omit to state any
material fact necessary to make the statements made not misleading.
(h) Nextel shall have received from each "affiliate" of PCI (as
defined in Rule 145 under the Securities Act) a Rule 145 Letter in the form of
Annex A.
(i) No stockholder of PCI shall be entitled to exercise dissenter's
or appraisal rights under the GCL.
(j) PCI shall be the sole owner of each entity listed on Schedule
2.2(b).
(k) Nextel and Castle shall have entered into definitive agreements
that are consistent with the terms set forth in Annex F.
8.3 Conditions to the Obligations of PCI. The obligation of PCI to
consummate the transactions contemplated by this Agreement is subject to the
satisfaction of the following
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additional conditions, any one or more of which may be waived in writing by
PCI:
(a) Each of the representations and warranties of Nextel contained
in this Agreement shall be true and correct in all material respects both on
the date of the First Agreement and as of the Closing, as if made anew at and
as of that time, and each of the covenants and agreements of Nextel to be
performed as of or prior to the Closing shall have been duly performed, except
in each case for changes after the date of the First Agreement which are
contemplated or expressly permitted by this Agreement.
(b) Nextel shall have delivered to PCI a certificate signed by an
officer of Nextel, dated the Closing, certifying, in form reasonably
satisfactory to PCI and its counsel, to the effect that to the best of the
knowledge and belief of such officer, the conditions specified in Section 8.1
as they relate to Nextel and in subsection 8.3(a) have been fulfilled.
(c) PCI shall have received an opinion, dated the Closing, from
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇ in the form of Annex E.
ARTICLE IX. TERMINATION/EFFECTIVENESS
9.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby abandoned:
(a) By mutual written consent of the parties authorized by their
respective Boards of Directors, at any time prior to the Closing.
(b) By PCI by written notice to Nextel on December 31, 1997 if the
Closing has not occurred on or before such date so
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long as any postponements of the date of the Closing are not caused principally
by the action or inaction of PCI.
(c) Prior to the Closing, by written notice to PCI from Nextel
authorized by the Board of Directors of Nextel, if (i) there is a material
breach of any representation, warranty, covenant or agreement on the part of
PCI or any Subsidiary set forth in this Agreement, or if a representation or
warranty of PCI shall be untrue in any material respect, in either case such
that the condition specified in Sections 8.2(a) or 8.2(b) would not be
satisfied at Closing (a "Terminating PCI Breach"), except that, if such
Terminating PCI Breach is curable by PCI through the exercise of its reasonable
best efforts, then, for up to thirty (30) days, but only as long as PCI
continues to exercise such reasonable best efforts, Nextel may not terminate
this Agreement under this Section 9.1(c)(i) (the number of days elapsed prior
to any such cure, the "PCI Cure Period"), (ii) any governmental or regulatory
consent or approval required for consummation of the transactions contemplated
hereby is denied by or in a final order or other final action issued or taken
by the appropriate governmental or regulatory authority, agency or similar body
or (iii) consummation of any of the transactions contemplated hereby is
enjoined, prohibited or otherwise restrained by the terms of a final,
non-appealable order or judgment of a court of competent jurisdiction. If any
amendments, consents and approvals with respect to stock option agreements for
the PCI Stock Options have not been obtained by
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October 30, 1996, such failure shall be a material breach of a covenant for
purposes of this Section 9.1(c).
(d) Prior to the Closing, by written notice to Nextel from PCI
authorized by its Board of Directors, if (i) there is a material breach of any
representation, warranty, covenant or agreement on the part of Nextel set forth
in this Agreement, or if a representation or warranty of Nextel shall be untrue
in any material respect, in either case such that the condition specified in
Sections 8.3(a) or 8.3(b) would not be satisfied at Closing (a "Terminating
Nextel Breach"), except that, if such Terminating Nextel Breach is curable by
Nextel through the exercise of its reasonable best efforts then for up to 30
days, but only as long as Nextel continues to exercise such reasonable best
efforts, PCI may not terminate this Agreement under this Section 9.1(d)(i) (the
number of days elapsed prior to any such cure, the "Nextel Cure Period"), (ii)
any governmental or regulatory consent or approval required for consummation of
the transactions contemplated hereby is denied by or in a final order or other
final action issued or taken by the appropriate governmental or regulatory
authority, agency or similar body, (iii) consummation of any of the
transactions contemplated hereby is enjoined, prohibited or otherwise
restrained by the terms of a final, non-appealable order or judgment of a court
of competent jurisdiction or (iv) the Nextel Closing Price is below $14.00 and
Nextel does not adjust the Exchange Ratio, as provided in Section 1.10.
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(e) By Nextel by written notice to PCI during the thirty (30) day
period commencing on March 1, 1997, if Nextel and Castle have not entered into
the agreements contemplated by Section 8.2(k) so long as any failure to enter
into such agreements has not been caused by the action or inaction of Nextel.
9.2 Effect. Any termination of this Agreement, however effected, shall
not release either Nextel or PCI from any liability or other consequences
arising from any breach or violation by any such party of the terms of this
Agreement prior to the effective time of such termination, nor shall any such
termination release any party from its obligations or duties under this
Agreement which, by their terms and/or expressed intent, may require
performance subsequent to any such termination, and all provisions of this
Agreement which set forth such obligations or duties (including, without
limitation, Section 6.1 and, to the extent provided therein, in Section 10.6)
and such other general or procedural provisions which may be relevant to any
attempt to enforce such obligations or duties, shall survive any such
termination of this Agreement until such obligations or duties shall have been
performed or discharged in full.
ARTICLE X. MISCELLANEOUS
10.1 Waiver. Any party to this Agreement may, at any time prior to the
Closing, by action taken by its Board of Directors, or officers thereunto duly
authorized, waive any of the terms or
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conditions of this Agreement or agree to an amendment or modification to this
Agreement by an agreement in writing executed in the same manner (but not
necessarily by the same persons) as this Agreement.
10.2 Notices. All notices and other communications among the parties
shall be in writing and shall be deemed to have been duly given when (i)
delivered in person, or (ii) five days after posting in the United States mail
having been sent registered or certified mail return receipt requested, or
(iii) delivered by telecopy, which must be received in its entirety during
normal business hours, meaning between the hours of 10:00 a.m. and 6:00 p.m.,
McLean, Virginia time, and promptly confirmed by delivery in person or post as
aforesaid in each case, with postage prepaid, addressed as follows:
(a) If to Nextel, to:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
North Point
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
105
97
(b) If to PCI, to:
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
Gardere & ▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or addresses as the parties may from time to time
designate in writing.
10.3 Assignment. Except as provided in Section 6.4, no party hereto shall
assign this Agreement or any part hereof without the prior written consent of
the other parties. Except as otherwise provided herein, this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
10.4 Rights of Third Parties. Nothing expressed or implied in this
Agreement is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto, or any subsidiary of Nextel
joining this Agreement under the circumstances described in Section 6.4, any
right or remedies under or by reason of this Agreement.
10.5 Reliance. Each of the parties to this Agreement shall be deemed to
have relied upon the accuracy of the written representations and warranties
made to it in or pursuant to this
106
98
Agreement, notwithstanding any investigations conducted by or on its behalf or
notice, knowledge or belief to the contrary.
10.6 Expenses. Nextel shall bear its own expenses incurred in connection
with this Agreement and the transactions herein contemplated whether or not
such transactions shall be consummated, including, without limitation, all fees
of its legal counsel and accountants. PCI and its Subsidiaries shall bear
their own legal, financial advisory and accounting fees and expenses incurred
in connection with this Agreement and the transactions herein contemplated if
such transactions shall be consummated. In no event will the expenses borne by
PCI and the Subsidiaries include expenses incurred by PCI's stockholders or the
officers and directors of PCI and its Subsidiaries in connection with the
transactions herein contemplated.
10.7 Construction. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware. Unless otherwise stated,
references to Sections, Articles or Annexes refer to the Sections, Articles and
Annexes to this Agreement. As used in this Agreement, the phrase "to the
knowledge of PCI" or "to the knowledge of the Subsidiaries" shall comprehend
those matters that are, known to any of the executive officers of PCI.
10.8 Captions; Counterparts. The captions in this Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Agreement. This
Agreement may be executed in two or more
107
99
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.9 Entire Agreement. This Agreement (together with the Schedules to
this Agreement), constitutes the entire agreement among the parties and
supersedes any other agreements, whether written or oral, that may have been
made or entered into by or among Nextel or its subsidiaries and PCI or its
Subsidiaries or by any Director or Directors or officer or officers of such
parties relating to the transactions contemplated hereby, or incident hereto.
No representations, warranties, covenants, understandings, agreements, oral or
otherwise, relating to the transactions contemplated by this Agreement exist
between the parties except as expressly set forth in this Agreement.
10.10 Amendments. This Agreement may be amended or modified in whole
or in part, only by a duly authorized agreement in writing executed in the same
manner as this Agreement and which makes reference to this Agreement.
