<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 18, 1997
CBS CORPORATION
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(Exact name of registrant as specified in its charter)
PENNSYLVANIA 1-977 25-0877540
------------ ----- ----------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
Westinghouse Building, 11 Stanwix Street, Pittsburgh, Pennsylvania 15222-1384
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(Address of principal executive offices, including zip code)
(412) 244-2000
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(Registrant's Telephone No., including area code)
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Item 5. Other Events
1. On September 19, 1997, American Radio Systems Corporation ("ARS"), CBS
Corporation (formerly Westinghouse Electric Corporation ("CBS")) and R
Acquisition Corp. ("CBS Sub") entered into an Agreement and Plan of Merger (the
"Original Merger Agreement") pursuant to which CBS Sub would be merged with and
into ARS and ARS would become a subsidiary of CBS (the "CBS Merger"). As a
condition of the Original Merger Agreement, prior to the effective time of the
CBS Merger (the "Effective Time"), American Tower Corporation ("ATS"), a
wholly-owned subsidiary of ARS which owns and operates ARS's communications
sites business, would be separated from ARS and distributed (the "Tower
Separation") to the holders of Class A Common Stock, $.01 par value per share,
Class B Common Stock, $.01 par value per share, and Class C Common Stock, $.01
par value per share, of ARS (collectively, the "ARS Common Stock").
On December 18, 1997, ARS, CBS and CBS Sub entered into an Amended and
Restated Agreement and Plan of Merger (the "Amended Agreement") to provide that
the Tower Separation may be effectuated (i) through the CBS Merger or (ii) at
ARS' election, if the CBS Merger has not been consummated by May 31, 1998,
through the merger (the "Tower Merger") of ATS Merger Corporation, a newly
formed wholly-owned subsidiary of ARS ("ATS Merger"), with and into ARS,
pursuant to the Agreement and Plan of Merger by and between ARS and ATS Merger,
dated as of December 18, 1997.
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On December 19, 1997, ARS, CBS and CBS Sub executed an amendment (the
"First Amendment") to the Amended Agreement reflecting approval and adoption by
the holders of ARS Common Stock of the Amended Agreement and approval of the CBS
Merger.
Item 7. Financial Statements and Exhibits
(c). Exhibits
Exhibit 2.1 - Amended and Restated Agreement and Plan of Merger, dated
as of December 18, 1997 by and among American Radio
Systems Corporation, a Delaware Corporation, CBS
Corporation (formerly, Westinghouse Electric Corporation),
a Pennsylvania corporation, and R Acquisition Corp., a
Delaware corporation.
Exhibit 2.2 - First Amendment, dated December 19, 1997 to Amended and
Restated Agreement, dated December 18, 1997 by and among
American Radio Systems Corporation, a Delaware
Corporation, CBS Corporation (formerly, Westinghouse
Electric Corporation), a Pennsylvania corporation, and R
Acquisition Corp., a Delaware corporation.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CBS CORPORATION
(Registrant)
By: /s/ LOUIS J. BRISKMAN
------------------------
Name: Louis J. Briskman
Title: Senior Vice President
and General Counsel
Date: January 7, 1998
<PAGE> 1
Exhibit 2.1
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
By and Among
AMERICAN RADIO SYSTEMS CORPORATION,
CBS CORPORATION
and
R ACQUISITION CORP.
Dated as of
December 18, 1997
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TABLE OF CONTENTS
<TABLE>
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ARTICLE 1 DEFINED TERMS.............................................................................1
ARTICLE 2 THE MERGER................................................................................2
2.1 The Merger.......................................................................2
2.2 Closing..........................................................................2
2.3 Effective Time...................................................................2
2.4 Effect of the Merger.............................................................2
2.5 Certificate of Incorporation.....................................................2
2.6 Bylaws...........................................................................2
2.7 Directors and Officers...........................................................2
ARTICLE 3 CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES............................................3
3.1 Conversion of Capital Stock......................................................3
3.2 Exchange of Certificates. ......................................................4
3.3 Closing of American's Transfer Books.............................................5
3.4 Dissenting Shares................................................................6
3.5 Tower Merger.....................................................................6
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF AMERICAN................................................8
4.1 Organization and Business; Power and Authority; Effect of Transaction............8
4.2 Financial and Other Information. ..............................................11
4.3 Changes in Condition............................................................11
4.4 Properties......................................................................11
4.5 Compliance with Private Authorizations..........................................11
4.6 Compliance with Governmental Authorizations and Applicable Law;
Litigation......................................................................12
4.7 Related Transactions............................................................13
4.8 Taxes and Tax Matters...........................................................13
4.9 Employee Retirement Income Security Act of 1974.................................14
4.10 Insurance.......................................................................17
4.11 Authorized Capital Stock........................................................17
4.12 Employment Arrangements.........................................................18
4.14 Brokers.........................................................................18
4.15 Information Supplied............................................................18
4.16 Ordinary Course of Busine Section ..............................................19
4.17 Environmental Matters...........................................................19
4.18 Opinion of Financial Advisor....................................................20
4.19 Contracts; Debt Instruments.....................................................20
4.20 State Takeover Statutes.........................................................21
4.21 Appraisal Rights................................................................21
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF MERGEPARTY.............................................21
5.1 Organization and Business; Power and Authority; Effect of Transaction...........21
5.2 Compliance with Governmental Authorizations and Applicable Law;
Litigation......................................................................22
5.3 Mergeparty Financing............................................................23
</TABLE>
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<TABLE>
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<S> <C> <C>
ARTICLE 6 COVENANTS................................................................................23
6.1 Access to Information; Confidentiality..........................................23
6.2 Agreement to Cooperate..........................................................23
6.3 Public Announcements............................................................26
6.4 Notification of Certain Matters.................................................26
6.5 Stockholder Approval. ..........................................................26
6.6 Proxy Statement; Registration Statement. ......................................26
6.7 Miscellaneous...................................................................27
6.8 Option Plans....................................................................27
6.9 Conduct of Business by Mergeparty Pending the Merger............................29
6.10 Conduct of Business by American Pending the Merger..............................29
6.11 Control of Operations...........................................................31
6.12 Directors', Officers' and Employees' Indemnification and Insurance..............31
6.13 Solicitation of Employees.......................................................32
6.14 Change of Name..................................................................33
6.15 Benefit Plans...................................................................33
6.16 American Cumulative Preferred Stock.............................................33
6.17 American Tower Transaction......................................................33
6.18 Purchase Price Adjustment.......................................................39
6.19 Tower Leases....................................................................41
6.20 Affiliates of American..........................................................42
ARTICLE 7 CLOSING CONDITIONS.......................................................................42
7.1 Conditions to Obligations of Each Party to Effect the Merger....................42
7.2 Conditions to Obligations of Mergeparty.........................................43
7.3 Conditions to Obligations of American...........................................44
ARTICLE 8 TERMINATION, AMENDMENT AND WAIVER........................................................44
8.1 Termination.....................................................................44
8.2 Effect of Termination.
........................................................................................45
ARTICLE 9 GENERAL PROVISIONS.......................................................................46
9.1 Amendment.......................................................................46
9.2 Waiver..........................................................................46
9.3 Fees, Expenses and Other Payments...............................................46
9.4 Notices.........................................................................47
9.5 Specific Performance; Other Rights and Remedies.................................47
9.6 Survival of Representations, Warranties, Covenants and Agreements...............48
9.7 Severability....................................................................48
9.8 Counterparts....................................................................48
9.9 Section Headings................................................................48
9.10 Governing Law...................................................................48
9.11 Further Acts....................................................................48
9.12 Entire Agreement; No Other Representations or Agreements........................49
9.13 Assignment......................................................................49
9.14 Parties in Interest.............................................................49
9.15 Mutual Drafting.................................................................49
9.16 Obligations of American and of Mergeparty.......................................50
9.17 Mergeparty Agent for Mergeparty Subsidiary......................................50
</TABLE>
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APPENDIX A: Definitions
EXHIBITS:
EXHIBIT A: Restated Certificate of Incorporation
EXHIBIT B: Market Fee Schedule
EXHIBIT C: Form of Opinion of FCC Counsel to American
EXHIBIT D: Tower Merger Agreement
SCHEDULES: Schedule 4.1(e)
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AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
Amended and Restated Agreement and Plan of Merger, dated as of December 18,
1997, by and among American Radio Systems Corporation, a Delaware corporation
("American"), CBS Corporation (formerly, Westinghouse Electric Corporation), a
Pennsylvania corporation ("Mergeparty"), and R Acquisition Corp., a Delaware
corporation ("Mergeparty Subsidiary").
W I T N E S S E T H:
WHEREAS, American, Mergeparty and Mergeparty Subsidiary are parties to an
Agreement and Plan of Merger, dated as of September 19, 1997 (the "Original
Merger Agreement"), providing for the merger of Mergeparty Subsidiary with and
into American on the terms and conditions set forth therein; and
WHEREAS, American, Mergeparty and Mergeparty Subsidiary desire to amend and
restate the Original Merger Agreement in its entirety to make certain changes to
the Original Merger Agreement; and
WHEREAS, American, Mergeparty and Mergeparty Subsidiary have entered into
this Amended and Restated Agreement and Plan of Merger (this "Agreement")
providing that Mergeparty Subsidiary shall be merged with and into American,
which shall be the surviving corporation, on the terms and conditions set forth
in this Agreement (the "Merger").
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained and other valuable
consideration, the receipt and adequacy whereof are hereby acknowledged, the
parties hereto hereby, intending to be legally bound, represent, warrant,
covenant and agree as follows:
ARTICLE 1
DEFINED TERMS
As used herein, unless the context otherwise requires, the terms defined in
Appendix A shall have the respective meanings set forth therein. Terms defined
in the singular shall have a comparable meaning when used in the plural, and
vice versa, and the reference to any gender shall be deemed to include all
genders. Unless otherwise defined or the context otherwise clearly requires,
terms for which meanings are provided in this Agreement shall have such meanings
when used in either Disclosure Schedule and each Collateral Document executed or
required to be executed pursuant hereto or thereto or otherwise delivered, from
time to time, pursuant hereto or thereto. References to "hereof," "herein" or
similar terms are intended to refer to the Agreement as a whole and not a
particular section, and references to "this Section" or "this Article" are
intended to refer to the entire section or article and not a particular
subsection thereof. The term "either party" shall, unless the context otherwise
requires, refer to American, on the one hand, and Mergeparty and Mergeparty
Subsidiary, on the other hand.
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ARTICLE 2
THE MERGER
2.1 The Merger. (a) Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the Delaware General Corporation Law
(the "DCL"), at the Effective Time, Mergeparty Subsidiary shall be merged with
and into American. As a result of the Merger, the separate corporate existence
of Mergeparty Subsidiary shall cease and American shall continue as the
surviving corporation in the Merger (sometimes referred to, as such, as the
"Surviving Corporation").
2.2 Closing. Unless this Agreement shall have been terminated pursuant to
Section 8.1 and subject to the satisfaction or, to the extent permitted by
Applicable Law, waiver of the conditions set forth in Article 7, the closing of
the Merger (the "Closing") will take place, at 10:00 a.m., on the Closing Date,
at the offices of Cravath, Swaine & Moore, 825 Eighth Avenue, New York, New York
10019, on the date that is the second (2nd) day after the date on which all of
the conditions set forth in Article 7 (other than those which require delivery
of opinions or documents at the Closing) shall have been satisfied or waived,
unless another date, time or place is agreed to in writing by the parties. The
date on which the Closing occurs is herein referred to as the "Closing Date."
2.3 Effective Time. Subject to the provisions of this Agreement, as
promptly as practicable after the Closing, the parties hereto shall cause the
Merger to be consummated by filing a certificate of merger (the "Certificate of
Merger") and any related filings required under the DCL with the Secretary of
State of the State of Delaware. The Merger shall become effective at such time
as such documents are duly filed with the Secretary of State of the State of
Delaware, or at such later time as is specified in such documents (the
"Effective Time").
2.4 Effect of the Merger. The Merger shall have the effects provided for
under the DCL.
2.5 Certificate of Incorporation. The Certificate of Incorporation of
American, as in effect immediately prior to the Effective Time, shall be amended
as of the Effective Time to read in its entirety as set forth in Exhibit A and,
as so amended, such Certificate of Incorporation, together with the Certificates
of Designation of (i) 113/8% Series B Cumulative Exchangeable Preferred Stock,
par value $.01 per share, of American ("American Cumulative Preferred Stock")
and (ii) 7% Convertible Exchangeable Preferred Stock, par value $.01 per share,
of American ("American Convertible Preferred Stock" and, collectively with
American Cumulative Preferred Stock, "American Preferred Stock"), shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by Applicable Law. Such amendment
shall not be deemed to affect in any manner the Certificates of Designation of
American Preferred Stock.
2.6 Bylaws. The bylaws of American in effect at the Effective Time shall be
the bylaws of the Surviving Corporation until amended in accordance with
Applicable Law and the Organic Documents of the Surviving Corporation.
2.7 Directors and Officers. From and after the Effective Time, until
successors are duly elected or appointed and qualified, or upon their earlier
resignation or removal, in accordance with Applicable Law and the Organic
Documents of the Surviving Corporation, (a) the directors of Mergeparty
Subsidiary at the Effective Time shall be the directors of the Surviving
Corporation, and (b) the officers of American at the Effective Time shall be the
officers of the Surviving Corporation.
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ARTICLE 3
CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
3.1 Conversion of Capital Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of Mergeparty, Mergeparty Subsidiary
or American or their respective stockholders:
(a) Each share of Common Stock, par value $1.00 per share, of Mergeparty
Subsidiary issued and outstanding immediately prior to the Effective Time shall
be converted into and become one validly issued, fully paid and nonassessable
share of Common Stock, par value $.01 per share, of the Surviving Corporation;
(b) Each share of American Cumulative Preferred Stock issued and
outstanding immediately prior to the Effective Time shall remain outstanding;
(c) Each share of American Convertible Preferred Stock issued and
outstanding immediately prior to the Effective Time shall remain outstanding;
(d) Subject to paragraph (e) below, each share of Class A Common Stock, par
value $.01 per share ("American Class A Common"), each share of Class B Common
Stock, par value $.01 per share ("American Class B Common"), and each share of
Class C Common Stock, par value $.01 per share ("American Class C Common" and,
collectively with American Class A Common and American Class B Common, "American
Common Stock"), of American issued and outstanding immediately prior to the
Effective Time (other than Dissenting Shares) shall be converted into the right
to receive the following:
(i) if the Tower Merger Effective Time shall not have occurred, (A)
$44.00 in cash and (B) one share of Tower Common Stock, with (x) each share
of American Class A Common being converted into the right to receive one
share of Class A Common Stock, par value $.01 per share ("Tower Class A
Common"), of American Tower Systems Corporation, a Delaware corporation and
a wholly-owned Subsidiary of American ("American Tower"), (y) each share of
American Class B Common being converted into the right to receive one share
of Class B Common Stock, par value $.01 per share ("Tower Class B Common"),
of American Tower, and (z) each share of American Class C Common being
converted into the right to receive one share of Class C Common Stock, par
value $.01 per share ("Tower Class C Common" and, collectively with Tower
Class A Common and Tower Class B Common, "Tower Common Stock"), of American
Tower (collectively, the "Tower Stock Consideration"); or
(ii) if the Tower Merger Effective Time shall have occurred, an amount
in cash determined by dividing $44.00 by the American Conversion Fraction.
The term "Cash Consideration" shall mean the following: (x) if the Tower Merger
Effective Time shall not have occurred, $44.00, and (y) if the Tower Merger
Effective Time shall have occurred, the amount of cash determined pursuant to
the provisions of clause (ii) preceding. The term "Merger Consideration" shall
mean the Cash Consideration and, if the Tower Merger Effective Time shall not
have occurred, the Tower Stock Consideration.
(e) Each share of American Common Stock owned by American or any of its
Subsidiaries or Mergeparty or any of its Subsidiaries immediately prior to the
Effective Time shall automatically be canceled and extinguished without any
conversion thereof and no payment shall be made with respect thereto.
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As a result of the Merger and without any action on the part of the holder
thereof, at the Effective Time all shares of American Common Stock shall cease
to be outstanding and shall be canceled and retired and shall cease to exist,
and each holder of any certificates formerly representing such shares shall
thereafter cease to have any rights with respect to such shares, except, subject
to paragraph (e) above, the right to receive, without interest, the Merger
Consideration, or, in the case of a holder of Dissenting Shares, the right to
perfect the right to receive payment for Dissenting Shares pursuant to Section
262 of the DCL.
3.2 Exchange of Certificates.
(a) From time to time, on or prior to or after the Effective Time,
Mergeparty shall deposit or cause to be deposited with an exchange agent
selected by Mergeparty and not reasonably disapproved of by American (the
"Exchange Agent") in trust for the benefit of the holders of American Common
Stock cash in amounts and at times necessary for the prompt payment of the Cash
Consideration, and American shall deposit or cause to be deposited with the
Exchange Agent in trust for the benefit of the holders of American Common Stock
shares of Tower Common Stock in amounts and at times necessary for the prompt
delivery of the Tower Stock Consideration, if any, upon the surrender of
Certificates.
(b) Not more than five (5) business days subsequent to the Effective Time,
the Exchange Agent shall mail to each holder of record of a certificate or
certificates that immediately prior to the Effective Time represented
outstanding shares of American Common Stock (the "Certificates") (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon actual delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as American and Mergeparty may agree) and (ii) instructions for use
in effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of Certificates for cancellation to the Exchange
Agent, together with a duly executed letter of transmittal and such other
documents as the Exchange Agent shall reasonably require, the holder of such
Certificate shall receive in exchange therefor the Merger Consideration
multiplied by the number of shares of American Common Stock formerly represented
by such Certificates. The amount of Cash Consideration paid to the holder of
Certificates shall be in the form of a wire transfer of immediately available
funds if so requested by any holder entitled to receive not less than $500,000
in cash, and the cost of such wire transfers shall be borne by the Surviving
Corporation. Such letter of transmittal and instructions shall be available at
the Closing for holders of American Common Stock. Notwithstanding the foregoing,
neither the Exchange Agent nor any party hereto shall be liable to a holder of
shares of American Common Stock for any Merger Consideration delivered to a
public official pursuant to applicable abandoned property, escheat or similar
Laws.
(c) Promptly following the date which is six (6) months after the Closing
Date, the Exchange Agent shall deliver to Mergeparty all cash and any shares of
Tower Common Stock in its possession relating to the transactions described in
this Agreement that remain unclaimed, and the Exchange Agent's duties shall
terminate. Thereafter, each holder of a Certificate may surrender such
Certificate to the Surviving Corporation and (subject to applicable abandoned
property, escheat and similar Laws) receive in exchange therefor the aggregate
Merger Consideration to which such holder is entitled, without any interest
thereon, but together with dividends and distributions, if any, paid by American
Tower on or with respect to the Tower Common Stock in accordance with the
provisions of Section 3.2(d).
(d) Notwithstanding any other provisions of this Agreement, no dividends or
other distributions declared after the earlier to occur of the Tower Merger
Effective Time or the Effective Time
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on Tower Common Stock shall be paid with respect to any shares of Tower Common
Stock represented by a Certificate until such Certificate is surrendered for
exchange as provided herein or, if the Tower Merger Effective Time shall have
occurred, as provided in the Tower Merger Agreement. Subject to the effect of
Applicable Laws, following surrender of any such Certificate, there shall be
paid to the holder of the shares of Tower Common Stock issued in exchange
therefor, without interest, (i) at the time of such surrender, the amount of
dividends or other distributions with a record date after the earlier to occur
of the Tower Merger Effective Time or the Effective Time theretofore payable
with respect to such shares of Tower Common Stock and not paid, less the amount
of any withholding taxes which may be required thereon, and (ii) at the
appropriate payment date, the amount of dividends or other distributions with a
record date after the earlier to occur of the Tower Merger Effective Time or the
Effective Time but prior to surrender and a payment date subsequent to surrender
payable with respect to such shares of Tower Common Stock, less the amount of
any withholding taxes which may be required thereon.
(e) If the Merger Consideration (or any portion thereof) is to be delivered
to a Person other than the Person in whose name the Certificate surrendered in
exchange therefor is registered, it shall be a condition to the delivery of the
Merger Consideration that the Certificate so surrendered shall be properly
endorsed or accompanied by appropriate stock powers (with signatures guaranteed
in accordance with the transmittal letter) and otherwise in proper form for
transfer, that such transfer otherwise be proper and that the Person requesting
such transfer pay to the Exchange Agent any transfer or other Taxes payable by
reason of the foregoing or establish to the satisfaction of the Exchange Agent
that such Taxes have been paid or are not required to be paid.
(f) In the event any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the Person claiming such
Certificate to be lost, stolen or destroyed and subject to such other reasonable
conditions as the Exchange Agent may impose, the Exchange Agent shall issue in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration
(to the extent applicable) deliverable in respect thereof as determined in
accordance with this Article. When authorizing such issue of the Merger
Consideration in exchange therefor, the Exchange Agent may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed Certificate (if other than a recognized financial
institution) to give the Exchange Agent a bond or other surety in such sum as it
may reasonably direct as indemnity against any Claim that may be made against
the Exchange Agent with respect to the Certificate alleged to have been lost,
stolen or destroyed.
(g) At and after the Effective Time, the holder of a Certificate shall
cease to have any rights as a holder of shares of American Common Stock, except
for the right to surrender Certificates in the manner prescribed by Section 3.2
in exchange for delivery of the Merger Consideration, or, in the case of a
holder of Dissenting Shares, the right to perfect the right to receive payment
for Dissenting Shares pursuant to Section 262 of the DCL.
(h) The Surviving Corporation shall be entitled to, or shall be entitled to
cause the Exchange Agent to, deduct and withhold from the consideration
otherwise deliverable pursuant to this Agreement to any holder of shares of
American Common Stock such amounts as are required to be deducted and withheld
with respect to the making of such payment under the Code, or any provision of
state, local or foreign Tax Law. To the extent that amounts are so withheld by
the Surviving Corporation or the Exchange Agent, as the case may be, such
withheld amounts shall be treated for all purposes of this Agreement as having
been delivered to the holder of the shares of American Common Stock in respect
of which such deduction and withholding was made by the Surviving Corporation or
the Exchange Agent.
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(i) The Exchange Agent shall invest any funds held by it for purposes of
this Section 3.2 as directed by Mergeparty, on a daily basis. Any interest and
other income resulting from such investments shall be paid to Mergeparty and any
risk of loss resulting from such investments shall be borne by Mergeparty.
3.3 Closing of American's Transfer Books. At the Effective Time, the stock
transfer books of American relating to American Common Stock shall be closed and
no transfer of shares of American Common Stock which were outstanding
immediately prior to the Effective Time shall thereafter be made. If, after the
Effective Time, subject to the terms and conditions of this Agreement,
Certificates formerly representing American Common Stock are presented to the
Surviving Corporation, they shall be canceled and exchanged for the Merger
Consideration in accordance with the provisions of this Article.
