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EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
among
ALLTEL CORPORATION,
WIGEON ACQUISITION LLC
and
WESTERN WIRELESS CORPORATION
Dated as of January 9, 2005
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TABLE OF CONTENTS
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PAGE
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ARTICLE I THE MERGER
Section 1.1 The
Merger...................................................... 5
Section 1.2
Closing.........................................................
5
Section 1.3 Effective
Time.................................................. 5
Section 1.4 Effects of the
Merger........................................... 5
Section 1.5 Certificate of Formation and Limited Liability
Company Agreement of the Surviving Company 5
Section 1.6
Manager.........................................................
6
Section 1.7
Officers........................................................
6
ARTICLE II CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
Section 2.1 Effect on
Stock................................................. 6
Section 2.2 Company Election
Procedures..................................... 9
Section 2.3 Exchange of
Certificates........................................ 11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Qualification, Organization,
Etc................................ 15
Section 3.2 Capital
Stock................................................... 16
Section 3.3 Corporate Authority Relative to this Agreement; No
Violation.... 17
Section 3.4 Reports and Financial
Statements................................ 19
Section 3.5 Internal Controls and
Procedures................................ 19
Section 3.6 No Undisclosed
Liabilities...................................... 20
Section 3.7 No Violation of Law;
Permits.................................... 20
Section 3.8 Environmental Laws and
Regulations.............................. 21
Section 3.9 Employee Benefit
Plan........................................... 21
Section 3.10 Absence of Certain Changes or
Events........................... 23
Section 3.11 Investigations;
Litigation..................................... 24
Section 3.12 Proxy Statement; Registration Statement; Other
Information..... 24
Section 3.13 No Rights
Plan................................................. 24
Section 3.14 Lack of Ownership of Parent Common
Stock....................... 24
Section 3.15 Tax
Matters.................................................... 25
Section 3.16 Labor
Matters.................................................. 26
Section 3.17 Intellectual
Property.......................................... 27
Section 3.18 Opinion of Financial
Advisor................................... 27
Section 3.19 Required Vote of the Company
Shareholders...................... 28
Section 3.20 Material
Contracts............................................. 28
Section 3.21 Domestic Communications Regulatory
Matters..................... 28
Section 3.22 Foreign Communications Regulatory
Matters...................... 30
Section 3.23 Company's Articles of Incorporation and WBCA
23B.19............ 31
Section 3.24 Affiliate
Transactions......................................... 31
Section 3.25 Finders or
Brokers............................................. 31
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT
Section 4.1 Qualification; Organization,
Etc................................ 32
Section 4.2 Capital
Stock................................................... 32
Section 4.3 Corporate Authority Relative to this Agreement; No
Violation.... 33
Section 4.4 Reports and Financial
Statements................................ 35
Section 4.5 Internal Controls and
Procedures................................ 35
Section 4.6 No Undisclosed
Liabilities...................................... 36
Section 4.7 No Violation of Law;
Permits.................................... 36
Section 4.8 Environmental Laws and
Regulations.............................. 37
Section 4.9 Employee Benefit
Plan........................................... 37
Section 4.10 Absence of Certain Changes or
Events........................... 38
Section 4.11 Investigations;
Litigation..................................... 38
Section 4.12 Proxy Statement; Registration Statement; Other
Information..... 39
Section 4.13 Lack of Ownership of the Company Common
Stock.................. 39
Section 4.14 Tax
Matters.................................................... 39
Section 4.15 Labor
Matters.................................................. 41
Section 4.16 Intellectual
Property.......................................... 41
Section 4.17 Parent Material
Contracts...................................... 42
Section 4.18 Communications Regulatory
Matters.............................. 42
Section 4.19 Parent's Certificate of
Incorporation.......................... 44
Section 4.20 Affiliate
Transactions......................................... 44
Section 4.21 No Vote of Parent
Stockholders............................... 44
Section 4.22 Finders or
Brokers............................................. 44
ARTICLE V COVENANTS AND AGREEMENTS
Section 5.1 Conduct of Business by the Company or
Parent.................... 44
Section 5.2 Tax-Free Reorganization
Treatment............................... 51
Section 5.3
Investigation...................................................
51
Section 5.4 No
Solicitation.................................................
52
Section 5.5 Proxy Material; Registration
Statement.......................... 54
Section 5.6 Affiliate
Agreements............................................ 56
Section 5.7 Stock Options; Restricted Stock; Employee
Matters............... 56
Section 5.8 Notification of Certain
Matters................................. 59
Section 5.9 Filings; Other
Action........................................... 59
Section 5.10 Takeover
Statute............................................... 61
Section 5.11 Public
Announcements........................................... 61
Section 5.12 Indemnification and
Insurance.................................. 61
Section 5.13 Accountants' "Comfort"
Letters................................. 62
Section 5.14 Additional Reports and
Information............................. 62
Section 5.15 Section 16
Matters............................................. 63
Section 5.16 Control of
Operations.......................................... 63
Section 5.17 Internal Controls and
Procedures............................... 63
Section 5.18 Real Estate Transfer
Taxes..................................... 63
Section 5.19 Parent Covenant Concerning Subsidiary
Indebtedness............. 64
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ARTICLE VI CONDITIONS TO THE MERGER
Section 6.1 Conditions to Each Party's Obligation to Effect the
Merger...... 64
Section 6.2 Conditions to Obligation of the Company to Effect
the Merger.... 65
Section 6.3 Conditions to Obligation of Parent to Effect the
Merger......... 66
ARTICLE VII TERMINATION
Section 7.1 Termination or
Abandonment...................................... 66
Section 7.2 Termination
Fee................................................. 68
Section 7.3 Amendment or
Supplement......................................... 68
Section 7.4 Extension of Time, Waiver,
Etc.................................. 68
ARTICLE VIII MISCELLANEOUS
Section 8.1 No Survival of Representations and
Warranties................... 69
Section 8.2
Expenses........................................................
69
Section 8.3 Counterparts;
Effectiveness..................................... 69
Section 8.4 Governing
Law................................................... 69
Section 8.5 Jurisdiction;
Enforcement....................................... 70
Section 8.6 Waiver of Jury
Trial............................................ 70
Section 8.7
Notices.........................................................
70
Section 8.8 Assignment; Binding
Effect...................................... 71
Section 8.9 Date For Any
Action............................................. 71
Section 8.10
Severability...................................................
71
Section 8.11 Entire Agreement; No Third-Party
Beneficiaries................. 72
Section 8.12
Headings.......................................................
72
Section 8.13
Interpretation.................................................
72
Section 8.14
Definitions....................................................
72
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Exhibit A - Form of Voting Agreement
Exhibit B - Form of the Company Affiliate Agreement
Schedule 2.1(d)(ii)
Schedule 5.9(d)
Company Disclosure Schedule
Parent Disclosure Schedule
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AGREEMENT AND PLAN OF MERGER, dated as of January 9, 2005
(the
"Agreement"), among ALLTEL Corporation, a Delaware corporation
("Parent"),
Wigeon Acquisition LLC, a Washington limited liability company
and a direct
wholly-owned Subsidiary of Parent ("Merger Sub"), and Western
Wireless
Corporation, a Washington corporation (the "Company").
WITNESSETH :
WHEREAS, the respective Boards of Directors of Parent and
the
Company, and the manager of Merger Sub, have approved the
acquisition of the
Company by Merger Sub upon the terms and subject to the
conditions set forth in
this Agreement;
WHEREAS, the respective Boards of Directors of Parent and
the
Company, and the manager of Merger Sub, have approved and
declared advisable
this Agreement and the merger of the Company with and into
Merger Sub (the
"Merger") upon the terms and subject to the conditions set forth
in this
Agreement and in accordance with the Washington Business
Corporation Act (the
"WBCA") and the Washington Limited Liability Company Act
("WLLCA");
WHEREAS, the Board of Directors of the Company has taken all
actions
so that the restrictions contained in the Company's articles of
incorporation
and the WBCA applicable to a "significant business transaction"
(as defined in
Section 23B.19 of the WBCA) will not apply to the execution,
delivery or
performance of this Agreement or the Voting Agreement (as
defined below), or to
the consummation of the Merger or the other transactions
contemplated hereby and
thereby;
WHEREAS, for United States federal income Tax purposes, the
Merger
is intended to qualify as a reorganization within the meaning of
Section 368(a)
of the United States Internal Revenue Code of 1986, as amended
(the "Code"), and
this Agreement is hereby adopted as a plan of reorganization for
purposes of
Section 368 of the Code; and
WHEREAS, concurrent with the execution of this Agreement, as
an
inducement to Parent's willingness to enter into this Agreement
and incurring
the obligations set forth herein, certain of the Company's
shareholders, who
beneficially or of record hold an aggregate of approximately
41.2% of the voting
power of the outstanding shares of capital stock of the Company,
have entered
with Parent into a Voting Agreement, dated as of the date
hereof, a copy of
which is attached hereto as Exhibit A (the "Voting Agreement"),
pursuant to
which such shareholders have agreed to vote their shares of
capital stock of the
Company over which such shareholders of the Company have voting
power to approve
this Agreement and the transactions contemplated hereby.
NOW THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements contained
herein, and
intending to be legally bound hereby, Parent, Merger Sub and the
Company agree
as follows:
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ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the
conditions set
forth in this Agreement and in accordance with the WBCA and the
WLLCA, the
Company shall be merged with and into Merger Sub at the
Effective Time (as
defined in Section 1.3). Following the Merger, the separate
corporate existence
of the Company shall cease, and Merger Sub shall continue as the
surviving
company (the "Surviving Company") and shall succeed to and
assume all the rights
and obligations of the Company in accordance with the WBCA and
the WLLCA.
Section 1.2 Closing. The closing of the Merger shall take place
at 10:00
a.m., local time, on a date to be specified by the parties (the
"Closing Date")
which shall be no later than the second business day after the
satisfaction or
waiver (to the extent permitted by applicable Law (as defined in
Section 3.7(a))
of the conditions set forth in Article VI (other than those that
are to be
satisfied by action at the Closing) at a location specified in
writing by
Parent.
Section 1.3 Effective Time. On the Closing Date, the parties
shall execute
and file in the office of the Secretary of State of the State of
Washington the
articles of merger in accordance with the plan of merger, in
such form as
required by, and executed in accordance with, the relevant
provisions of the
WBCA and the WLLCA (the "Articles of Merger"), and shall make
all other filings
or recordings, if any, required under the WBCA and the WLLCA.