10.11 Publicity. All press releases or other public communications of
any nature whatsoever relating to the transactions contemplated by this
Agreement, and the method of the release for publication thereof, shall be
subject to the prior mutual approval of Nextel and PCI which approval shall not
be unreasonably withheld by any party; provided, however, that, subject to
compliance with Section 6.1, nothing herein shall prevent any party from
publishing such press releases or other public communications as such party may
consider necessary in order to satisfy such party's legal or contractual
obligations.
108
100
IN WITNESS WHEREOF the parties have hereunto caused this Agreement to
be duly executed as of the date first above written.
NEXTEL COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
Title:
------------------------
NEXTEL FINANCE COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
Title:
------------------------
DCI MERGER INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
Title:
------------------------
PITTENCRIEFF COMMUNICATIONS, INC.
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
-------------------------
Title:
------------------------
109
ANNEX A
110
ANNEX A
__________________, 1997
Nextel Communications, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Pittencrieff Communications, Inc.
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
The undersigned has been advised that as of the date hereof he, she
or it may be deemed to be an "affiliate" of Pittencrieff Communications, Inc.,
a Delaware corporation ("PCI"), as that term is defined for purposes of Rule
145 under the Securities Act of 1933, as amended (the "Securities Act"),
although nothing contained herein shall be construed as an admission that the
undersigned is an affiliate of PCI. PCI, Nextel Communications, Inc., a
Delaware corporation ("Nextel"), Nextel Finance Company, a Delaware corporation
and a wholly owned subsidiary of Nextel ("NFC") and DCI Merger Inc., a Delaware
corporation and a wholly owned subsidiary of NFC ("Merger Sub"), have entered
into an Agreement of Merger and Plan of Reorganization dated as of October 2,
1996 (the "Merger Agreement"). The Merger Agreement provides, among other
things, for the merger of Merger Sub with and into PCI (the "Merger") and, in
accordance therewith, the shares of common stock, par value $.01 per share, of
PCI and rights to acquire shares owned by the undersigned at the Effective Time
of the Merger (as defined in the Merger Agreement) shall be converted into the
right to receive shares or rights to acquire shares of Class A Common Stock,
par value $.001 per share, of Nextel (the "Nextel Common Stock") on the terms
and subject to the conditions set forth in the Merger Agreement.
With respect to Nextel Common Stock to be received by the undersigned
in the Merger, the undersigned represents, warrants, understands and agrees as
follows:
1. The undersigned has been advised that the issuance of the Nextel
Common Stock to it pursuant to the Merger Agreement has been registered with
the Securities and Exchange Commission
111
Nextel Communications, Inc.
Pittencrieff Communications, Inc.
_________________, 1997
Page 2
(the "Commission") under the Securities Act on a Registration Statement on Form
S-4. However, the undersigned also has been advised that any offer, sale,
transfer or disposition by it of any of the Nextel Common Stock received by it
in the Merger may, under current law, be made only in accordance with the
provisions of Rule 145 under the Securities Act, pursuant to an effective
registration statement under the Securities Act or pursuant to an exemption
provided thereunder.
2. The undersigned understands that, as an affiliate of PCI, the
provisions of Rule 145 permit sales, in general, while Nextel is a Reporting
Company (as defined below), only in "brokers' transactions" within the meaning
of Section 4(4) of the Securities Act and paragraph (g) of Rule 144 thereunder
or transactions directly with a "market maker," as defined in Section 3(a)(38)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), where
the aggregate number of shares of Nextel Common Stock sold at any time,
together with all sales of restricted Nextel Common Stock sold for the
undersigned's account during the preceding three-month period, does not exceed
the greater of (i) one percent of the Nextel Common Stock outstanding or (ii)
the average weekly volume of trading in Nextel Common Stock on all national
securities exchanges and/or reported through the automated quotation system of
a registered securities association during the four-week period preceding any
such sale. For purposes of determining the amount of securities specified in
clauses (i) and (ii) above, the provisions of paragraph (e)(3) of Rule 144
shall apply. A "Reporting Company" means a company that is subject to the
requirements to file, and is filing, periodic reports under Section 13 or 15(d)
of the Exchange Act.
3. The undersigned further understands that Rule 145 permits sales
of Nextel Common Stock without the restrictions set forth in paragraph 2 above
if (i) at the time of sale, the undersigned is not an affiliate of Nextel, the
shares of Nextel Common Stock have been held for a minimum period of two years
after the Effective Time of the Merger and Nextel is a Reporting Company or
(ii) such shares have been held for a minimum period of three years after the
Effective Time of the Merger and the undersigned has not been an affiliate of
Nextel for at least three months prior to the sale.
4. The undersigned hereby represents and warrants to Nextel that
the undersigned will not offer, sell, transfer or otherwise dispose of any
Nextel Common Stock received by the undersigned in the Merger, except pursuant
to (i) the provisions of Rule 145 under the Securities Act, (ii) an effective
registration statement under the Securities Act or (iii) in a transaction that,
in the opinion of legal counsel reasonably satisfactory to Nextel,
112
Nextel Communications, Inc.
Pittencrieff Communications, Inc.
_________________, 1997
Page 3
is exempt from registration under the Securities Act. In the event of a sale
or other disposition pursuant to Rule 145, the undersigned will, upon request
of Nextel, supply evidence reasonably satisfactory to Nextel of compliance with
such Rule.
5. The undersigned has carefully read this letter and the Merger
Agreement and has discussed their requirements and other applicable limitations
upon the offer, sale, transfer or other disposition of the Nextel Common Stock
to be acquired by the undersigned in the Merger, to the extent it believed
necessary, with the undersigned's counsel or counsel for PCI.
6. The undersigned understands that, except as provided in Section
5.2 of the Merger Agreement, Nextel is under no obligation to register the
offer, sale, transfer or other disposition of the Nextel Common Stock by the
undersigned or on behalf of the undersigned or to take any other action
necessary in order to make compliance with an exemption from registration
available.
7. The undersigned understands and agrees that stop transfer
instructions may be given to Nextel's transfer agents with respect to Nextel
Common Stock to be acquired by the undersigned in the Merger and that there may
be placed on the certificates for such shares, and any certificates issued in
exchange or substitution therefor, a legend stating:
"The shares represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the Securities Act of
1933 applies. The shares represented by this certificate may only be
transferred in accordance with the terms of an Agreement dated
____________, 1996 among the registered holder hereof, Nextel
Communications, Inc. and PCI, a copy of which Agreement is on file at
the principal offices of Nextel Communications, Inc."
The undersigned understands and agrees that, upon the undersigned's
request or the request of a transferee, the legend set forth in this paragraph
7 shall be removed by delivery of substitute certificates without such legend
(a) if the transfer to the transferee was effected in accordance with clause
(i) or (ii) of paragraph 4 and the conditions of paragraph 4 were complied with
or (b) upon delivery to Nextel of an opinion of counsel reasonably satisfactory
to Nextel or other evidence reasonably satisfactory to Nextel to the effect
that such legend is not required for purposes of the Securities Act.
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Nextel Communications, Inc.
Pittencrieff Communications, Inc.
_________________, 1997
Page 4
8. The undersigned also understands that unless the transfer by the
undersigned of the Nextel Common Stock to be acquired in the Merger has been
registered under the Securities Act or is a sale made in conformity with the
provisions of Rule 145, Nextel reserves the right to put the following legend
on the certificates issued to its transferee:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933 and were acquired from a person who
received such shares in a transaction to which Rule 145 promulgated
under the Securities Act of 1933 applies. The shares have been
acquired by the holder not with a view to, or for resale in
connection with, any distribution of such shares, and such shares may
not be sold or otherwise transferred except in accordance with an
exemption from the registration requirements of the Securities Act of
1933."
In addition, the undersigned understands and agrees that, upon its
request or the request of its transferee, the legend set forth in this
paragraph 8 shall be removed by delivery of substitute certificates without
such legend upon delivery to Nextel of an opinion of counsel reasonably
satisfactory to Nextel or other evidence reasonably satisfactory to Nextel to
the effect that such legend is not required for purposes of the Securities Act.
Very truly yours,
-----------------------------------------
Accepted this ___ day
of _____________, 1997.
Nextel Communications, Inc.
By:
------------------------
114
Nextel Communications, Inc.
Pittencrieff Communications, Inc.
_________________, 1997
Page 5
Accepted this ___ day
of _____________, 1997.
Pittencrieff Communications, Inc.
By:
------------------------
115
ANNEX B
116
ANNEX B
None.
117
ANNEX C-1
118
ANNEX C-1
_______________, 1997
Nextel Communications, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pittencrieff Communications, Inc.
Ladies and Gentlemen:
We have acted as counsel for Pittencrieff Communications, Inc., a
Delaware corporation ("PCI"), in connection with the Agreement of Merger and
Plan of Reorganization, by and between PCI, Nextel Communications, Inc., a
Delaware corporation ("Nextel"), Nextel Finance Company, a Delaware corporation
and a wholly owned subsidiary of Nextel formerly known as Dispatch
Communications, Inc. and DCI Merger Inc., a Delaware corporation and a wholly
owned subsidiary of Nextel Finance Company, dated as of October 2, 1996
("Merger Agreement").