3.4 Dissenting Shares.
(a) Notwithstanding any other provision of this Agreement to the contrary,
shares of American Common Stock that are outstanding immediately prior to the
Effective Time and which are held by American stockholders who shall have not
voted in favor of the Merger or consented thereto in writing and who shall be
entitled to and shall have demanded properly in writing appraisal rights for
such shares of American Common Stock in accordance with Section 262 of the DCL
and who shall not have withdrawn such demand or otherwise have forfeited
appraisal rights (collectively, the "Dissenting Shares"), shall not be converted
into or represent the right to receive the Merger Consideration payable in
respect of each share of American Common Stock represented thereby. Such
American stockholders shall be entitled to receive payment of the appraised
value of such shares of American Common Stock held by them in accordance with
the provisions of the DCL; provided, however, that all Dissenting Shares held by
American stockholders who shall have failed to perfect or who effectively shall
have withdrawn, forfeited or lost their appraisal rights with respect to such
shares of American Common Stock under the DCL shall thereupon be deemed to have
been converted into and to have become exchangeable for, as of the Effective
Time, the right to receive, without any interest thereon, the Merger
Consideration upon surrender, in the manner provided in Section 3.2, of the
Certificates with respect to such shares.
(b) American shall give Mergeparty prompt notice of any demands for
appraisal rights received by it, withdrawals of such demands, and any other
instruments served pursuant to the DCL and received by American and relating
thereto. American shall give Mergeparty the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal rights under
the provisions of the DCL. American shall not, except with the prior written
consent of Mergeparty, make any payment with respect to any demands for
appraisal rights, or offer to settle, or settle, any such demands.
(c) If the Tower Merger Effective Time shall not have occurred and the
Delaware Court of Chancery (the "Court") conducts an appraisal proceeding
pursuant to Section 262 of the DCL relating to an obligation to pay the
appraised value per share of American Common Stock ("Appraised Total Value") to
the holders of the Dissenting Shares, American Tower shall promptly pay to
American the portion of the Appraised Total Value attributable to the Tower
Stock Consideration (the "Tower Stock Payment") and American shall contribute
(without the payment of any amount or the issuance of any securities by American
Tower) to the capital of American Tower such shares of Tower Common Stock owned
by American that the holders of the Dissenting Shares would have been entitled
to receive had they not exercised their appraisal rights. The Tower Stock
Payment shall be determined pursuant to the following provisions:
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(i) American shall request the Court to determine in writing the Tower
Stock Payment. If the Court shall make such determination the Tower Stock
Payment shall be the amount so determined; and
(ii) If the Court shall not make such determination within a 30-day
period following such request (at which time such request shall be
withdrawn) (the "Determination Deadline"), American, American Tower and
Mergeparty shall submit to an arbitrator (the "Arbitrator") for review and
resolution the determination of the Tower Stock Payment. The Arbitrator
shall be a nationally recognized investment banking firm which shall be
agreed upon by American, Mergeparty and American Tower in writing. The
Arbitrator shall be requested to render a decision resolving the amount of
the Tower Stock Payment within 30 days following the date of its selection.
If the parties cannot agree on the firm to be selected as Arbitrator within
15 days following the Determination Deadline, then American and Mergeparty,
on the one hand, and American Tower, on the other hand, shall each choose
one such firm within 10 days following the expiration of such 15-day period
to review, resolve and agree on the determination of the Tower Stock
Payment, which determination, once agreed to in writing by both such firms,
shall be final, conclusive and binding on the parties. If such two firms
cannot agree on the amount of the Tower Stock Payment within 30 days
following the date on which the second of such firms is selected, then such
two firms shall promptly select a third such firm to make such
determination, which determination shall be made by such third firm within
30 days of the date on which such third firm is selected. The determination
of such third firm of the amount of the Tower Stock Payment shall be final,
conclusive and binding on the parties. The cost of any such arbitration
(including the fees of the Arbitrator and any other firm selected
hereunder) shall be borne 50% by American and 50% by American Tower.
American Tower shall promptly pay to American the amount of the Tower Stock
Payment once such amount is determined in accordance with this clause (ii).
3.5 Tower Merger. Anything in this Agreement to the contrary
notwithstanding, if the Effective Time shall not have occurred by May 31, 1998
(as such date may be extended by American with the written consent of
Mergeparty, such consent not to be unreasonably withheld, delayed or
conditioned), on June 1, 1998 (or the date following the date, if any, to which
the May 31, 1998 date shall have been so extended), the Board of Directors of
American shall, in its sole discretion, either (i) consummate the merger of ATS
Merger Corporation, a Delaware corporation and a wholly-owned subsidiary of
American ("ATS Mergercorp"), with and into American, which will be the surviving
corporation (the "Tower Merger"), pursuant to the agreement and plan of merger
between American and ATS Mergercorp dated as of the date hereof and set forth as
Exhibit D hereto (the "Tower Merger Agreement"), or (ii) irrevocably elect to
abandon the Tower Merger. Pursuant to the Tower Merger Agreement, each share of
ATS Mergercorp Common Stock issued and outstanding immediately prior to the
effective time of the Tower Merger (the "Tower Merger Effective Time") shall, by
virtue of the Tower Merger and without any action on the part of the holder
thereof, be automatically canceled and extinguished and each share of American
Common Stock issued and outstanding immediately prior to the Tower Merger
Effective Time shall be converted into the right to receive:
(a) one share of Tower Common Stock, with (i) each share of American
Class A Common being converted into the right to receive one share of Tower
Class A Common, (ii) each share of American Class B Common being converted
into the right to receive one share of Tower Class B Common, and (iii) each
share of American Class C Common being converted into the right to receive
one share of Tower Class C Common (collectively, the "Tower Merger Tower
Consideration"); and
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(b) a fraction (the "American Conversion Fraction") of a share of
American Common Stock of the same class as the class of American Common
Stock being converted, (i) the numerator of which is the difference between
(A) the denominator and (B) the value (determined as set forth below) of
one share of Tower Class A Common immediately prior to the Tower Merger
Effective Time, and (ii) the denominator of which is the value (determined
as set forth below) of one share of American Class A Common immediately
prior to the Tower Merger Effective Time (collectively with the Tower
Merger Tower Consideration, the "Tower Merger Consideration").
For purposes of determining the value of the American Class A Common and the
Tower Class A Common immediately prior to the Tower Merger Effective Time the
following principles shall apply:
(x) each share of American Class A Common shall be valued at an amount
equal to the average closing sales price of the American Class A Common on
the NYSE, as reported by the Wall Street Journal, for the ten (10)
consecutive trading days immediately preceding the second trading date
prior to the Tower Merger Effective Time; and
(y) each share of Tower Class A Common shall be valued at the amount
determined in good faith by the American Radio Board of Directors to be its
fair market value immediately prior to the Tower Merger Effective Time.
No certificates in respect of fractional shares of American Common Stock shall
be issued in the Tower Merger, and cash shall be paid in lieu thereof as
provided in the Tower Merger Agreement. The certificates that immediately prior
to the Tower Merger Effective Time represented outstanding shares of American
Common Stock shall be deemed, without any action of the holders thereof, to
represent that number of shares of American Common Stock that the holder thereof
has the right to receive pursuant to clause 3.5(b), together with cash in lieu
of fractional shares as provided in the Tower Merger Agreement.
Immediately prior to the Tower Merger Effective Time, American shall
contribute to ATS Mergercorp a number of shares of Tower Common Stock equal to
the Tower Merger Tower Consideration.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF AMERICAN
Except as set forth with respect to specifically identified representations
and warranties in the American Disclosure Schedule or as otherwise contemplated
by this Agreement, American hereby represents and warrants to Mergeparty and
Mergeparty Subsidiary as follows:
4.1 Organization and Business; Power and Authority; Effect of Transaction.
(a) American is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
power and authority (corporate and other) to own or hold under lease its
properties and to conduct its business as now conducted and as presently
proposed to be conducted. American is duly qualified and in good standing as a
foreign corporation in each other jurisdiction (as shown on Section 4.1(a) of
the American Disclosure Schedule) in which the character of the property owned
or leased by it or the nature of its business or operations requires such
qualification,
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with full power and authority (corporate and other) to carry on the business in
which it is engaged, except in such jurisdictions where the failure to be so
qualified or in good standing, individually or in the aggregate, is not
reasonably likely to have a Material Adverse Effect on American.
(b) Each of American and its Subsidiaries has all requisite power and
authority (corporate and other) to execute, deliver and perform its obligations
under this Agreement and each Collateral Document executed or required to be
executed by such party pursuant hereto or thereto and to consummate the Merger
and the other transactions contemplated hereby and thereby, and the execution,
delivery and performance of this Agreement and each Collateral Document executed
or required to be executed pursuant hereto or thereto have been duly authorized
by all requisite corporate or other action on the part of American and its
Subsidiaries, other than the approval of the holders of shares of American
Common Stock contemplated by Section 4.13, and no other corporate proceedings on
the part of American or any of its Subsidiaries are necessary to authorize this
Agreement or the transactions contemplated hereby or to consummate the Merger or
the other transactions so contemplated (other than, with respect to the Merger,
the Required Vote and with respect to the Tower Merger, the Required Tower
Vote). This Agreement has been duly executed and delivered by American and
constitutes, and each Collateral Document executed or required to be executed by
American and its Subsidiaries pursuant hereto or to consummate the Merger when
executed and delivered by American and its Subsidiaries, as applicable, will
constitute, a valid and binding obligation of American and its Subsidiaries, as
applicable, enforceable in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, moratorium, insolvency and
similar laws affecting the rights and remedies of creditors and obligations of
debtors generally and by general principles of equity. As of the date hereof,
the Board of Directors of American, at a meeting duly called and held at which a
quorum was present throughout, has approved the Merger and this Agreement, and
the Tower Merger and the Tower Merger Agreement, and has recommended that the
holders of shares of American Common Stock approve and adopt this Agreement, the
Tower Merger Agreement and the transactions contemplated hereby and thereby,
including without limitation the Merger and the Tower Merger.
(c) The execution, delivery and performance by American and its
Subsidiaries, as applicable, of this Agreement and any Collateral Document
executed or required to be executed by such parties pursuant hereto or thereto
do not, and the consummation by American of the Merger and the other
transactions contemplated hereby and thereby, and compliance with the terms,
conditions and provisions hereof or thereof by such parties will not:
(i) (A) Except as set forth in Section 4.1(c) of the American
Disclosure Schedule, conflict with, or result in a breach or violation of,
or constitute a default under, any Organic Document of American or its
Subsidiaries, as applicable, or (B) conflict with, or result in a breach or
violation of, or constitute a default under, or permit the termination,
cancellation or acceleration of any obligation or liability in, or but for
any requirement of the giving of notice or passage of time or both would
constitute such a conflict with, breach or violation of, or default under,
or permit any such termination, cancellation or acceleration of, any
agreement, arrangement, contract, undertaking, understanding, Applicable
Law or other obligation or Private Authorization of American or its
Subsidiaries, as applicable, except, in the case of clause (B), for such
conflicts, breaches, violations, terminations, cancellations, defaults or
accelerations that would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect on American; or
(ii) result in or permit the creation or imposition of any Lien upon
any property now owned or leased by American except for such Liens that
would not, individually or in the
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aggregate, be reasonably likely to have a Material Adverse Effect on
American; or
(iii) require any Governmental Authorization or Governmental Filing
except for (A) the FCC Consents, (B) filings under the Hart-Scott-Rodino
Act, (C) the filing with the Commission of (I) the Proxy Statement, (II)
the Tower Proxy Statement, (III) the Registration Statement and (IV) such
reports under Section 13(a) or 15(d) of the Exchange Act as may be required
in connection with this Agreement and the transactions contemplated by this
Agreement, (D) the filing of the Certificate of Merger and a certificate of
merger relating to the Tower Merger with the Delaware Secretary of State
and appropriate documents with the relevant authorities of other states in
which American is qualified to do business and (E) such other Governmental
Authorizations and Governmental Filings the failure of which to be made or
obtained would not be individually or in the aggregate, reasonably likely
to have a Material Adverse Effect on American.
(d) American does not have any direct or indirect Subsidiaries other than
those set forth on Section 4.1(d) of the American Disclosure Schedule (read
without the last three lines of the first page thereof) (and other than ATS
Mergercorp, American Tower, American Tower Systems (Delaware), Inc., ATS
Needham, LLC, Tower, LLC and Communications Systems Development, LLC). Each
direct or indirect Subsidiary of American (and other than ATS Mergercorp,
American Tower, American Tower Systems (Delaware), Inc., ATS Needham, LLC,
Tower, LLC and Communications Systems Development, LLC) is (i) wholly-owned
unless noted otherwise in Section 4.1(d) of the American Disclosure Schedule,
(ii) a corporation which is duly organized, validly existing and in good
standing under the laws of the respective state of incorporation set forth
opposite its name on Section 4.1(d) of the American Disclosure Schedule, and
(iii) duly qualified and in good standing as a foreign corporation in each other
jurisdiction (as shown on Section 4.1(d) of the American Disclosure Schedule) in
which the character of the property owned or leased by it or the nature of its
business or operations requires such qualification, with full power and
authority (corporate and other) to carry on the business in which it is engaged,
except where the failure to be so qualified or in good standing, individually or
in the aggregate, would not be reasonably likely to have a Material Adverse
Effect on American. American owns, directly or indirectly, all of the
outstanding capital stock and equity interests (as shown in Section 4.1(d) of
the American Disclosure Schedule) of such Subsidiaries, free and clear of all
Liens (except as set forth in the American Financial Statements or Section
4.1(d) of the American Disclosure Schedule), and all such stock has been duly
authorized and validly issued and is fully paid and nonassessable. There are no
outstanding Option Securities or Convertible Securities, or agreements or
understandings of any nature whatsoever, relating to the authorized and unissued
or outstanding capital stock of such Subsidiaries (except as set forth in the
American Financial Statements or Section 4.1(d) of the American Disclosure
Schedule.
(e) Each of ATS Mergercorp and American Tower is (i) a wholly-owned
subsidiary of American (in the case of American Tower, as of the date hereof)
and (ii) a corporation which is duly organized, validly existing and in good
standing under the DCL. American owns, directly or indirectly, all of the
outstanding capital stock and equity interests of each of ATS Mergercorp and
American Tower, free and clear of all Liens, subject, in the case of ATS
Mergercorp, to the receipt of Amendment No. 2 to American's Credit Agreements
referred to in Section 4.1(d) of the American Disclosure Schedule, a copy of
which has been delivered to Mergeparty prior to the date hereof, and all such
stock has been duly authorized and validly issued, is fully paid and
nonassessable and is not subject to any preemptive or similar rights. There are
no outstanding Option Securities or Convertible Securities, or agreements or
understandings of any nature whatsoever, relating to the authorized and unissued
outstanding capital stock of such Subsidiaries (except, with respect to American
Tower, pursuant to the following: (i) the
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Agreement and Plan of Merger, dated as of December 12, 1997 (the "ATC Merger
Agreement"), by and between American Tower and American Tower Corporation, an
unaffiliated Delaware corporation, a copy of which has been delivered to
Mergeparty prior to the date hereof, (ii) the Agreement and Plan of Merger,
dated as of November 21, 1997, by and among American Tower, American Tower
Systems (Delaware), Inc., Gearon & Co., Inc., and J. Michael Gearon, Jr., a copy
of which has been delivered to Mergeparty prior to the date hereof, (iii) the
proposed issue and sale of shares of Tower Common Stock to certain officers and
directors of American Tower (and their affiliates) for an aggregate
consideration of approximately $80,000,000, (iv) employee stock options
outstanding to purchase shares of American Tower Systems (Delaware), Inc. which
will be converted into options to acquire Tower Common Stock, and (v) as
contemplated by Section 6.8(b)). The authorized capital stock of (i) ATS
Mergercorp consists of 3,000 shares of common stock, par value $.01 per share
(the "ATS Mergercorp Common Stock"), and (ii) American Tower consists of
20,000,000 shares of preferred stock, 200,000,000 shares of Tower Class A
Common, 50,000,000 shares of Tower Class B Common, and 10,000,000 shares of
Tower Class C Common, and the terms of the Restated Certificate of Incorporation
of American Tower, a copy of which has been delivered to Mergeparty prior to the
date hereof, relating to each of the shares of Tower Class A Common, Tower Class
B Common and Tower Class C Common (other than those relating to the number of
authorized shares) are identical to the terms of the Restated Certificate of
Incorporation of American as in effect on the date of the Original Merger
Agreement relating to the shares of American Class A Common, American Class B
Common and American Class C Common, respectively, except for the following
terms: (i) terms which permit dividends and other distributions of securities of
Persons other than American Tower (including Subsidiaries of American Tower) to
be made in the form of different classes of securities of such Persons, (ii)
terms which provide that if a holder of Tower Common Stock grants a proxy,
whether revocable or irrevocable, and whether general or specific to a
particular transaction, the granting of such proxy does not constitute a
transfer for purposes of requiring conversion of Tower Class B Common to Tower
Class A Common, (iii) terms which permit any CEA Holder (as defined in the
Restated Certificate of Incorporation of American Tower) to convert shares of
Tower Class C Common Stock into shares of Tower Class A Common Stock upon
approval of the Board of Directors of American Tower, and (iv) terms clarifying
the fact that holders of Tower Class A Common Stock and Tower Class B Common
Stock vote as a single class on all matters submitted for a stockholder vote,
including, notwithstanding the first sentence of Section 242(b)(2) of the DCL,
any amendment of the Restated Certificate of Incorporation of American Tower
which would increase or decrease the number of authorized shares of any class of
Tower Common Stock. The number of shares of American Tower which are authorized
and outstanding and owned by American is equal to the number of authorized and
outstanding shares of American Common Stock and the number of shares of American
Common Stock issuable upon the exercise of Option Securities and upon the
conversion of Convertible Securities (except with respect to shares of American
Common Stock subject to American Options set forth on Schedule 4.1(e) to this
Agreement which are held by Tower Employees who have stated that they will enter
into definitive agreements to have such American Options assumed by American
Tower and converted into options to acquire Tower Common Stock in accordance
with Section 6.8(b)).
4.2 Financial and Other Information. American has heretofore furnished
to Mergeparty copies of the audited consolidated financial statements of
American and its Subsidiaries set forth in its Annual Report on Form 10-K (the
"American 10-K") for the fiscal year ended December 31, 1996 and the unaudited
consolidated financial statements of American and its Subsidiaries set forth in
its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1997 and
its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30,
1997 (the "American September 10-Q") (collectively, the "American Financial
Statements"). The American Financial Statements, including in each case the
notes thereto, comply as to form, in all material respects, with applicable
accounting requirements and the published rules and regulations of the
Commission with respect thereto, have been prepared in
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accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, except as otherwise noted therein, and fairly present in all
material respects the financial condition, results of operations and cash flows
of American and its Subsidiaries on the bases therein stated, as of the
respective dates thereof, and for the respective periods covered thereby
subject, in the case of unaudited financial statements, to normal year-end audit
adjustments and accruals. American has filed all required reports and other
documents with the Commission since July 1, 1995 (the "American SEC Documents").
Except as set forth in the American SEC Documents filed and publicly available
prior to the date of the Original Merger Agreement (the "Filed American SEC
Documents"), neither American nor any of its Subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
which, individually or in the aggregate, would be reasonably likely to have a
Material Adverse Effect on American. None of the American Disclosure Schedule or
the American SEC Documents contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact required to be
stated herein or therein or necessary in order to make the statements contained
herein or therein, in light of the circumstances under which they were made, not
misleading.
4.3 Changes in Condition. Except as set forth in Section 4.3 of the
American Disclosure Schedule, between June 30, 1997 and the date of the Original
Merger Agreement, there has been no Material Adverse Change in American.
4.4 Properties. (a) American and each of its Subsidiaries (other than the
Tower Subsidiaries) has good and marketable title to all material parcels of
real property owned by it and good and merchantable title to all material items
of property and assets, tangible and intangible, (i) reflected in the financial
statements of American as of June 30, 1997, and (ii) acquired after June 30,
1997, except in each case for those sold or otherwise disposed of since June 30,
1997, in each case free and clear of all Liens, except (x) Permitted Liens and
(y) Liens set forth in the American Financial Statements or Section 4.4 of the
American Disclosure Schedule.
(b) All of the assets of American and its Subsidiaries material to the
continued operation of their respective businesses are in good operating
condition, reasonable wear and tear excepted, and usable in the ordinary course
of business, except where the failure to be in such condition or so usable would
not, individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect on American.
4.5 Compliance with Private Authorizations. American and each of its
Subsidiaries (other than the Tower Subsidiaries) has obtained all Private
Authorizations which are necessary for the ownership and operation by American
or its Subsidiaries of the business of American and its Subsidiaries, taken as a
whole, and the conduct of business thereof as now conducted and which, if not
obtained and maintained, would, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect on American. All such Private
Authorizations are, to American's knowledge, in full force and effect, and
neither American nor any of its Subsidiaries (other than the Tower Subsidiaries)
is, to American's knowledge, in breach or violation of, or in default in the
performance, observance or fulfillment of, any such Private Authorization, and,
to American's knowledge, no Event exists or has occurred, which constitutes, or
but for any requirement of the giving of notice or passage of time or both would
constitute, such a breach, violation or default, under any such Private
Authorization, except for such defaults, breaches or violations as would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect on American.
4.6 Compliance with Governmental Authorizations and Applicable Law;
Litigation.
(a) Section 4.6(a) of the American Disclosure Schedule contains a list of
each material
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Governmental Authorization (including without limitation all material American
FCC Licenses) required under Applicable Laws to own and operate the business of
American and its Subsidiaries (other than the Tower Subsidiaries), including
without limitation each of the American Stations, as currently operated, all of
which are in full force and effect, subject to such qualifications and
exceptions as may be set forth in Section 4.6(a) of the American Disclosure
Schedule. Certain of the Subsidiaries of American (other than any of the Tower
Subsidiaries) are the authorized legal holders of the American FCC Licenses
listed in Section 4.6(a) of the American Disclosure Schedule, none of which is
subject to any restriction or condition which would limit in any material
respect the operations of any of the American Stations as currently conducted
except as noted in Section 4.6(a) of the American Disclosure Schedule. The
American FCC Licenses listed in Section 4.6(a) of the American Disclosure
Schedule are valid and in full force and effect and are not impaired in any
material respect by any act or omission of American or any of its Subsidiaries,
subject to such qualifications and exceptions as may be set forth in Section
4.6(a) of the American Disclosure Schedule; and the operation of each of the
American Stations is in accordance with such American FCC Licenses in all
material respects, except to the extent so listed in Sections 4.6(a) and (b) of
the American Disclosure Schedule. American is fully qualified to be the
transferor of control of the American FCC Licenses. All material reports, forms
and statements required to be filed by American or any of its Subsidiaries with
the FCC with respect to each of the American Stations have been filed and are
true, complete and accurate in all material respects. American or one of its
Subsidiaries (other than the Tower Subsidiaries) has obtained all Governmental
Authorizations in addition to the American FCC Licenses listed in Section 4.6(a)
of the American Disclosure Schedule which are necessary for the ownership or
operations or the conduct of the business of American and its Subsidiaries,
taken as a whole (except with respect to the American Brokered Stations), as now
conducted and which, if not obtained and maintained, would, individually or in
the aggregate, be reasonably likely to have a Material Adverse Effect on
American and American's performance with respect thereto, and the operation of
the American Brokered Stations is in accordance with all applicable Governmental
Authorizations except where the failure to be so in accordance would not be
reasonably likely to have a Material Adverse Effect on American. As of the date
of the Original Merger Agreement, except as noted in Section 4.6(a) of the
American Disclosure Schedule, no application, action or proceeding is pending
for the renewal or material modification of any of the American FCC Licenses
and, to American's knowledge, except as noted in Section 4.6(b) of the American
Disclosure Schedule, there was not as of the date of the Original Merger
Agreement before the FCC any material investigation, proceeding, notice of
violation, order of forfeiture or complaint against American or any of its
Subsidiaries relating to any of the American Stations or other FCC licensed
facilities that, if adversely decided, would be reasonably likely to have a
Material Adverse Effect on American (and as of the date of the Original Merger
Agreement American did not have knowledge of any basis that would cause the FCC
not to renew any of the American FCC Licenses). Except as noted in Schedule
4.6(b) of the American Disclosure Schedule, as of the date of the Original
Merger Agreement, there was not then pending and, to American's knowledge, there
was not threatened, any action by or before the FCC to revoke, suspend, cancel,
rescind or modify in any material respect any of the American FCC Licenses that,
if adversely decided, would be reasonably likely to have a Material Adverse
Effect on American (other than proceedings to amend FCC rules of general
applicability to the radio industry).