The Merger shall
become effective at the time of filing of the Articles of
Merger, or at such
later time as is agreed upon by the parties hereto and set forth
therein (such
time as the Merger becomes effective is referred to herein as
the "Effective
Time").
Section 1.4 Effects of the Merger. At the Effective Time, the
effect of
the Merger shall be as provided in this Agreement and the
applicable provisions
of the WBCA and the WLLCA. Without limiting the generality of
the foregoing, at
the Effective Time, all the property, rights, privileges, powers
and franchises
of the Company and Merger Sub shall vest in the Surviving
Company, and all
debts, liabilities and duties of the Company and Merger Sub
shall become the
debts, liabilities and duties of the Surviving Company.
Section 1.5 Certificate of Formation and Limited Liability
Company
Agreement of the Surviving Company.
(a) Subject to Section 5.12 of this Agreement, at the
Effective
Time, the certificate of formation of Merger Sub, as in effect
immediately prior
to the Effective Time, shall be the certificate of formation of
the Surviving
Company until thereafter changed or amended as provided by the
WLLCA or therein,
except that as of the Effective Time, Paragraph 1 of the
certificate of
formation of the Surviving Company shall be amended to reflect
the name of the
Company (or a variation thereof) as the name of the Surviving
Company.
(b) Subject to Section 5.12 of this Agreement, at the
Effective
Time, the limited liability company agreement of Merger Sub, as
in effect
immediately prior to the Effective Time, shall become the
limited liability
company agreement of the Surviving Company,
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until thereafter changed or amended as provided by the WLLCA,
the certificate of
formation of the Surviving Company and such limited liability
company agreement.
Section 1.6 Manager. The manager of Merger Sub immediately prior
to the
Effective Time shall become the initial manager of the Surviving
Company, to
hold office in accordance with the limited liability company
agreement of the
Surviving Company.
Section 1.7 Officers. The officers of Merger Sub immediately
prior to the
Effective Time shall become the initial officers of the
Surviving Company, each
to hold office in accordance with the limited liability company
agreement of the
Surviving Company.
ARTICLE II
CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
Section 2.1 Effect on Stock. At the Effective Time, by virtue of
the
Merger and without any action on the part of the Company, Merger
Sub or the
holders of any securities of the Company or Merger Sub:
(a) Conversion of Company Common Stock. Subject to Section
2.1(d)
and 2.1(e), each issued and outstanding share of Class A Common
Stock, no par
value per share ("Class A Common Stock"), and each issued and
outstanding share
of Class B Common Stock, no par value per share ("Class B Common
Stock"), in
each case, of the Company (together, Class A Common Stock and
Class B Common
Stock, "Company Common Stock" or "Shares") (other than shares to
be cancelled in
accordance with Section 2.1(b) and any Dissenting Shares (as
defined, and to the
extent provided in, Section 2.1(e)) shall thereupon be converted
into and shall
thereafter represent the right to receive the following
consideration (the
"Merger Consideration"):
(i) Each share of Company Common Stock with respect to which
an
election to receive a combination of stock and cash (a "Mixed
Election") has
been effectively made and not revoked or lost pursuant to
Section 2.2 (each, a
"Mixed Consideration Electing Share") and each Non-Electing
Company Share (as
that term is defined in Section 2.2(c) hereof) shall be
converted into the right
to receive the combination (which combination shall hereinafter
be referred to
as the "Mixed Consideration") of (x) $9.25 in cash (the "Per
Share Cash Amount")
and (y) 0.535 of a share of validly issued, fully paid and
non-assessable shares
of Parent Common Stock (the "Mixed Election Stock Exchange
Ratio"), subject to
adjustment in accordance with Section 2.1(d).
(ii) Each share of Company Common Stock with respect to which
an
election to receive cash (a "Cash Election") has been
effectively made and not
revoked or lost pursuant to Section 2.2 (each, a "Cash Electing
Company Share")
shall be converted (provided that the Available Cash Election
Amount (as defined
below) equals or exceeds the Cash Election Amount (as defined
below)) into the
right to receive $40.00 in cash without interest (the "Per Share
Cash Election
Consideration"); if, however, (A) the product of the number of
Cash Electing
Company Shares and the Per Share Cash Election Consideration
(such product being
the "Cash Election Amount") exceeds (B) the
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difference between (x) the product of Per Share Cash Amount and
the total number
of shares of Company Common Stock (other than the Cancelled
Shares, as such term
is defined in Section 2.1(b) hereof) issued and outstanding
immediately prior to
the Effective Time minus (y) the product of the number of Mixed
Consideration
Electing Shares and the Per Share Cash Amount (such difference
being the
"Available Cash Election Amount"), then each Cash Electing
Company Share shall
be converted into a right to receive (1) an amount of cash
(without interest)
equal to the product of (p) the Per Share Cash Election
Consideration and (q) a
fraction, the numerator of which shall be the Available Cash
Election Amount and
the denominator of which shall be the Cash Election Amount (such
fraction being
the "Cash Fraction") and (2) a number of validly issued, fully
paid and
non-assessable shares of Parent Common Stock equal to the
product of (r) the
Exchange Ratio and (s) one (1) minus the Cash Fraction.
(iii) Each share of Company Common Stock with respect to which
an
election to receive stock consideration (a "Stock Election") is
properly made
and not revoked or lost pursuant to Section 2.2 (each, a "Stock
Electing Company
Share") shall be converted (provided that the Cash Election
Amount equals or
exceeds the Available Cash Election Amount), into the right to
receive 0.7
shares of validly issued, fully paid and non-assessable shares
of Parent Common
Stock (the "Exchange Ratio"), subject to adjustment in
accordance with Section
2.1(d) (together with any cash in lieu of fractional shares of
Parent Common
Stock to be paid pursuant to Section 2.4(e), the "Stock
Consideration"),
however, if the Available Cash Election Amount exceeds the Cash
Election Amount,
then each Stock Electing Company Share shall be converted into
the right to
receive (1) an amount of cash (without interest) equal to the
amount of such
excess divided by the number of Stock Electing Company Shares
and (2) a number
of validly issued, fully paid and non-assessable shares of
Parent Common stock
equal to the product of (x) the Exchange Ratio and (y) a
fraction, the numerator
of which shall be the Per Share Cash Election Consideration
minus the amount
calculated in clause (1) of this paragraph and the denominator
of which shall be
the Per Share Cash Election Consideration.
(b) Parent and Merger Sub-Owned Shares. Each share of Company
Common
Stock that is owned by Parent or Merger Sub immediately prior to
the Effective
Time (the "Cancelled Shares") shall automatically be cancelled
and retired and
shall cease to exist, and no consideration shall be delivered in
exchange
therefor.
(c) Conversion of Merger Sub Interests. Each issued and
outstanding
limited liability company interest of Merger Sub shall be
converted into one
validly issued limited liability company interest of the
Surviving Company.
(d) Adjustments. (i) If at any time during the period between
the
date of this Agreement and the Effective Time, any change in the
outstanding
shares of capital stock of Parent or the Company shall occur as
a result of any
reclassification, recapitalization, stock split (including a
reverse stock
split) or combination, exchange or readjustment of shares, or
any stock dividend
or stock distribution with a record date during such period, the
Merger
Consideration, the Per Share Cash Amount, the Mixed Election
Stock Exchange
Ratio, the Exchange Ratio and any other similarly dependent
items, as the case
may be, shall be equitably adjusted; provided,
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however, that nothing contained herein shall be deemed to permit
any action that
Parent is otherwise prohibited from taking pursuant to this
Agreement.
(ii) The matters contained in Schedule 2.1(d)(ii) are
incorporated here.
(e) Dissenting Shares. (i) Notwithstanding any provision of
this
Agreement to the contrary other than Section 2.1(e)(ii), any
Shares of Company
Common Stock held by a holder who has demanded and perfected
dissenters rights
for such shares in accordance with the provisions of Section
23B.13 of the WBCA
and who, as of the Effective Time, has not effectively withdrawn
or lost such
dissenters' rights ("Dissenting Shares"), shall not be converted
into or
represent a right to receive Merger Consideration pursuant to
Section 2.1(a),
but instead shall be converted into the right to receive only
such consideration
as may be determined to be due with respect to such Dissenting
Shares under the
WBCA. From and after the Effective Time, a holder of Dissenting
Shares shall not
be entitled to exercise any of the voting rights or other rights
of a member or
equity owner of the Surviving Company or of a shareholder of
Parent. For
purposes of the calculations in Section 2.1(a), all Non-Electing
Company Shares
and shares of Company Common Stock that constitute Dissenting
Shares immediately
prior to the Effective Time shall be deemed to be Mixed
Consideration Electing
Shares.
(ii) Notwithstanding the provisions of Section 2.1(a), if
any
holder of shares of Company Common Stock who demands dissenters'
rights of such
shares under the WBCA shall effectively withdraw or lose
(through failure to
perfect or otherwise) the right to dissent, then, as of the
later of the
Effective Time and the occurrence of such event, such holder's
shares shall no
longer be Dissenting Shares and shall automatically be converted
into and
represent only the right to receive Merger Consideration payable
or issuable in
respect of Mixed Consideration Electing Shares as set forth in
Section 2.1(a) of
this Agreement, without any interest thereon.
(iii) The Company shall give Parent (A) prompt notice of any
written demands for dissenters' rights of any shares of Company
Common Stock,
withdrawals of such demands, and any other instruments served
pursuant to the
WBCA and received by the Company which relate to any such demand
for dissenters'
rights and (B) the opportunity to participate in all
negotiations and
proceedings which take place prior to the Effective Time with
respect to demands
for dissenters' rights under the WBCA. The Company shall not,
except with the
prior written consent of Parent, make any payment with respect
to any demands
for dissenters' rights of Company Common Stock or offer to
settle or settle any
such demands.
Section 2.2 Company Election Procedures.
(a) Not less than three Business Days prior to the mailing of
the
Proxy Statement, Parent shall designate a bank or trust company
to act as
exchange agent hereunder (the "Exchange Agent"), which Exchange
Agent shall be
reasonably acceptable to the Company, for the purpose of
exchanging certificates
that immediately prior to the Effective Time represented shares
of Company
Common Stock (the "Certificates") and shares of Company Common
Stock represented
by book-entry ("Company Book-Entry Shares").
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(b) Each person who, on or prior to the Election Date (as
defined
below), is a record holder of shares of Company Common Stock
other than
Dissenting Shares shall be entitled to specify the number of
such holder's
shares of Company Common Stock (and, if such shares to which the
election
relates are represented by Certificates, such particular shares)
with respect to
which such holder makes a Cash Election, Stock Election or Mixed
Election.