The opinions herein are rendered to you pursuant to Section 8.2(c) of
the Merger Agreement. Capitalized terms used herein that are defined in the
Merger Agreement, and not otherwise defined herein, shall have the meanings
given to such terms in the Merger Agreement.
As such counsel, we have examined such documents, records and matters
of fact and questions of law as we have considered appropriate for purposes of
rendering the opinions expressed below, except where a statement is qualified
as to knowledge, in which case we have made only the limited inquiry as
specified below. We have examined, among other things, the following:
(a) The Merger Agreement;
(b) The Registration Statement;
(c) The material written agreements and instruments to which
PCI is a party, or by which it may be bound, or to which PCI's properties
or assets are subject identified to us in an officer's certificate signed
by an officer of PCI ("Material Agreements");
119
Nextel Communications, Inc.
____________, 1997
Page 2
(e) Any court or administrative orders, writs, judgments, and
decrees specifically directed to and currently binding on PCI and
identified to us in an officer's certificate signed by an officer of PCI
("Court Orders"); and
(f) The current Certificate of Incorporation and the current
Bylaws of PCI ("Governing Documents").
In rendering the opinions expressed herein, we have assumed without
any independent verification (a) the legal capacity of natural persons, (b) the
genuineness of all signatures (other than those of officers of PCI on the
Merger Agreement), (c) the authenticity of all documents submitted to us as
originals, the conformity to authentic original documents of all documents
submitted to us as certified, notarial, conformed, or photostatic copies, and
the accuracy of all public files, records and certificates of, or furnished by,
governmental or regulatory agencies or authorities and examined by us.
We have been furnished with, and with your consent have relied upon,
certificates of officers of PCI with respect to certain factual matters. In
addition, we have obtained and relied upon such certificates and assurances
from public officials as we have deemed necessary.
Based on the foregoing, and subject to the exceptions,
qualifications, and limitations contained herein, it is our opinion that, as of
the date hereof:
1. PCI is a corporation duly incorporated, validly existing, and in
good standing under the General Corporation Law of Delaware ("DGCL"), and has
the corporate power and authority to own its properties and to conduct its
business as currently conducted, and as proposed to be conducted, as described
in the Proxy Statement/Prospectus which is part of the Registration Statement.
PCI has the corporate power and authority to enter into and perform its
obligations under the Merger Agreement.
2. The Merger Agreement has been duly authorized by all necessary
corporate action on the part of PCI and has been duly executed and delivered by
PCI.
3. Neither the execution and delivery of the Merger Agreement, nor
the consummation of the Merger, by PCI will (i) constitute a violation of the
DGCL, any statute or regulation of the United States of America applicable to
PCI, or any Court Orders or (ii) constitute a breach or violation of any
provision of the Governing Documents.
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Nextel Communications, Inc.
____________, 1997
Page 3
4. Neither the execution and delivery of the Merger Agreement, nor
the consummation of the Merger, by PCI will (i) constitute a violation of or
result in a breach of or a default (or an event that, with notice or lapse of
time or both, would constitute a default) under, (ii) cause the creation of any
security interest, lien, charge or encumbrance upon any of the properties or
assets of PCI under, or (iii) cause or permit the acceleration of the maturity
of any debt or obligation of PCI pursuant to any Material Agreement.
5. No registration with or authorization or approval by any court
or federal governmental authority of the United States of America or under the
DGCL that has not been made or obtained is required of PCI in connection with
its execution and delivery of the Merger Agreement or its consummation of the
Merger, except the filing to effect the Merger under the DGCL.
6. To the best of our knowledge, there are no actions, proceedings
or investigations pending or overtly threatened against PCI or any of its
properties by or before any court, governmental authority, or arbitrator,
domestic or foreign, seeking to restrain or prohibit the consummation of the
transactions described in the Merger Agreement.
The foregoing opinions are subject to the following exceptions,
qualifications and limitations:
A. We are opining herein as to the effect on the Merger Agreement only
of the federal laws of the United States of America, the laws of the State of
Texas, and the DGCL, and we express no opinion with respect to the
applicability thereto, or the effect thereon, of the laws of any other
jurisdiction or, in the case of Delaware, any other laws or as to any matters
of municipal law or the laws of any local agencies within any state. We
express no opinion as to, and have assumed for purposes of the opinions set
forth herein, compliance by the parties with (i) the statutes administered by,
the rules and regulations of, or matters exclusively within the purview of the
Federal Communications Commission, including, without limitation, the
Communications Act of 1934, as amended, (ii) the application of any antitrust,
antifraud or trade regulation laws, other than the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended, or (iii) the securities laws and
regulations of the United States of America and the State of Texas.
B. We have assumed that the Merger Agreement has been duly authorized,
executed, and delivered by or on behalf of each of the parties thereto (other
than PCI) and is the valid, legally binding, and enforceable obligation of each
of the parties thereto (other than PCI).
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Nextel Communications, Inc.
____________, 1997
Page 4
C. As used in the opinions expressed herein, "to the best of our
knowledge" and similar phrases refer only to the actual current consciousness,
without independent verification, of attorneys of our Firm who are or have been
involved in the representation of PCI in connection with the Merger Agreement.
D. To the extent any of the opinions expressed herein relate to or
involve materiality in any form, we have relied upon PCI to determine what is
or would be "material" under the circumstances.
E. The opinion expressed in Paragraph 1 regarding the good standing of
PCI is rendered solely on the basis of, and has only the meaning ascribed to, a
certificate issued by the Secretary of State of the State of Delaware.
F. We have not conducted any search of any indices, dockets, or other
records of any federal, state, or local court, administrative agency or body,
or of any arbitrator.
G. This opinion letter is limited to the matters expressly stated, and
no other opinion upon the matters so expressly stated is implied or may be
inferred.
H. This opinion letter is as of the date hereof, and we undertake no
obligation, and expressly disclaim any obligation, to advise you of any change
in the matters set forth herein or of any circumstances or developments after
the date hereof that would or might conflict with any of the assumptions herein
stated.
I. The opinions expressed herein are rendered only to you and are solely
for your benefit in connection with the transactions described in the Merger
Agreement. This opinion letter may not be relied upon by you for any other
purpose, or furnished to, quoted to, or relied upon by any other person, firm,
or entity for any purpose, without our prior written consent.
Respectfully submitted,
GARDERE & ▇▇▇▇▇, L.L.P.
By:
------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇, Partner
122
ANNEX C-2
123
DRAFT GC&D LEGAL OPINION
[DATE]
Nextel Communications, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as special communications counsel to Pittencrieff
Communications, Inc., a Delaware corporation (the "Company"), in connection
with the transactions contemplated by the Agreement of Merger and Plan of
Reorganization dated as of October 2, 1996 (the "Agreement") between the
Company; Nextel Communications, Inc., a Delaware corporation ("Nextel"); Nextel
Finance Company, a Delaware corporation and wholly-owned subsidiary of Nextel
("NFC"); and DCI Merger, Inc., a Delaware corporation and wholly-owned
subsidiary of NFC. This opinion is being delivered to you at the Company's
request pursuant to Section 8.2(c) of the Agreement. All capitalized terms used
but not defined herein shall have the meanings assigned thereto in the
Agreement.
In connection with the delivery of this opinion, we have examined
originals, or copies certified or otherwise identified to our satisfaction of
the following documents:
(i) the Agreement;
(ii) the licenses, permits and authorizations issued to the Company by
the Federal Communications Commission ("FCC" or the "Commission") and set forth
in Exhibit A hereto (the "Licenses");
(iii) the publicly-available files of the FCC, and the FCC's database
as maintained for the FCC by its contractor, Inneractive Systems, Inc. (the
"FCC Database"), relating the Company or its assets, as such were publicly
available for public inspection on __________, 1996 (the "Record Date"). It is
the Commission's currently policy to eliminate licensing records from existing
station files which are more than six years old upon review by the Commission
of a particular station file. Therefore, the publicly available Commission
station files may not contain a complete record of the licensing history of a
particular system or station. In addition, documents submitted to the FCC are
generally not immediately included in station files. This too may prevent a
complete review of the licensing records to be undertaken in some
circumstances; and
(iv) a Finder's Preference case list dated __________ which was made
available through the Commission's copying contractor, International
Transcription Services, and which is intended to include Finder's Preference
cases received at the FCC.
124
Nextel Communications, Inc.
___________, 1997
Page 2
We have been retained by the Company strictly as special
communications counsel and not as general counsel or in any other role. Our
opinions set forth herein are strictly as to law under the Federal
Communications Act of 1934, as amended and the Rules of the FCC adopted
thereunder (collectively, the "Act"). Without limitation, we express no opinion
herein as to the enforceability of the Documents under the laws of any State or
as to the enforceability of the choice of law provision set forth in the
Agreement.