(b) Except as otherwise specifically set forth in Section 4.6(b) of the
American Disclosure Schedule, since January 1, 1996, American and its
Subsidiaries (other than the Tower Subsidiaries) have conducted its and each of
their respective businesses and owned and operated its and each of their
respective properties in accordance with all Applicable Laws (excluding
Environmental Laws) and Governmental Authorizations, except for such breaches,
violations and defaults as, individually or in the aggregate, have not had and
are not reasonably likely to have a Material Adverse Effect on American. Except
as
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otherwise specifically described in Section 4.6(b) of the American Disclosure
Schedule and except with respect to Environmental Laws, neither American nor any
of its Subsidiaries is in or is charged in writing by any Authority with, or, to
American's knowledge, is threatened or under investigation by any Authority with
respect to, any breach or violation of, or default in the performance,
observance or fulfillment of, any Applicable Law relating to the ownership and
operation of American's and its Subsidiaries' properties or the conduct of
American's and its Subsidiaries' business which will, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on American.
Except as otherwise specifically described in Section 4.6(b) of the American
Disclosure Schedule and except with respect to Environmental Laws, no Event
exists or has occurred, which constitutes, or but for any requirement of giving
of notice or passage of time or both would constitute, such a breach, violation
or default, under any Governmental Authorization or any Applicable Law, except
for such breaches, violations or defaults as, individually or in the aggregate,
have not had and would not be reasonably likely to have a Material Adverse
Effect on American. With respect to matters, if any, of a nature referred to in
Section 4.6(b) of the American Disclosure Schedule, except as otherwise
specifically described in Section 4.6(b) of the American Disclosure Schedule,
all such information and matters set forth in the American Disclosure Schedule,
if adversely determined against American or one of its Subsidiaries (other than
the Tower Subsidiaries), individually or in the aggregate, would not be
reasonably likely to have a Material Adverse Effect on American.
(c) Except as disclosed in the Filed American SEC Documents or in Section
4.6(c) of the American Disclosure Schedule, there are no Legal Actions pending
or, to the knowledge of American, threatened against or affecting American or
any of its Subsidiaries (other than the Tower Subsidiaries) including any action
by or before the FCC to revoke, suspend, cancel, rescind or modify in any
material respect any of the American FCC Licenses, except for Legal Actions
that, individually or in the aggregate, would not be reasonably likely to have a
Material Adverse Effect on American.
4.7 Related Transactions. Except as set forth in Section 4.7 of the
American Disclosure Schedule, as contemplated herein or as disclosed in the
Filed American SEC Documents, no director, officer, Affiliate or "associate" (as
such term is defined in Rule 12b-2 under the Exchange Act) of American or any of
its Subsidiaries is currently a party to any transaction which would be required
to be disclosed under Item 404 of Regulation S-K of the Securities Act.
4.8 Taxes and Tax Matters. Except as provided in Section 4.8 of the
American Disclosure Schedule:
(a) American has filed completely and correctly in all material
respects all Tax Returns which are required by all Applicable Laws to be
filed by it, and has paid, or made adequate provision for the payment of,
all material Taxes which have or may become due and payable pursuant to
said Tax Returns and all other Taxes, governmental charges and assessments
received to date other than those Taxes being contested in good faith for
which adequate provision has been made on the most recent balance sheet
forming part of the American Financial Statements. The Tax Returns of
American have been prepared, in all material respects, in accordance with
all Applicable Laws and generally accepted principles applicable to
taxation consistently applied;
(b) all material Taxes which American is required by law to withhold
and collect have been duly withheld and collected, and have been paid over,
in a timely manner, to the proper Taxing Authorities to the extent due and
payable;
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(c) American has not executed any waiver to extend, or otherwise taken
or failed to take any action that would have the effect of extending, the
applicable statute of limitations in respect of any Tax liabilities of
American for the fiscal years prior to and including the most recent fiscal
year;
(d) American is not a "consenting corporation" within the meaning of
Section 341(f) of the Code. American has at all times been taxable as a
Subchapter C corporation under the Code;
(e) American has never been a member of any consolidated group (other
than with American and its Subsidiaries) for Tax purposes. American is not
a party to any tax sharing agreement or arrangement, other than with its
Subsidiaries;
(f) no Liens for Taxes exist with respect to any of the assets or
properties of American, except for statutory Liens for Taxes not yet due or
payable or that are being contested in good faith;
(g) all of the U.S. Federal income Tax Returns filed by or on behalf
of each of American and its Subsidiaries have been examined by and settled
with the Internal Revenue Service, or the statute of limitations with
respect to the relevant Tax liability expired, for all taxable periods
through and including the period ending on the date on which the Effective
Time occurs;
(h) all Taxes due with respect to any completed and settled audit,
examination or deficiency litigation with any Taxing Authority have been
paid in full;
(i) there is no audit, examination, deficiency, or refund litigation
pending with respect to any Taxes and during the past three years no Taxing
Authority has given written notice of the commencement of any audit,
examination or deficiency litigation, with respect to any Taxes;
(j) American is not bound by any currently effective private ruling,
closing agreement or similar agreement with any Taxing Authority relating
to a material amount of Taxes;
(k) except with respect to like-kind exchanges pursuant to Section
1031 of the Code, American shall not be required to include in a taxable
period ending after the Effective Time, any taxable income attributable to
income that economically accrued in a prior taxable period as a result of
Section 481 of the Code, the installment method of accounting or any
comparable provision of state or local Tax law;
(l) (A) no material amount of property of American is "tax exempt
property" within the meaning of Section 168(h) of the Code, (B) no material
amount of assets of American is subject to a lease under Section 7701(h) of
the Code, and (C) American is not a party to any material lease made
pursuant to Section 168(f)(8) of the Internal Revenue Code of 1954, as
amended and in effect prior to the date of enactment of the Tax Equity and
Fiscal Responsibility Act of 1982; and
(m) immediately following the Merger, American will not have any
material amount
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of income or gain that has been deferred under Treasury Regulation Section
1.1502-13, or any material excess loss account in a Subsidiary under
Treasury Regulation Section 1.1502-19.
4.9 Employee Retirement Income Security Act of 1974.
(a) American (which for purposes of this Section 4.9 shall include any
ERISA Affiliate) currently sponsors, maintains and contributes only to the Plans
and Benefit Arrangements set forth in Section 4.9(a) of the American Disclosure
Schedule. American has delivered or made available to Mergeparty true, complete
and correct copies of (1) each Plan and Benefit Arrangement (or, in the case of
any unwritten Plans or Benefit Arrangements, reasonable descriptions thereof),
(2) the two most recent annual reports on Form 5500 (including all schedules and
attachments thereto) filed with the Internal Revenue Service with respect to
each Plan (if any such report was required by Applicable Law), (3) the most
recent summary plan description (or similar document) for each Plan for which
such a summary plan description is required by Applicable Law or was otherwise
provided to plan participants or beneficiaries and (4) each trust agreement and
insurance or annuity contract or other funding or financing arrangement relating
to any Plan. To the knowledge of American, each such Form 5500 and each such
summary plan description (or similar document) does not, as of the date hereof,
contain any material misstatements. Except as set forth in Section 4.9(a) of the
American Disclosure Schedule, as to all Plans and Benefit Arrangements listed in
Section 4.9(a) of the American Disclosure Schedule:
(i) all such Plans and Benefit Arrangements comply and have been
administered in form and in operation in accordance with their respective
terms, and with all Applicable Laws, in all material respects, and American
has not received any notice from any Authority disputing or investigating
such compliance;
(ii) all such Plans maintained by American that are intended to comply
with Sections 401 and 501 of the Code comply in all material respects with
all applicable requirements of such sections, and no Event has occurred
which is known to American which will give rise to disqualification of any
such Plan under such sections or to a tax under Section 511 of the Code and
each such Plan has been the subject of a determination letter from the
Internal Revenue Service to the effect that such Plan and related trust is
qualified and exempt from Federal income Taxes under Sections 401(a) and
501(a), respectively, of the Code; no such determination letter has been
revoked, and, to the knowledge of American, revocation has not been
threatened. American has delivered or made available to Mergeparty a copy
of the most recent determination letter received with respect to each Plan
for which such a letter has been issued, as well as a copy of any pending
application for a determination letter. American has also provided or made
available to Mergeparty a list of all Plan amendments as to which a
favorable determination letter has not yet been received;
(iii) none of the assets of any such Plan are invested in employer
securities or employer real property;
(iv) there are no Claims (other than routine Claims for benefits or
actions seeking qualified domestic relations orders) pending or, to
American's knowledge, threatened involving such Plans or the assets of such
Plans, and, to American's knowledge, no facts exist which are reasonably
likely to give rise to any such Claims (other than routine Claims for
benefits or actions seeking qualified domestic relations orders);
(v) no such Plan is subject to Title IV of ERISA, and American has no
actual or potential liability thereunder;
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<PAGE> 21
(vi) all group health Plans of American have been operated in
compliance in all material respects with the group health plan continuation
coverage requirements of COBRA;
(vii) neither American nor, to its knowledge, any of its directors,
officers, employees or any other fiduciary has committed any breach of
fiduciary responsibility imposed by ERISA or any similar Applicable Law
that would subject American or any of its respective directors, officers or
employees to liability under ERISA or any similar Applicable Law;
(viii) American is not and never has been a party to any Multiemployer
Plan or made contributions to any such Plan;
(ix) except as set forth in the American Financial Statements and
pursuant to the provisions of COBRA, American does not maintain any Plan
that provides for post-retirement medical or life insurance benefits, and
American does not have any obligation or liability with respect to any such
Plan previously maintained by it, except as the provisions of COBRA may
apply to any former employees or retirees of American;
(x) all material contributions to, and material payments from, the
Plans and Benefit Arrangements that may have been required to be made in
accordance with the terms of the Plans and Benefit Arrangements, and any
applicable collective bargaining agreement, have been made. All such
contributions to, and payments from, the Plans and Benefit Arrangements,
except those payments to be made from a trust qualified under Section
401(a) of the Code, for any period ending before the Closing Date that are
not yet, but will be, required to be made, will be properly accrued and
reflected in the Closing Balance Sheet;
(xi) (1) no "prohibited transaction" (as defined in Section 4975 of
the Code or Section 406 of ERISA) has occurred that involves the assets of
any Plan; (2) no prohibited transaction has occurred that could subject
American, any of its employees, or, to the knowledge of American, a
trustee, administrator or other fiduciary of any trust created under any
Plan to the tax or sanctions on prohibited transactions imposed by Section
4975 of the Code or Title I of ERISA; (3) none of American, any of its
ERISA Affiliates or, to the knowledge of American, any trustee,
administrator or other fiduciary of any Plan or any agent of any of the
foregoing has engaged in any transaction or acted in a manner that could,
or has failed to act so as to, subject American or any trustee,
administrator or other fiduciary to any liability for breach of fiduciary
duty under ERISA or any other Applicable Law;
(xii) American has not incurred any material liability to a Plan
(other than for contributions not yet due) which liability has not been
fully paid or accrued for payment as of the date of the Original Merger
Agreement;
(xiii) except as otherwise contemplated by this Agreement, no current
or former employee of American will be entitled to any additional benefits
or any acceleration of the time of payment or vesting of any benefits under
any Plan or Benefit Arrangement as a result of the transactions
contemplated by this Agreement;
(xiv) no compensation payable by American to any of its employees
under any existing Plan, Benefit Arrangement (including by reason of the
transactions contemplated hereby)
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<PAGE> 22
will be subject to disallowance under Section 162(m) of the Code;
(xv) any amount that could be received (whether in cash or property or
the vesting of property) as a result of any of the transactions
contemplated by this Agreement by any employee, officer, director or
independent contractor of American who is a "disqualified individual" (as
such term is defined in proposed Treasury Regulation Section 1.280G-1)
under any employment arrangement would not be characterized as an "excess
parachute payment" (as such term is defined in Section 280G(b)(1) of the
Code);
(xvi) no Plan which is an employee stock ownership plan (an "ESOP")
constitutes a leveraged employee stock ownership plan within the meaning of
Section 4975(e)(7) of the Code and there are no unallocated shares of stock
of American currently held under any such ESOP in a suspense account; and
(xvii) there are no outstanding options (or contractual obligations to
issue options) to acquire American Common Stock or other American
securities other than options held by employees or directors of American
and issued under Benefit Arrangements (the aggregate number of which are as
set forth in Section 4.11 of the American Disclosure Schedule).
(b) The execution, delivery and performance by American of this Agreement
and the Collateral Documents executed or required to be executed by American
pursuant hereto and thereto will not involve any prohibited transaction within
the meaning of ERISA or Section 4975 of the Code.
4.10 Insurance. All material fire and casualty, general liability, business
interruption, product liability, and sprinkler and water damage insurance
policies maintained by American or any of its Subsidiaries (other than the Tower
Subsidiaries) are with reputable insurance carriers, provide full and adequate
coverage, for American and such Subsidiaries (other than the Tower Subsidiaries)
and their respective properties and assets, and are in character and amount at
least equivalent to that carried by Persons engaged in similar businesses and
subject to the same or similar perils or hazards, except where the failure to
maintain such insurance policies, either individually or in the aggregate, would
not be reasonably likely to have a Material Adverse Effect on American.
4.11 Authorized Capital Stock. The authorized and outstanding capital
stock, Option Securities and Convertible Securities of American, as of September
18, 1997, are as set forth in Section 4.11 of the American Disclosure Schedule.
Except as set forth in Section 4.11 of the American Disclosure Schedule, since
September 18, 1997, American has not issued any shares of capital stock of any
class, any Option Securities or any Convertible Securities, except for the issue
of American Common Stock pursuant to the conversion of Convertible Securities or
the exercise of Option Securities outstanding on September 18, 1997 and in each
case in accordance with their present terms or as otherwise described or
contemplated by the Filed American SEC Documents. All of such outstanding
capital stock has been duly authorized and validly issued, is fully paid and
nonassessable and is not subject to any preemptive or similar rights. American
had, prior to the date of the Original Merger Agreement, made available to
Mergeparty a true and correct copy of the Restated Certificate of Incorporation
of American (the "Restated Certificate") as in effect on the date of the
Original Merger Agreement. Except as set forth in Section 4.11 of the American
Disclosure Schedule, there are no bonds, debentures, notes or other indebtedness
of American outstanding having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
stockholders of American may vote. Except as set forth in Section 4.11 of the
American Disclosure Schedule, or, except as set forth in the Restated
Certificate, there are no contractual obligations of American or any of its
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<PAGE> 23
Subsidiaries outstanding to repurchase, redeem or otherwise acquire any shares
of capital stock of American or any of its Subsidiaries. Except as otherwise
contemplated by this Agreement or as set forth in Section 4.11 of the American
Disclosure Schedule, there are no contractual obligations of American to vote or
to dispose of any shares of the capital stock of any of its Subsidiaries. No
adjustment in either the conversion price or the amount or nature of the
securities or other property issuable upon conversion of the shares of American
Convertible Preferred Stock is required as a result of (i) the Tower Merger,
other than an adjustment to the effect that, upon conversion, the holders
thereof shall have the right to receive the Tower Merger Consideration upon any
conversion following the Tower Merger Effective Time, as if such conversion had
been effected immediately prior to the Tower Merger Effective Time, and (ii) the
Merger, other than an adjustment to the effect that, upon conversion, the
holders thereof shall have the right to receive the Merger Consideration upon
any conversion following the Effective Time as if such conversion had been
effected immediately prior to the Effective Time. No adjustment in the exercise
price or the number of shares of American Common Stock or the amount or nature
of any other securities or property issuable upon the exercise of the American
Options is required as result of (i) the Tower Merger, other than an adjustment
to the effect that, upon exercise, the holders thereof shall have the right to
receive the Tower Merger Consideration upon any exercise following the Tower
Merger Effective Time, as if such exercise had been effected immediately prior
to the Tower Merger Effective Time and (ii) the Merger, other than an adjustment
to the effect that, upon exercise, the holders thereof shall have the right to
receive the Merger Consideration upon any exercise following the Effective Time
as if such exercise had been effected immediately prior to the Effective Time.
4.12 Employment Arrangements. Except as described in the Filed American SEC
Documents or in Section 4.12 of the American Disclosure Schedule, as of the date
of the Original Merger Agreement (i) none of the employees of American or any of
its Subsidiaries (other than the Tower Subsidiaries) was, or, to American's
knowledge, since November 1, 1993 and while an employee of American or any of
its Subsidiaries had been, represented by any labor union or other employee
collective bargaining organization, or were, as of the date of the Original
Merger Agreement, or, to American's knowledge, since November 1, 1993 to such
date had been, parties to any labor or other collective bargaining agreement,
(ii) there are, to American's knowledge, no pending labor strikes, work
stoppages, lockouts, slow downs, grievances (including unfair labor charges),
disputes or controversies with any union or any other employee or collective
bargaining organization of such employees, or threats of such labor strikes,
work stoppages, lockouts or slowdowns or any pending demands for collective
bargaining by any union or other such organization, and (iii) neither American
nor any of its Subsidiaries (other than the Tower Subsidiaries) nor any of its
or any of their employees was, as of the date of the Original Merger Agreement,
or, to American's knowledge, since November 1, 1993 to such date had been,
subject to or involved in or, to American's knowledge, threatened with, any
union elections, petitions therefor or other organizational or recruiting
activities. American and its Subsidiaries (other than the Tower Subsidiaries)
have performed all obligations required to be performed under all Employment
Arrangements and none of them is in breach or violation of or in default or
arrears under any of the terms, provisions or conditions thereof, except for
such breaches, violations, defaults and arrears, which either individually or in
the aggregate, have not had and are not reasonably likely to have a Material
Adverse Effect on American.
4.13 Voting Requirements. The affirmative vote of the holders of shares of
American Common Stock, representing a majority of the outstanding voting power
of American Common Stock, voting as a single class, is (i) the only vote
necessary to approve and adopt this Agreement and the transactions contemplated
by this Agreement (other than the Tower Merger Agreement) (the "Required Vote")
and (ii) the only vote necessary to approve and adopt the Tower Merger Agreement
and the transactions contemplated by the Tower Merger Agreement (the "Required
Tower Vote").
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<PAGE> 24
4.14 Brokers. No broker, investment banker, financial advisor or other
person, other than Credit Suisse First Boston Corporation ("CSFB"), the fees and
expenses of which will be paid by American, and Merrill Lynch Pierce Fenner &
Smith Incorporated, the fees and expenses of which will be paid by American
Tower (or reimbursed to American by American Tower) following the Effective Time
in accordance with the provisions of Section 9.3(b), is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated or permitted by this Agreement.
American has furnished to Mergeparty true and complete copies of all agreements
under which any such fees or expenses may be payable and all indemnification and
other agreements related to the engagement of the persons to whom such fees may
be payable.
4.15 Information Supplied.
(a) Each of the Proxy Statement and the Tower Proxy Statement will not, at
the date it is first mailed to the holders of American Common Stock and at the
time of the American Stockholders Meeting (in the case of the Proxy Statement)
and the American Stockholders Tower Meeting (in the case of the Tower Proxy
Statement), contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. For purposes of the foregoing, the truth of any information or the
existence of any omissions at the time of the American Stockholders Meeting and
the American Stockholders Tower Meeting shall be determined with reference to
the Proxy Statement and the Tower Proxy Statement, respectively, as then amended
or supplemented. The Proxy Statement and the Tower Proxy Statement will comply
as to form in all material respects with the requirements of the Exchange Act
and the rules and regulations thereunder. Notwithstanding the foregoing, no
representation or warranty is made by American with respect to statements made
or incorporated by reference therein based on information specifically supplied
by Mergeparty or Mergeparty Subsidiary for inclusion or incorporation by
reference in the Proxy Statement or the Tower Proxy Statement.
(b) The Registration Statement to be filed with the Commission by American
Tower pursuant to the provisions of Section 6.6(b) will not (except to the
extent revised or superseded by amendments or supplements contemplated hereby),
at the time such Registration Statement is filed with the Commission, at the
time such Registration Statement is amended or supplemented or at the time such
Registration Statement becomes effective under the Securities Act, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
4.16 Ordinary Course of Business. Except as may be described in the Filed
American SEC Documents or in Section 4.9(a) or Section 4.16 of the American
Disclosure Schedule, since June 30, 1997 to the date of the Original Merger
Agreement, (i) each of American and its Subsidiaries (other than the Tower
Subsidiaries) has operated its business in the normal, usual and customary
manner in the ordinary and regular course of business, consistent with prior
practice (it being understood and agreed for purposes of this Section 4.16 by
the parties that the acquisition, disposition and exchange of radio stations is
in the ordinary course of business) and (ii) there has not been by American and
its Subsidiaries (other than the Tower Subsidiaries) (a) any declaration,
setting aside or payment of any dividend or other distribution payable in cash,
stock, property or otherwise except for (x) the payment of dividends or the
making of distributions by a direct or indirect wholly-owned Subsidiary of
American and (y) the payment of dividends on shares of American Preferred Stock
in accordance with their terms, (b) any split, combination or reclassification
of any of its capital stock or any issuance or the authorization of any issuance
of any other securities in respect of, in lieu of or in substitution for shares
of its capital stock, (c)
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(I) any granting to any executive officer or other key employee of American or
any of its Subsidiaries of any increase in compensation, except for normal
increases in the ordinary course of business consistent with past practice or as
required under Benefit Arrangements, (II) any granting to any such executive
officer of any increase in severance or termination pay, except as was required
under any Benefit Arrangement, (III) except in the ordinary course, any entering
into, amendment in any material respect or termination of any Governmental
Authorization, Private Authorization or material agreement, arrangement,
contract, undertaking, understanding or other obligation, or (IV) any adoption
or amendment of any Plan or Benefit Arrangement (including changing any
actuarial or other assumption used to calculate funding obligations with respect
to any Plan, or changing the manner in which contributions to any Plan are made
or the basis on which such contributions are determined) except as required to
comply with changes in Applicable Law, (d) except insofar as may have been
disclosed in the Filed American SEC Documents or required by a change in GAAP,
any change in accounting methods, principles or practices by American materially
affecting its assets, liabilities or business, (e) any sale, disposition or
contract to dispose of any of its properties or assets having a value in excess
of $1,000,000 other than in the ordinary course, and (f) any damage, destruction
or loss, whether or not covered by insurance, that has had a Material Adverse
Effect on American.