(c) Parent shall prepare and file as an exhibit to the
Registration
Statement a form of election (the "Form of Election") in form
and substance
reasonably acceptable to the Company. The Form of Election shall
specify that
delivery shall be effected, and risk of loss and title to any
Certificates shall
pass only upon proper delivery of the Form of Election and any
Certificates. The
Company shall mail the Form of Election with the Proxy Statement
(as defined in
Section 3.12) to all persons who are record holders of shares of
Company Common
Stock as of the record date for the Company Meeting (as defined
in Section
5.5(d)). The Form of Election shall be used by each record
holder of shares of
Company Common Stock (or, in the case of nominee record holders,
the beneficial
owner through proper instructions and documentation) to make a
valid and timely
Cash Election, a Stock Election or a Mixed Election. In the
event that a holder
fails to make a valid and timely Cash Election, a Stock Election
or a Mixed
Election with respect to any shares of Company Common Stock held
or beneficially
owned by such holder, then such holder shall be deemed to have
made a Mixed
Election with respect to those shares (each such share, a
"Non-Electing Company
Share"). The Company shall use its reasonable best efforts to
make the Form of
Election available to all persons who become holders of shares
of Company Common
Stock during the period between the record date for the Company
Meeting and the
Election Date.
(d) Any holder's election shall have been properly made only if
the
Exchange Agent shall have received at its designated office, by
5:00 p.m., New
York City time, on the date specified on the Form of Election as
agreed upon by
the parties, or if no such date is specified, on the later of
(1) the date of
the Company Meeting or (2) if the Closing Date is more than four
Business Days
following the Company Meeting, two Business Days preceding the
Closing Date (the
"Election Date"), a Form of Election properly completed and
signed and
accompanied by (i) Certificates representing the shares of
Company Common Stock
to which such Form of Election relates, duly endorsed in blank
or otherwise in
form acceptable for transfer on the books of the Company (or by
an appropriate
guarantee of delivery of such Certificates as set forth in such
Form of Election
from a firm that is an "eligible guarantor institution" (as
defined in Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended
(the "Exchange
Act")); provided that such Certificates are in fact delivered to
the Exchange
Agent by the time set forth in such guarantee of delivery) or
(ii) in the case
of Company Book-Entry Shares, any additional documents required
by the
procedures set forth in the Form of Election. After a Cash
Election, a Stock
Election or a Mixed Election is validly made with respect to any
shares of
Company Common Stock, no further registration of transfers of
such shares shall
be made on the stock transfer books of the Company, unless and
until such Cash
Election, Stock Election or Mixed Election is properly
revoked.
(e) Parent and Company shall publicly announce the
anticipated
Election Date at least five Business Days prior to the
anticipated Closing Date.
If the Closing Date is delayed to a subsequent date, the
Election Date shall be
similarly delayed to a subsequent date, and
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Parent and the Company shall promptly announce any such delay
and, when
determined, the rescheduled Election Date.
(f) Any Cash Election, Stock Election or Mixed Election may
be
revoked with respect to all or a portion of the shares of
Company Common Stock
subject thereto by the holder who submitted the applicable Form
of Election by
written notice received by the Exchange Agent prior to 5:00
p.m., New York City
time, on the Election Date. In addition, all Cash Elections,
Stock Elections and
Mixed Elections shall automatically be revoked if this Agreement
is terminated
in accordance with Article VII. If a Cash Election or Stock
Election is revoked
with respect to shares of Company Common Stock represented by
Certificates,
Certificates representing such shares shall be promptly returned
to the holder
that submitted the same to the Exchange Agent.
(g) The determination of the Exchange Agent (or the joint
determination of Parent and the Company, in the event that the
Exchange Agent
declines to make any such determination) shall be conclusive and
binding as to
whether or not Mixed Elections, Cash Elections and Stock
Elections shall have
been properly made or revoked pursuant to this Section 2.2 and
as to when Mixed
Elections, Cash Elections, Stock Elections and revocations were
received by the
Exchange Agent. The Exchange Agent (or Parent and the Company
jointly, in the
event that the Exchange Agent declines to make the following
computation) shall
also make all computations contemplated by Section 2.1(a), and
absent manifest
error this computation shall be conclusive and binding. The
Exchange Agent may,
with the written agreement of Parent, after Parent's reasonable
consultation
with the Company, make any rules as are consistent with this
Section 2.2 for the
implementation of the Mixed Elections, Cash Elections, Stock
Elections provided
for in this Agreement as shall be necessary or desirable to
effect these Mixed
Elections, Cash Elections and Stock Elections.
Section 2.3 Exchange of Certificates.
(a) Deposit of Merger Consideration. (i) At or prior to
Effective
Time, Parent shall deposit with the Exchange Agent, for the
benefit of the
shareholders of the Company, (A) certificates or, at Parent's
option, evidence
of shares in book entry form, representing shares of Parent
Common Stock (the
"Parent Certificates") in denominations as the Exchange Agent
may reasonably
specify and (B) cash, in each case as are issuable or payable,
respectively,
pursuant to this Article II in respect of shares of Company
Common Stock for
which Certificates or Company Book-Entry Shares have been
properly delivered to
the Exchange Agent or the cash to be paid in lieu of fractional
shares. Such
Parent Certificates (or evidence of book-entry form, as the case
may be) and
such cash so deposited, together with any dividends or
distributions with
respect thereto, are hereinafter referred to as the "Exchange
Fund".
(b) Exchange Procedures. As soon as reasonably practicable after
the
Effective Time and in any event not later than the second (2nd)
Business Day
following the Effective Time, the Exchange Agent shall mail to
each holder of
record of a Certificate whose shares were converted into the
Merger
Consideration, pursuant to Section 2.1 (i) a letter of
transmittal (which shall
specify that delivery shall be effected, and risk of loss and
title to the
Certificates shall pass, only upon delivery of the Certificates
to the Exchange
Agent and shall be in such form and have such other provisions
as Parent and the
Company may reasonably specify),
10
<PAGE>
and (ii) instructions for use in effecting the surrender of the
Certificates in
exchange for the Merger Consideration. (x) Each former
shareholder of the
Company who properly made and did not revoke a Cash Election,
Stock Election or
Mixed Election shall be entitled to receive in exchange for such
shareholder's
Cash Electing Company Shares, Stock Electing Company Shares or
Mixed
Consideration Electing Shares, as the case may be; and (y) each
holder of
Non-Electing Company Shares, upon surrender to the Exchange
Agent of a
Certificate or Company Book-Entry Shares, as applicable,
representing such
Non-Electing Company Shares together with a letter of
transmittal, duly
completed and validly executed in accordance with the
instructions thereto, and
such other documents as may customarily be required by the
Exchange Agent, shall
be able to exchange therefor, the following
(i) the number of whole shares of Parent Common Stock, if
any,
into which such holder's shares of Company Common Stock
represented by such
holder's properly surrendered Certificates or Company Book-Entry
Shares, as
applicable, were converted in accordance with this Article II
(after taking into
account all shares of Company Common Stock to which an election
or non-election
of the same type were made), and such Certificates or Company
Book-Entry Shares
so surrendered shall be forthwith cancelled, and
(ii) a check in an amount of U.S. dollars (after giving effect
to
any required withholdings pursuant this Section 2.3(b)) equal to
(I) the amount
of cash (including the Per Share Cash Election Consideration or
the Per Share
Cash Election Amount, as applicable and cash in lieu of
fractional interests in
shares of Parent Common Stock to be paid pursuant to Section
2.3(e)), if any,
into which such holder's shares of Company Common Stock
represented by such
holder's properly surrendered Certificates or Company Book-Entry
Shares, as
applicable, were converted in accordance with this Article II,
plus (II) any
cash dividends or other distributions that such holder has the
right to receive
pursuant to Section 2.3(c); provided, however, that the holders
of such
Certificates or Company Book-Entry Shares, as applicable, shall
be permitted to
specifically elect on such letter of transmittal those shares of
stock that are
to be Mixed Consideration Electing Shares, Cash Electing Company
Shares, and/or
Stock Electing Company Shares, at such holder's option. In the
event of a
transfer of ownership of Company Common Stock which is not
registered in the
transfer records of the Company, a Parent Certificate
representing the proper
number of shares of Parent Common Stock may be issued to a
person other than the
person in whose name the Certificate so surrendered is
registered if such
Certificate shall be properly endorsed or otherwise be in proper
form for
transfer and the person requesting such issuance shall pay any
transfer or other
non-income Taxes (as defined in Section 3.15(k)) required by
reason of the
issuance of shares of Parent Common Stock to a person other than
the registered
holder of such Certificate or establish to the reasonable
satisfaction of Parent
that any such Tax has been paid or is not applicable. Parent or
the Exchange
Agent shall be entitled to deduct and withhold from the
consideration otherwise
payable under this Agreement to any holder of Company Common
Stock such amounts
as Parent or the Exchange Agent are required to withhold or
deduct under the
Code or any provision of state, local or foreign Tax Law with
respect to the
making of such payment. To the extent that amounts are so
withheld by Parent or
the Exchange Agent, such withheld amounts shall be treated for
all purposes of
this Agreement as having been paid to the holder of the
Company
11
<PAGE>
Common Stock in respect of whom such deduction and withholding
were made by
Parent or the Exchange Agent. Until surrendered as contemplated
by this Section
2.3, each Certificate or Company Book-Entry Share shall be
deemed at any time
after the Effective Time to represent only the right to receive
upon such
surrender the applicable Merger Consideration as contemplated by
this Article II
and cash, if any, in lieu of any fractional share in accordance
with Section
2.3(e). No interest will be paid or will accrue on any cash
payable to holders
of Certificates under the provisions of this Article II.