To the extent we deemed necessary for purposes of this opinion, we
have relied upon the accuracy and completeness of (i) statements and
representations of officers of the Company as to factual matters, (ii) the
corporate records provided to us by such officers, and (iii) certificates and
other documents obtained from public officials (the "Documents"). We have
further relied as to factual matters on the representations and warranties
contained in the Documents and we have assumed the completeness and accuracy of
all such representations and warranties as to factual matters. We further have
assumed the genuineness of all signatures, the legal capacity of all
individuals who have executed the Documents and all other documents we have
reviewed; the authenticity of all documents submitted to us as originals; and
the conformity to original documents of all documents submitted to us as
certified photostatic, reproduced or conformed copies. We have also assumed
that the Documents have been duly authorized, executed and delivered by each of
the parties thereto; are enforceable in accordance with their terms against
such parties; ands that the execution, delivery and performance of the
Documents by each of the parties thereto does not and will not result in a
breach of, or constitute a default under any agreement, instrument or other
document to which such party is a party or any order, judgment, writ or decree
applicable to such party or to which such party's property is subject.
Whenever our opinion with respect to factual matters is indicated to
be based on our "Knowledge," we are referring to the actual, current knowledge
of ▇▇▇▇▇▇▇ ▇▇▇, the attorney having supervisory responsibility for the
Company's relationship with this firm, and those other attorneys of ▇▇▇▇▇▇▇,
Carton & ▇▇▇▇▇▇▇ who have been given substantive legal attention to the affairs
of the Company during the preceding 12 months. When, in this opinion, we refer
to our knowledge after "Due Inquiry," we are referring solely to the review of
documents referenced above. This letter does not express an opinion on those
matters which would require a physical inspection of specific actual
transmitter sites or systems in connection with this Opinion. Moreover, we have
not, except as set forth herein, undertaken any independent investigation to
determine the existence or absence of facts upon which our opinion relies; we
have not undertaken any physical inspection of the Company, its stations or its
other assets; and no inference as to our knowledge of the existence or absence
of such facts should be drawn from such representation.
Based upon and subject to our examination as aforesaid and
subject to the qualifications set forth herein, we are of the opinion that:
125
Nextel Communications, Inc.
___________, 1997
Page 3
1. The FCC has granted its consent and authorization for the transfer
of control or the Licenses from the Company to [DCI] and such consent and
authorization has become a Final Order. To the best of our Knowledge after Due
Inquiry, except as otherwise noted in Exhibit A hereto, the Licenses are in
full force and effect and have the expiration dates set forth in Exhibit A. The
Licenses are the only licenses, permits or authorizations of the FCC required
under an Act for the operation of the facilities authorized by the Licenses,
and, except as otherwise indicated in Exhibit A hereto, no other party has
received an authorization from the FCC to operate a transmitting station in the
same radio service, on the same frequencies, and in the same geographic areas
as is authorized to each respective System. To the best of our Knowledge after
Due Inquiry, any application for the renewal of a License required to be filed
under the Act prior to the date hereof has been filed.
2. To the best of our Knowledge after Due Inquiry, except as set forth
in Exhibit A hereto, and except for facts which affect the industry generally
there is no fact that permits, or after notice or lapse of time or both would
permit revocation or termination of the Licenses, the issuance by the FCC of a
notice of violation or notice of apparent liability; or that would materially
and adversely affect the Licenses or the Systems.
3. To the best of our Knowledge after Due Inquiry, except as set forth
in Exhibit A hereto, and except for decrees, orders or rulings which affect the
industry generally, there is no outstanding decree, order or other ruling of
the FCC relating to the Licenses or the transmitting facilities authorized
thereunder (the "Systems") which would have a material, adverse affect on the
Licenses or the Systems; the FCC has not issued any notice of a default,
revocation, or demand for return with respect to any License; and there are no
claims (including "finder's preference" claims), complaints, investigations,
proceedings, petitions, notices of violation or notices of apparent liability
which, if accurate and adopted finally, would result in the revocation or
termination of, or have a material adverse on, the Licenses under the Act.
4. All FCC authorizations and consents required to be obtained under
the Agreement prior to Closing have been obtained and are Final Orders. The
execution, delivery and performance of the Parties' obligations under the
Agreement does not violate the Act.
The opinions set forth herein are provided only with respect to the
laws and the regulations under the Act which are in effect as of the date
hereof and we assume no responsibility for updating this opinion to take into
account any event, action, interpretation or change of law occurring subsequent
to the date hereof that may affect the validity of any of the opinions
expressed herein.
This opinion is furnished by us solely for your benefit for use in
connection with the Documents and the transactions contemplated thereby and it
may not be furnished or quoted to, or relied upon by, any other person, without
our prior written consent.
126
Nextel Communications, Inc.
___________, 1997
Page 4
Very truly yours,
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ANNEX D
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THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO THE
DISTRIBUTION HEREOF OR OF THE COMMON STOCK OR OTHER SECURITIES ISSUABLE UPON
EXERCISE HEREOF WITHIN THE MEANING OF THE SECURITIES ACT OF 1933 AND THE RULES
AND REGULATIONS THEREUNDER NEITHER THIS WARRANT NOR THE COMMON STOCK ISSUABLE
UPON EXERCISE HEREOF MAY BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933 OR
UPON RECEIPT BY THE COMPANY OF AN OPINION SATISFACTORY AS TO FORM, SCOPE AND
SUBSTANCE OF COUNSEL ACCEPTABLE TO THE COMPANY AS TO AN EXEMPTION THEREFROM.
WARRANT
To Purchase _______ Shares
of Class A Common Stock, $.001 par value, of
NEXTEL COMMUNICATIONS, INC.
No. __ ______________, 199_
THIS IS TO CERTIFY that, for value received, _____________, or registered
assigns, is entitled upon the due exercise hereof at any time during the
Exercise Period (as hereinafter defined) to purchase _________________________
shares of Common Stock of Nextel Communications, Inc., a Delaware corporation
(the "Company"), at an Exercise Price of $_______ per share (subject to
adjustment as provided herein), and to exercise the other rights, powers and
privileges hereinafter provided, all on the terms and subject to the conditions
hereinafter set forth.
Pursuant to the terms of the Agreement of Merger and Plan of
Reorganization, dated as of September ____, 1996, (the "Merger Agreement") by
and between the Company, [Sub] and _________ ("Frontier"), [Sub] was merged
with and into [Frontier] (the "Merger"). As contemplated by the Merger
Agreement, the Company offered to exchange for each outstanding warrant to
purchase common stock of Frontier (the "Frontier Warrant") a new warrant of the
Company with the terms and conditions set forth herein. This warrant (the
"Warrant") has been issued in exchange for a Frontier Warrant upon the
consummation of the Merger.
1. Definitions. The terms defined in this Section 1 shall have the following
respective meanings:
"Assignment" shall mean the form of Assignment appearing at the end of
this Warrant.
"Common Stock" shall mean the Class A Common Stock, $0.001 par value per
share, of the Company, or, after consummation of the Merger, such other
generally held class of common stock of the Company as may be outstanding from
time to time. In addition, for the purpose of determining whether an
adjustment under Section 4 may be required as a result of the issuance of
Common Stock or Convertible Securities, Common Stock shall be deemed to include
any other class or series of stock which participates in a corporation's
profits with the Common Stock.
"Company" shall mean Nextel Communications, Inc., a Delaware corporation,
and any successor corporation.
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"Convertible Securities" shall mean evidences of indebtedness, shares of
stock or other securities which are directly or indirectly convertible into or
exchangeable for, with or without payment of additional consideration, shares
of Common Stock, either immediately or upon a specified date or the happening
of a specified event.
"corporation" shall include an association, partnership, joint stock
company, business trust or other similar organization.
"Current Market Price" of any security as of any date herein specified
shall be (a) if such security is listed or admitted for trading on any national
securities exchange, the last sale price of such security, regular way, or the
average of the closing bid and asked prices thereof if no such sale occurred,
in each case as officially reported on the principal securities exchange on
which such security is listed, or (b) if not reported as described in clause
(a), the average of the closing bid and asked prices of such security in the
over-the-counter market as shown by the National Association of Securities
Dealers, Inc. Automated Quotation System, or any similar system of automated
dissemination of quotations of securities prices then in common use, if so
quoted, as reported by any member firm of the New York Stock Exchange selected
by the Company, or (c) if not quoted as described in clause (b), the average of
the closing bid and asked prices for such security as reported by the National
Quotation Bureau Incorporated or any similar successor organization, as
reported by any member firm of the New York Stock Exchange selected by the
Company. If such security is quoted on a national securities or central market
system in lieu of a market or quotation system described above, the closing
price shall be determined in the manner set forth in clause (a) of the
preceding sentence if actual transactions are reported and in the manner set
forth in clause (b) of the preceding sentence if bid and asked prices are
reported but actual transactions are not.
"Exercise Period" shall mean the period commencing upon consummation of
the Merger and terminating at the close of business on ______________________ .
"Exercise Price" shall mean the price per share of Common Stock set forth
in the preamble to this Warrant, as such price may be adjusted pursuant to
Section 4.
"Fair Value" shall mean the fair value of the appropriate security,
property, assets, business or entity as determined in good faith by the Board
of Directors of the Company (the "Board"), provided that the fair value of the
security, property, assets, business or entity, as the case may be, in question
shall be determined without, in the case of any such securities, applying a
discount for any lack of liquidity thereof, but otherwise in each case in
accordance with generally accepted financial practice.