4.17 Environmental Matters. Except as set forth in the American SEC
Documents or Section 4.17 of the American Disclosure Schedule, American:
(a) (i) has not been notified in writing that it is potentially liable
and, has not received any written request for information or other
correspondence concerning its potential liability with respect to any site
or facility, under or pursuant to any Environmental Law, (ii) to the
knowledge of American, is not a potentially "responsible party" under, the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, the Resource Conservation and Recovery Act, as amended,
or any similar state Law, and (iii) to the knowledge of American, is not
the subject of or, to the knowledge of American, threatened with any Legal
Action involving a demand for damages or other potential liability,
including any Lien, with respect to violations or breaches of any
Environmental Law;
(b) to the knowledge of American, is in compliance with all
Environmental Laws and has obtained all Environmental Permits required
under Environmental Laws, except for such noncompliances and failures to
obtain Environmental Permits as, individually or in the aggregate, have not
had and would not be reasonably likely to have a Material Adverse Affect on
American;
(c) (i) has not entered into or received any consent decree,
compliance order or administrative order issued pursuant to any
Environmental Law, and (ii) is not a party in interest or in default under
any judgment, order, writ, injunction or decree of any Final Order issued
pursuant to any Environmental Law; and
(d) to the knowledge of American, there have not been any releases,
spills or disposal activities of or involving Hazardous Materials,
including without limitation from underground storage tanks, on or from any
property owned, operated or leased by American which releases, spills or
disposal activities resulted or could reasonably be expected to result in
investigation and cleanup expenditures which upon payment of such
expenditures would be reasonably likely to have a Material Adverse Effect
on American.
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Notwithstanding anything to the contrary contained in this Agreement,
American makes no representation or warranty with respect to its compliance with
Environmental Laws or environmental matters generally, except as specifically
set forth in this Section 4.17.
4.18 Opinion of Financial Advisor. American has received the opinion of
CSFB, dated the date of the Original Merger Agreement, to the effect that, as of
such date, the Merger Consideration (as defined in the Original Merger
Agreement) to be received by the holders of American Common Stock in the Merger
is fair from a financial point of view to the holders of American Common Stock.
4.19 Contracts; Debt Instruments.
(a) Except as set forth in Section 4.20 of the American Disclosure
Schedule, neither American nor any of its Subsidiaries is in violation of or in
default under (nor does there exist any condition which upon the passage of time
or the giving of notice, or both, would cause such a violation of or default
under) any material agreement, arrangement, contract, undertaking, understanding
or other obligation, including the American Preferred Stock ("Contracts"), to
which it is a party or by which it or any of its properties or assets is bound,
except for violations or defaults, that individually or in the aggregate, would
not be reasonably likely to have a Material Adverse Effect on American, and none
of the Contracts prohibits American from incurring an additional $1.00 of
indebtedness.
(b) American has made available to Mergeparty (i) true and correct copies
of all Contracts to which any indebtedness of American or any of its
Subsidiaries (other than the Tower Subsidiaries) in an aggregate principal
amount in excess of $1,000,000 is outstanding or may be incurred and (ii)
accurate information regarding the respective principal amounts currently
outstanding as of the date of the Original Merger Agreement thereunder.
4.20 State Takeover Statutes. Except for Section 203 of the DCL, to
American's knowledge, no other state takeover Law, statute or similar statute or
regulation applies or purports to apply to the Merger, this Agreement or any of
the transactions contemplated by this Agreement.
4.21 Appraisal Rights. No appraisal rights under Section 262 of the DCL are
applicable to the Tower Merger or the Tower Merger Consideration.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF MERGEPARTY
Except as set forth with respect to specifically identified representations
and warranties in the Mergeparty Disclosure Schedule, Mergeparty represents and
warrants to American as follows:
5.1 Organization and Business; Power and Authority; Effect of Transaction.
(a) Each of Mergeparty and Mergeparty Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of organization and has all requisite power and authority
(corporate and other) to own or hold under lease its properties and to conduct
its business as now conducted and as presently proposed to be conducted. Each of
Mergeparty and Mergeparty Subsidiary is duly qualified and in good standing as a
foreign corporation in each other jurisdiction (as shown on Section 5.1(a) of
the Mergeparty Disclosure Schedule) in which the character of the property owned
or leased by it or the nature of its business or operations requires such
qualification,
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with full power and authority (corporate and other) to carry on the business in
which it is engaged, except in such jurisdictions where the failure to be so
qualified and in good standing, individually or in the aggregate, is not
reasonably likely to have a Material Adverse Effect on Mergeparty.
(b) Each of Mergeparty and Mergeparty Subsidiary has all requisite power
and authority (corporate and other) to execute, deliver and perform its
obligations under this Agreement and each Collateral Document executed or
required to be executed by Mergeparty and/or Mergeparty Subsidiary pursuant
hereto or thereto or to consummate the Merger and the other transactions
contemplated hereby and thereby, and the execution, delivery and performance of
this Agreement and each Collateral Document executed or required to be executed
pursuant hereto have been duly authorized by all requisite corporate or other
action on the part of Mergeparty and/or Mergeparty Subsidiary, and no other
corporate proceedings on the part of Mergeparty and/or Mergeparty Subsidiary are
necessary to authorize this Agreement or the transactions contemplated hereby or
to consummate the Merger or the other transactions so contemplated. This
Agreement has been duly executed and delivered by each of Mergeparty and
Mergeparty Subsidiary and constitutes, and each Collateral Document executed or
required to be executed pursuant hereto or to consummate the Merger when
executed and delivered by Mergeparty and/or Mergeparty Subsidiary will
constitute, a valid and binding obligation of Mergeparty and/or Mergeparty
Subsidiary, enforceable in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, moratorium, insolvency and
similar laws affecting the rights and remedies of creditors and obligations of
debtors generally and by general principles of equity.
(c) At the time of execution of this Agreement, Mergeparty and all of its
Affiliates or "associates" (as defined in the Exchange Act) collectively
beneficially own less than 5% of the outstanding shares of American Common
Stock.
(d) The execution, delivery and performance by each of Mergeparty and/or
Mergeparty Subsidiary of this Agreement and any Collateral Document executed or
required to be executed by such party pursuant hereto or thereto, do not, and
the consummation by Mergeparty Subsidiary of the Merger and the other
transactions hereby and thereby and compliance with the terms, conditions and
provisions hereof or thereof by Mergeparty and/or Mergeparty Subsidiary will
not:
(i) (A) conflict with, or result in a breach or violation of, or
constitute a default under, any Organic Document of Mergeparty or
Mergeparty Subsidiary or (B) any Applicable Law applicable to Mergeparty or
Mergeparty Subsidiary, or conflict with, or result in a breach or violation
of, or constitute a default under, or permit the termination, cancellation
or acceleration of any obligation or liability in, or but for any
requirement of the giving of notice or passage of time or both would
constitute such a conflict with, breach or violation of, or default under,
or permit any such termination, cancellation or acceleration of, any
Contract or Private Authorization of Mergeparty or Mergeparty Subsidiary,
except, in the case of clause (B), for such conflicts, breaches,
violations, terminations, cancellations or accelerations that would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect on Mergeparty; or
(ii) result in or permit the creation or imposition of any Lien upon
any property now owned or leased by Mergeparty or Mergeparty Subsidiary
except for such Liens that would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect on Mergeparty or
Mergeparty Subsidiary; or
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(iii) require any Governmental Authorization or Governmental Filing
except for (A) the FCC Consents, (B) filings under the Hart-Scott-Rodino
Act, (C) the filing with the Commission of such reports under Section 13(a)
or 15(d) of the Exchange Act as may be required in connection with this
Agreement and the transactions contemplated by this Agreement, (D) the
filing of the Certificate of Merger with the Delaware Secretary of State
and appropriate documents with the relevant authorities of other states in
which American is qualified to do business and (E) such other Governmental
Authorizations and Governmental Filings the failure of which to be made or
obtained would, individually or in the aggregate, not be reasonably likely
to have a Material Adverse Effect on American.
(e) Mergeparty Subsidiary was formed solely for the purpose of engaging in
the transactions contemplated by this Agreement and has not engaged in any
business activities or conducted any operations other than in connection with
the transactions contemplated by this Agreement.
5.2 Compliance with Governmental Authorizations and Applicable Law;
Litigation. Except as disclosed in any report or other document filed by
Mergeparty with the SEC prior to the date of the Original Merger Agreement or in
Section 5.2 of the Mergeparty Disclosure Schedule, there are no Legal Actions
pending or, to the knowledge of Mergeparty, threatened against Mergeparty or any
of its Subsidiaries, except for Legal Actions that, individually or in the
aggregate, would not be reasonably likely to have a Material Adverse Effect on
Mergeparty or prevent or materially burden or materially impair the ability of
Mergeparty to consummate the transactions contemplated by this Agreement. Except
as set forth in Section 5.2 of the Mergeparty Disclosure Schedule, there are not
facts relating to Mergeparty (or any Affiliate thereof) under the FCA that would
disqualify it (or any Affiliate or assignee) from obtaining control of the
American FCC Licenses or that would prevent it (or any Affiliate or assignee)
from consummating the transactions contemplated by this Agreement or, to
Mergeparty's knowledge, materially delay the grant of the FCC Consents. Except
as may be set forth in Section 5.2 of the Mergeparty Disclosure Schedule, it is
not necessary for Mergeparty or any of its Subsidiaries or other Affiliates (or
assigns) to (a) seek or obtain any waiver from the FCC, (b) dispose of any
interest in any media or communications property or interest (including without
limitation any of the American Stations or the American Brokered Stations), (c)
terminate any venture or arrangement, or (d) effectuate any change or
restructuring of ownership (including without limitation the removal or
withdrawal of officers or directors or the conversion or repurchase of equity
securities in Mergeparty or any Affiliate) to obtain, or to avoid any delay in
obtaining, the FCC Consents. Mergeparty is able to certify on an FCC Form 315
that it is financially qualified.
5.3 Mergeparty Financing. On the Closing Date, Mergeparty will have
sufficient funds to consummate the transactions contemplated by this Agreement,
including without limitation the Merger, and to pay all related fees and
expenses.
ARTICLE 6
COVENANTS
6.1 Access to Information; Confidentiality. American shall afford to
Mergeparty and its accountants, counsel, investment bankers, financial advisors
and other agents and representatives (the "Representatives") full access during
normal business hours throughout the period prior to the Closing Date to all of
its (and its Subsidiaries', other than those of the Tower Subsidiaries)
properties, books, contracts, commitments and records (including without
limitation Tax Returns) and, during such period, shall furnish promptly upon
request (i) a copy of each report, schedule and other document filed or
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received by it pursuant to the requirements of any Applicable Law (including
without limitation the FCA) or filed by it or any of its Subsidiaries (other
than the Tower Subsidiaries) with any Authority in connection with the Merger or
which may have a material effect on it or its business, financial condition or
results of operations, and (ii) such other information concerning any of the
foregoing as Mergeparty shall reasonably request; provided, however, that the
foregoing shall not require American to permit any disclosure or to disclose any
information, that in the reasonable judgment of American would result in the
disclosure of any trade secrets of third parties or violate any of its
obligations with respect to confidentiality if American shall have used its best
efforts to obtain the consent of such third party to such inspections or
disclosure. All requests for information shall be directed to an executive
officer of American or such other Persons as may be designated by American. All
information disclosed pursuant to this Section or otherwise shall be governed by
the terms of the Confidentiality Agreement, the terms and provisions of which
are incorporated herein by reference with the same force and effect as though
set forth here in their entirety. No investigation pursuant to this Section or
otherwise shall affect any representation or warranty of American in this
Agreement or any condition to the obligations of Mergeparty hereto.
6.2 Agreement to Cooperate.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties hereto shall use best efforts (x) to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate the Merger and (y) to refrain from
taking, or cause to be taken, any action and to refrain from doing or causing to
be done, any thing which could impede or impair the consummation of the Merger,
including, in all cases, without limitation using its best efforts (i) to
prepare and file with the applicable Authorities as promptly as practicable
after the execution of this Agreement all requisite applications and amendments
thereto, together with related information, data and exhibits, necessary to
request issuance of orders approving the Merger by all such applicable
Authorities, (ii) to obtain all necessary or appropriate waivers, consents and
approvals, (iii) to effect all necessary registrations, filings and submissions,
(iv) to defend any suit, action or proceeding, whether judicial or
administrative, challenging the Merger or any of the transactions contemplated
by the Merger Agreement, including seeking to lift any injunction or other legal
bar to the Merger (and, in such case, to proceed with the Merger as
expeditiously as possible), and (v) to obtain the satisfaction of the conditions
specified in Article 7, including without limitation the securing of all
authorizations, consents, waivers, modifications, order or approvals referred to
in Sections 7.1(b) and 7.1(d) and, without limiting the generality of the
foregoing, and notwithstanding any provision contained in this Agreement to the
contrary, including without limitation the last sentence of Section 6.10,
American shall not, and shall not permit any Tower Subsidiary to, take any
action or enter into any agreement, plan or arrangement to take any action (a
"Prohibited Transaction") which could reasonably be expected to materially delay
the date of the American Stockholders Meeting or the Effective Time (it being
understood that any delay in excess of fifteen (15) business days which would
arise as a result of any such action shall be deemed "material" for purposes
hereof). American hereby agrees to provide Mergeparty with prior written
notification of any proposed action which could reasonably be expected to
constitute a Prohibited Transaction.
(b) Without limiting the generality of the foregoing, the parties
acknowledge and agree that the transfer of control of the American FCC Licenses
as contemplated by this Agreement is subject to the prior consent and approval
of the FCC. American and Mergeparty acknowledge that they have heretofore filed
with the FCC appropriate applications requesting the FCC's written consent to
the transfer of control of the American FCC Licenses pursuant to this Agreement
and have caused all necessary persons to join in one or more such applications
filed with the FCC (the "Applications"). American and Mergeparty will use their
best efforts to take such steps as may be necessary (i) diligently
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to prosecute the Applications and to prepare and file any further Applications
or amendments as may be necessary to obtain the consent for the transfer of
control to Mergeparty of the licenses held by the American Brokered Stations to
be acquired by American and (ii) to obtain the FCC Consents, including action by
Mergeparty, at its sole cost and expense (except as provided elsewhere in this
Agreement), to satisfy or cause to be removed all Divestiture Conditions, if
any. The failure by American or Mergeparty to use its best efforts to timely
file or diligently prosecute its portion of any Application or, in the case of
Mergeparty, the failure to use its best efforts to make any Required Divestiture
or otherwise satisfy or cause to be removed all Divestiture Conditions on or
before the Termination Date, shall be a material breach by American or
Mergeparty, as the case may be, of this Agreement. American agrees that any
delay in prosecuting the Applications or obtaining the FCC Consents resulting
from Mergeparty's good faith negotiations, subject to Applicable Law, with the
FCC, Antitrust Division or FTC with respect to the imposition of a Divestiture
Condition shall not constitute a failure by Mergeparty to use its best efforts
diligently to prosecute the Applications or obtain the FCC Consents and so long
as such negotiations do not interfere with satisfaction of all conditions to
Closing prior to the Termination Date. If reconsideration or judicial review is
sought with respect to any FCC Consent, American and Mergeparty shall (promptly
and with all due efforts) oppose such efforts to obtain reconsideration or
judicial review.
(c) Without limiting the generality of Section 6.2(a), the parties
undertake and agree to file as soon as practicable after the date hereof, and in
any event within sufficient time to be able to consummate the Merger prior to
the Termination Date, a Notification and Report Form under the Hart-Scott-Rodino
Act with the Federal Trade Commission (the "FTC") and the Antitrust Division of
the Department of Justice (the "Antitrust Division"). Each of the parties shall
(i) use its best efforts to comply as expeditiously as possible with all lawful
requests of the FTC or the Antitrust Division for additional information and
documents and (ii) not extend any waiting period under the Hart-Scott-Rodino Act
or enter into any agreement with the FTC or the Antitrust Division not to
consummate the transactions contemplated by this Agreement, except with the
prior written consent of the other party hereto; provided, however, that nothing
shall limit the ability of Mergeparty to extend the 20-day waiting period under
the Hart-Scott-Rodino Act following substantial compliance with any request for
additional information that may be forthcoming, if such extension is reasonably
necessary to allow the continuation of good-faith negotiations intended to
remove any objection to the transaction that the FTC or Antitrust Division may
have asserted, and if such extension will expire not less than 30 days prior to
the Termination Date.
(d) Anything in this Agreement, including without limitation Section
6.2(b), to the contrary notwithstanding, Mergeparty shall obtain the FCC
Consents and clearances under the Hart-Scott-Rodino Act and the grant of any
waivers in connection therewith prior to the Termination Date in accordance with
this Agreement unless the failure to obtain such FCC Consents, clearances and
waivers is primarily the result of one or more Uncontrollable Events. For
purposes of this Agreement, the term "Uncontrollable Events" shall mean (i) acts
or omissions on the part of American or any of its Subsidiaries in conducting
its respective operations other than those relating to the number of American
FCC Licenses or amount of revenues in a particular market, (ii) an unremedied or
unwaived material breach by American of its obligations under this Agreement, or
(iii) any change in or enactment of Applicable Law by Congress and signed by the
President and which (A) has the effect of decreasing the number of radio
licenses which a Person may own nationally or locally or (B) materially and
adversely relates to the concentration of radio licenses which a Person may own
in a market, and as a result of the change or enactment referred to in either
clause (A) or (B) above, Mergeparty's performance of its obligations under this
Agreement would have a Material Adverse Effect on Mergeparty's radio and
television broadcasting business. Mergeparty shall file with the FCC, within
sufficient time to permit timely grant of the Applications, applications for
consent to assign or transfer, pursuant to trust
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arrangements satisfying the FCC's local multiple ownership rules and policies,
such radio broadcast stations as Mergeparty may designate, so that the radio
broadcast stations of Mergeparty and American not designated for such trust
arrangements may be held by the Surviving Corporation in compliance with the
FCC's local multiple ownership rules and policies. Mergeparty shall, to the
extent necessary to obtain grant of the trust applications, thereafter promptly
file or cause to be filed any further applications (including applications to
assign radio broadcast stations to third party purchasers for value) that may be
required by the FCC. Notwithstanding the two preceding sentences, with regard to
stations located in the San Jose market, the obligations of Mergeparty to submit
trust or sale applications shall be excused for such stations to the extent and
for the duration of the period that Mergeparty is unable to identify the
stations to be placed in trust or sold because of the failure of American to
notify Mergeparty of the resolution of the Antitrust Division impediment
impacting the American transactions pending in the San Jose market.
(e) If Mergeparty or any of its Affiliates receives an administrative or
other order or notification relating to any violation or claimed violation of
the rules and regulations of the FCC, or of any other Authority (including
without limitation seeking or relating to a Divestiture Condition), that could
affect Mergeparty's or Mergeparty Subsidiary's ability to consummate the
transactions contemplated hereby, or if Mergeparty or any other Affiliate of
Mergeparty should become aware of any fact relating to the qualifications of
Mergeparty or any of its Affiliates that reasonably could be expected to cause
the FCC to withhold its consent to the assignment of the American FCC Licenses,
Mergeparty shall promptly notify American thereof and American shall do likewise
with Mergeparty and Mergeparty shall use its best efforts, and take such steps
as are necessary, in order to satisfy or remove the Divestiture Conditions to
enable the Closing to occur prior to the Termination Date. Mergeparty covenants
and agrees to keep American fully informed as to all matters concerning all
Required Divestitures and shall promptly notify American in writing of any and
all significant developments relating thereto and American agrees to do likewise
with Mergeparty.
(f) Mergeparty acknowledges and agrees that certain of the American
Stations and American Brokered Stations may file applications for renewal of
license during the time that an application for the FCC Consents is pending
before the FCC. To the extent any such application for renewal may be filed,
Mergeparty agrees to amend the transferee's portion of any application for the
FCC Consents and, as may be required, to amend any license renewal applications
for all of the American Stations or American Brokered Stations, to confirm
Mergeparty's intention to consummate this Agreement during the pendency of such
license renewal application, and to agree to assume the consequences associated
with succeeding to the place of American in such license renewal applications.
The making of this statement shall not be deemed to limit or waive any other
rights that Mergeparty may otherwise have under this Agreement.
(g) The parties shall cooperate with one another in the preparation,
execution and filing of all Tax Returns, questionnaires, applications, or other
documents regarding any real property transfer or gains, sales, use, transfer,
value added, stock transfer and stamp Taxes, any transfer, recording,
registration and other fees, and any similar Taxes which become payable in
connection with the Merger that are required or permitted to be filed on or
before the Closing Date.
(h) Subject to Applicable Laws relating to the exchange of information,
American, on the one hand, and Mergeparty, on the other hand, shall have the
right to review in advance, and to the extent practicable each will consult the
other with respect to, all the information relating to American or Mergeparty,
as the case may be, and any of their respective Subsidiaries, that appear in any
filing made with, or written materials submitted to, any Authority and/or other
Person in connection with the Merger
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and the other transactions contemplated by this Agreement. In exercising the
foregoing right, each of American and Mergeparty shall act reasonably and as
promptly as practicable.
6.3 Public Announcements. Until the Closing, or in the event of termination
of this Agreement, each party shall consult with the other before issuing any
press release or otherwise making any public statements with respect to this
Agreement or the Merger and shall not issue any such press release or make any
such public statement without the prior consent of the other. Notwithstanding
the foregoing, the parties acknowledge and agree that they may, without each
other's prior consent, issue such press releases or make such public statements
as may be required by Applicable Law, in which case, to the extent practicable,
they will consult with the other regarding the nature, content and form of such
press release or public statement.
6.4 Notification of Certain Matters. Each party shall give prompt notice to
the other, of the occurrence or non-occurrence of any Event the occurrence or
non-occurrence of which would be reasonably likely to cause (i) any
representation or warranty made by it contained in this Agreement to be untrue
or inaccurate in any material respect or (ii) any failure made by it to comply
with or satisfy, or be able to comply with or satisfy, in any material respect,
any covenant, condition or agreement to be complied with or satisfied by it
under this Agreement in any material respect, such that, in any such case, one
or more of the conditions of Closing would not be satisfied; provided, however,
that the delivery of any notice pursuant to this Section shall not limit or
otherwise affect the rights and remedies available hereunder to the party
receiving such notice or the obligations of the party delivering such notice and
shall not, in any event, affect the representations, warranties, covenants and
agreements of the parties or the conditions to their respective obligations
under this Agreement.
6.5 Stockholder Approval. American will, as soon as practicable following
the date thereof, establish separate record dates (which will be as soon as
practicable following the date hereof) for, duly call, give notice of, convene
and hold (on separate dates) (i) a meeting (the "American Stockholders Meeting")
of the holders of shares of American Common Stock for the purpose of obtaining
the Required Vote and (ii) a meeting (the "American Stockholders Tower Meeting")
of holders of shares of American Common Stock for the purpose of obtaining the
Required Tower Vote. American will, through its Board of Directors, recommend to
the holders of shares of American Common Stock approval and adoption of this
Agreement and the Tower Merger Agreement, subject, with respect to approval and
adoption of this Agreement, to the fiduciary duties of the Board of Directors of
American under Applicable Law.