(c) Distributions with Respect to Unexchanged Shares. No
dividends
or other distributions with respect to Parent Common Stock with
a record date on
or after the Effective Time, or that are payable to the holders
of record
thereof who become such on or after the Effective Time, shall be
paid to the
holder of any unsurrendered Certificate or Company Book-Entry
Share until those
Certificates or Book-Entry Shares are surrendered as provided in
this Article
II. All such dividends, other distributions and cash in lieu of
fractional
shares of Parent Common Stock which are to be paid in respect of
the shares of
Parent Common Stock to be received upon surrender of the
Certificate shall be
paid by Parent to the Exchange Agent and shall be included in
the Exchange Fund,
in each case until the surrender of such Certificate in
accordance with this
Article II. Subject to the effect of applicable escheat or
similar Laws and Laws
with respect to the withholding of Taxes, following surrender of
any such
Certificate there shall be paid to the holder of the Parent
Certificate
representing whole shares of Parent Common Stock issued in
exchange therefor,
without interest (i) at the time of such surrender, the amount
of dividends or
other distributions with a record date after the Effective Time
previously paid
with respect to such whole shares of Parent Common Stock and the
amount of any
cash payable in lieu of a fractional share of Parent Common
Stock to which such
holder is entitled pursuant to Section 2.3(e) and (ii) at the
appropriate
payment date, the amount of dividends or other distributions
with a record date
after the Effective Time but prior to such surrender and with a
payment date
subsequent to such surrender payable with respect to such whole
shares of Parent
Common Stock. Parent shall make available to the Exchange Agent
sufficient cash
for the purpose of satisfying its obligations under clause (i)
above.
(d) No Further Ownership Rights in Company Common Stock. The
transfer of shares of Parent Common Stock issued upon the
surrender for the
applicable Merger Consideration in accordance with the terms of
this Article II
(including distributions and dividends paid pursuant to Section
2.3(c) and any
cash paid in lieu of fractional shares pursuant to Section
2.3(e)) shall be
deemed payment in full satisfaction of all rights pertaining to
the shares of
Company Common Stock previously represented by such
Certificates, subject,
however, to the Surviving Company's obligation to pay any
dividends or make any
other distributions with a record date prior to the Effective
Time which may
have been authorized or made by the Company on such shares of
Company Common
Stock which remain unpaid at the Effective Time, and there shall
be no further
registration of transfers on the transfer books of the Surviving
Company of the
shares of Company Common Stock which were outstanding
immediately prior to the
Effective Time. If, after the Effective Time, Certificates are
presented to the
Surviving Company or the Exchange Agent for any reason, they
shall be cancelled
and exchanged as provided in this Article II, except as
otherwise provided by
Law.
(e) No Fractional Shares.
12
<PAGE>
(i) No Parent Certificates or scrip representing fractional
shares of Parent Common Stock shall be issued upon the surrender
for exchange of
Certificates, no dividend or distribution of Parent shall relate
to such
fractional share interests, and such fractional share interests
will not entitle
the owner thereof to vote or to any rights of a stockholder of
Parent.
(ii) As promptly as practicable following the Effective Time,
the
Surviving Company shall pay to the Exchange Agent, for the
benefit of each
holder of Company Common Stock, an amount in cash, if any, equal
to the product
obtained by multiplying (A) the fractional share interest to
which such holder
(after taking into account all shares of Company Common Stock
held at the
Effective Time by such holder) would otherwise be entitled by
(B) the closing
price for a share of Parent Common Stock as reported on the NYSE
Composite
Transactions Tape (as reported in The Wall Street Journal, or,
if not reported
thereby, any other authoritative source) on the day of the
Effective Time. The
Surviving Company shall pay any commissions, transfer Taxes and
other
out-of-pocket transaction costs in connection with the sale, if
any, of any
Parent Common Stock in connection with this Section 2.3(e).
(f) Termination of Exchange Fund. Any portion of the Exchange
Fund
which remains undistributed to the holders of the Certificates
for one year
after the Effective Time shall be delivered to Parent upon
demand, and any
holders of the Certificates who have not theretofore complied
with this Article
II shall thereafter look only to Parent for payment of their
claim for Merger
Consideration, any cash in lieu of fractional shares of Parent
Common Stock and
any dividends or distributions with respect to Parent Common
Stock.
(g) Closing of Transfer Books. At the Effective Time, the
stock
transfer books of the Company shall be closed, and there shall
be no further
registration of transfers on the transfer books of the Surviving
Company of the
Company Common Stock which were outstanding immediately prior to
the Effective
Time. If, after the Effective Time, Certificates are presented
to the Surviving
Company or the Exchange Agent for any reason, they shall be
cancelled and
exchanged as provided in this Section, except as otherwise
provided by Section
2.1(e).
(h) No Liability. None of the Company, Parent, Merger Sub,
the
Surviving Company or the Exchange Agent shall be liable to any
person in respect
of any shares of Parent Common Stock (or dividends or
distributions with respect
thereto) or cash from the Exchange Fund in each case delivered
to a public
official pursuant to any applicable abandoned property, escheat
or similar Law.
If any Certificate shall not have been surrendered prior to such
date on which
any Merger Consideration, any cash payable to the holder of such
Certificate
pursuant to this Article II or any dividends or distributions
payable to the
holder of such Certificate would otherwise escheat to or become
the property of
any Governmental Entity, any such Merger Consideration or cash,
dividends or
distributions in respect of such Certificate shall, to the
extent permitted by
applicable Law, become the property of the Surviving Company,
and any holders of
the Certificates who have not theretofore complied with this
Article II shall
thereafter look only to Parent for payment of their claim for
Merger
Consideration, any cash in lieu of fractional shares of Parent
Common Stock and
any dividends or distributions with respect to Parent Common
Stock.
13
<PAGE>
(i) Investment of Exchange Fund. The Exchange Agent shall invest
all
cash included in the Exchange Fund, as directed by Parent. Any
interest and
other income resulting from such investments shall be paid to
Parent.
(j) Lost Certificates. In the case of any Certificate that has
been
lost, stolen or destroyed, upon the making of an affidavit of
that fact by the
person claiming such Certificate to be lost, stolen or destroyed
and, if
required by the Exchange Agent, the posting by such person of a
bond in
customary amount as indemnity against any claim that may be made
against it with
respect to such Certificate, the Exchange Agent will issue in
exchange for such
lost, stolen or destroyed Certificate the Merger Consideration
and, if
applicable, any cash in lieu of fractional shares, and unpaid
dividends and
distributions on shares of Parent Common Stock deliverable in
accordance with
this Article II in respect thereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in the Company SEC Documents or in the
corresponding section of the Disclosure Schedule delivered by
the Company to
Parent immediately prior to the execution of this Agreement and
signed by an
authorized officer of the Company (the "Company Disclosure
Schedule") (it being
agreed that disclosure of any item in any section of the Company
Disclosure
Schedule shall be deemed disclosure with respect to any other
section of this
Agreement to which the relevance of such item is reasonably
apparent from the
face of such disclosure), the Company represents and warrants to
Parent and
Merger Sub as follows:
Section 3.1 Qualification, Organization, Etc.
(a) The Company is a corporation duly organized, validly
existing
and in good standing under the laws of the State of Washington
and has the
corporate power and authority to own its properties and assets
and to carry on
its business as it is now being conducted. The Company is duly
qualified or
licensed to do business and is in good standing in each
jurisdiction in which
the ownership of its properties or the conduct of its business
requires such
qualification, except for jurisdictions in which the failure to
be so qualified
or in good standing has not had, and would not reasonably be
expected to have,
individually or in the aggregate, a Material Adverse Effect (as
hereinafter
defined) on the Company. As used in this Agreement, any
reference to any state
of facts, event, change or effect having a "Material Adverse
Effect" on or with
respect to the Company or Parent, as the case may be, means such
state of facts,
event, change or effect that has had a material adverse effect
on the business,
operations or financial condition of the Company and its
Subsidiaries, taken as
a whole or of Parent and its Subsidiaries, taken as a whole, as
the case may be,
but shall not include facts, events, changes, effects or
developments (i) (A)
generally affecting the rural, regional or nationwide wireless
voice and data
industry in the United States or in other countries in which the
Company or its
Subsidiaries conduct business, including regulatory and
political developments,
or (B) generally affecting the economy or financial markets in
the United States
or in other countries in which the Company or its Subsidiaries
conduct business,
or (ii) resulting from the announcement or the existence of this
Agreement and
the transactions contemplated hereby. The copies of the
Company's articles of
incorporation and by-laws which have been
14
<PAGE>
delivered to Parent are complete and correct copies thereof,
each as amended
through the date hereof. The Company is not in violation of any
provision of its
articles of incorporation or by-laws.
(b) Section 3.1 of the Company Disclosure Schedule sets forth a
list
of (i) each Subsidiary of the Company and (ii) each other
corporation,
partnership, limited liability company or other entity that is
not a Subsidiary
but in which the Company owns, directly or indirectly, an equity
interest, other
than any such interest held as a passive investment (each, a
"Company Minority
Interest Business"), in each case identifying the percentage and
type of
ownership held by the Company. Each of the Company's
Subsidiaries is a
corporation, partnership or other entity duly organized, validly
existing and,
if applicable, in good standing under the laws of its
jurisdiction of
incorporation or organization, has the power and authority to
own its properties
and to carry on its business as it is now being conducted, and
is duly qualified
or licensed to do business and, if applicable, is in good
standing in each
jurisdiction in which the ownership of its property or the
conduct of its
business requires such qualification, except for jurisdictions
in which the
failure to be so qualified or in good standing has not had, and
would not
reasonably be expected to have, individually or in the
aggregate, a Material
Adverse Effect on the Company. All the outstanding shares of
capital stock of,
or other ownership interests in, the Company's Subsidiaries
which are
corporations are validly issued and, if applicable, fully paid
and
non-assessable and all the outstanding shares of capital stock
of, or other
ownership interests in, the Company's Subsidiaries which are
owned by the
Company or any of its Subsidiaries are owned free and clear of
all liens,
claims, mortgages, encumbrances, pledges, security interests,
equities or
charges of any kind (each, a "Lien"). There are no existing
options, rights of
first refusal, preemptive rights, calls, claims or commitments
of any character
relating to the issued or unissued capital stock or other
securities of, or
other ownership interests in, any Subsidiary of the Company
which are owned by
the Company or any of its Subsidiaries.
Section 3.2 Capital Stock.