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"Merger" shall have the meaning specified in the preamble to this Warrant.
"Merger Agreement" shall have the meaning specified in the preamble to
this Warrant.
"Notice of Exercise" shall mean the form of Notice of Exercise appearing
at the end of this Warrant.
"Other Securities" shall mean with reference to the exercise privilege of
the holder of the Warrant, any shares (other than Common Stock) and any other
securities of the Company or of any other Person which the holder of the
Warrant at any time shall be entitled to receive, or shall have received, upon
the exercise or partial exercise of the Warrants, in lieu of or in addition to
Common Stock, or which at any time shall be issuable or shall have been issued
in exchange for or in replacement of Common Stock (or Other Securities)
pursuant to the terms of the Warrant or otherwise.
"Frontier" shall mean __________________, a Delaware corporation.
"Frontier Warrant" shall have the meaning specified in the preamble to
this Warrant.
"shares" of any Person shall include any and all shares of capital stock
of such Person of any class or other shares, interests, participations or other
equivalents (however designated) in the capital of such Person.
"Warrant Register" shall have the meaning specified in Section 3.1.
"Warrant Shares" shall mean the shares of Common Stock (and/or Other
Securities) issued or issuable, as the case may be, from time to time upon
exercise of the Warrant, including, without limitation, any shares of Common
Stock (and/or Other Securities) issuable with respect thereto by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation, other reorganization or otherwise.
"Warrant" shall have the meaning specified in the preamble to this
Warrant.
2. Exercise of Warrant.
2.1. Right to Exercise; Notice. On the terms and subject to the
conditions of this Section 2, the holder hereof shall have the right, at its
option, to exercise this Warrant in whole or in part at any time or from time
to time during the Exercise Period.
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2.2. Manner of Exercise; Issuance of Common Stock. To exercise this
Warrant, the holder hereof shall deliver to the Company (a) a Notice of
Exercise duly executed by the holder hereof specifying the number of Warrant
Shares to be purchased, (b) payment of an amount equal to the aggregate
Exercise Price for all such Warrant Shares, which shall be made (i) in cash or
by certified or bank cashier's check payable to the order of the Company, or
(ii) by delivery to the Company of that number of shares of Common Stock having
a value computed based upon the Current Market Price equal to the then
applicable Exercise Price multiplied by the number of Warrant Shares then being
purchased, and (c) this Warrant. In the alternative, this Warrant may be
exercised on a net basis, such that, without the exchange of any funds, the
holder of this Warrant receives that number of Warrant Shares subscribed to
less that number of shares of Common Stock having an aggregate value computed
based upon the Current Market Price at the time of exercise equal to the
aggregate Exercise Price that would otherwise have been paid by such holder for
the number of Warrant Shares subscribed to. The Company shall, as promptly as
practicable, and in any event within five days thereafter, cause to be issued
and delivered to the holder hereof (or its nominee) or the transferee
designated in the Notice of Exercise, (y) a certificate or certificates
representing the number of Warrant Shares specified in the Notice of Exercise
and (z) if this Warrant is exercised in part, a new Warrant evidencing the
right of the holder to purchase the aggregate number of Warrant Shares for
which this Warrant shall not have been exercised. The holder or transferee so
designated in the Notice of Exercise shall be deemed to have become the holder
of record of such Warrant Shares for all purposes as of the close of business
on the date on which the Notice of Exercise, an amount equal to the aggregate
Exercise Price, and this Warrant shall have been received by the Company.
2.3. Fractional Shares. Notwithstanding any other provision of this
Warrant, the Company shall not issue fractional Warrant Shares or scrip
representing fractional Warrant Shares upon any exercises of this Warrant.
3. Registration, Transfer and Exchange; Legends.
3.1. Maintenance of Registration Books. The Company shall keep at its
principal executive office, or such other address (including that of the
Company's transfer agent) as the Company shall notify the holder in writing, a
register (the "Warrant Register") in which the Company shall provide for the
registration, transfer and exchange of the Warrant. The Company shall not at
any time close the Warrant Register so as to result in preventing or delaying
the exercise or transfer of this Warrant, provided that the Company may make
reasonable provisions with respect to closing the Warrant Register.
3.2. Transfer and Exchange. Upon surrender for registration of transfer
of this Warrant at such office, the Company shall
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execute and deliver in the name of the designated transferee or transferees one
or more new Warrants representing the right to purchase at the Exercise Price
then in effect a like aggregate number of Warrant Shares, and shall execute
and deliver to the holder of this Warrant a new Warrant conveying the right to
purchase any Warrant Shares not transferred.
If such a transfer is not made pursuant to an effective Registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
the Warrant holder will, if requested by the Company, deliver to the Company an
opinion of counsel, which counsel and opinion shall be satisfactory in form,
scope and substance to the Company, that the Warrant may be sold without
registration under the Securities Act, as well as:
(a) an investment covenant satisfactory to the Company signed by the
proposed transferee;
(b) an agreement by such transferee to the impression of the
restrictive investment legend set forth at the beginning of this Warrant;
and
(c) an agreement by such transferee to be bound by the provisions of
this Warrant.
3.3. Replacement. In the case of any loss, theft or destruction of this
Warrant, upon delivery of a written agreement to indemnify the Company (which
agreement may be unsecured, if from the original holder of this Warrant), or in
the case of any mutilation of this Warrant, upon surrender of this Warrant to
the Company, the Company, at its expense, will execute and deliver, in lieu
thereof, a new Warrant representing the right to purchase at the Exercise Price
then in effect a like aggregate number of Warrant Shares.
4. Anti-Dilution Provisions.
4.1. Adjustment of Number of Shares Purchasable. Upon any adjustment of
the Exercise Price as provided in Section 4.2, the holder hereof shall
thereafter be entitled to purchase, at the Exercise Price resulting from such
adjustment, the number of shares of Common Stock (calculated to the nearest
1/100th of a share) obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
purchasable hereunder immediately prior to such adjustment and dividing the
product thereof by the Exercise Price resulting from such adjustment.
4.2. Adjustment of Exercise Price. The Exercise Price shall be subject to
adjustment from time to time as set forth in this Section 4.2.
(a) Stock Dividends, Subdivisions and Combinations. If the Company
at any time and from time to time subsequent to
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the date hereof: (i) declares a dividend upon, or makes any distribution in
respect of, any of its stock, payable in shares of Common Stock or Convertible
Securities or (ii) subdivides its outstanding shares of Common Stock into a
larger number of shares of Common Stock, or (iii) combines its outstanding
shares of Common Stock into a smaller number of shares of Common Stock, then
the Exercise Price shall be adjusted to the price determined by multiplying the
Exercise Price per share of Common Stock immediately prior to such event by a
fraction (A) the numerator of which shall be the total number of outstanding
shares of Common Stock immediately prior to such event, and (B) the denominator
of which shall be the total number of outstanding shares of Common Stock
immediately after such event, treating as outstanding all shares of Common
Stock issuable upon conversions or exchanges of such Convertible Securities.
(b) Issuance of Additional Shares of Common Stock. If the Company
at any time and from time to time subsequent to the date hereof shall issue or
sell any shares of Common Stock, for a consideration (before underwriters
discount, in the case of a sale involving an unaffiliated underwriter) less
than the Current Market Price per share, the Exercise Price upon each such
issuance or sale shall be adjusted to the price determined by multiplying the
Exercise Price in effect as of the date specified in the next succeeding
paragraph by a fraction the numerator of which is (i) the sum of (A) the number
of shares of Common Stock outstanding immediately prior to such issue or sale
multiplied by the Current Market Price per share of Common Stock immediately
prior to such issue or sale plus (B) the aggregate consideration, if any,
received by the Company upon such issue or sale, divided by (ii) the total
number of shares of Common Stock outstanding immediately after such issue or
sale, and the denominator of which is the Current Market Price per share of
Common Stock immediately prior to such issue or sale. No adjustment will be
made under this Section 4.2(b) that would result in an increase in the Exercise
Price.
For purposes of this Section 4.2(b), the date as of which the Current
Market Price shall be determined shall be the earlier of (x) the date on which
the Company shall enter into a firm contract for the issuance of such shares of
Common Stock and (y) the date of actual issuance of such shares of Common
Stock.
No adjustment of the Exercise Price shall be made under this Section
4.2(b) upon the issuance of any shares of Common Stock which are (aa)
distributed to holders of Common Stock pursuant to a stock dividend or
subdivision for which an adjustment is provided under Section 4.2(a) or (bb)
issued pursuant to the conversion or exchange of any Convertible Securities to
the extent that an adjustment shall previously have been made upon the issuance
of such Convertible Securities pursuant to Sections 4.2(a) or (c).