6.6 Proxy Statement; Registration Statement.
(a) American shall prepare and file with the Commission as soon as is
reasonably practicable after the date hereof a proxy statement in connection
with the American Stockholders Meeting (the "Proxy Statement") and a proxy
statement in connection with the American Stockholders Tower Meeting (the "Tower
Proxy Statement"), in each case complying with applicable rules and regulations
of the Commission and the DCL.
(b) American shall cause American Tower to prepare and file with the
Commission as soon as is reasonably practicable after the date hereof a
registration statement on Form S-4 (the "Registration Statement") complying with
applicable rules and regulations of the Commission. The Registration Statement
shall cover the registration under the Securities Act of the shares of Tower
Common Stock to be delivered as the Tower Stock Consideration or Tower Merger
Tower Consideration to the holders of shares of American Common Stock at the
Effective Time or the Tower Merger Effective Time, as the case may be.
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(c) Mergeparty and American shall, and American shall cause American Tower
to, promptly furnish to the other all information, and take such other actions,
as may reasonably be requested in connection with any action taken to comply
with the provisions of this Section 6.6. Each of American and Mergeparty shall,
and American shall cause American Tower to, correct promptly any information
provided by it to be used specifically in the Proxy Statement, the Tower Proxy
Statement or the Registration Statement that shall have become false or
misleading in any material respect and shall take all steps necessary to file
with the Commission and have cleared by the Commission any amendment or
supplement to the Proxy Statement, the Tower Proxy Statement or the Registration
Statement so as to correct such Proxy Statement, such Tower Proxy Statement or
such Registration Statement and cause it to be disseminated to the stockholders
of American, to the extent required by Applicable Law. Without limiting the
generality of the foregoing, American shall, and American shall cause American
Tower to, notify Mergeparty promptly of the receipt of the comments of the
Commission and of any request by the Commission for amendments or supplements to
the Proxy Statement, the Tower Proxy Statement or the Registration Statement, or
for additional information, and shall supply Mergeparty with copies of all
correspondence between it or its representatives, on the one hand, and the
Commission or members of its staff, on the other hand, with respect to the Proxy
Statement, the Tower Proxy Statement or the Registration Statement. Whenever any
event occurs which should be described in an amendment or a supplement to the
Proxy Statement, the Tower Proxy Statement or the Registration Statement,
American shall, and American shall cause American Tower to, upon learning of
such event, promptly prepare, file and clear with the Commission and, if prior
to the Effective Time, mail to the holders of shares of American Common Stock
such amendment or supplement; provided, however, that, prior to such mailing,
(i) American shall, and American shall cause American Tower to, consult with
Mergeparty with respect to such amendment or supplement, (ii) shall afford
Mergeparty reasonable opportunity to comment thereon, and (iii) each such
amendment or supplement shall be reasonably satisfactory to Mergeparty.
6.7 Miscellaneous. Nothing contained in this Agreement shall prohibit
American from (a) taking and disclosing to its stockholders a position
contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or
(b) making any disclosure to American's stockholders if, in the good faith
judgment of the majority of the members of the Board of Directors of American,
after consultation with independent counsel, failure to so disclose would be
inconsistent with Applicable Laws.
6.8 Option Plans.
(a) All unexpired options to purchase American Common Stock that are
outstanding immediately prior to the Effective Time (each, an "American
Option"), except as provided otherwise in this Section 6.8, will be canceled by
American immediately prior to the Effective Time. Each employee or director of
American or any of its Subsidiaries immediately prior to the Effective Time
(each, an "Optionholder") shall receive, with respect to each share of American
Common Stock subject to an unexpired American Option of the Optionholder so
canceled by American, the Merger Consideration, or, if the Tower Merger
Effective Time shall have occurred, the cash that the Optionholder would have
received pursuant to the Merger and shares of American Tower Common Stock that
the Optionholder would have received pursuant to the Tower Merger, in each case
with respect to each share of American Common Stock subject to an unexpired
American Option of the Optionholder had such American Option been exercised
immediately prior to the Tower Merger Effective Time, in all cases reduced by an
amount of cash (and, to the extent necessary, Tower Common Stock) equal to the
exercise price per share of American Common Stock subject to such American
Option. Except as provided in the preceding sentence, no other consideration
will be paid by American to an Optionholder in respect of his or her
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canceled American Options. If the Merger is not consummated, the cancellation of
the Optionholder's American Options shall be rescinded and the Optionholder
shall continue to hold such American Options upon their original terms and
conditions. At the election of any Optionholder who is a "disqualified
individual" (as such term is defined in proposed Treasury Regulation Section
1.280G-1), this Section 6.8(a) will be inoperative with respect to such American
Options as he or she may specify to the extent that the acceleration, vesting
cancellation and cash-out of American Options at the Effective Time as provided
herein would constitute an "excess parachute payment" (as such term is defined
in Section 280G(b)(1) of the Code). Any Optionholder who makes such election
shall forfeit the American Options which are subject to such election and shall
receive no consideration therefor.
(b) With respect to American Options held by Tower Employees,
notwithstanding the foregoing provisions of this Section 6.8 and in lieu
thereof, and subject to the approval of the provisions of this Section 6.8 by
the Board of Directors of American and the Compensation Committee thereof, such
Tower Employees may elect to have their American Options assumed by American
Tower and converted into options to acquire Tower Common Stock as of the earlier
to occur of the Tower Merger Effective Time and the Effective Time, such
conversion to be effectuated in a manner that will preserve the spread in such
American Options between the option exercise price and the fair market value of
American Common Stock at the time of such conversion, and the ratio of the
spread to the exercise price prior to such conversion and, to the extent
applicable, otherwise in conformity with the rules under Section 424(a) of the
Code and the regulations promulgated thereunder. To the extent that Tower
Employees elect to so convert their American Options into options to acquire
Tower Common Stock, American shall contribute (without the payment of any amount
or the issuance of any securities by American Tower) to the capital of American
Tower at the time of such conversion a number of shares of Tower Common Stock
equal to the excess, if any, of (i) the number of shares of Tower Common Stock
owned by American immediately prior to the Tower Merger Effective Time or the
Effective Time, as the case may be, over (ii) the number of shares of Tower
Common Stock required to be delivered (x) to the holders of shares of American
Common Stock, (y) to holders of American Options pursuant to the provisions of
Section 6.8(a), and (z) upon conversion of American Convertible Preferred Stock.
If the Tower Employees set forth on Schedule 4.1(e) do not enter into definitive
agreements prior to the earlier to occur of the Tower Merger Effective Time and
the Effective Time to convert the American Options which are held by such Tower
Employees and set forth on such Schedule into options to acquire Tower Common
Stock in accordance with this Section 6.8(b), American shall, prior to the
earlier to occur of the Tower Merger Effective Time and the Effective Time,
cause American Tower to issue to American in exchange for payment of the par
value thereof a number of shares of Tower Common Stock equal to the aggregate
number of shares of American Common Stock subject to such American Options set
forth on such Schedule. American shall cause American Tower to file with, and
cause to be declared effective prior to the earlier to occur of the Tower Merger
Effective Time or the Effective Time under the Securities Act by, the
Commission, a registration statement on Form S-8 to register the shares of Tower
Common Stock subject to such converted American Options under the Securities
Act.
(c) American will use its best efforts (including best efforts to obtain
any consents of Optionholders, if required) to cause the cancellation of all of
the American Options immediately prior to the Effective Time.
(d) Notwithstanding the foregoing provisions of this Section 6.8, in the
event that any amount payable under Section 6.8(a) to an Optionholder in respect
of his American Options would fail to be deductible by American (or any
successor thereto) solely by reason of Section 162(m) of the Code (after taking
into account all amounts paid or reasonably expected to be payable to the
Optionholder in the same taxable year in which the payments under Section 6.8(a)
are made to the Optionholder and which are not
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otherwise exempt from Code Section 162(m) in determining whether any amount
payable to the Optionholder will fail to be deductible thereunder), then, with
respect to such portion of the Optionholder's American Options the cancellation
and cash-out of which would be nondeductible under said Section 162(m) (the
"Section 162(m) Options"), such Section 162(m) Options shall be canceled in
accordance with the foregoing provisions of this Section 6.8, but the payments
contemplated in Section 6.8(a) in respect of the Optionholder's Section 162(m)
Options shall be made to the Optionholder on the 110th day following the
Effective Time. American shall use its best efforts to obtain the written
consent of each Optionholder affected by this Section 6.8(e) to the foregoing
provisions hereof.
(e) All amounts payable hereunder to an Optionholder shall be reduced by
any applicable withholding taxes.
Notwithstanding anything to the contrary in this Agreement, American shall
have the right, in its sole and absolute discretion, to accelerate, on such
terms and conditions as it shall determine, in whole or in part, the vesting of
any or all of the American Options outstanding on the date hereof (other than
the Section 162(m) Options) so that such American Options are exercisable in
full prior to the Effective Time.
6.9 Conduct of Business by Mergeparty Pending the Merger. Except as
otherwise contemplated by this Agreement, or as has been publicly disclosed
prior to the date of the Original Merger Agreement, after the date of the
Original Merger Agreement and prior to the Closing Date or earlier termination
of this Agreement unless American shall otherwise agree in writing, with respect
to Mergeparty's media business, Mergeparty shall, and shall cause its
Subsidiaries, to:
(i) conduct their respective businesses in the ordinary and usual
course of business and consistent with past practice, which includes the
acquisition of other radio broadcasting stations;
(ii) not amend or propose to amend its Organic Documents in any manner
materially adverse to the holders of the American Preferred Stock;
(iii) use all best efforts to preserve intact their respective
business organizations and goodwill, keep available the services of their
respective present officers and key employees, and preserve the goodwill
and business relationships with customers and others having business
relationships with them and not engage in any action, directly or
indirectly, with the intent to adversely affect the transactions
contemplated by this Agreement; and
(iv) not authorize or enter into any agreement that would violate any
of the foregoing.
6.10 Conduct of Business by American Pending the Merger. Except as set
forth in Section 6.10 of the American Disclosure Schedule or as otherwise
contemplated by this Agreement, including without limitation the transactions
contemplated by the Tower Documentation and Section 6.19 hereof, after the date
of the Original Merger Agreement and prior to the Closing Date or earlier
termination of this Agreement, unless Mergeparty shall otherwise consent in
writing, American shall, and shall cause its Subsidiaries, to:
(i) conduct their respective businesses in the ordinary and usual
course of business and consistent with past practice;
(ii) not (A) amend or propose to amend their respective Organic
Documents,
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(B) split, combine or reclassify (whether by stock dividend or otherwise)
their outstanding capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of, or in substitution for shares
of its capital stock, or (C) declare, set aside or pay any dividend or
distribution payable in cash, stock, property or otherwise, except for (x)
the payment of dividends or the making of distributions by a direct or
indirect wholly-owned Subsidiary of American and (y) the payment of
dividends on shares of the American Preferred Stock in accordance with
their terms;
(iii) not issue, sell, pledge or dispose of, or agree to issue, sell,
pledge or dispose of, any shares of its capital stock, Convertible
Securities or Option Securities, except that American may issue shares of
American Common Stock upon conversion of Convertible Securities and
exercise of Option Securities outstanding on the date hereof and in
accordance with their present terms;
(iv) not (A) incur or become contingently liable with respect to any
indebtedness other than (x) short-term borrowings not to exceed $25 million
in the aggregate outstanding at any one time, (y) borrowings to finance
pending acquisitions of radio stations set forth in Section 6.10 of the
American Disclosure Schedule and, pursuant to agreements in effect on the
date of the Original Merger Agreement and (z) borrowings not to exceed $120
million to finance a capital contribution by American to Tower, (B) redeem,
purchase, acquire or offer to purchase or acquire any shares of its capital
stock, Convertible Securities or Option Securities, except pursuant to the
conversion or exercise thereof, as the case may be, or except to the extent
required by the present terms thereof, (C) sell, lease, license, pledge,
dispose of or encumber any properties or assets or sell any businesses
other than pursuant to agreements in effect on the date of the Original
Merger Agreement and set forth in Section 6.10 of the American Disclosure
Schedule or Liens arising in accordance with the provisions of indebtedness
in effect on the date of the Original Merger Agreement and in accordance
with their present terms, or (D) make any loans, advances or capital
contributions to, or investments in, any other Person, other than to any
direct or indirect wholly owned Subsidiary of American (other than the
Tower Subsidiaries) and, except as provided in clause (z) above, or to
officers and employees of American or any of its Subsidiaries for travel,
business or relocation expenses in the ordinary course of business;
(v) use all reasonable efforts to preserve intact their respective
business organizations and goodwill, keep available the services of their
respective present officers and key employees, and preserve the goodwill
and business relationships with customers and others having business
relationships with them and not engage in any action, directly or
indirectly, with the intent to adversely impact the transactions
contemplated by this Agreement;
(vi) confer on a regular and frequent basis with one or more
representatives of Mergeparty to report material operational matters and
the general status of ongoing operations;
(vii) not adopt, enter into, amend or terminate any employment,
severance, special pay arrangement with respect to termination of
employment or other similar arrangements or agreements with any directors,
officers or key employees;
(viii) maintain with financially responsible insurance companies
insurance on their respective tangible assets and their respective
businesses in such amounts and against such risks and losses as are
consistent with past practice;
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(ix) not make any Tax election that could reasonably be likely to have
a Material Adverse Effect on American or settle or compromise any material
income Tax liability;
(x) except in the ordinary course of business or except as would not
reasonably be likely to have a Material Adverse Effect on American, not
modify, amend or terminate any Material Agreement to which American or any
Subsidiary is a party or waive, release or assign any material rights or
claims thereunder;
(xi) not make any material change to its accounting methods,
principles or practices, except as may be required by GAAP;
(xii) not acquire or agree to acquire (x) by merging or consolidating
with, or by purchasing a substantial portion of the assets of, or by any
other manner, any business or any Person or other business organization or
division thereof or (y) any assets that, individually or in the aggregate,
are material to American and its Subsidiaries taken as a whole, in each
case, other than pursuant to agreements in effect on the date of the
Original Merger Agreement and set forth in the Section 6.10 of the American
Disclosure Schedule (Mergeparty agrees not to unreasonably withhold, delay
or condition a consent to any matters described in this paragraph);
(xiii) except as set forth in Section 4.9(a) or Section 4.16 of the
American Disclosure Schedule, (a) not grant to any executive officer or
other key employee of American or any of its Subsidiaries any increase in
compensation, except for normal increases in the ordinary course of
business consistent with past practice or as required under Benefit
Arrangements in effect as of June 30, 1997, (b) not grant to any such
executive officer any increase in severance or termination pay, except as
was required under any Benefit Arrangements in effect as of June 30, 1997,
(c) not adopt or amend any Plan or Benefit Arrangement (including change
any actuarial or other assumption used to calculate funding obligations
with respect to any Plan, or change the manner in which contributions to
any Plan are made or the basis on which such contributions are determined)
and (d) except in the ordinary course, not enter into, amend in any
material respect or terminate any Governmental Authorization (except as
would not be reasonably likely to have a Material Adverse Effect on
American), material Private Authorization or Contract; and
(xiv) not authorize or enter into any agreement that would violate any
of the foregoing.
Anything in this Section to the contrary notwithstanding, the provisions of this
Section (other than clause (ii) hereof) shall not apply to any of the Tower
Subsidiaries.
6.11 Control of Operations. Nothing contained in this Agreement shall give
to Mergeparty, directly or indirectly, rights to control or direct American's
operations prior to the Effective Time. Prior to the Effective Time, American
shall exercise, consistent with the terms and conditions of this Agreement,
complete control and supervision of its operations. Nothing contained in this
Agreement shall give to American, directly or indirectly, rights to control or
direct Mergeparty's operations prior to the Effective Time. Prior to the
Effective Time, Mergeparty shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision of its
operations.
6.12 Directors', Officers' and Employees' Indemnification and Insurance.
(a) The Organic Documents of the Surviving Corporation shall contain
provisions no less favorable with respect to indemnification than are set forth
in the Organic Documents of American, as in
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effect on the date of the Original Merger Agreement, which provisions shall not
be amended, repealed or otherwise modified for a period of six (6) years from
the Effective Time in any manner that would affect adversely the rights
thereunder of individuals who at any time prior to the Effective Time were
directors, officers or employees of American or any of its Subsidiaries, unless
such modification shall be required by Applicable Law.
(b) From and after the Effective Time, Mergeparty shall indemnify, defend
and hold harmless the present and former officers, directors and employees of
American or any of its Subsidiaries (collectively, the "Indemnified Parties")
against all losses, expenses, claims, damages, liabilities or amounts that are
paid in settlement of, or otherwise in connection with any claim, action, suit,
proceeding or investigation (as used in this Section, a "claim") (including,
without limitation, in connection with this Agreement, the Merger and the
transactions contemplated hereby), based in whole or in part on the fact that
the Indemnified Party (or the Person controlled by the Indemnified Party) is or
was a director, officer or employee of American or any of its Subsidiaries and
arising out of actions or omissions occurring at or prior to the Effective Time
whether asserted or claimed prior to, at or after the Effective Time, in each
case to the fullest extent permitted under the DCL (and shall pay any expenses,
as incurred, in advance of the final disposition of any such action or
proceeding to each Indemnified Party to the fullest extent permitted under the
DCL). Without limiting the foregoing, in the event any such claim is brought
against any of the Indemnified Parties, (i) such Indemnified Parties may retain
counsel (including local counsel) satisfactory to them and which shall be
reasonably satisfactory to Mergeparty and they shall pay all reasonable fees and
expenses of such counsel for such Indemnified Parties; and (ii) Mergeparty shall
use its best efforts to assist in the defense of any such claim; provided,
however, that Mergeparty shall not be liable for any settlement effected without
its written consent, which consent shall not be unreasonably withheld, delayed
or conditioned. Notwithstanding the foregoing, nothing contained in this Section
shall be deemed to grant any right to any Indemnified Party which is not
permitted to be granted to an officer, director or employee of Mergeparty under
the DCL, assuming for such purposes that Mergeparty's Organic Documents provide
for the maximum indemnification permitted by the DCL.
(c) Mergeparty will cause to be maintained for a period of not less than
six (6) years from the Effective Time American's current directors' and
officers' insurance and indemnification policy to the extent that it provides
coverage for events occurring prior to the Effective Time ("D&O Insurance") for
all Persons who are directors and officers of American on the date of this
Agreement, so long as the annual premium therefor would not be in excess of 200%
of the last annual premium therefor paid prior to the date of the Original
Merger Agreement (the "Maximum Premium"); provided, however, that if the annual
premiums of such insurance coverage exceed such amount, Mergeparty shall only be
obligated to obtain the greatest coverage available under such policy for a cost
not exceeding such amount, provided further, however, that Mergeparty may, in
lieu of maintaining such existing D&O Insurance as provided above, cause
coverage to be provided under any policy maintained for the benefit of
Mergeparty or any of its Subsidiaries, so long as the terms thereof are no less
advantageous to the intended beneficiaries thereof than the existing D&O
Insurance. If the existing D&O Insurance expires, is terminated or canceled
during such six-year period, Mergeparty will use its best efforts to cause to be
obtained as much D&O Insurance as can be obtained for the remainder of such
period for an annualized premium not in excess of the Maximum Premium, on terms
and conditions no less advantageous to the covered Persons than the existing D&O
Insurance. American represents to Mergeparty that the Maximum Premium is not
greater than $500,000.
(d) In the event Mergeparty or Mergeparty Subsidiary or any of their
respective successors or assigns (i) consolidates with or merges into any other
person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers all or substantially all of
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its properties and assets to any person, then and in each such case, proper
provisions shall be made so that the successors and assigns of Mergeparty or
Mergeparty Subsidiary, as the case may be, shall assume the obligations set
forth in this Section.
(e) This Section is intended to be for the benefit of, and shall be
enforceable by, the Indemnified Parties, their heirs and personal
representatives and shall be binding on Mergeparty, Mergeparty Subsidiary and
their respective successors and assigns.
6.13 Solicitation of Employees. If this Agreement is terminated, Mergeparty
agrees that neither it nor any of its Subsidiaries or other Affiliates will, for
a period of eighteen (18) months from the date of such termination, solicit or
actively seek to hire any key employees (including without limitation any
station manager, sales manager, program director or any individual senior to any
of such individuals) who during such period is employed by American or any of
its Subsidiaries, whether or not such individual would commit breach of such
individual's employment agreement or contract in leaving such employment;
provided, however, that the foregoing shall not prevent Mergeparty from taking
any action permitted by the Confidentiality Agreement.
6.14 Change of Name. Within ten (10) days after the Closing, Mergeparty
shall cause each of its Subsidiaries, if necessary, to file certificates of
amendment with the appropriate Secretary of State, amending such company's
Organic Documents to change the name of such company to any name which does not
include the words "American Radio". Immediately prior to the Closing, American
will assign to American Tower or its designee all right, title and interest,
including all the goodwill related thereto, in and for past infringements of the
name "American Radio" and related trademarks, service marks, logos and the like.
As soon as commercially practicable, but in no event later than six (6) months
from the Closing Date, Mergeparty Subsidiary and its Subsidiaries shall cease
all use of the name "American Radio" in all modes.
6.15 Benefit Plans. Mergeparty shall take such action as may be necessary
so that on and after the Effective Time and for one (1) year thereafter,
officers and employees of American and its Subsidiaries (other than Tower
Employees) shall be provided employee benefits, plans and programs (excluding
equity incentive arrangements) which are no less favorable in the aggregate than
those generally available pursuant to those employee benefit plans and programs
in effect for such officers and employees immediately prior to the Effective
Time; it being understood that Mergeparty shall determine the types and levels
of specific benefits to be so provided. For purposes of eligibility to
participate and vesting in all benefits provided to officers and employees of
American and its Subsidiaries (other than Tower Employees), such officers and
employees of American and its Subsidiaries will be credited with their years of
service with American and its Subsidiaries and prior employers to the extent
service with American and its Subsidiaries and prior employers is taken into
account under the applicable plans of American and its Subsidiaries as in effect
as of the date of the Original Merger Agreement. Upon termination of any health
plan of American or any of its Subsidiaries, individuals who were officers or
employees of American or its Subsidiaries at the Effective Time (other than
Tower Employees) shall if employed by Mergeparty or its Subsidiaries become
eligible to participate in such health plans as may be established or maintained
by Mergeparty or its Subsidiaries to the extent that such individuals were
eligible to participate in the applicable health plan of American or its
Subsidiaries immediately prior to the Effective Time. Amounts paid during the
calendar year in which the Effective Time occurs, but before the Effective Time,
by officers and employees of American and its Subsidiaries (other than Tower
Employees) under any health plans of American shall after the Effective Time be
taken into account in applying deductible and out-of-pocket limits applicable
under the health plans of Mergeparty or its Subsidiaries provided during such
calendar year to the same extent as if such amounts had been paid
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under such health plans of Mergeparty or its Subsidiaries and Mergeparty shall
cause to be waived under its health plans any pre-existing conditions as of the
date of termination of the American health plan and eligibility to participate
in such health plan to the extent such conditions would be waived under the
applicable plans of American and its Subsidiaries as in effect on the date of
the Original Merger Agreement. Nothing in this Agreement shall be construed as
granting to any employee of American or its Subsidiaries any rights of
continuing employment.