(a) The authorized capital stock of the Company consists of
300,000,000 shares of Company Common Stock and 50,000,000 shares
of preferred
stock, no par value per share ("Company Preferred Stock"). Of
the Company Common
Stock, 293,161,204 shares are classified as Class A Common Stock
and 6,838,796
shares are classified as Class B Common Stock. As of December
31, 2004, (i)
93,300,241 shares of Class A Common Stock were issued and
outstanding, (ii)
6,838,796 shares of Class B Common Stock were issued and
outstanding, (iii)
4,068,632 shares of Class A Common Stock were reserved for
issuance pursuant to
the Amended and Restated 1994 Management Incentive Stock Option
Plan (the
"Option Plan"); (iv) 6,838,796 shares of Class A Common Stock
were reserved for
issuance upon the conversion of Class B Common Stock; (v)
945,750 shares of
Class A Common Stock were reserved for issuance pursuant to the
Company's 2004
Employee Stock Purchase Plan (the "ESPP"); (vi) 656,990 shares
of Class A Common
Stock were reserved for issuance pursuant to the Executive
Restricted Stock Plan
(the "Restricted Stock Plan"); (vii) 286,984 shares of Class B
Common Stock were
reserved for issuance pursuant to options granted to certain
officers and
directors of the Company, (viii) 993,500 shares of Class A
Common Stock were
reserved for issuance pursuant to the Company's 2005 Long-Term
Incentive
Compensation Plan (the "2005 Plan ") (subject to approval of the
2005 Plan by
Company Shareholders), (ix) 7,440,000 shares of Class A Common
Stock were
reserved for issuance upon conversion of the 4.625% Notes (as
defined
15
<PAGE>
in Section 3.2(d)), and (x) no shares of Company Preferred Stock
were issued or
outstanding. All the outstanding shares of Company Common Stock
are, and all
Shares of Company Common Stock reserved for issuance as noted in
clauses
(iii)-(ix) above, shall be, when issued in accordance with the
respective terms
thereof, duly authorized, validly issued and are fully paid and
non-assessable
and free of pre-emptive rights.
(b) Except as set forth in subsection (a) above, as of the
date
hereof: (i) the Company does not have any shares of its capital
stock issued or
outstanding other than shares of Class A Common Stock that have
become
outstanding after December 31, 2004, but were reserved for
issuance as set forth
in subsection (a) above, and (ii) there are no outstanding
subscriptions,
options, warrants, calls, convertible securities or other
similar rights,
agreements or commitments relating to the issuance of capital
stock to which the
Company or any of the Company's Subsidiaries is a party
obligating the Company
or any of the Company's Subsidiaries to (A) issue, transfer or
sell any shares
of capital stock or other equity interests of the Company or any
Subsidiary of
the Company or securities convertible into or exchangeable for
such shares or
equity interests; (B) grant, extend or enter into any such
subscription, option,
warrant, call, convertible securities or other similar right,
agreement,
arrangement or commitment to repurchase; (C) redeem or otherwise
acquire any
such shares of capital stock or other equity interests; or (D)
provide a
material amount of funds to, or make any material investment (in
the form of a
loan, capital contribution or otherwise) in, any Subsidiary.
(c) Section 3.2(c) of the Company Disclosure Schedule sets forth
a
true, complete and correct list of all persons who, as of
December 31, 2004 held
outstanding awards to acquire shares of Company Common Stock or
to acquire cash
payments (the "Company Stock Awards") under each of the Option
Plan and the
Restricted Stock Plan or under any other equity incentive plan
of the Company
and its Subsidiaries, indicating, with respect to each Company
Stock Award then
outstanding, the type of award granted, the number of shares of
Company Common
Stock subject to such Company Stock Award, the name of the plan
under which such
Company Stock Award was granted and the exercise price, date of
grant, vesting
schedule and expiration date thereof, including to the extent to
which any
vesting has occurred as of the date of this Agreement and a
description of
whether (and to what extent) the vesting of such Company Stock
Award will be
accelerated in any way by the consummation of the transactions
contemplated by
this Agreement or by the termination of employment or engagement
or change in
position of any holder thereof following or in connection with
the consummation
of the Merger.
(d) Except for the 4.625% Convertible Subordinated Notes of
the
Company due 2023 (the "4.625% Notes") and the Company Stock
Awards, neither the
Company nor any of its Subsidiaries has outstanding bonds,
debentures, notes or
other obligations, the holders of which have the right to vote
(or which are
convertible into or exercisable for securities having the right
to vote) with
the shareholders of the Company or such Subsidiary on any
matter.
(e) There are no voting trusts or other agreements or
understandings
to which the Company or any of its Subsidiaries is a party with
respect to the
voting of the capital stock or other equity interest of the
Company or any of
its Subsidiaries.
16
<PAGE>
(f) Neither the Company nor any Subsidiary of the Company
owns,
directly or indirectly, a material amount of any capital stock
or equity
investment or debt security in any corporation, partnership,
limited liability
company, joint venture, business, trust or other entity other
than interests in
another Subsidiary or Company Minority Interest Business.
Section 3.3 Corporate Authority Relative to this Agreement; No
Violation.
(a) The Company has requisite corporate power and authority to
enter
into this Agreement and, subject to receipt of the Company
Shareholder Approval,
to consummate the transactions contemplated hereby, including
the Merger. The
execution and delivery of this Agreement and the consummation of
the
transactions contemplated hereby have been duly and validly
authorized by the
Board of Directors of the Company and, except for the (i)
Company Shareholder
Approval and (ii) the filing of the Articles of Merger with the
Secretary of
State of Washington, no other corporate proceedings on the part
of the Company
are necessary to authorize the consummation of the transactions
contemplated
hereby. The Board of Directors of the Company has taken all
necessary action so
that Section 23B.19 of the WBCA will be inapplicable to this
Agreement, the
Voting Agreement and the transactions contemplated hereby and
thereby. The Board
of Directors of the Company has determined that the transactions
contemplated by
this Agreement are fair to and in the best interest of the
Company and its
shareholders and to recommend to such shareholders that they
approve and adopt
this Agreement. This Agreement has been duly and validly
executed and delivered
by the Company and, assuming this Agreement constitutes a valid
and binding
agreement of the other parties hereto, constitutes a valid and
binding agreement
of the Company, enforceable against the Company in accordance
with its terms
(except to the extent that enforceability may be limited by
applicable
bankruptcy, insolvency, reorganization or other Laws affecting
the enforcement
of creditors' rights generally or by principles governing the
availability of
equitable remedies).
(b) Other than in connection with or in compliance with (i)
the
provisions of the WBCA and the WLLCA, (ii) the Securities Act of
1933, as
amended (the "Securities Act"), (iii) the Exchange Act, (iv)
the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR
Act"), (v) the Communications Act of 1934, as amended (the
"Communications Act")
and applicable rules and regulations thereunder and any
applicable laws, rules,
regulations, practices and orders of any state public utility
commissions
("PUCs") or similar state or foreign regulatory bodies
regulating competition
and telecommunications businesses, (vi) any applicable
non-United States
competition, antitrust and investment laws and (vii) the
approvals set forth on
Section 3.3(b) of the Disclosure Schedule (collectively, the
"Company
Approvals"), no authorization, consent or approval of, or filing
with, any
United States or foreign governmental or regulatory agency,
commission, court,
body, entity or authority (each a "Governmental Entity") is
necessary for the
consummation by the Company of the transactions contemplated by
this Agreement,
except for such authorizations, consents, approvals or filings
that, if not
obtained or made, would not reasonably be expected to have,
individually or in
the aggregate, a Material Adverse Effect on the Company or
significantly impair
or delay the consummation of the transactions contemplated
hereby and thereby.
(c) The execution and delivery by the Company of this Agreement
does
not, and the consummation of the transactions contemplated
hereby and compliance
with the provisions hereof will not (i) result in any violation
of, or default
(with or without notice or lapse
17
<PAGE>
of time, or both) under, or give rise to a right of termination,
cancellation or
acceleration of any obligation or to the loss of a material
benefit under any
loan, guarantee of indebtedness or credit agreement, note, bond,
mortgage,
indenture, lease, agreement, contract, instrument, permit,
concession,
franchise, right or license binding upon the Company or any of
the Company's
Subsidiaries or result in the creation of any Lien upon any of
the properties or
assets of the Company or any of the Company's Subsidiaries, (ii)
conflict with
or result in any violation of any provision of the articles of
incorporation or
by-laws or other equivalent organizational document, in each
case as amended, of
the Company or any of the Company's Subsidiaries or (iii)
conflict with or
violate any Laws (as defined in Section 3.7(a)) applicable to
the Company or any
of the Company's Subsidiaries or any of their respective
properties or assets,
other than, in the case of clauses (i) and (iii), any such
violation, conflict,
default, right, loss or Lien that has not had, and would not
reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect on
the Company.
Section 3.4 Reports and Financial Statements.
(a) The Company has filed all forms, documents and reports
required
to be filed prior to the date hereof by it with the Securities
and Exchange
Commission (the "SEC") since December 31, 2002 (the "Company SEC
Documents"). As
of their respective dates, or, if amended, as of the date of the
last such
amendment, the Company SEC Documents complied in all material
respects, and all
documents required to be filed by the Company with the SEC after
the date hereof
and prior to the Effective Time (the "Subsequent Company SEC
Documents") will
comply in all material respects, with the requirements of the
Securities Act and
the Exchange Act, as the case may be, and the applicable rules
and regulations
promulgated thereunder, and none of the Company SEC Documents
contained, and the
Subsequent Company SEC Documents will not contain, any untrue
statement of a
material fact or omitted, or will omit, to state any material
fact required to
be stated therein or necessary to make the statements therein,
in light of the
circumstances under which they were made, or are to be made, not
misleading.
(b) The consolidated financial statements (including all
related
notes and schedules) of the Company included in the Company SEC
Documents fairly
present in all material respects, and included in the Subsequent
Company SEC
Documents will fairly present in all material respects, the
consolidated
financial position of the Company and its consolidated
Subsidiaries, as at the
respective dates thereof and the consolidated results of their
operations and
their consolidated cash flows for the respective periods then
ended (subject, in
the case of the unaudited statements, to normal year-end audit
adjustments and
to any other adjustments described therein including the notes
thereto) in
conformity with United States generally accepted accounting
principles ("GAAP")
(except, in the case of the unaudited statements, as permitted
by Form 10-Q of
the SEC) applied on a consistent basis during the periods
involved (except as
may be indicated therein or in the notes thereto). Since
December 31, 2002, the
Company has not made any change in the accounting practices or
policies applied
in the preparation of its financial statements, except as
required by GAAP, SEC
rule or policy or applicable Law.
Section 3.5 Internal Controls and Procedures. The Company has
established
and maintains disclosure controls and procedures and internal
control over
financial reporting (as such terms are defined in paragraphs (e)
and (f),
respectively, of Rule 13a-15 under the
18
<PAGE>
Exchange Act) as required by Rule 13a-15 under the Exchange Act.