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(c) Issuance of Convertible Securities. If the Company at any time
and from time to time subsequent to the date hereof shall issue or sell any
Convertible Securities and the consideration per share for which shares of
Common Stock may at any time thereafter be issuable pursuant to the terms of
such Convertible Securities shall be less than the Current Market Price per
share (determined as of the date specified in the next succeeding paragraph),
the Exercise Price upon each such issuance or sale shall be adjusted as
provided in Section 4.2(b) on the basis that (i) the maximum number of shares
of Common Stock necessary to effect the conversion or exchange of all such
Convertible Securities shall be deemed to have been issued as of the date of
the determination of the Current Market Price, specified in the next succeeding
paragraph, and (ii) the aggregate consideration, if any, received for such
shares of Common Stock shall be deemed to be the minimum consideration received
and receivable by the Company in connection with the issuance and exercise of
such Convertible Securities.
For the purposes of this Section 4.2(c), the date as of which the
Current Market Price per share shall be determined shall be the earlier of (x)
the date on which the Company shall enter into a firm contract for the issuance
of such Convertible Securities and (y) the date of actual issuance of such
Convertible Securities.
(d) Readjustment of Exercise Price. In the event of any change in
(i) the purchase price payable for any Convertible Securities referred to in
Section 4.2(c), (ii) the consideration, if any, payable upon the conversion or
exchange of such Convertible Securities or (iii) the rate at which any
Convertible Securities are convertible into or exchangeable for shares of
Common Stock, the Exercise Price in effect at the time of such event shall
forthwith be readjusted to the Exercise Price which would have been in effect
at such time had such Convertible Securities provided for such changed
consideration or conversion rate, as the case may be, at the time initially
granted, issued or sold. On the expiration of any right to convert or exchange
under any Convertible Securities not exercised, the Exercise Price then in
effect shall forthwith be increased to the Exercise Price which would have been
in effect at the time of such expiration had such Convertible Securities never
been issued. No readjustment of the Exercise Price pursuant to this Section
4.2(e) shall (x) increase the Exercise Price by an amount in excess of the
adjustment previously made to the Exercise Price in respect of the issue, sale
or grant of the applicable Convertible Securities or (y) require any adjustment
to the amount paid or number of shares of Common Stock received by any Person
upon any exercise of this Warrant prior to the date upon which such
readjustment to the Exercise Price shall occur.
(e) Reorganization, Reclassification or Recapitalization of Company.
If the Company at any time and from time to time subsequent to the date hereof
shall effect (i) any
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reorganization or reclassification or recapitalization of the capital stock of
the Company (other than in the cases referred to in Section 4.2(a)), (ii) any
consolidation or merger of the Company with or into another Person, (iii) the
sale, transfer or other disposition of the property, assets or business of the
Company as an entirety or substantially as an entirety or (iv) any other
transaction or any other event shall occur as a result of which holders of
Common Stock become entitled to receive any shares of stock or other securities
and/or property of another Person, there shall thereafter be deliverable upon
the exercise of this Warrant or any portion thereof (in lieu of or in addition
to the Warrant Shares theretofore deliverable, as appropriate) the highest
number of shares of stock or other securities and/or the greatest amount of
property to which the holder of the number of Warrant Shares which would
otherwise have been deliverable upon the exercise of this Warrant or any
portion thereof at the time would have been entitled upon such reorganization
or reclassification or recapitalization of capital stock, consolidation,
merger, sale, transfer, disposition or other transaction or upon the occurrence
of such other event, and at the same aggregate Exercise Price.
Prior to and as a condition of the consummation of any transaction
described in the preceding sentence, the Company shall make equitable, written
adjustments in the application of the provisions herein set forth so that the
provisions set forth herein shall thereafter be applicable, as nearly as
possible, in relation to any shares of stock or other securities or other
property thereafter deliverable upon exercise of the Warrants. Any such
adjustment shall be made by and set forth in a supplemental agreement of the
Company and/or the successor entity, as applicable, for the benefit of the
holder or holders of the Warrants at the time outstanding, which agreement
shall bind each such entity and shall be accompanied by a favorable opinion of
counsel to the Company reasonably acceptable to the holder or holders of the
Warrant as to the enforceability of such agreement and as to such other matters
as such holder or holders may reasonably request.
(f) Distribution of Assets. If the Company at any time and from
time to time subsequent to the date hereof declares a dividend upon, or makes
any distribution in respect of, any of its stock payable in any asset or
property of the Company, other than any cash dividend that is paid out of the
retained earnings of the Company, in any transaction as to which the other
provisions of this Section 4 are not strictly applicable, then and in each such
case, the Exercise Price shall be adjusted by subtracting from the Exercise
Price then in effect the Fair Value of the assets or property so distributed to
the holder of one share of Common Stock; provided that no such adjustment will
result in an Exercise Price of less than the par value of the Common Stock.
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(g) Determination of Consideration. For purposes of this Section 4,
the consideration received or receivable by the Company for the issuance, sale,
grant or assumption of shares of Common Stock or Convertible Securities,
irrespective of the accounting treatment of such consideration, shall be valued
as follows:
(i) Cash Payment. In the case of cash, the net
amount received by the Company after deduction of any accrued interest
or dividends, any expenses paid or incurred and any underwriting
commissions or concessions paid or allowed by the Company in
connection with such issue or sale.
(ii) Non-Cash Payment. In the case of
consideration other than cash, the Fair Value thereof or, if less, in
the case of any security, the Current Market Price of such security,
if applicable (in each case, as of the date immediately preceding the
issuance, sale or grant in question).
(iii) Allocation Related to Common Stock. If
shares of Common Stock are issued or sold together with other
securities or other assets of the Company for a consideration which
covers both, the consideration received or receivable (computed as
provided in clauses (i) and (ii) above) shall be allocable to such
shares of Common Stock as determined by the Board in good faith.
(iv) Allocation Related to Convertible
Securities. If any Convertible Securities are issued or sold together
with other securities or other assets of the Company in a transaction
in which no specific consideration is allocated to the Convertible
Securities, the consideration received shall be allocated among such
Convertible Securities and securities or other assets as determined in
good faith by the Board.
(v) Dividends in Securities. If the Company
shall declare a dividend or make any other distribution upon any stock
of the Company (other than Common Stock) payable in shares of Common
Stock or Convertible Securities, such shares of Common Stock or
Convertible Securities, as the case may be, issuable in payment of
such dividend and distribution shall be deemed to have been issued or
sold without consideration.
(vi) Convertible Securities. The consideration
for which shares of Common Stock shall be deemed to be issued upon the
issuance or sale of any Convertible Securities shall be determined by
dividing (A) the total consideration, if any, received by the Company
as consideration for the Convertible Securities, as the case may be,
plus the minimum aggregate amount of additional
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consideration, if any, payable to the Company upon the conversion or
exchange of such Convertible Securities, as the case may be, in each
case after deducting any accrued interest or dividends; by (B) the
maximum number of shares of Common Stock issuable or upon the
conversion or exchange of such Convertible Securities.
(vii) Merger, Consolidation or Sale of Assets.
If any shares of Common Stock or Convertible Securities are issued in
connection with any merger or consolidation in which the Company is
the surviving corporation, the amount of consideration therefor shall
be deemed to be the Fair Value of such portion of the assets and
business of the non-surviving corporation as shall be attributable to
such Common Stock or Convertible Securities, as the case may be. In
the event of (A) any merger or consolidation of which the Company is
not the surviving corporation or (B) the sale, transfer or other
disposition of the property, assets or business of the Company as an
entirety or substantially as an entirety for stock or other securities
of any other Person, the Company shall be deemed to have issued the
number of shares of its Common Stock for stock or securities of the
surviving corporation or such other Person computed on the basis of
the actual exchange ratio on which the transaction was predicated and
for a consideration equal to the Fair Value on the date of such
transaction of such stock or securities of the surviving corporation
or such other Person, and if any such calculation results in
adjustment of the Exercise Price, the determination of the number of
Warrant Shares issuable upon exercise of this Warrant immediately
prior to such merger, consolidation or sale, for the purposes of
Section 4.2(e), shall be made after giving effect to such adjustment
of the Exercise Price.
(h) Record Date. If the Company shall take a record of
the holders of the Common Stock for the purpose of entitling them (i) to
receive a dividend or other distribution payable in Common Stock or Convertible
Securities or (ii) to subscribe for or purchase Common Stock or Convertible
Securities, then all references in this Section 4 to the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be, shall be deemed to be references to such record date.
(i) Shares Outstanding. The number of shares of Common
Stock deemed to be outstanding at any given time shall not include shares of
Common Stock held by the Company or any Subsidiary.
(j) Maximum Exercise Price. At no time shall the
Exercise Price exceed the amount set forth in the first paragraph
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of the Preamble of this Warrant except as a result of an adjustment thereto
pursuant to Section 4.2(a)(iii).
(k) No Adjustments under Certain Circumstances. Anything
herein to the contrary notwithstanding, no adjustment to the Exercise Price
shall be made in the case of any issuance of (i) shares of Common Stock upon
the exercise in whole or part of any Warrant or, any warrant included in the
Other Securities, including any Frontier Warrant exchanged by the holder for
this Warrant in connection with the Merger or (ii) shares of Common Stock to an
employee, director or consultant of the Company or any Subsidiary for such
person's own investment and as part of a bona fide compensation plan approved
by the Board.