6.16 American Cumulative Preferred Stock. To the extent permitted under
Contracts, pursuant to which any indebtedness for money borrowed of American or
any of its Subsidiaries is outstanding as of the date of the Original Merger
Agreement, and by the American Preferred Stock, American shall pay all dividends
in respect of the American Cumulative Preferred Stock in cash.
6.17 American Tower Transaction. As soon as practicable following the
execution of the Original Merger Agreement and in any event prior to the
consummation of the Merger, American shall prepare, in consultation with
Mergeparty and its counsel, the definitive documentation to be executed by
American and American Tower to effect the delivery of the shares of Tower Common
Stock as part of the Tower Merger Consideration or the Merger Consideration, as
the case may be (the "Tower Separation"), and submit such documentation to
Mergeparty for its approval, which approval shall not be unreasonably withheld,
delayed or conditioned (as approved, the "Tower Documentation"), and American
and American Tower shall execute and deliver the Tower Documentation in the form
so approved. Mergeparty and American agree that the Tower Documentation shall
include or be prepared on a basis consistent with the following:
(a) American Tower shall indemnify, defend and hold Mergeparty,
American and Subsidiaries of American (other than the Tower Subsidiaries,
collectively in this Section the "American Tower Group") harmless from and
against any liabilities to which American or any of its Subsidiaries (other
than the American Tower Group or, in the case of clauses (B) and (C) below
of this paragraph (a), any of their officers or directors) may be or become
subject that relate to or arise from the assets, business, operations,
debts or liabilities of ATS Mergercorp or the American Tower Group (other
than, in the case of the American Tower Group, income tax liabilities),
including without limitation (i) the assets to be transferred to American
Tower pursuant to Section 6.17(f), (ii) liabilities (A) in connection with
the distribution of the shares of Tower Common Stock as part of the Tower
Merger Consideration or the Merger Consideration, as the case may be, (B)
relating to or arising from any agreement, arrangement or understanding
(other than the Tower Documentation) entered into by American, ATS
Mergercorp or any member of the American Tower Group (x) for the benefit of
any member of the American Tower Group, (y) in contemplation of the Tower
Separation, or (z) with respect to the sale, assignment, transfer or other
disposition of shares of American Tower Common Stock, (C) relating to or
arising from any untrue statement or alleged untrue statements of a
material fact contained in the Proxy Statement, the Tower Proxy Statement,
the Registration Statement or in any document filed or required to be filed
in connection with the Merger, or in any document filed or required to be
filed by American, ATS Mergercorp or any member of the American Tower Group
in connection with the preceding clause (B) or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, except with respect to
information provided by or relating solely to American (excluding ATS
Mergercorp and the American Tower Group) which is contained in or expressly
consistent with the Filed American SEC Documents or the American September
10-Q, (iii) any economic impact related to or arising from the failure to
obtain any Governmental Authorizations, Private Authorizations or other
third
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party consents, or to make any Governmental Filings, necessary to
consummate the Tower Separation, and (iv) the rental and related expenses
for the relevant portion of the leased premises located at 116 Huntington
Avenue, Boston, Massachusetts in the event of the failure to obtain the
landlord's consent to the assignment of the obligations relating to, or
sublease of, such relevant portion of such premises.
(b) American shall indemnify, defend and hold the American Tower Group
harmless from and against any liabilities (other than income tax
liabilities) to which the American Tower Group may be or become subject
that relate to or arise from the assets, business, operations, debts or
liabilities of American or its Subsidiaries (other than the American Tower
Group) whether arising prior to, concurrent with or after the Merger.
(c) The Tower Documentation shall include an agreement that addresses
issues of the allocation of Tax liabilities and deconsolidation of American
and the American Tower Group which shall contain principles to the
following effect:
(i) The tax sharing agreement among members of the American Tower
Group and American and its other Subsidiaries shall be terminated as
of the earlier of (x) the effective date of the Merger, and (y) the
date (the "Tower Deconsolidation Date") that the American Tower Group
is no long eligible to be included in the consolidated tax returns of
American and its other Subsidiaries under Sections 1501 to 1504 of the
Code (the "Tower Deconsolidation") and will have no further effect for
any taxable year (whether the current year, a future year, or a past
year).
(ii) American shall include the income of the American Tower
Group (including any deferred income triggered into income by Reg.
Section 1.1502-13 and Reg. Section 1.1502-14 and any excess loss
accounts taken into income under Reg. Section 1.1502-19) on American's
consolidated federal income Tax returns and consolidated or combined
state and local income Tax returns to the extent such income is
properly includible thereon for all periods through the Tower
Deconsolidation Date, and pay any income Taxes attributable to such
income. American Tower shall reimburse American for any such federal,
state and local income Taxes payable by the American Tax Group
attributable to such income, as determined on a separate company
basis; provided, however, that American Tower shall have no
reimbursement obligation if American has no income Tax liability on a
consolidated basis as a result of a net operating loss or to the
extent that the income of the American Tower Group is offset by a net
operating loss under the principles of clause 6.17(c)(v). The American
Tower Group will furnish Tax information to American for inclusion in
American's federal consolidated income Tax return for the period
through the Tower Deconsolidation Date in accordance with American
Tower's past custom and practice. The income of the American Tower
Group will be apportioned to the period up to and including the Tower
Deconsolidation Date and the period after the Tower Deconsolidation
Date by closing the books of the American Tower Group as of the end of
such date.
(iii) American Tower shall indemnify the American Tax Group and
Mergeparty for all Taxes imposed by any Taxing Authority on any member
of the American Tax Group or on Mergeparty (or on any member of its
consolidated tax group) as a result of or in connection with the sale
or transfer of assets to the American Tower Group pursuant to
Section 6.17(g) (or between members of the American Tax Group
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prior to the final transfer to a member of the American Tower Group or
between members of the American Tower Group), the Merger, the Tower
Merger, the Tower Separation, any other disposition or issuance of
stock of American Tower contemplated or permitted hereby, or the
merger of American Tower with any other Person, as the case may be,
including without limitation any Taxes on any gain to any member of
the American Tax Group arising under Section 311 of the Code, any
Taxes on any deferred gain to any member of the American Tax Group
triggered as a result of or upon any such event, any gain attributable
to any excess loss account triggered upon any such event, any Taxes
arising as a result of the election or other transactions contemplated
by clause 6.17(c)(xii), income or gain arising as a result of
transactions described in Section 3.4(c) or the second sentence of
Section 6.8(a), and gain on the conversion of American Convertible
Preferred Stock into Tower Common Stock and any transfer Taxes arising
from any such event; provided, however, that such indemnity shall only
apply to the extent that the additional liability for such Taxes
payable by the American Tax Group as a consequence of such events (on
a "but for" basis) exceeds $20,000,000.
(iv) If, as a result of any payment by American Tower to any
member of the American Tax Group or to Mergeparty pursuant to this
Section 6.17(c) (including this clause (iv)), Mergeparty (or any
member of its consolidated group for Federal income tax purposes) or
any member of the American Tax Group becomes liable in any taxable
year to pay any Taxes in excess of the Taxes they would have owed in
the absence of any such payment by American Tower, American Tower will
indemnify such Person for such Tax liability and make such Person
whole on an after-tax basis for such Tax liability.
(v) For the purposes of clauses 6.17(c)(ii) and (iii), net
operating losses of the American Tax Group shall be reduced and deemed
absorbed in the following order for each taxable year of the American
Tax Group: first, by all income unrelated to the transactions
contemplated by this Agreement of members of the American Tax Group
other than members of the American Tower Group for the entire
applicable taxable year of the American Tax Group; second, by income
of the American Tower Group described in clause 6.17(c)(ii); and
third, by income of the American Tax Group described in Section
6.17(c)(iii). Neither the American Tax Group nor Mergeparty (or any
member of its consolidated group for Federal income tax purposes)
shall have any claim under either Section 6.17(c)(ii) or (iii) for
additional Tax liability arising in subsequent taxable years solely as
a result of the absorption of net operating losses of the American Tax
Group in this manner.
(vi) American shall control any audit or contest relating to
Taxes attributable to the American Tax Group. To the extent such audit
or contest relates to Taxes that American Tower is obligated to
reimburse or indemnify American under this agreement, American shall
(x) regularly consult with American Tower in connection with such
audit or contest; (y) provide American Tower with periodic reports on
the status of such audit or contest; and (z) not enter into a
settlement agreement relating to such audit or contest that materially
prejudices American Tower without American Tower's consent.
(vii) If pursuant to any Tax audit or contest there is an
adjustment to any Taxes that are reimbursable or indemnifiable by the
American Tower Group to any member of the American Tax Group under
this Agreement, including clauses 6.17(c)(ii), (iii) and (iv), then
(x) any additional Taxes imposed on the American Tax Group as a
<PAGE> 43
result of such adjustment shall be indemnified by the American Tower
Group; and (y) any refund of Taxes paid to the American Tax Group as a
result of such adjustment of amounts previously indemnified by
American Tower shall be promptly paid over to American Tower
(including additional amounts to make American Tower whole on an
after-Tax basis, not exceeding amounts previously paid by American
Tower Group with regard to such Taxes).
(viii) American Tower shall not have the right to any refund,
credit (or other reduction) of Taxes realized by the American Tax
Group resulting from a carry back of a post-acquisition Tax attribute
of any of the American Tower Group into a Tax Return filed by the
American Tax Group.
(ix) American Tower, American and Mergeparty agree to attempt in
good faith to mutually agree on such terms as promptly as practicable
after the date hereof. If American Tower, American and Mergeparty
cannot agree on such terms, then any disagreement shall be resolved by
an arbitrator jointly selected by American Tower, American and
Mergeparty. The arbitrator shall be a law or accounting firm
nationally recognized in tax matters. The costs of such arbitration
shall be shared equally by American Tower and American. The decision
of the arbitrator shall be binding on all parties.
(x) American shall not elect to retain any net operating loss
carryovers or capital loss carryovers of the American Tower Group.
(xi) The indemnities of the American Tower Group described in
this Section 6.17(c) shall apply to all applicable Taxes whenever they
shall arise.
(xii) At the request of any member of the American Tower Group,
American agrees that it shall, and shall cause its Subsidiaries or
other appropriate Affiliates to, make and/or cooperate with members of
the American Tower Group (x) in making an election under Section
336(e) of the Code with respect to the Tower Separation, or (y) in
effecting intercompany sales or exchanges of assets designed to
achieve a comparable effect whereby deferred intercompany gains are
recognized immediately prior to the Tower Deconsolidation.
(d) The Tower Documentation shall provide that American shall obtain
all Governmental Authorizations, Private Authorizations or other third
party consents, and make any necessary Governmental Filings, necessary to
consummate the Tower Separation, except where the failure to obtain such
consents, in the aggregate, would not (i) be reasonably likely to have any
adverse effect on American, (ii) materially impair the ability of American
to perform its obligations under this Agreement or the Tower Documentation,
or (iii) materially delay or prevent the consummation of the Merger. The
Tower Documentation shall provide that the Tower Separation shall be done
in compliance with American's certificate of incorporation and by-laws and
in material compliance with all Applicable Laws.
(e) At the Effective Time, a member of the American Tower Group shall
assume (i) to the extent permitted by the landlord, the obligations under
the lease of 116 Huntington Avenue, Boston, Massachusetts, with respect to
the relevant portion of such leased premises or, if such permission is not
obtained, sublease such relevant portion, and (ii) all liabilities with
respect
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to which indemnification is provided under Section 6.17(a). American shall
cause all members of the American Tower Group to be released from all other
liabilities; provided, however, that American Tower agrees to reimburse
American for any expenses incurred in obtaining such release. American and
its Subsidiaries (other than the American Tower Group) shall release the
American Tower Group from all Claims by American or its Subsidiaries (other
than the American Tower Group), and the American Tower Group shall release
American and its other Subsidiaries from all Claims by the American Tower
Group, in each case except for Claims arising from or attributable to the
transactions contemplated by this Agreement or any Collateral Document or
otherwise asserted prior to the Effective Time.
(f) Except as otherwise provided by Section 6.19, American shall, or
shall cause its Subsidiaries to, as applicable, contribute, transfer or
convey to American Tower the assets described in Section 6.17 of the
American Disclosure Schedule, and American Tower shall assume all of
American's and such Subsidiaries' obligations with respect to such assets
to the extent so set forth.
(g) The Tower Documentation shall not include any representations or
warranties by American or American Tower relating to the business,
operations, assets, debts or liabilities of American and its Subsidiaries
(other than the American Tower Group) or the American Tower Group.
(h) On the Closing Date, the employees of American listed in Section
6.17 of the American Disclosure Schedule (the "Tower Employees") shall be
offered full-time employment by American Tower or one of its Subsidiaries.
Effective immediately prior to the Effective Time, American Tower shall
assume all obligations arising under any Plan or Benefit Arrangement
between American or any of its Subsidiaries and the Tower Employees other
than the rights, if any, of the Tower Employees with respect to the
American Options (which are being satisfied by American as provided in
Section 6.8) and all existing rights to indemnification. Such assumption
agreement shall provide that American and its Subsidiaries, effective as of
the Effective Time shall be indemnified by American Tower from all
obligations arising under such employment agreements or arrangements
(except in respect of any American Option which is not converted into an
option to acquire Tower Common Stock in accordance with the provisions of
Section 6.8(b) and all existing rights to indemnification). For a period of
eighteen (18) months following the consummation of the Merger, members of
the American Tower Group shall not actively solicit or seek to hire any
employees of American or its Subsidiaries not currently engaged in the
Tower Business, other than the Tower Employees, it being understood and
agreed that such agreement shall not be deemed to prevent members of the
American Tower Group from placing general advertisements in publications or
on the Internet or soliciting any such employee who (i) initiates
employment discussions with a member of the American Tower Group or (ii) is
not employed by American or Mergeparty or any of their respective
Subsidiaries on the date such a member first solicits such employee.
(i) At the request of American Tower and subject to the requirements
and restrictions imposed on American by any of its financing documents (as
from time to time amended), American shall, from time to time after the
date of the Original Merger Agreement and prior to the Effective Time,
permit American Tower to (i) acquire (whether by merger, stock or asset
acquisition or otherwise) additional businesses engaged in the business in
which American Tower is engaged, (ii) construct additional communication
towers, or (iii) make other capital improvements on assets owned or leased
by American Tower or its Subsidiaries, and in
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each such case make additional capital contributions in American Tower, or
make loans to American Tower, of the funds.
(j) The indemnification and other obligations referred to in this
Section shall survive the consummation of the Merger.
(k) The Tower Documentation shall provide that prior to the Effective
Time, American shall amend (i) its Section 401(k) Plan to permit a transfer
of the assets held thereunder for the benefit of the Tower Employees to a
Section 401(k) Plan to be established by American Tower and, prior to the
Effective Time, such assets will be so transferred (along with any
outstanding qualified domestic relations orders and loans) and (ii) any
other Benefit Plan arrangements with respect to Tower Employees to reflect
the Merger.
(l) The Tower Documentation shall provide that prior to the Effective
Time American shall, to the extent requested by Mergeparty, cause the
American Tower Group to perform its obligations under the Tower
Documentation.
(m) Mergeparty shall, at the written request of American in its sole
and absolute discretion, immediately prior to the Merger, and subject to
the satisfaction of all of the conditions to the consummation of the
transactions contemplated hereby, purchase, at their then fair market
value, shares of a new class of American preferred stock that constitutes
"Junior Securities" (as defined in the American Cumulative Preferred Stock)
in an amount (which shall not in the aggregate exceed $200,000,000)
necessary to enable (i) the Tower Stock Consideration to be delivered to
the holders of shares of American Common Stock and holders of American
Options pursuant to the Merger, and (ii) Tower Common Stock to be delivered
upon conversion of the American Convertible Preferred Stock, without
causing any conflict with, or breach or violation of, or default under, or
creating any right to accelerate any obligation or liability in, or causing
or creating any of the foregoing after the giving of notice or passage of
time or both with, of, under or in any indebtedness of American or the
American Cumulative Preferred Stock; provided, however, that anything in
this Section or elsewhere in this Agreement to the contrary
notwithstanding, in such event such new class of American preferred stock
shall remain outstanding immediately following the Effective Time.
(n) The Tower Documentation shall provide that American shall cause
American Tower to file with, and cause to be declared effective under the
Securities Act prior to the Effective Time by, the Commission a
registration statement to permit the delivery of shares of Tower Common
Stock by American upon conversion of American Convertible Preferred Stock
following the Effective Time under the Securities Act. Such Tower
Documentation shall further provide that American Tower shall maintain, on
customary terms, the effectiveness of such registration statement under the
Securities Act until such time as American Tower shall deliver to American
an opinion of legal counsel reasonably satisfactory to American and
Mergeparty that such registration statement is no longer required to permit
such delivery in accordance with the Securities Act.
6.18 Purchase Price Adjustment. (a) Within 90 days after the Closing Date,
Mergeparty shall prepare and deliver to American Tower (i) a consolidated
balance sheet (the "Closing Balance Sheet") of American and its Subsidiaries
(other than the Tower Subsidiaries) (the "Post-Closing American Group"),
prepared from the books and records of the Post-Closing American Group, and (ii)
a statement (the "Closing Statement") setting forth (A) Working Capital (as
defined below) as of the Effective Time
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<PAGE> 46
("Closing Working Capital") and (B) Net Debt (as defined below) as of the
Effective Time ("Closing Net Debt"), together with a certificate of Mergeparty's
chief financial officer that the Closing Statement has been prepared in
accordance with this Section 6.18.
During the 45-day period following American Tower's receipt of the Closing
Statement, American Tower shall be permitted to review (and make copies of) the
working papers of Mergeparty relating to the Closing Statement. The Closing
Statement shall become final and binding upon the parties on the forty-sixth day
following delivery thereof, unless American Tower gives written notice of its
disagreement with the Closing Statement ("Notice of Disagreement") to Mergeparty
prior to such date. Any Notice of Disagreement shall (i) specify in reasonable
detail the nature of any disagreement so asserted, (ii) only include
disagreements based on Closing Working Capital or Closing Net Debt (or the
components thereof) not being calculated in accordance with this Section 6.18
and (iii) be accompanied by a certificate of American Tower's chief financial
officer that he or she concurs with each of the positions taken by American
Tower in the Notice of Disagreement. If a Notice of Disagreement is received by
Mergeparty in a timely manner, then the Closing Statement (as revised in
accordance with clause (A) or (B) immediately following) shall become final and
binding on the earlier of (A) the date Mergeparty and American Tower resolve in
writing any differences they have with respect to the matters specified in the
Notice of Disagreement or (B) the date any disputed matters are finally resolved
in writing by the Accounting Firm (as defined below).
During the 30-day period following delivery of a Notice of Disagreement,
Mergeparty and American Tower shall seek in good faith to resolve in writing any
differences which they may have with respect to the matters specified in the
Notice of Disagreement. During such period Mergeparty shall have access to (and
shall be permitted to make copies of) the working papers of American Tower
prepared in connection with the Notice of Disagreement. At the end of such
30-day period, Mergeparty and American Tower shall submit to an independent
accounting firm (the "Accounting Firm") for review and resolution any and all
matters which remain in dispute and which were properly included in the Notice
of Disagreement and each of Mergeparty and American Tower shall submit a
memorandum setting forth in reasonable detail the basis for its positions. The
Accounting Firm shall be a nationally recognized independent public accounting
firm agreed upon by Mergeparty and American Tower in writing. Mergeparty and
American Tower shall jointly use all reasonable efforts to cause the Accounting
Firm to render a decision within thirty (30) days following submission or as
promptly thereafter as is practicable. Mergeparty and American Tower agree that
judgment may be entered upon the determination of the Accounting Firm in any
court having jurisdiction over the party against which such determination is to
be enforced. The cost of any dispute resolution (including the fees and expenses
of the Accounting Firm and reasonable attorney fees and expenses of the parties)
pursuant to this Section 6.18 shall be borne by Mergeparty and American Tower in
inverse proportion as they may prevail on matters resolved by the Accounting
Firm, which proportionate allocations shall also be determined by the Accounting
Firm at the time the determination of the Accounting Firm is rendered on the
merits of the matters submitted.
(b) Subject to Section 6.18(d), if Closing Working Capital is less than (i)
$60,000,000 in the event the Closing Date is on or prior to March 31, 1998 or
(ii) $70,000,000 in the event the Closing Date is after March 31, 1998 (the "WC
Amount"), American Tower shall, and if Closing Working Capital is greater than
the WC Amount, Mergeparty shall, owe the other the amount of such difference.
The term "Working Capital" shall mean Current Assets minus Liabilities (in each
case as defined below). The terms "Current Assets" and "Liabilities" shall mean
the current assets and liabilities of the Post-Closing American Group calculated
in accordance with GAAP except that (i) outstanding principal amount of
indebtedness and liquidation preference of preferred stock shall be excluded,
(ii) cash shall be excluded, (iii) accruals for Taxes shall be included, except
that (A) Tax liabilities which American Tower is
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obligated to indemnify American and its Subsidiaries (other than the American
Tower Group) pursuant to the provisions of the Tower Documentation, and deferred
income Tax assets and liabilities that exist or arise from differences in basis
for Tax and financial reporting purposes attributable to acquisitions, exchanges
and dispositions or attributable to depreciation and amortization, shall not be
taken into account, (B) Tax benefits arising from the exercise or cancellation
of options between the date of the Original Merger Agreement and the Effective
Time shall not be taken into account, and (C) accruals for Taxes relating to
acquisitions, exchanges or dispositions shall be determined in accordance with
American's past accounting practices, (iv) Current Assets shall be increased by
an amount equal to the sum of (x) the amount derived by multiplying the Cash
Consideration by the number of shares of American Common Stock held in its
treasury as of the Effective Date and (y) the aggregate amount of the spread of
$44.00 over the exercise price of each American Option outstanding on the date
of the Original Merger Agreement terminated or cancelled prior to the Effective
Time or for which the holder has elected to receive an option to acquire Tower
Common Stock in lieu thereof, less the Tax benefit that would have been received
with respect to the exercise of such options, (v) Current Assets shall be (A)
increased (if the number of shares of American Common Stock issuable upon
conversion of the American Convertible Preferred Stock is fewer than 3,750,000
(or if the Tower Merger Effective Time shall have occurred, 3,750,000 multiplied
by the American Conversion Fraction)) by an amount equal to the amount derived
by multiplying the Cash Consideration by the excess of (I) 3,750,000 (or if the
Tower Merger Effective Time shall have occurred, 3,750,000 multiplied by the
American Conversion Fraction) less (II) the number of shares of American Common
Stock issuable upon conversion of the American Convertible Preferred Stock or
(B) decreased (if the number of shares of American Common Stock issuable upon
conversion of the American Convertible Preferred Stock is greater than 3,750,000
(or if the Tower Merger Effective Time shall have occurred, 3,750,000 multiplied
by the American Conversion Fraction) by an amount equal to the amount derived by
multiplying the Cash Contribution by the excess of (I) the number of shares of
American Common Stock issuable upon conversion of the American Convertible
Preferred Stock less (II) 3,750,000 (or if the Tower Merger Effective Time shall
have occurred, 3,750,000 multiplied by the American Conversion Fraction), (vi)
liabilities from the radio broadcasting rights contracts for St. Louis Rams
games shall be limited to $3,300,000 and (vii) amounts owed by American Tower to
American pursuant to Section 9.3(b) shall be excluded from Current Assets, and
liabilities of American, if any, with respect to such amounts shall be excluded
from Liabilities (it being understood that neither American nor Mergeparty shall
be responsible for any such liabilities).