The Company's
disclosure controls and procedures are reasonably designed to
ensure that all
material information required to be disclosed by the Company in
the reports that
it files or furnishes under the Exchange Act is recorded,
processed, summarized
and reported within the time periods specified in the rules and
forms of the
SEC, and that all such material information is accumulated and
communicated to
the Company's management as appropriate to allow timely
decisions regarding
required disclosure and to make the certifications required
pursuant to Sections
302 and 906 of the Sarbanes-Oxley Act. Without limiting the
generality of the
foregoing, the Company and its Subsidiaries maintain a system of
internal
accounting controls sufficient to provide reasonable assurance
that (a)
transactions are executed in accordance with management's
general or specific
authorizations; (b) transactions are recorded as necessary to
permit preparation
of financial statements in conformity with GAAP and to maintain
asset
accountability; (c) access to assets is permitted only in
accordance with
management's general or specific authorization; and (d) the
recorded
accountability for assets is compared with the existing assets
at reasonable
intervals and appropriate action is taken with respect to any
differences. The
Company has delivered to Parent complete and accurate copies of
notices received
from its independent auditor prior to the date hereof of any
significant
deficiencies or material weaknesses in the Company's internal
control over
financial reporting since December 31, 2003 and any other
management letter or
similar correspondence from any independent auditor of the
Company or any of its
Subsidiaries received since December 31, 2002 and prior to the
date hereof. As
of the date hereof, the Company is implementing such programs
and is taking such
steps as it believes are necessary to effect compliance (not
later than the
relevant statutory and regulatory deadline therefor) with all
provisions of
Section 404 of the Sarbanes-Oxley Act that will become
applicable to the Company
and has not received, orally or in writing, any notification
that its
independent auditor (i) believes that the Company will not be
able to complete
its assessment before the reporting deadline, or, if completed,
that it will not
be completed in sufficient time for the independent auditor to
complete its
assessment or (ii) will not be able to issue unqualified
attestation reports
with respect thereto.
Section 3.6 No Undisclosed Liabilities. Except (i) as reflected
or
reserved against in the Company's consolidated balance sheets
(or the notes
thereto) included in the Company SEC Documents, (ii) for
liabilities and
obligations incurred in the ordinary course of business,
consistent with past
practice, since December 31, 2003, (iii) liabilities or
obligations which have
been discharged or paid in full in the ordinary course of
business and (iv)
liabilities and obligations arising after December 31, 2003,
which, individually
or in the aggregate, would not reasonably be expected to have a
Material Adverse
Effect on the Company, neither the Company, any Subsidiary of
the Company nor,
to the knowledge of the Company, any Company Minority Interest
Business, has any
liabilities or obligations of any nature, whether or not
accrued, contingent or
otherwise, that would be required by GAAP to be reflected on a
consolidated
balance sheet of the Company and its Subsidiaries (or in the
notes thereto).
Section 3.7 No Violation of Law; Permits.
(a) The Company and each of the Company's Subsidiaries are
in
compliance with and are not in default under or in violation of
any federal,
state, local or foreign law, statute, ordinance, rule,
regulation, judgment,
order, injunction, decree, arbitration award, agency
requirement, license or
permit of any Governmental Entity (collectively, "Laws"),
applicable to
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the Company, such Subsidiaries or any of their respective
properties or assets,
including, without limitation, the Sarbanes-Oxley Act of 2002
("Sarbanes-Oxley
Act") and the Foreign Corrupt Practices Act of 1977, as amended,
except where
such non-compliance, default or violation has not had, and would
not reasonably
be expected to have, individually or in the aggregate, a
Material Adverse Effect
on the Company and except as would not reasonably be expected to
significantly
impair or delay consummation of the transactions contemplated
hereby.
Notwithstanding anything contained in this Section 3.7(a), no
representation or
warranty shall be deemed to be made in this Section 3.7(a) in
respect of the
matters referenced in Section 3.5, or in respect of
environmental, tax, employee
benefits, labor or communications Laws matters, which are the
subject of the
representations and warranties made in Sections 3.5, 3.8, 3.9,
3.15, 3.16, 3.21
and 3.22 of this Agreement.
(b) The Company and the Company's Subsidiaries are in possession
of
all franchises, grants, authorizations, licenses, permits,
easements, variances,
exceptions, consents, certificates, approvals and orders of any
Governmental
Entity necessary for the Company and the Company's Subsidiaries
to own, lease
and operate their properties and assets or to carry on their
businesses as they
are now being conducted (the "Company Permits"), except where
the failure to
have any of the Company Permits has not had, and would not
reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect on
the Company and except as would not reasonably be expected to
significantly
impair or delay consummation of the transactions contemplated
hereby. All
Company Permits are in full force and effect, except where the
failure to be in
full force and effect has not had, and would not reasonably be
expected to have,
individually or in the aggregate, a Material Adverse Effect on
the Company and
except as would not reasonably be expected to significantly
impair or delay
consummation of the transactions contemplated hereby.
Section 3.8 Environmental Laws and Regulations.
(a) The Company and each of its Subsidiaries is in compliance
with
all applicable Laws relating to pollution or protection of human
health or the
environment (including, without limitation, ambient air, surface
water, ground
water, land surface or subsurface strata) (collectively,
"Environmental Laws"),
which compliance includes, but is not limited to, the possession
by the Company
and its Subsidiaries of all Company Permits that are required
under applicable
Environmental Laws, and compliance with the terms and conditions
thereof, except
for such non-compliance or failure to possess such Company
Permits as has not
had, and would not reasonably be expected to have, individually
or in the
aggregate, a Material Adverse Effect on the Company; and (b)
neither the Company
nor any of its Subsidiaries has received written notice of, or,
is the subject
of, any actions, causes of action, claims, investigations,
demands or notices by
any person asserting an obligation on the part of the Company or
its
Subsidiaries to conduct investigations or clean-up activities
under
Environmental Law or alleging liability under or non-compliance
with any
Environmental Law (collectively, "Environmental Claims") which
would reasonably
be expected to result in, individually or in the aggregate, a
Material Adverse
Effect on the Company. As used herein "knowledge" of any person
means the actual
knowledge of the executive officers of such person.
Section 3.9 Employee Benefit Plan.
20
<PAGE>
(a) Section 3.9(a) of the Company Disclosure Schedule lists
all
material Company Benefit Plans. "Company Benefit Plans" means
all employee
benefit plans, compensation arrangements and other benefit
arrangements, whether
or not "employee benefit plans" (within the meaning of Section
3(3) of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), whether
or not subject to ERISA), providing cash- or equity-based
incentives, health,
medical, dental, disability, accident or life insurance benefits
or vacation,
severance, retirement, pension or savings benefits, that are
sponsored,
maintained or contributed to by the Company or any of its
Subsidiaries for the
benefit of employees, directors, consultants, former employees,
former
consultants and former directors of the Company or its
Subsidiaries and all
employee agreements providing compensation, vacation, severance
or other
benefits to any officer, employee, consultant or former employee
of the Company
or its Subsidiaries, except to the extent providing benefits
imposed or implied
by applicable foreign Law.
(b) Any Company Benefit Plan intended to be qualified under
Section
401(a) or 401(k) of the Code has received a determination letter
from the
Internal Revenue Service and, to the knowledge of the Company,
continues to
satisfy the requirements for such qualification, except where
the failure to so
qualify has not had, and would not reasonably be expected to
have, individually
or in the aggregate, a Material Adverse Effect on the Company.
Neither the
Company nor any ERISA Affiliates of the Company maintains or
contributes to any
benefit plan covered by Title IV of ERISA or Section 412 of the
Code. Neither
the Company nor any of its Subsidiaries has incurred any
liability or penalty
under Section 4975 of the Code or Section 502(i) of ERISA which
would reasonably
be expected to have, individually or in the aggregate, a
Material Adverse Effect
on the Company or has engaged in any transaction which is
reasonably likely to
result in any liability or penalty which would reasonably be
expected to have,
individually or in the aggregate, a Material Adverse Effect on
the Company. Each
Company Benefit Plan has been maintained and administered in
compliance with its
terms and with ERISA and the Code to the extent applicable
thereto, except for
such non-compliance which has not had, and would not reasonably
be expected to
have, individually or in the aggregate, a Material Adverse
Effect on the
Company. Neither the Company nor its Subsidiaries maintains or
contributes to
any plan or arrangement which, and no Company Benefit Plan
provides, or has any
liability to provide, life insurance or medical or other
employee welfare
benefits to any employee or former employee following his
retirement or
termination of employment, except as required by applicable Law.
The Company has
not amended the Company Benefit Plans in any manner whatsoever
that would
increase materially the expense to the Company or its
Subsidiaries of
maintaining the Company Benefit Plans above the level or expense
incurred in
respect thereof for the year ended December 31, 2003. The
consummation of the
transactions contemplated by this Agreement will not, either
alone or in
combination with another event (A) entitle any current or former
employee,
consultant or officer of the Company or any its Subsidiaries to
severance pay,
unemployment compensation or any other payment, except as
expressly provided in
this Agreement or as required by applicable Law, or (B)
accelerate the time of
payment or vesting, or increase the amount of compensation due
any such
employee, consultant or officer, except as expressly provided in
this Agreement,
and no amounts payable under the Company Benefit Plans will fail
to be
deductible for federal income tax purposes by virtue of Section
280G of the Code
(assuming no acceleration of any options set forth on Section
3.2(c) of the
Company Disclosure Schedule).
21
<PAGE>
(c) No Company Benefit Plan is a "multiemployer plan," as such
term
is defined in Section 3(37) of ERISA, or a "multiple employer
plan" as such term
is defined in Section 413 of the Code. Each Company Benefit Plan
that is
intended to satisfy the requirements of Section 501(c)(9) of the
Code satisfies
the requirements of Section 501(c)(9) of the Code, except where
failure to
satisfy such requirements has not had, and would not reasonably
be expected to
have, individually or in the aggregate, a Material Adverse
Effect on the
Company.