4.3. Certificates and Notices.
(a) Adjustments to Exercise Price. Upon any adjustment
under this Section 4 of the number of shares of Common Stock purchasable upon
exercise of this Warrant or of the Exercise Price, the Company shall
immediately notify the holder of this Warrant in writing setting forth in
reasonable detail the events requiring the adjustment and the method by which
such adjustment was calculated and specifying the adjusted Exercise Price and
the number of shares of Common Stock purchasable upon exercise of this Warrant
after giving effect to such adjustment.
(b) Extraordinary Corporate Events. If the Company at
any time and from time to time after the date hereof shall propose to (i) pay
any dividend payable in stock to the holders of shares of Common Stock or to
make any other distribution to the holders of shares of Common Stock, (ii)
offer to the holders of shares of Common Stock rights to subscribe for or
purchase any additional shares of any class of stock or any other rights or
options or (iii) effect any reclassification of the Common Stock (other than a
reclassification involving merely the subdivision or combination of outstanding
shares of Common Stock), or any reorganization or recapitalization or any
consolidation or merger (other than a merger in which no distribution of
securities or other property is to be made to holders of shares of Common
Stock), or any sale, transfer or other disposition of its property, assets and
business as an entirety or substantially as an entirety, or the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall mail to the holder of this Warrant a certificate giving notice of such
proposed action, specifying (A) the date on which the stock transfer books of
the Company shall close, or a record shall be taken, for determining the
holders of Common Stock entitled to receive such stock dividends or other
distribution or such rights or options, or the date on which such
reclassification, reorganization, recapitalization, consolidation, merger,
sale, transfer, other disposition, liquidation, dissolution or winding up shall
take place or commence, as the case may be, and (B) the date as of which it is
expected that holders of Common Stock of record shall be entitled to receive
securities or other property
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deliverable upon such action, if any such date is to be fixed. Such
certificate shall be mailed in the case of any action covered by clause (i) or
(ii) above at least 20 days prior to the record date for determining holders of
Common Stock for purposes of receiving such payment or offer, or in the case of
any action covered by clause (iii) above at least 20 days prior to the date
upon which such action takes place and 20 days prior to any record date to
determine holders of Common Stock entitled to receive such securities or other
property.
5. Covenants of the Company.
5.1. No Impairment or Amendment. The Company shall not by any
action including, without limitation, amending its charter, any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate to protect the
rights of the holder hereof against impairment. Without limiting the
generality of the foregoing, the Company (a) will not increase the par value of
any Warrant Shares above the amount payable therefor upon such exercise, (b)
will take all such action as may be necessary or appropriate in order that the
Company may validly issue fully paid and nonassessable Warrant Shares, (c) will
obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction as may be necessary to enable the Company
to perform its obligations under this Warrant, and (d) will not issue any
capital stock or enter into any agreement, the terms of which would have the
effect, directly or indirectly, of preventing the Company from honoring its
obligations hereunder.
So long as any Warrants are outstanding, the Company will acknowledge
in writing, in form satisfactory to any holder of any such security the
continued validity of the Company's obligations hereunder to the holders of
Warrants.
5.2. Reservation of Common Stock. The Company will at all times
reserve and keep available, solely for issuance, sale and delivery upon the
exercise of this Warrant, such number of shares of Common Stock equal to the
number of shares of Common Stock (and/or Other Securities) issuable upon the
exercise of this Warrant. All such shares of Common Stock (and/or Other
Securities) shall be duly authorized and, when issued upon exercise of this
Warrant, will be validly issued and fully paid and nonassessable with no
liability on the part of the holders thereof.
6. Miscellaneous.
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140
6.1. Nonwaiver. No course of dealing or any delay or failure to
exercise any right, power or remedy hereunder on the part of the holder of this
Warrant or any Warrant Shares shall operate as a waiver of or otherwise
prejudice such holder's rights, powers or remedies.
6.2. Amendment. Any term, covenant, agreement or condition of this
Warrant may, with the consent of the Company, be amended, or compliance
therewith may be waived (either generally or in a particular instance and
either retroactively or prospectively), only by one or more substantially
concurrent written instruments signed by the holder or holders of the Warrant.
6.3. Communications. All notices to the Company or the holder
shall be in writing and shall be deemed to have been adequately given if
delivered in person, by facsimile transmission with receipt acknowledged or by
delivery by a recognized courier for overnight delivery, or mailed, certified
mail, return receipt requested, to such party at its address set forth below
(or such other address as it may from time to time designate in writing to the
other parties hereto).
The Company: Nextel Communications, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
North Point
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Holder:
-------------------------------
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-------------------------------
With a copy to:
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6.4. Remedies. The Company stipulates that the remedies at law of
the holder or holders of the Warrant in the event of any default or threatened
default by the Company in the performance of or compliance with any of the
terms of the Warrant are not and will not be adequate and that, to the fullest
extent permitted by law, such terms may be specifically enforced by a decree
for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.
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141
6.5. Successors and Assigns. This Warrant and the rights evidenced
hereby shall inure to the benefit of and be binding upon the successors and
assigns of the Company and the holder or holders of this Warrant, to the extent
provided herein, and shall be enforceable by such holder or holders.
6.6. Governing Law. This Warrant, including the validity hereof
and the rights and obligations of the parties hereto and all amendments and
supplements hereof and all waivers and consents hereunder, shall be construed
in accordance with and governed by the laws of Delaware.
IN WITNESS WHEREOF, NEXTEL COMMUNICATIONS, INC. has caused this
Warrant to be executed as an instrument under seal as of the date first above
written.
NEXTEL COMMUNICATIONS, INC.
By
------------------------------
(Title)
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142
FORM OF NOTICE OF EXERCISE
(To be executed only upon partial or full exercise
of the within Warrant)
The undersigned registered holder of the within Warrant irrevocably
exercises the within Warrant for and purchases ___________ shares of Common
Stock (or Other Securities) [Specify] of NEXTEL COMMUNICATIONS, INC. and
herewith makes payment therefor in the amount of $_____________, all at the
price and on the terms and conditions specified in the within Warrant, and
requests that a certificate (or ____ certificates in denominations of ______
shares) for such shares hereby purchased be issued in the name of and delivered
to (choose one) (a) the undersigned or (b) _____________, whose address is
___________________________ and, if such shares shall not include all the
Warrant Shares issuable as provided in the within Warrant, that a new Warrant
of like tenor for the number of Warrant Shares not being purchased hereunder be
issued in the name of and delivered to (choose one) (a) the undersigned or (b)
_____________, whose address is __________________________.
Dated: _______________ __, ________.
[ ]
By
----------------------------------
(Signature of Registered Holder)
NOTICE: The signature on this Notice of Exercise must correspond with the name
as written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatever.
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143
FORM OF ASSIGNMENT
(To be executed only upon the assignment
of the within Warrant)
FOR VALUE RECEIVED, the undersigned registered holder of the within
Warrant hereby sells, assigns and transfers unto __________, whose address is
___________________________, all of the rights of the undersigned under the
within Warrant, with respect to _______ shares of Common Stock (or Other
Securities) [Specify] of NEXTEL COMMUNICATIONS, INC. and, if such shares shall
not include all the Warrant Shares issuable as provided in the within Warrant,
that a new Warrant of like tenor for the number of Warrant Shares not being
transferred hereunder be issued in the name of and delivered to the
undersigned, and does hereby irrevocably constitute and appoint _____________
Attorney to register such transfer on the books of NEXTEL COMMUNICATIONS, INC.
maintained for the purpose, with full power of substitution in the premises.
Dated: _______________ __, ________.
[ ]
By
----------------------------------
(Signature of Registered Holder)
NOTICE: The signature on this Assignment must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatever.
-16-
▇▇▇
▇▇▇▇▇ ▇
▇▇▇
▇▇▇▇▇ ▇
JDR&P LETTERHEAD
______________, 1997
Pittencrieff Communications, Inc.
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Re: Agreement of Merger and Plan of Reorganization, dated as of
October 2, 1996, by and among Pittencrieff Communications, Inc.,
Nextel Communications, Inc., Nextel Finance Company and DCI
Merger Inc.
Gentlemen:
We have acted as counsel to Nextel Communications, Inc., a Delaware
corporation ("Nextel"), Nextel Finance Company, a Delaware corporation and a
wholly owned subsidiary of Nextel, formerly known as Dispatch Communications,
Inc. ("NFC"), and DCI Merger Inc., a Delaware corporation and a wholly owned
subsidiary of NFC ("Merger Sub"), in connection with the Agreement of Merger
and Plan of Reorganization by and among Pittencrieff Communications, Inc.
("PCI"), Nextel, NFC and Merger Sub, dated as of October 2, 1996 (the "Merger
Agreement"). This opinion is being furnished to you pursuant to Section 8.3(c)
of the Merger Agreement. Capitalized terms that are used but not defined in
this opinion shall have the meanings given to them in the Merger Agreement.
In rendering the opinions expressed herein, we have assumed without
any independent investigation: (a) that the signatures on all documents that
we have examined are genuine and that where any such signature purports to have
been made in a corporate, governmental, fiduciary or other capacity, the person
who affixed such signature to such documents had authority to do so (other than
if such person is or was a director or an officer of Nextel, NFC or Merger Sub)
(b) the authenticity of all documents submitted to us as originals, and the
conformity to authentic original documents of all documents submitted to us as
certified, conformed or photostatic copies, and (c) the correctness of public
files, records and certificates of, or furnished by, governmental or regulatory
agencies or authorities that we have examined.