(c) Subject to Section 6.18(d), if Closing Net Debt is greater than the
Debt Amount (as defined below) minus $50,419,000, minus cash received by the
Post-Closing American Group in respect of options exercised between the date of
the Original Merger Agreement and the Effective Time (the "CD Amount"), American
Tower shall, and if Closing Net Debt is less than the CD Amount, Mergeparty
shall, owe the other the amount of such difference. "Debt Amount" shall mean
$1,066,721,000, minus the consideration that was expected to be paid (as set
forth on Section 6.10(a) of the American Disclosure Schedule) with respect to
all acquisitions set forth in Section 6.10(a) of the American Disclosure
Schedule which were not consummated prior to the Closing Date, plus the
consideration that was expected to be received (as set forth in Section 6.10(a)
of the American Disclosure Schedule) with respect to all dispositions set forth
in Section 6.10(a) of the American Disclosure Schedule which were not
consummated prior to the Closing Date, plus the consideration paid in connection
with acquisitions consummated prior to the Closing Date which were not listed in
Section 6.10(a) of the American Disclosure Schedule, minus the consideration
received in connection with dispositions consummated prior to the Closing Date
which were not listed in Section 6.10(a) of the American Disclosure Schedule.
The term "Net Debt" shall mean outstanding principal amount of indebtedness
(including, without duplication, guarantees of indebtedness) plus outstanding
liquidation preference of all preferred stock (other than the American
Convertible Preferred Stock) minus cash.
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(d) Amounts owed pursuant to the first sentence of Section 6.18(b) and the
first sentence of 6.18(c) shall be aggregated or netted, as appropriate (the
resulting amount, the "Adjustment Amount"). In the event that the Adjustment
Amount minus $10,000,000 is greater than $0 (the "Final Adjustment Amount"), the
party that owes the Final Adjustment Amount shall make payment by wire transfer
of immediately available funds of the Final Adjustment Amount together with
interest thereon at a rate of interest equal to the lesser of (i) 10% per annum
and (ii) if American Tower is being charged a rate of interest by a financial
institution, such rate, but in not event lower than the prime rate as reported
in the Wall Street Journal on the date the Closing Statement becomes final and
binding on the parties, calculated on the basis of the actual number of days
elapsed divided by 365, from the date of the Effective Time to the date of
actual payment.
(e) The scope of the disputes to be resolved by the Accounting Firm is
limited to whether the Closing Statement was prepared in compliance with the
requirements of this Section 6.18 and the allocation of the costs of dispute
resolution, and the Accounting Firm is not to make any other determination.
(f) During the period of time from and after the delivery of the Closing
Statement to American Tower through the date the Closing Statement becomes final
and binding on Mergeparty, American and American Tower, Mergeparty shall cause
the Post-Closing American Group to afford to American Tower and any accountants,
counsel or financial advisors retained by American Tower in connection with the
adjustment contemplated by this Section 6.18 reasonable access (with the right
to make copies) during normal business hours to the books and records of the
Post-Closing American Group to the extent relevant to the adjustment
contemplated by this Section 6.18.
(g) Any adjustment pursuant to this Section 6.18 shall be taken into
account in the calculation of Tax liability pursuant to clause 6.17(c)(iii), and
any increase or decrease in the amount of Taxes that are reimbursable or
indemnifiable by the American Tower Group as a result of any such adjustment
shall be treated as an adjustment to Taxes for purposes of clause 6.17(c)(vii)
6.19 Tower Leases. In connection with the Tower Separation, Mergeparty
and American shall agree on the definitive documentation ("Tower Leases") to be
executed by American and American Tower with respect to certain broadcasting
towers set forth in Section 6.17(i) of the American Disclosure Schedules
("Towers"). The markets in which such Towers are located and the annual "market
price" for each antenna are set forth in Exhibit "B." Except as set forth in
Section 6.17(i) of the American Disclosure Schedule, such Towers are now owned
or leased by American and shall become the property of American Tower. Each of
the Tower Leases shall contain standard and customary terms and conditions and
Mergeparty and American specifically agree to the inclusion of the following in
each of the Tower Leases:
(a) except as provided in clause (b) below with respect to those Tower
Leases set forth in Section 6.19 of the American Disclosure Schedule, each
Tower Lease shall be for a term of twenty (20) years with four (4) renewal
periods of five (5) years each, each such renewal to be upon the same terms
and conditions as the original Tower Lease;
(b) Prior to the Effective time, American shall use its best efforts
to extend the term of each lease set forth in Section 6.19 of the American
Disclosure Schedule ("Land Leases") to a minimum duration of twenty (20)
years, inclusive of renewal periods, if any, and provide Mergeparty with
respect to the Towers subject to the extended Land Leases, tower leases
with the equivalent benefits set forth in clauses (c), (d) and (e) and for
a minimum duration of twenty (20) years ("Extended Tower Leases"). With
respect to any such Land Lease that is not so extended
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(except with respect to the Land Lease for KUFX(FM), which present term of
approximately eighteen (18) remaining years shall be deemed to satisfy the
foregoing requirement of a minimum duration of twenty (20) years),
American, American Tower and Mergeparty shall negotiate in good faith to
agree upon definitive documentation to provide Mergeparty with respect to
the Towers subject to such Land Leases, tower leases with the benefits
equivalent of such Extended Tower Leases or mutually agreed to alternative
arrangements providing equivalent value to Mergeparty;
(c) each Tower Lease shall provide that no payments shall be payable
by Mergeparty for a period of three (3) years from the Effective Time; for
the next three (3) years the payments shall be as follows: one-third (1/3)
of the market price as set forth in Exhibit B corresponding to each FM
antenna (or AM/FM antenna) for year four (4); two-thirds (2/3) for year
five (5) and full market price for year six (6); thereafter, for the
balance of the term and any renewals thereof, the payments shall be the
market price, together with an annual increase every year, beginning for
year seven (7), of the lesser of five percent (5%) or the Consumer Price
Index for all Urban Consumers over the previous year's payments (except
with respect to San Jose (KUFX) and Boston (WNFT) which such payments shall
begin at the Effective Time, with respect to Mergeparty, and will begin on
January 1, 1998 as between American and American Tower). Notwithstanding
the foregoing, Mergeparty acknowledges that Tower Lease payments at the
full "market price" indicated on Exhibit B by American to American tower
may commence upon such leases becoming the property of American Tower and
shall continue until the Effective Time;
(d) all expenses for taxes, insurance, maintenance and utilities in
respect of each Tower shall be paid by American Tower; and
(e) American Tower will assume the obligation and responsibility for
complying with all Applicable Law with respect to the Towers.
6.20 Affiliates of American. American shall use its best efforts to cause
each principal executive officer, each director and each other person who is an
"affiliate" of American for purposes of Rule 145 under the Securities Act at the
times each of this Agreement and the Tower Merger Agreement is submitted for a
vote of the holders of shares of American Common Stock to deliver to American
Tower on or prior to the Effective Time and the Tower Merger Effective Time,
respectively, a written agreement (an "Affiliate Agreement"), reasonably
satisfactory in form, scope and substance to American and Mergeparty, to the
effect that such Person will not offer to sell, assign, transfer or otherwise
dispose of any shares of Tower Common Stock issued in the Merger or the Tower
Merger, as the case may be, except, in each case, pursuant to an effective
registration statement or in compliance with Rule 145, or in a transaction
which, in the opinion of legal counsel reasonably satisfactory to American and
Mergeparty, is exempt from the registration requirements of the Securities Act.
ARTICLE 7
CLOSING CONDITIONS
7.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to effect the Merger shall, except as
hereinafter provided in this Section, be subject to the satisfaction at or prior
to the Closing Date of the following conditions, any or all of which may be
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waived, in whole or in part, to the extent permitted by Applicable Law:
(a) the Required Vote shall have been obtained;
(b) the FCC shall have issued the FCC Order (as defined below)
approving the applications for transfer of control of American's FCC
Licenses in connection with the transactions contemplated herein, and the
FCC Order shall have been obtained without the imposition of conditions
that would have a Material Adverse Effect on Mergeparty's television and
radio broadcasting business; provided that without triggering Mergeparty's
right to approve such conditions or restrictions, the FCC Order (i) may
condition consummation of the Merger on Mergeparty complying with the
numerical limits on local multiple radio ownership imposed by 47 C.F.R.
Section 73.3555(a) by affording Mergeparty a period of at least six (6)
months following the Effective Time within which to comply with such rule
through the use of divestiture trusts on terms and conditions required by
the FCC, provided further, however, that to the extent that the FCC
authority for such divestiture trusts provides for a period of less than
six (6) months, (A) American has the right to postpone the Effective Time
(and, to the extent necessary, the Termination Date), so that Mergeparty is
afforded the six (6) month divestiture period, whether before or after the
Effective Time and (B) if American exercises such right, Mergeparty's right
to approve such condition shall not be triggered, and (ii) may grant
Mergeparty temporary, rather than permanent, waivers of the
"one-to-a-market" rule, 47 C.F.R. Section 73.3555(c), so long as such
temporary waivers shall remain in effect until at least six (6) months
following the effective date of FCC action concluding the ongoing
rulemaking proceeding in MM Docket Nos. 91-221, 87-8 (FCC 94-322) or a
successor rulemaking proceeding pending at the time of the grant of the FCC
Order, that considers the "one-to-a-market" rule. The "FCC Order" shall be
an action by the FCC approving the transfer of the American FCC Licenses
with respect to which, except as may be waived in writing by Mergeparty in
its sole discretion, (i) no timely request for stay, petition for
reconsideration or appeal or sua sponte action of the FCC with comparable
effect is pending, or (ii) if any of the foregoing is pending, in the
judgment of Mergeparty it lacks any substantial merit or is contrary to
established FCC precedent, or (iii) if it were to be so granted, it would
not have a Material Adverse Effect on Mergeparty's television and radio
broadcasting business; and as to which the thirty (30) day time period
specified in 47 U.S.C. Section 405(a) for initiating a petition for
reconsideration of the grant of the FCC Order has expired;
(c) no Authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any Law (whether temporary, preliminary or
permanent) that remains in effect and restrains, enjoins or otherwise
prohibits consummation of the Merger; and
(d) the waiting period applicable to the consummation of the Merger
under the Hart-Scott-Rodino Act shall have expired or been terminated.
7.2 Conditions to Obligations of Mergeparty. The obligation of Mergeparty
and Mergeparty Subsidiary to effect the Merger shall be subject to the
satisfaction of the following conditions, any or all of which may be waived, in
whole or in part, to the extent permitted by Applicable Law:
(a) American shall have furnished Mergeparty, with an opinion, dated
the Closing Date of Dow, Lohnes & Albertson, FCC counsel for American,
substantially in the form attached hereto as Exhibit C;
(b) (i) the representations and warranties of American set forth in
this Agreement
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(other than in Sections 4.1(e), 4.11 and 4.13) shall be true and correct as
of the date of the Original Merger Agreement and as of the Closing Date as
though made on and as of the Closing Date except (x) to the extent such
representations and warranties expressly speak as of an earlier date (in
which case such representations and warranties shall be true and correct as
of such earlier date) and (y) to the extent that the failure of such
representations and warranties to be true and correct, individually or in
the aggregate, would not have a Material Adverse Effect on American;
provided, however, that for the purpose of this clause (y), representations
and warranties that are qualified as to materiality (including by reference
to "Material Adverse Effect") shall not be deemed to be so qualified, and
(ii) the representations and warranties of American set forth in Sections
4.1(e), 4.11 and 4.13 of this Agreement shall be true and correct in all
material respects as of the date of the Original Merger Agreement and as of
the Closing Date; and
(c) American shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior
to the Closing Date;
(d) between the date of the Original Merger Agreement and the Closing
Date, except as contemplated by this Agreement, and except as set forth in
Section 4.3 of the American Disclosure Schedule, there shall not have
occurred and be continuing any Material Adverse Change in American.
7.3 Conditions to Obligations of American. The obligation of American to
effect the Merger shall be subject to the satisfaction of the following
conditions, any or all of which may be waived, in whole or in part, to the
extent permitted by Applicable Law:
(a) the representations and warranties of Mergeparty set forth in this
Agreement shall be true and correct as of the date of the Original Merger
Agreement and as of the Closing Date as though made on and as of the
Closing Date except (x) to the extent such representations and warranties
expressly speak as of an earlier date (in which case such representations
and warranties shall be true and correct as of such earlier date) and (y)
to the extent that the failure of such representations and warranties to be
true and correct, individually or in the aggregate, would not have a
Material Adverse Effect on Mergeparty; provided, however, that for the
purpose of this clause (y), representations and warranties that are
qualified as to materiality (including by reference to "Material Adverse
Effect") shall not be deemed to be so qualified.; and
(b) Mergeparty shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior
to the Closing Date.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time prior to the
Closing Date, whether before or after receipt by American of the Required Vote:
(a) by mutual written consent of American, Mergeparty and Mergeparty
Subsidiary;
(b) by either Mergeparty or American if any Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered
any Law that shall have become
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final and nonappealable and that restrains, enjoins or otherwise prohibits
consummation of the Merger, unless the party seeking such restraint,
injunction or prohibition or any Affiliate thereof was the terminating
party;
(c) by either Mergeparty or American if the Merger shall not have been
consummated by the Termination Date for any reason; provided, however, that
the right to terminate this Agreement under this Section 8.1(c) shall not
be available to any party whose action or failure to act (or the action or
failure to act of any Affiliate) has been a principal cause of or resulted
in the failure of the Merger to occur on or before such date and such
action or failure to act constitutes a breach of this Agreement;
(d) by either Mergeparty or American if the Required Vote shall not
have been obtained at the American Stockholders Meeting duly convened
therefor or at any adjournment or postponement thereof or by written
consent;
(e) by American in the event (i) American is not in material breach of
this Agreement and none of its representations or warranties shall have
been or become and continue to be untrue in any material respect, and (ii)
Mergeparty is in material breach of this Agreement or any of its
representations or warranties shall have become and continue to be untrue
in any manner that would cause the condition in Section 7.3(a) not to be
satisfied, and such a breach or untruth exists and is not capable of being
cured by and will prevent or delay consummation of the Merger by or beyond
the Termination Date; or
(f) by Mergeparty in the event (i) Mergeparty is not in material
breach of this Agreement and none of its representations or warranties
shall have been or become and continue to be untrue in any material
respect, and (ii) American is in material breach of this Agreement or any
of its representations or warranties shall have become and continue to be
untrue in any manner that would cause the condition in Section 7.2(b) not
to be satisfied, and such a breach or untruth exists and is not capable of
being cured by and will prevent or delay consummation of the Merger by or
beyond the Termination Date.
The term "Termination Date" shall mean December 31, 1998, as such date may from
time to time be extended pursuant to the provisions of Section 7.1(b) or by
mutual agreement of the parties.
The right of Mergeparty or American to terminate this Agreement pursuant to
this Section shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of either party, any Person controlling
any such party or any of their respective Representatives, whether prior to or
after the execution of this Agreement.
8.2 Effect of Termination.
Except as provided in Sections 6.1 (Access to Information;
Confidentiality), 6.3 (Public Announcements), and 9.3 (Fees, Expenses and other
Payments) and this Section, in the event of the termination of this Agreement
pursuant to Section 8.1, or in the event the Merger shall not have become
effective prior to the end of business on the day prior to the Termination Date,
this Agreement shall forthwith become void and have no effect, without any
liability on the part of any party, or any of its respective stockholders,
officers or directors, to the other; provided, however, that such termination
shall not relieve any party from liability for any breach of any of its
warranties, covenants or agreements set forth in this Agreement and, provided,
however that such termination will not terminate the Confidentiality Agreement.
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ARTICLE 9
GENERAL PROVISIONS
9.1 Amendment. This Agreement may be amended from time to time by the
parties hereto at any time prior to the Closing Date but only by an instrument
in writing signed by the parties hereto and, after receipt of the Required Vote,
subject, in the case of American, to Applicable Law.
9.2 Waiver. At any time prior to the Closing Date, except to the extent not
permitted by Applicable Law, Mergeparty or American may, either generally or in
a particular instance and either retroactively or prospectively, extend the time
for the performance of any of the obligations or other acts of the other,
subject, however, to the provisions of Section 8.1, waive any inaccuracies in
the representations and warranties of the other contained herein or in any
document delivered pursuant hereto, and waive compliance by the other with any
of the agreements, covenants, conditions or other provision contained herein.
Any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party or parties to be bound thereby.
9.3 Fees, Expenses and Other Payments. (a) Subject to the provisions of
paragraph (b) of this Section 9.3, all costs and expenses incurred in connection
with any filing fees (including without limitation Hart-Scott-Rodino Act filings
and FCC filing fees), transfer Taxes, sales Taxes, document stamps or other
charges levied by any Authority in connection with this Agreement and the Merger
shall be borne equally by Mergeparty and American. Subject as aforesaid, all
other costs and expenses incurred in connection with the negotiation,
preparation, performance and enforcement of this Agreement (including all fees
and expenses of counsel, financial advisors, accountants, and other consultants,
advisors and representatives for all activities of such persons undertaken
pursuant to this Agreement) incurred by the parties hereto, shall be borne
solely and entirely by the party which has incurred such costs and expenses,
except to the extent, if any, otherwise specifically set forth in this
Agreement.
(b) Promptly following the Effective Time, American Tower shall pay to
American in immediately available funds (and make American whole on an after-tax
basis under the principles set forth in Section 6.17(c)(iv)) an amount equal to
the aggregate costs and expenses incurred by American in connection with any
agreement, arrangement or understanding (other than the Tower Documentation)
entered into by American, ATS Mergercorp or any member of the American Tower
Group following the date of the Original Merger Agreement (x) for the benefit of
any member of the American Tower Group, (y) in contemplation of the Tower
Separation or (z) in connection with the sale, assignment, transfer or other
disposition of shares of American Tower Common Stock, including without
limitation such costs and expenses incurred by American to Merrill Lynch Pierce
Fenner & Smith Incorporated and any such costs and expenses incurred by American
to CSFB in excess of those set forth in the engagement letter between American
and CSFB provided by American to Mergeparty in accordance with Section 4.14 of
the Original Merger Agreement.
(c) In the event that this Agreement is terminated by any party pursuant to
8.1(d), American shall promptly, but in no event later than two (2) days after
the date of such termination, pay Mergeparty a fee equal to $35 million in
immediately available funds, plus Expenses. "Expenses" shall mean reasonable and
reasonably documented out-of-pocket fees and expenses incurred or paid by or on
behalf of Mergeparty in connection with the Merger or the consummation of any of
the transactions
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contemplated by this Agreement, including all fees and expenses of counsel,
commercial banks, investment banking firms, accountants, experts and consultants
to Mergeparty in an aggregate amount not to exceed $5 million.
9.4 Notices. All notices and other communications which by any provision of
this Agreement are required or permitted to be given shall be given in writing
and shall be (a) mailed by first-class or express mail, postage prepaid, or by
recognized courier service, (b) sent by telecopy or other form of rapid
transmission, confirmed by mailing (by first class or express mail, postage
prepaid, or by recognized courier service) written confirmation at substantially
the same time as such rapid transmission, or (c) personally delivered to the
receiving party (which if, other than an individual, shall be an officer or
other responsible party of the receiving party). All such notices and
communications shall be mailed, sent or delivered as follows:
(a) If to Mergeparty:
CBS Corporation
11 Stanwix Street
Pittsburgh, Pennsylvania 15222
Attention: Louis J. Briskman, Esq.
Telecopier No.: (412) 642-5224
with a copy to:
Cravath, Swaine & Moore
825 Eighth Avenue
New York, New York 10019
Attention: Allen Finkelson, Esq.
Telecopier No.: (212) 474-3700
(b) If to American:
American Radio Systems Corporation
116 Huntington Avenue
Boston, Massachusetts 02116
Attention: Steven B. Dodge, President and Chief Executive Officer
Telecopier No.: (617) 375-7575
with a copy to:
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
Attention: Norman A. Bikales, Esq.
Telecopier No.: (617) 338-2880
or to such other person(s), telex or facsimile number(s) or address(es) as the
party to receive any such communication or notice may have designated by written
notice to the other party.
9.5 Specific Performance; Other Rights and Remedies. Each party recognizes
and agrees
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that in the event the other party should refuse to perform any of its
obligations under this Agreement or any Collateral Document, the remedy at law
would be inadequate and agrees that for breach of such provisions, each party
shall, in addition to such other remedies as may be available to it at law or in
equity or as provided in Article 8, be entitled to injunctive relief and to
enforce its rights by an action for specific performance to the extent permitted
by Applicable Law. Each party hereby waives any requirement for security or the
posting of any bond or other surety in connection with any temporary or
permanent award of injunctive, mandatory or other equitable relief. Nothing
herein contained shall be construed as prohibiting each party from pursuing any
other remedies available to it under Applicable Law or pursuant to the
provisions of this Agreement for such breach or threatened breach, including
without limitation the recovery of damages, including, to the extent awarded in
any Legal Action, punitive, incidental and consequential damages (including
without limitation damages for diminution in value and loss of anticipated
profits) or any other measure of damages permitted by Applicable Law.
9.6 Survival of Representations, Warranties, Covenants and Agreements. None
of the representations and warranties in this Agreement shall survive the
Merger, and after effectiveness of the Merger neither Mergeparty, American or
their respective officers, directors or shareholders shall have any further
obligation with respect thereto. This Section 9.6 shall not limit any covenant
or agreement of the parties which by its terms contemplates performance after
the Effective Time.
9.7 Severability. If any term or provision of this Agreement shall be held
or deemed to be, or shall in fact be, invalid, inoperative, illegal or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the
conflicting of any provision with any constitution or statute or rule of public
policy or for any other reason, such circumstance shall not have the effect of
rendering the provision or provisions in question invalid, inoperative, illegal
or unenforceable in any other jurisdiction or in any other case or circumstance
or of rendering any other provision or provisions herein contained invalid,
inoperative, illegal or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative, illegal or unenforceable
provision had never been contained herein and such provision reformed so that it
would be valid, operative and enforceable to the maximum extent permitted in
such jurisdiction or in such case. Notwithstanding the foregoing, in the event
of any such determination, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by Applicable Law in an acceptable
manner to the end that the Merger is fulfilled and consummated to the maximum
extent possible.
9.8 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument, binding upon all of the parties. In
pleading or proving any provision of this Agreement, it shall not be necessary
to produce more than one of such counterparts.
9.9 Section Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
9.10 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by, and construed in accordance
with, the Applicable Laws of the United States of America and the laws of the
State of New York applicable to contracts made and performed in such State and,
in any event, without giving effect to any choice or conflict of laws provision
or rule that would cause the application of domestic substantive laws of any
other jurisdiction, except to the extent
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the corporate laws of the State of Delaware are applicable. Anything in this
Agreement to the contrary notwithstanding, in the event of any dispute between
the parties which results in a Legal Action, the prevailing party shall be
entitled to receive from the non-prevailing party reimbursement for reasonable
legal fees and expenses incurred by such prevailing party in such Legal Action.