(d) With respect to each Company Benefit Plan that is not
subject to
United States law (a "Foreign Benefit Plan"): (i) all employer
and employee
contributions to each Foreign Benefit Plan required by Law or by
the terms of
such Foreign Benefit Plan have been made, or, if applicable,
accrued in
accordance with GAAP, except for such contributions or accruals,
the failure of
which to make or accrue has not had, and would not reasonably be
expected to
have, individually or in the aggregate, a Material Adverse
Effect on the
Company; (ii) as of the Closing Date, the fair market value of
the assets of
each funded Foreign Benefit Plan, the liability of each insurer
for any Foreign
Benefit Plan funded through insurance or the book reserve
established for any
Foreign Benefit Plan, together with any accrued contributions,
will be
sufficient to procure or provide for the accrued benefit
obligations, as of the
Closing Date, with respect to all current and former
participants in such plan
according to the actuarial assumptions and valuations most
recently used to
determine employer contributions to such Foreign Benefit Plan,
and no
transaction contemplated by this Agreement shall cause such
assets or insurance
obligations to be less than such benefit obligations, except, in
each case, for
insufficiencies or transactions that would not reasonably be
expected to have,
individually or in the aggregate, a Material Adverse Effect on
the Company; and
(iii) each Foreign Benefit Plan required to be registered has
been registered
and has been maintained in good standing with applicable
regulatory authorities,
except for such failures to register or maintain as have not
had, and would not
reasonably be expected to have, individually or in the
aggregate, a Material
Adverse Effect on the Company.
(e) For purposes of this Agreement, "ERISA Affiliate" means
any
business or entity which is a member of the same "controlled
group of
corporations," under "common control" or an "affiliated service
group" with an
entity within the meanings of Sections 414(b), (c) or (m) of the
Code, or
required to be aggregated with the entity under Section 414(o)
of the Code, or
is under "common control" with the entity, within the meaning of
Section
400l(a)(14) of ERISA, or any regulations promulgated or proposed
under any of
the foregoing Sections of ERISA and the Code.
Section 3.10 Absence of Certain Changes or Events. Other than
the
transactions contemplated by this Agreement and as disclosed in
the Company SEC
Documents, from December 31, 2003 through the date of this
Agreement, the
businesses of the Company and its Subsidiaries, and, to the
knowledge of the
Company, the Company Minority Interest Businesses, have been
conducted in the
ordinary course consistent with past practice, and there has not
been any event,
occurrence, development or state of circumstances or facts that
has had, or
would reasonably be expected to have, individually or in the
aggregate, a
Material Adverse Effect on the Company.
Section 3.11 Investigations; Litigation. Except as described in
the
Company SEC Documents:
22
<PAGE>
(a) there is no investigation or review pending (or, to the
knowledge of the Company, threatened) by any Governmental Entity
with respect to
the Company, any of the Company's Subsidiaries or, to the
knowledge of the
Company, any of the Company Minority Interest Businesses, which
would reasonably
be expected to have, individually or in the aggregate, a
Material Adverse Effect
on the Company; and
(b) there are no actions, suits, inquiries, investigations
or
proceedings pending (or, to the knowledge of the Company,
threatened) against or
affecting the Company, any of the Company's Subsidiaries or, to
the knowledge of
the Company, any of the Company Minority Interest Businesses, or
any of their
respective properties at law or in equity before, and there are
no orders,
judgments or decrees of or before any Governmental Entity, in
each case, which
would reasonably be expected to have, individually or in the
aggregate, a
Material Adverse Effect on the Company.
Section 3.12 Proxy Statement; Registration Statement; Other
Information.
None of the information with respect to the Company or its
Subsidiaries to be
included in the Proxy Statement (as defined below) or the
Registration Statement
(as defined in Section 5.5(a)(i)) will, in the case of the Proxy
Statement or
any amendments thereof or supplements thereto, at the time of
the mailing of the
Proxy Statement or any amendments or supplements thereto, and at
the time of the
Company Meeting, or, in the case of the Registration Statement,
at the time it
becomes effective, 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. The Proxy Statement will comply as to form
in all material
respects with the provisions of the Exchange Act and the rules
and regulations
promulgated thereunder. The letters to shareholders, notices of
meeting, proxy
statement and forms of proxies to be distributed to shareholders
in connection
with the Merger and any schedules required to be filed with the
SEC in
connection therewith are collectively referred to herein as the
"Proxy
Statement."
Section 3.13 No Rights Plan. There is no shareholder rights
plan, "poison
pill" anti-takeover plan or other similar device in effect, to
which the Company
is a party or otherwise bound.
Section 3.14 Lack of Ownership of Parent Common Stock. Neither
the Company
nor any of its Subsidiaries owns any shares of Parent Common
Stock or other
securities convertible into shares of Parent Common Stock
(exclusive of any
shares owned by the Company's employee benefit plans).
Section 3.15 Tax Matters.
(a) The Company and each of the Company's Subsidiaries has (A)
duly
and timely filed (or there has been filed on its behalf) all
material Tax
Returns (as defined below) required to be filed by it (taking
into account all
applicable extensions) with the appropriate Tax Authority (as
defined below),
(B) paid all Taxes shown as due on such Tax Returns, except for
such failures to
file or pay which do not have, and would not reasonably be
expected to have,
individually or in the aggregate, a Material Adverse Effect on
the Company.
23
<PAGE>
(b) Except for such Liens which do not have, and would not
reasonably be expected to have, individually or in the
aggregate, a Material
Adverse Effect on the Company, there are no Liens for Taxes upon
any property or
assets of the Company or any of the Company's Subsidiaries
except for liens for
Taxes not yet due and payable or for which adequate reserves
have been provided
in accordance with GAAP in the most recent financial statements
contained in the
Company SEC Documents filed prior to the date of this
Agreement.
(c) There is no audit, examination, deficiency, refund
litigation or
proposed adjustment with respect to any Taxes other than those
which do not
have, and would not reasonably be expected to have, individually
or in the
aggregate, a Material Adverse Effect on the Company. As of the
date hereof, none
of the Company or its Subsidiaries has received notice in
writing of any claim
made by a Tax Authority in a jurisdiction where the Company or
any of its
Subsidiaries, as applicable, does not file a Tax Return, that
the Company or
such Subsidiary is or may be subject to material taxation by
that jurisdiction,
where such claim has not been resolved favorably to the Company
or such
Subsidiary.
(d) There are no outstanding written requests, agreements,
consents
or waivers to extend the statutory period of limitations
applicable to the
assessment of any income Taxes or income Tax deficiencies
against the Company or
any of the Company's Subsidiaries, except, in each case, with
respect to income
Taxes or deficiencies, as the case may be, which do not have,
and would not
reasonably be expected to have, individually or in the
aggregate, a Material
Adverse Effect on the Company, and, as of the date hereof, no
power of attorney
granted by either the Company or any of its Subsidiaries with
respect to any
material Taxes is currently in force.
(e) Neither the Company nor any of its Subsidiaries is a party
to
any agreement providing for the allocation, indemnification or
sharing of Taxes
other than such an agreement exclusively between or among the
Company and any of
its Subsidiaries, and neither the Company nor any of its
Subsidiaries (A) has
been a member of an affiliated group (or similar state, local or
foreign filing
group) filing a material consolidated income Tax Return (other
than a group the
common parent of which is the Company) or (B) has any material
liability
(including as a result of any agreement or obligation to
reimburse or indemnify)
for the Taxes of any other Person (other than the Company or any
of its
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any
similar
provision of state, local or foreign Tax law), as a transferee
or successor, by
contract or otherwise.
(f) Neither the Company nor any of its Subsidiaries has: (A)
agreed
to make or is required to make any adjustment for a taxable
period ending after
the Effective Time under Section 481(a) of the Code by reason of
a change in
accounting method or otherwise, except where such adjustments do
not have, and
would not reasonably be expected to have, individually or in the
aggregate, a
Material Adverse Effect on the Company; (B) constituted either a
"distributing
corporation" or a "controlled corporation" (within the meaning
of Section
355(a)(1)(A) of the Code) in a distribution of stock qualifying
for tax-free
treatment under Section 355 of the Code (I) in the two years
prior to the date
of this Agreement or (II) in a distribution which could
otherwise constitute
part of a "plan" or "series of related transactions" (within the
meaning of
Section 355(e) of the Code) in connection with the Merger; or
(C) taken any
action or knows of any fact, agreement, plan or other
circumstance that is
reasonably likely
24
<PAGE>
to prevent the Merger from qualifying as a "reorganization"
within the meaning
of Section 368(a) of the Code.
(g) The Company and its Subsidiaries will not be required to
include
any material item of income in, or exclude any material item of
deduction from,
taxable income for any taxable period (or portion thereof)
ending after the
Effective Time as a result of any "closing agreement" described
in Section 7121
of the Code (or any corresponding or similar provision of state,
local or
foreign income Tax law) executed on or prior to the date hereof,
except for such
inclusions or exclusions which do not have, and would not
reasonably be expected
to have, individually or in the aggregate, a Material Adverse
Effect on the
Company.
(h) The Company and each of its Subsidiaries is in material
compliance with all applicable information reporting and Tax
withholding
requirements under federal, state and local Tax laws, except for
such failures
to comply which do not have, and would not reasonably be
expected to have,
individually or in the aggregate, a Material Adverse Effect on
the Company.
(i) Section 3.15(i) of the Company Disclosure Schedule lists
all
foreign jurisdictions in which the Company and any of the
Company's Subsidiaries
files a material Tax Return.
(j) For purposes of this Agreement: (i) "Taxes" means any and
all
domestic or foreign, federal, state, local or other taxes of any
kind (together
with any and all interest, penalties, additions to tax and
additional amounts
imposed with respect thereto) imposed by any Governmental
Entity, including
taxes on or with respect to income, franchises, windfall or
other profits, gross
receipts, property, sales, use, capital stock, payroll,
employment,
unemployment, social security, workers' compensation or net
worth, and taxes in
the nature of excise, withholding, ad valorem or value added;
(ii) "Tax
Authority" means the Internal Revenue Service and any other
domestic or foreign
Governmental Entity responsible for the administration or
collection of any
Taxes; and (iii) "Tax Return" means any return, report or
similar filing
(including the attached schedules) required to be filed with
respect to Taxes,
including any information return, claim for refund, amended
return, or
declaration of estimated Taxes.
Section 3.16 Labor Matters. Except to the extent imposed or
implied by
applicable foreign Law, as of the date hereof, neither the
Company nor any of
its Subsidiaries is a party to, or bound by, any collective
bargaining agreement
(or similar agreement or arrangement in any foreign country)
with employees, a
labor union or labor organization. Except for such matters which
have not had,
and would not reasonably be expected to have, individually or in
the aggregate,
a Material Adverse Effect on the Company, (a) as of the date
hereof, (i) there
are no strikes or lockouts with respect to any employees of the
Company or any
of its Subsidiaries ("Employees"), and, (ii) to the knowledge of
the Company,
there is no union organizing effort pending or threatened
against the Company or
any of its Subsidiaries; (b) there is no unfair labor practice,
labor dispute
(other than routine individual grievances) or labor arbitration
proceeding
pending or, to the knowledge of the Company, threatened against
the Company or
any of its Subsidiaries; (c) there is no slowdown, or work
stoppage in effect
or, to the knowledge of the Company, threatened with respect to
Employees; and
(d) the Company and its Subsidiaries are in compliance with all
applicable Laws
respecting (i) employment and employment practices,
25
<PAGE>
(ii) terms and conditions of employment and wages and hours and
(iii) unfair
labor practices. Neither the Company nor any of its Subsidiaries
has any
liabilities under the Worker Adjustment and Retraining
Notification Act (the
"WARN Act") as a result of any action taken by the Company
(other than at the
written direction of Parent or as a result of the Merger) and
that would
reasonably be expected to have, individually or in the
aggregate, a Material
Adverse Effect on the Company.