We have examined such documents, records and matters of fact and
questions of law as we have deemed necessary for
146
Pittencrieff Communications, Inc.
____________, 1997
Page 2
purposes of this opinion. In addition, we have relied as to matters of fact
upon certificates of officers of Nextel and its subsidiaries, and have not
independently verified the accuracy of the statements contained in such
certificates. In rendering our opinions below regarding good standing and
qualification as a foreign corporation, we have relied exclusively upon
certificates of public officials of the relevant jurisdictions (and with
respect to the payment of taxes and the filing of tax returns in the States of
_______________, a certificate of an officer of Nextel), copies of which have
been delivered to you. In rendering the opinion in paragraph 3 below, we have
reviewed only those judgments, orders or decrees that have been specifically
identified to us by Nextel as binding upon Nextel, NFC or Merger Sub or its or
their property. In rendering the opinions in paragraph 4 below, we have
reviewed only those contracts and agreements binding on Nextel, NFC or Merger
Sub or its or their property and which have been specifically identified to us
by Nextel as those that are material to the business or financial condition of
Nextel, NFC and Merger Sub taken as a whole, and which are identified and
listed in Exhibit A hereto. With your approval, we have assumed that the
Merger Agreement has been duly authorized, executed and delivered by PCI.
In rendering the opinions herein, we are expressing no opinion as to
(i) the laws of any jurisdiction other than the State of Delaware and the
Federal laws of the United States, all as in effect on the date hereof, (ii)
the statutes administered by, the rules and regulations of, or matters
exclusively within the purview of the Federal Communications Commission, or any
comparable state governmental authority or agency, (iii) any state securities
laws or (iv) any Federal or state antitrust laws, other than the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended.
Based upon the foregoing and subject to the further qualifications,
assumptions and limitations set forth herein, we are of the opinion that:
1. Each of Nextel, NFC and Merger Sub is a corporation duly
incorporated, validly existing and in good standing under the General
Corporation Law of Delaware ("DGCL"), and has the corporate power and authority
to own its properties and to conduct its business as currently conducted, and
as proposed to be conducted, as described in the Annual Report on Form 10-K of
Nextel for the year ended December 31, 1995, which is incorporated by reference
into the Registration Statement on Form S-4 of Nextel, as amended (the
"Registration Statement"), and in the related Proxy Statement/Prospectus
(together with any supplements or amendments thereto, the "Proxy Statement").
Each of Nextel, NFC and Merger Sub has the corporate power and
2
147
Pittencrieff Communications, Inc.
____________, 1997
Page 3
authority to enter into and perform its respective obligations under the Merger
Agreement.
2. The Merger Agreement has been duly authorized, executed and
delivered by Nextel, NFC and Merger Sub, respectively.
3. To our Actual Knowledge, neither the execution and delivery of
the Merger Agreement by Nextel, NFC and Merger Sub nor the consummation by
Merger Sub of the Merger, will constitute a violation of the DGCL or any
Federal statute or regulation, or any judgment, order or decree of any court or
governmental authority binding upon Nextel, NFC or Merger Sub or its or their
property, or conflict with or constitute a breach or violation of any provision
of the certificate of incorporation or by-laws of Nextel, NFC or Merger Sub.
4. Neither the execution and delivery of the Merger Agreement by
Nextel, NFC and Merger Sub nor the consummation of the Merger, will conflict
with, constitute a violation of or result in a breach in or a default (or an
event that, with notice or lapse of time or both, would constitute a default)
under, or cause the creation of any security interest, lien, charge or
encumbrance upon any of the properties or assets of Nextel, NFC or Merger Sub
under, or cause or permit the acceleration of the maturity of any debt or
obligation of Nextel, NFC or Merger Sub pursuant to any agreement listed on
Exhibit A hereto to which Nextel, NFC or Merger Sub is a party.
5. No registration with or authorization or approval by any Federal
or Delaware court or governmental authority that has not been made or obtained
is required of Nextel, NFC or Merger Sub in connection with the execution and
delivery of the Merger Agreement, or the consummation of the Merger, except the
filing to effect the Merger under the DGCL.
6. The shares of Nextel Common Stock to be issued in the Merger
have been duly authorized, and when issued at or after the Effective Time of
the Merger as contemplated in and in accordance with the Merger Agreement, will
be validly issued and fully paid and nonassessable.
7. The shares of Nextel Common Stock to be issued in the Merger
have been duly authorized for quotation on The Nasdaq Stock Market, Inc. upon
official notice of issuance.
8. The Registration Statement has become effective under the
Securities Act of 1933, as amended, and to our Actual Knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for
3
148
Pittencrieff Communications, Inc.
____________, 1997
Page 4
that purpose are pending or threatened by the Securities and Exchange
Commission.
9. To our Actual Knowledge, there are no actions, proceedings or
investigations pending or overtly threatened against Nextel, NFC or Merger Sub
or any of their properties by or before any court, governmental authority or
arbitrator, domestic or foreign, seeking to restrain or prohibit the
consummation of the transactions described in the Merger Agreement.
As used herein, the phrase "our Actual Knowledge" means the Actual
Knowledge of the Primary Lawyer Group. The Primary Lawyer Group includes
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
This opinion is furnished by us solely for your benefit upon the
understanding that we are not hereby assuming any professional responsibility
to any other person, firm, or entity whatsoever and have no responsibility to
advise you of changes in the facts, or of any circumstances or developments
after the date hereof that would or might conflict with any of the assumptions
herein stated.
Very truly yours,
4
149
ANNEX F
150
NEXTEL COMMUNICATIONS, INC.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇ FAX ▇▇▇-▇▇▇-▇▇▇▇
[NEXTEL LOGO]
October 2, 1996
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
and Chief Executive Officer President
Pittencrieff Communications, Inc. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Re: Certain Understandings
Dear Sirs:
As you are aware, Nextel Communications, Inc., either
directly or through one or more of its subsidiaries (collectively, "Nextel"),
currently is exploring a potential transaction with Pittencrieff
Communications, Inc. ("Frontier'). Certain contractual arrangements currently
in place between Castle Tower corporation ("Castle") and Frontier present
issues or concerns for Nextel, which Nextel would require to be satisfactorily
resolved before proceeding with any potential transaction with Frontier. Such
issues and concerns chiefly are presented by the terms and conditions contained
in a certain Purchase and Sale Agreement ("Purchase Agreement") and related
License Agreement ("License Agreement"), each by and between Castle and
Frontier. Representatives of Castle, Frontier and Nextel have discussed and
tentatively and conditionally agreed on certain changes to the terms and
conditions of such Purchase Agreement and License Agreement, certain related
actions and the establishment of certain additional arrangements, all as
summarized on Exhibit 1 attached hereto.
In the interest of time, Nextel has indicated its willingness
to proceed to prepare and finalize suitable definitive documentation regarding
the potential transaction with Frontier prior to the preparation and execution
of all definitive documents required to implement the tentative agreements and
understandings reflected in the attached Exhibit 1, subject, however to (1)
Castle and Frontier entering into this letter confirming their conditional
acceptance of such agreements and understandings as is reflected on Exhibit 1
hereto and their commitment to work in good faith with Nextel to prepare and
enter into appropriate definitive documents to evidence all of the terms and
conditions required to implement such agreements and understandings and (2)
Castle and Frontier acknowledging that Nextel shall have no liability or
responsibility to either of them, except pursuant to and in accordance with the
terms of any definitive agreements between either or both of them and Nextel,
whether or not appropriate definitive documents of the type referred to in the
foregoing clause (1) are in fact entered into or whether or not any potential
transaction between Nextel and Frontier is ultimately consummated.
151
Nextel and Frontier acknowledge that the agreement of Castle
contained in this letter and the attached Exhibit 1 are conditional in that
they are subject to the approval of both Castle's Board of Directors and
Castle's bank lending group; Nextel and Frontier further acknowledge that
Castle shall have no liability or responsibility in either one of them, except
pursuant to and in accordance with the terms of any definitive agreements
between either or both of them and Castle, and then only in the event the
potential merger transaction between Nextel and Frontier closes.
Nextel has asked that in the event its potential merger
transaction with Frontier closes, Castle should release all or a substantial
part of its collateral under the License Agreement, and modify certain rights
to which it is currently entitled under the Purchase Agreement and the License
Agreement (the "Concession"). Nextel acknowledges that Castle would not agree
to the Concessions, were it not for Castle's reliance on Nextel's agreement to
perform its commitments and agreements reflected in the attached Exhibit 1.
Please signify your acceptance, approval and acknowledgment
of the foregoing by signing the enclosed copy of this letter in the space
indicated below and returning a fully executed copy to the undersigned.
Very truly yours,
NEXTEL COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
Accepted, approved and acknowledged:
CASTLE TOWER CORPORATION
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-------------------------
PITTENCRIEFF COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Attachment