Section 3.17 Intellectual Property. Except as would not
reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect on
the Company, (i) either the Company or a Subsidiary of the
Company owns, or is
licensed or otherwise possesses legally enforceable rights to
use, all
Intellectual Property (as defined below) used in their
respective businesses as
currently conducted, and (ii) the consummation of the
transactions will not
alter or impair such rights. There are no pending or, to the
knowledge of the
Company, threatened claims by any Person challenging the use by
the Company or
its Subsidiaries of any material trademarks, trade names,
service marks, service
names, mark registrations, logos, assumed names, registered and
unregistered
copyrights, patents or applications and registrations therefor
(collectively,
the "Intellectual Property") in their respective businesses as
currently
conducted that would reasonably be expected to have,
individually or in the
aggregate, a Material Adverse Effect on the Company. Except as
would not
reasonably be expected to have, individually or in the
aggregate, a Material
Adverse Effect on the Company, the conduct of the businesses of
the Company and
its Subsidiaries does not infringe upon any intellectual
property rights or any
other proprietary right of any Person, and neither the Company
nor any
Subsidiary has received any written notice from any other Person
pertaining to
or challenging the right of the Company or any Subsidiary to use
any of the
Intellectual Property. As of the date hereof, neither the
Company nor any of its
Subsidiaries has made any claim of a violation or infringement
by others of its
rights to or in connection with the Intellectual Property used
in their
respective businesses which violation or infringement has had,
or would
reasonably be expected to have, individually or in the
aggregate, a Material
Adverse Effect.
Section 3.18 Opinion of Financial Advisor. The Board of
Directors of the
Company has received the opinion of Bear, Stearns & Co. Inc.
dated the date of
this Agreement, substantially to the effect that, as of such
date, the Merger
Consideration is fair to the holders of the Company Common Stock
from a
financial point of view. The Company has delivered a complete
and accurate copy
of such opinion to Parent, which opinion shall be included in
the Proxy
Statement.
Section 3.19 Required Vote of the Company Shareholders. The
affirmative
vote of the holders of outstanding shares of Company Common
Stock, voting
together as a single class, representing at least two-thirds of
all the votes
entitled to be cast by holders of Company Common Stock is the
only vote of
holders of securities of the Company which is required to
approve and adopt this
Agreement and the transactions contemplated hereby (the "Company
Shareholder
Approval").
Section 3.20 Material Contracts.
(a) Except for this Agreement, the Voting Agreement and the
Company
Benefit Plans and except as set forth in the Company SEC
Documents, as of the
date hereof, neither the Company nor any of its Subsidiaries is
a party to or
bound by any "material contract"
26
<PAGE>
(as such term is defined in item 601(b)(10) of Regulation S-K of
the SEC) (all
contracts of the type described in this Section 3.20 being
referred to herein as
"Company Material Contracts").
(b) Neither the Company nor any Subsidiary of the Company is
in
breach of or default under the terms of any Company Material
Contract where such
breach or default has had, or would reasonably be expected to
have, individually
or in the aggregate, a Material Adverse Effect on the Company.
To the knowledge
of the Company, no other party to any Company Material Contract
is in breach of
or default under the terms of any Company Material Contract
where such breach or
default has had, or would reasonably be expected to have,
individually or in the
aggregate, a Material Adverse Effect on the Company. Each
Company Material
Contract is a valid and binding obligation of the Company or the
Subsidiary of
the Company which is party thereto and, to the knowledge of the
Company, of each
other party thereto, and is in full force and effect, except
that (i) such
enforcement may be subject to applicable bankruptcy, insolvency,
reorganization,
moratorium or other similar Laws, now or hereafter in effect,
relating to
creditors' rights generally and (ii) equitable remedies of
specific performance
and injunctive and other forms of equitable relief may be
subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor
may be brought.
Section 3.21 Domestic Communications Regulatory Matters.
(a) Section 3.21 of the Company Disclosure Schedule (the
"Company
License Schedule") lists all licenses and authorizations issued
by the Federal
Communications Commission (the "FCC") to the Company or its
Subsidiaries (the
"Company Licenses"), together with the name of the licensee or
authorization
holder, the expiration date of the Company Licenses and, where
applicable, the
relevant FCC market designation. The Company Licenses constitute
all
authorizations necessary from the FCC for the business
operations of the Company
and its Subsidiaries as they are currently being conducted in
the United States,
except those authorizations the absence of which has not had, or
would not
reasonably be expected to have, individually or in the
aggregate, a Material
Adverse Effect on the Company.
(b) Each Company License is valid and in full force and effect
and
has not been suspended, revoked, cancelled or adversely
modified, except where
the failure to be in full force and effect, or the suspension,
revocation,
cancellation or modification of which has not had or would not
reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect on
the Company. No Company License is subject to (i) any conditions
or requirements
that have not been imposed generally upon licenses in the same
service, unless
such conditions or requirements would not reasonably be expected
to have,
individually or in the aggregate, a Material Adverse Effect on
the Company, or
(ii) any pending regulatory proceeding (other than those
affecting the wireless
industry generally) or judicial review before a Governmental
Entity, unless such
pending regulatory proceedings or judicial review would not
reasonably be
expected to have a Material Adverse Effect on the Company. The
Company and its
Subsidiaries have no knowledge of any event, condition or
circumstance that
would preclude any Company License from being renewed in the
ordinary course (to
the extent that such Company License is renewable by its terms),
except where
the failure to be renewed has not had or would not reasonably be
expected to
have, individually or in the aggregate, a Material Adverse
Effect on the
Company.
27
<PAGE>
(c) The licensee of each Company License is in compliance with
each
Company License and has fulfilled and performed all of its
material obligations
with respect thereto, including all reports, notifications and
applications
required by the Communications Act or the rules, regulations,
policies,
instructions and orders of the FCC (the "FCC Rules") and the
payment of all
regulatory fees, contributions to the Universal Service Fund,
the TRS Fund and
all other such funds to which contributions are required by the
FCC Rules,
except (i) for exemptions, waivers or similar concessions or
allowances and (ii)
where such failure to be in compliance, fulfill or perform its
obligations or
pay such fees or contributions has not had, or would not
reasonably be expected
to have, individually or in the aggregate, a Material Adverse
Effect on the
Company.
(d) Except as provided in the Company License Schedule, there
are no
outstanding material auction or other monetary obligations due
to the FCC, and
the completion of the Merger will not give rise to any unjust
enrichment
obligations related to Company Licenses obtained through the
FCC's auction
process.
(e) Except for structures that do not require registration, each
of
the antenna structures used for the operation of the Company
Licenses has been
registered with the FCC, except with respect to registrations
the failure of
which to obtain have not had, or would not reasonably be
expected to have,
individually or in the aggregate, a Material Adverse Effect on
the Company.
Except with the consent of the FCC or as otherwise permitted in
accordance with
the FCC Rules, no facility located in the United States for the
operations of
the Company and its Subsidiaries has been constructed in a
manner that has
resulted in a significant environmental effect, as defined by
FCC Rules, except
as would not reasonably be expected to have, individually or in
the aggregate, a
Material Adverse Effect on the Company. Other than as may affect
the wireless
industry generally, there is no application, petition, objection
or other
proceeding pending before any Governmental Entity that could
affect the Company
Licenses or the business operations of the Company or any of its
Subsidiaries,
except for such applications, petitions, objections or other
proceedings that
have not had, or would not reasonably be expected to have,
individually or in
the aggregate, a Material Adverse Effect on the Company.
(f) The Company or a wholly-owned Subsidiary of the Company owns
one
hundred percent (100%) of the equity and controls one hundred
percent (100%) of
the voting power and decision-making authority of each licensee
of the Company
Licenses.
(g) Section 3.21 of the Company Disclosure Schedule lists
all
pending federal or state proceedings with regard to efforts by
the Company or
any of its Subsidiaries to be designated as an Eligible
Telecommunications
Carrier.
Section 3.22 Foreign Communications Regulatory Matters.
(a) Section 3.22 of the Company Disclosure Schedule (the
"Foreign
License Schedule") lists all the licenses and authorizations
issued by the
Telekom-Control-Kommission (the "TKK"), the Rundfunk &
Telekom Regulierungs-GmbH
(the "RTR-GmbH") in Austria and the Commission for
Communications Regulation in
Ireland ("ComReg") to the Company or its Subsidiaries (the
"Austrian and Irish
Company Licenses"). Such licenses constitute all material
authorizations
necessary from the TKK, the RTR-GmbH and ComReg for the
business
28
<PAGE>
operations of the Company and its Subsidiaries as they are
currently being
conducted in Austria and Ireland, except those authorizations
the absence of
which has not had, or would not reasonably be expected to have,
individually or
in the aggregate, a Material Adverse Effect on the Company. To
the knowledge of
the Company, the Company holds all licenses and authorizations
necessary for the
business operations of the Company in Bolivia, Georgia and
Haiti, except those
licenses and authorizations the failure to hold which has not
had, and would not
reasonably be expected to have, individually or in the
aggregate, a Material
Adverse Effect on the Company. The Austrian and Irish Company
Licenses, together
with the material licenses and authorizations in Bolivia,
Georgia and Haiti are
hereinafter referred to collectively as the "Foreign Company
Licenses."
(b) Each Foreign Company License is valid and in full force
and
effect and has not been suspended, revoked, cancelled or
adversely modified,
except where the failure to be in full force and effect, or the
suspension,
revocation, cancellation or modification of such license or
licenses has not had
or would not reasonably be expected to have, individually or in
the aggregate, a
Material Adverse Effect on the Company. No Foreign Company
License is subject to
(i) any conditions or requirements that have not been imposed
generally upon
licenses in the same service, unless such conditions or
requirements would not
reasonably be expected to have, individually or in the
aggregate, a Material
Adver
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