9.11 Further Acts. Each party agrees that at any time, and from time to
time, before and after the consummation of the transactions contemplated by this
Agreement, it will do all such things and execute and deliver all such
Collateral Documents and other assurances, as the other party or its counsel
reasonably deems necessary or desirable in order to carry out the terms and
conditions of this Agreement and the transactions contemplated hereby or to
facilitate the enjoyment of any of the rights created hereby or to be created
hereunder.
9.12 Entire Agreement; No Other Representations or Agreements. This
Agreement (together with the Disclosure Schedules and the Exhibits and the other
Collateral Documents delivered or to be delivered in connection herewith)
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes all prior agreements, arrangements, covenants,
promises, conditions, undertakings, inducements, representations, warranties and
negotiations, expressed or implied, oral or written, between the parties, with
respect to the subject matter hereof. Each of the parties is a sophisticated
legal entity that was advised by experienced counsel and, to the extent it
deemed necessary, other advisors in connection with this Agreement. Each of the
parties hereby acknowledges that (a) neither party has relied or will rely in
respect of this Agreement or the transactions contemplated hereby upon any
document or written or oral information previously furnished to or discovered by
it or its representatives, other than this Agreement (including the Exhibits and
the Disclosure Schedules and the other Collateral Documents) or such of the
foregoing as are delivered at the Closing, (b) there are no covenants or
agreements by or on behalf of either party hereto or any of its respective
Affiliates or representatives other than those expressly set forth in this
Agreement and the Collateral Documents, and (c) the parties' respective rights
and obligations with respect to this Agreement and the events giving rise
thereto will be solely as set forth in this Agreement and the Collateral
Documents. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH PARTY HERETO
AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
AGREEMENT, NEITHER AMERICAN NOR MERGEPARTY MAKES ANY OTHER REPRESENTATIONS OR
WARRANTIES, AND EACH HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES
MADE BY ITSELF OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL
AND LEGAL ADVISORS OR OTHER REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND
DELIVERY OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY,
NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR THE OTHER'S
REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY
ONE OR MORE OF THE FOREGOING.
9.13 Assignment. This Agreement shall not be assignable by any party and
any such assignment shall be null and void, except that it shall inure to the
benefit of and be binding upon any successor to each party by operation of Law,
including by way of merger, consolidation or sale of all or substantially all of
its assets, and each party may assign its rights and remedies hereunder to any
bank or other financial institution which has loaned funds or otherwise extended
credit to it.
9.14 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party and their permitted successors and assigns,
and nothing in this Agreement, express or implied, is intended to or shall
confer upon any Person any right, benefit or remedy of any nature
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whatsoever under or by reason of this Agreement, except as otherwise provided in
Articles 2 and 3 and Sections 6.8(d), 6.12 and 9.13.
9.15 Mutual Drafting. This Agreement is the result of the joint efforts of
Mergeparty and American, and each provision hereof has been subject to the
mutual consultation, negotiation and agreement of the parties and there shall be
no construction against either party based on any presumption of that party's
involvement in the drafting thereof.
9.16 Obligations of American and of Mergeparty. Whenever this Agreement
requires a Subsidiary of American to take any action, such requirement shall be
deemed to include an undertaking on the part of American to cause such
Subsidiary to take such action. Whenever this Agreement requires a Subsidiary of
Mergeparty to take any action, such requirement shall be deemed to include an
undertaking on the part of Mergeparty to cause such Subsidiary to take such
action and, after the Effective Time, on the part of the Surviving Corporation
to cause such Subsidiary to take such action.
9.17 Mergeparty Agent for Mergeparty Subsidiary. Anything in this Agreement
to the contrary notwithstanding, Mergeparty Subsidiary hereby grants Mergeparty
an irrevocably power of attorney and hereby irrevocably appoints Mergeparty its
agent for all purposes of this Agreement, including without limitation for the
purpose of executing and delivering extensions of the time for the performance
of any of the obligations or other acts of Mergeparty, waivers, terminations or
amendments, and any action taken by Mergeparty pursuant to such power of
attorney and agency, and any such extension, waiver, termination or amendment
executed and delivered by Mergeparty, shall be binding upon Mergeparty
Subsidiary whether or not it has specifically approved such action or executed
such extension, waiver, termination or amendment.
9.18 Original Merger Agreement. Notwithstanding anything to the contrary in
Section 9.3 of the Original Merger Agreement, this Agreement shall not amend or
restate the Original Merger Agreement, and the Original Merger Agreement shall
continue in full force and effect without any amendment or modification thereof
pursuant to the provisions of this Agreement, until such time as this Agreement
shall have been approved and adopted by the Required Vote.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, American, Mergeparty and Mergeparty Subsidiary have
caused this Amended and Restated Agreement and Plan of Merger to be executed,
pursuant to the authority and approval of each of their respective Boards of
Directors, as of the date first written above by their respective officers
thereunto duly authorized.
American Radio Systems Corporation
By:
---------------------------------------
Name: Steven B. Dodge
Title:Chairman of the Board, President and
Chief Executive Officer
CBS Corporation
By:
---------------------------------------
Name:
Title:
R Acquisition Corp.
By:
---------------------------------------
Name:
Title:
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APPENDIX A
DEFINITIONS
ACCOUNTING FIRM shall have the meaning given to it in Section 6.18.
ADJUSTMENT AMOUNT shall have the meaning given to it in Section 6.18(d).
ADVERSE, ADVERSELY, when used alone or in conjunction with other terms
(including without limitation "Affect," "Change" and "Effect") shall mean any
Event that has adversely affected or is reasonably likely to adversely affect
(a) the validity or enforceability of this Agreement or the likelihood of
consummation of the Merger, (b) the business, properties, financial condition or
results of operations of American and its Subsidiaries, taken as a whole, or the
Mergeparty and its Subsidiaries, taken as a whole, as the case may be, or (c)
American's or Mergeparty's, as the case may be, ability to fulfill its
obligations under the terms of this Agreement. Notwithstanding the foregoing,
and anything in this Agreement to the contrary notwithstanding, any Event
affecting the radio broadcasting industry or the national or any regional or
market economy generally shall not be deemed to constitute an Adverse Change,
have an Adverse Effect or to Adversely Affect within the meaning of any of the
foregoing clauses (a) through (c).
AFFILIATE, AFFILIATED shall mean, with respect to any Person, (a) any other
Person at the time directly or indirectly controlling, controlled by or under
direct or indirect common control with such Person, any other Person of which
such Person at the time owns, or has the right to acquire, directly or
indirectly, twenty percent (20%) or more of any class of the capital stock or
beneficial interest, (c) any other Person which at the time owns, or has the
right to acquire, directly or indirectly, twenty percent (20%) or more of any
class of the capital stock or beneficial interest of such Person, (d) any
executive officer or director of such Person, (e) with respect to any
partnership, joint venture or similar Entity, any general partner thereof, and
(f) when used with respect to an individual, shall include any member of such
individual's immediate family or a family trust.
AFFILIATE AGREEMENT shall have the meaning given to it in Section 6.20.
AGREEMENT shall have the meaning given to it in the third "Whereas"
paragraph and shall include any amendments executed and delivered by the parties
pursuant to the provisions of Section 9.1.
AMERICAN shall have the meaning given to it in the Preamble.
AMERICAN BROKERED STATIONS shall mean the radio broadcast stations which
American has the right to acquire, but which as of the date of the Original
Merger Agreement it is operating pursuant to time brokerage, local marketing or
other similar agreements.
AMERICAN CLASS A COMMON shall have the meaning given to it in
Section 3.1(d).
AMERICAN CLASS B COMMON shall have the meaning given to it in
Section 3.1(d).
AMERICAN CLASS C COMMON shall have the meaning given to it in
Section 3.1(d).
AMERICAN COMMON STOCK shall have the meaning given to it in Section 3.1(d).
AMERICAN CONVERSION FRACTION shall have the meaning given to it in
Section 3.5.
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AMERICAN CONVERTIBLE PREFERRED STOCK shall have the meaning given to it in
Section 2.5.
AMERICAN CUMULATIVE PREFERRED STOCK shall have the meaning given to it in
Section 2.5.
AMERICAN DISCLOSURE SCHEDULE shall mean the American Disclosure Schedule
dated as of the date of the Original Merger Agreement delivered by American to
Mergeparty simultaneously with the execution and delivery of the Original Merger
Agreement.
AMERICAN FCC LICENSES means all FCC Licenses issued to American or any of
its Subsidiaries and used in the business or operations of any of the American
Stations, including those listed on Section 4.6(a) of the American Disclosure
Schedule (other than those relating to the American Brokered Stations, which
shall be deemed American FCC Licenses only upon consummation of the acquisition
of the applicable American Brokered Station), and any additions thereto between
the date of the Original Merger Agreement and the Closing Date. Auxiliary
broadcast licenses issued pursuant to 47 C.F.R. Part 74 shall not be deemed to
be material American FCC Licenses.
AMERICAN FINANCIAL STATEMENTS shall have the meaning given to it in
Section 4.2.
AMERICAN OPTIONS shall have the meaning given to it in Section 6.8.
AMERICAN PREFERRED STOCK shall have the meaning given to it in Section 2.5.
AMERICAN SEC DOCUMENTS shall have the meaning given to it in Section 4.2.
AMERICAN SEPTEMBER 10-Q shall have the meaning given to it in Section 4.2.
AMERICAN STATIONS means the radio broadcast stations owned by American, or
which it has the right to acquire (and acquires prior to the Closing Date but
only from and after such acquisition) as of the date of the Original Merger
Agreement; provided, however, that American Stations shall not include any
American Station disposed of by American subsequent to the date of the Original
Merger Agreement not in violation of the provisions of this Agreement; further,
provided, that American Stations shall include American Brokered Stations if the
context so requires.
AMERICAN STOCK means the American Common Stock and the American Preferred
stock.
AMERICAN STOCKHOLDERS MEETING shall have the meaning given to it in
Section 6.5.
AMERICAN STOCKHOLDERS TOWER MEETING shall have the meaning given to it in
Section 6.5.
AMERICAN 10-K shall have the meaning given to it in Section 4.2.
AMERICAN TAX GROUP shall mean American and those of its Subsidiaries as are
included in the consolidated Federal Income Tax Returns of American.
AMERICAN TOWER shall have the meaning given to it in Section 3.1(d).
AMERICAN TOWER GROUP shall have the meaning given to it in Section 6.17.
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AMERICAN'S KNOWLEDGE (including the term "to the knowledge of American")
means the actual knowledge of the Chief Executive Officer or the Chief Financial
Officer of American, and that such Officer shall have reason to believe and
shall believe that the subject representation or warranty is true and accurate
as stated.
ANTITRUST DIVISION shall have the meaning given to it in Section 6.2(c).
APPLICABLE LAW shall mean, with respect to any Person, any Law of any
Authority, whether domestic or foreign, to which such Person is subject or by
which it or any of its business or operations is subject or any of its property
or assets is bound.
APPLICATIONS shall have the meaning given to it in Section 6.2(b).
APPRAISED TOTAL VALUE shall have the meaning given to it in Section 3.4(c).
ARBITRATOR shall have the meaning given to it in Section 3.4(c).
ATC MERGER AGREEMENT shall have the meaning given to it in Section 4.1(e).
ATS MERGERCORP shall have the meaning given to it in Section 3.5.
ATS MERGERCORP COMMON STOCK shall have the meaning given to it in
Section 4.1(e).
AUTHORITY shall mean any governmental or quasi-governmental authority,
whether administrative, executive, judicial, legislative or other, or any
combination thereof, including without limitation any federal, state,
territorial, county, municipal or other government or governmental or
quasi-governmental agency, arbitrator, authority, board, body, branch, bureau,
central bank or comparable agency or Entity, commission, corporation, court,
department, instrumentality, master, mediator, panel, referee, system or other
political unit or subdivision or other Entity of any of the foregoing, whether
domestic or foreign.
BENEFIT ARRANGEMENT shall mean, with respect to any Person, any benefit
arrangement that is not a Plan, including (a) any employment, severance or
consulting agreement, (b) any arrangement providing for insurance coverage or
workers' compensation benefits, (c) any incentive bonus or deferred bonus
arrangement, (d) any arrangement providing termination allowance, severance or
similar benefits, (e) any equity compensation plan, and (f) any deferred
compensation plan which American or any ERISA Affiliate maintains, contributes
to or is required to contribute to for the benefit of any current or former
officers, employees, agents, directors or independent contractors of American or
any of its ERISA Affiliates.
CASH CONSIDERATION shall have the meaning given to it in Section 3.1(d).
CERTIFICATE OF MERGER shall have the meaning given to it in Section 2.3.
CERTIFICATES shall have the meaning given to it in Section 3.2(b).
CD AMOUNT shall have the meaning given to it in Section 6.18(c).
CLAIMS shall mean any and all debts, liabilities, obligations, losses,
damages, deficiencies,
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assessments and penalties, together with all Legal Actions, pending or
threatened, claims and judgments of whatever kind and nature relating thereto,
and all fees, costs, expenses and disbursements (including without limitation
reasonable attorneys' and other legal fees, costs and expenses) relating to any
of the foregoing.
CLOSING shall have the meaning given to it in Section 2.2.
CLOSING BALANCE SHEET shall have the meaning given to it in Section 6.18.
CLOSING DATE shall have the meaning given to it in Section 2.2.
CLOSING NET DEBT shall have the meaning given to it in Section 6.18.
CLOSING STATEMENT shall have the meaning given to it in Section 6.18.
CLOSING WORKING CAPITAL shall have the meaning given to it in Section 6.18.
COBRA shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, as set forth in Section 4980B of the Code and Part 6 of
Subtitle B of Title I of ERISA.
CODE shall mean the Internal Revenue Code of 1986, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
COLLATERAL DOCUMENT shall mean any agreement, certificate, contract,
instrument, notice, opinion or other document delivered pursuant to the
provisions of this Agreement, including without limitation, the Confidentiality
Agreement, the Tower Documentation and the Tower Merger Agreement.
COMMISSION or SEC shall mean the Securities and Exchange Commission and
shall include any successor Authority.
CONTRACTS shall have the meaning given to it in Section 4.19(a).
CONFIDENTIALITY AGREEMENT shall mean the letter agreement, dated August 21,
1997 between American and Mergeparty.
CONTROL (including the terms "controlled," "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management or
policies of a Person, or the disposition of such Person's assets or properties,
whether through the ownership of stock, equity or other ownership, by contract,
arrangement or understanding, or as trustee or executor, by contract or credit
arrangement or otherwise.
CONVERTIBLE SECURITIES shall mean any evidences of indebtedness, shares of
capital stock (other than common stock) or other securities directly or
indirectly convertible into or exchangeable for shares of capital stock, whether
or not the right to convert or exchange thereunder is immediately exercisable or
is conditioned upon the passage of time, the occurrence or non-occurrence or
existence or non-existence of some other Event, or both.
COURT shall have the meaning given to it in Section 3.4(c).
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CSFB shall have the meaning given to it in Section 4.14.
CURRENT ASSETS shall have the meaning given to it in Section 6.18(b).
DCL shall have the meaning given to it in Section 2.1.
DEBT AMOUNT shall have the meaning given to it in Section 6.18(c).
DETERMINATION DEADLINE shall have the meaning given to it in Section
3.4(c). DISCLOSURE SCHEDULE shall mean the Mergeparty Disclosure Schedule, if
any, or the American Disclosure Schedule, as the case may be.
DISSENTING SHARES shall have the meaning given to it in Section 3.4(a).
DIVESTITURE CONDITION means any condition imposed or required by the FCC
(including conditions required by the FCC's multiple ownership rules or
policies), the Antitrust Division or the FTC as a condition to its consent to or
approval of the transfer of control of any of the American FCC Licenses or
otherwise to the transactions (or any of them) contemplated by this Agreement,
including without limitation the Merger, or as a condition to its agreement not
to institute any Legal Action to prevent the transfer of control of any of the
American FCC Licenses or otherwise to prevent any of the transactions
contemplated hereby, which would require Mergeparty or any of its Subsidiaries
or any of its other Affiliates to dispose of one or more of the American
Stations or American Brokered Stations, or in Mergeparty's sole discretion, one
or more of the radio broadcast stations owned by Mergeparty and operating in the
same Arbitron Survey area as any of the American Stations or American Brokered
Stations; provided, however, that with respect to compliance with any condition
imposed by the FCC, Mergeparty shall have been afforded a period of six months,
from Closing, through the use of trusts or otherwise, within which to comply
with the radio duopoly overlap rule, 47 C.F.R. Section 73.3555(a), and
Mergeparty shall have been afforded temporary, rather than permanent, waivers of
the one-to-a-market rule, 47 C.F.R. Section 73.3555(c), so long as such
temporary waivers shall remain in effect until at least 6 months following the
effective date of FCC action concluding the ongoing proceeding in MM Docket Nos.
91-221, 87-8 (FCC 94-322) or a successor rulemaking proceeding pending at the
time of the grant of the FCC Order, that considers the one-to-a-market rule.
D&O INSURANCE shall have the meaning given to it in Section 6.12(c).
EFFECTIVE TIME shall have the meaning given to it in Section 2.3.
ENTITY shall mean any corporation, firm, unincorporated organization,
association, partnership, limited liability company, trust (inter vivos or
testamentary), estate of a deceased, insane or incompetent individual, business
trust, joint stock company, joint venture or other organization, entity or
business, whether acting in an individual, fiduciary or other capacity, or any
Authority.
ENVIRONMENTAL LAW excluding any regulations issued by the FCC shall mean
any Law relating to or otherwise imposing liability or standards of conduct
concerning pollution or protection of the environment, including without
limitation, Laws relating to emissions, discharges, releases or threatened
releases of Hazardous Materials into the environment (including, without
limitation, ambient air, surface water, ground water, mining or reclamation of
mined land, land surface or subsurface strata) or otherwise that relate to the
manufacture, processing, generation, distribution, use, treatment, storage,
disposal, cleanup, transport or handling of pollutants, contaminants, chemicals
or industrial, toxic or hazardous
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substances, materials or wastes. Environmental Laws shall include without
limitation the Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. Section 6901 et seq.), the Hazardous Material Transportation Act
(49 U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery Act (42
U.S.C. Section 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the
Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the Occupational
Safety and Health Act (29 U.S.C. Section 651 et seq.), the Federal Insecticide,
Fungicide and Rodenticide Act (7 U.S.C. Section 136 et seq.), and the Surface
Mining Control and Reclamation Act of 1977 (30 U.S.C. Section 1201 et seq.), and
any analogous federal, state, local or foreign Laws, and the rules and
regulations promulgated thereunder, all as from time to time in effect, and any
reference to any such statutory or regulatory provision shall be deemed to be a
reference to any successor statutory or regulatory provision.
ENVIRONMENTAL PERMIT shall mean, with respect to any Person, any
Governmental Authorization required by or pursuant to any Environmental Law.
ERISA shall mean the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, all as from time to time in effect, or any
successor law, rules or regulations, and any reference to any such statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
ERISA AFFILIATE shall mean any Person that is treated as a single employer
with American under Sections 414(b), (c), (m) or (o) of the Code or Section
4001(b)(1) of ERISA.
ESOP shall have the meaning given to it in Section 4.9(a)(xvi).
EVENT shall mean the existence or occurrence of any act, action, activity,
circumstance, condition, event, fact, failure to act, omission, incident or
practice, or any set or combination of any of the foregoing.
EXCHANGE ACT shall mean the Securities Exchange Act of 1934, and the rules
and regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any such statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
EXCHANGE AGENT shall have the meaning given to it in Section 3.2(a).
EXPENSES shall have the meaning given to it in Section 9.3.
EXTENDED TOWER LEASE shall have the meaning given to it in Section 6.19(b).
FCA shall mean the Communication Act of 1934, and the rules and regulations
thereunder, all as from time to time in effect, or any successor law, rules or
regulations, and any reference to any such statutory or regulatory provision
shall be deemed to be a reference to any successor statutory or regulatory
provision.
FCC shall mean the Federal Communications Commission and shall include any
successor Authority.
FCC CONSENTS means actions by the FCC (including the Chief, Mass Media
Bureau, acting under delegated authority) granting its consent to the transfer
of control of the American FCC Licenses for each
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of the American Stations to Mergeparty as contemplated by this Agreement whether
or not such consent has become a Final Order.
FCC LICENSES means all of the licenses, permits and other authorizations
issued by the FCC to an owner and operator of radio broadcast stations.
FCC ORDER shall have the meaning given to it in Section 7.1(b).
FILED AMERICAN SEC DOCUMENTS shall have the meaning given to it in
Section 4.2.
FINAL ADJUSTMENT AMOUNT shall have the meaning given to it in
Section 6.18(d).
FINAL ORDER shall mean, with respect to any Authority, including without
limitation the FCC, a consent or approval with respect to which no appeal, no
stay, no petition or application for rehearing, reconsideration, review or stay,
whether on motion of the applicable Authority or other Person or otherwise, and
no other Legal Action contesting such consent or approval, is in effect or
pending and as to which the time or deadline for filing any such appeal,
petition or application or other Legal Action has expired or, if filed, has been
denied, dismissed or withdrawn, and the time or deadline for instituting any
further Legal Action has expired.
FTC shall have the meaning given to it in Section 6.2(c).
GAAP shall mean generally accepted accounting principles as in effect from
time to time in the United States of America.
GOVERNMENTAL AUTHORIZATIONS shall mean all approvals, concessions,
consents, franchises, licenses, permits, plans, registrations and other
authorizations of all Authorities, including the FCC Licenses, issued by the
FCC, the Federal Aviation Administration and any other Authority in connection
with the conduct of business or operations of any of the Stations.
GOVERNMENTAL FILINGS shall mean all filings, including franchise and
similar Tax filings, and the payment of all fees, assessments, interest and
penalties associated with such filings, with all Authorities.
HART-SCOTT-RODINO ACT shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, and the rules and regulations thereunder, all as from
time to time in effect, or any successor law, rules or regulations, and any
reference to any such statutory or regulatory provision shall be deemed to be a
reference to any successor statutory or regulatory provision.
HAZARDOUS MATERIALS shall mean and include any substance, material, waste,
constituent, compound, chemical, natural or man-made element or force (in
whatever state of matter): (a) the presence of which requires investigation or
remediation under any Environmental Law; or (b) that is defined as a "hazardous
waste" or "hazardous substance" under any Environmental Law; or (c) that is
toxic, explosive, corrosive, etiologic, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is regulated by any
applicable Authority or subject to any Environmental Law; or (d) that poses or
threatens to pose a hazard to the health or safety of persons; or (e) that
contains gasoline, diesel fuel or other petroleum hydrocarbons, or any
by-products or fractions thereof, natural gas, polychlorinated biphenyls
("PCBs") and PCB-containing equipment, radon or other radioactive elements,
ionizing radiation, lead, asbestos or asbestos-containing materials, or urea
formaldehyde foam insulation.
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INDEBTEDNESS shall mean, with respect to any Person, without duplication,
(A) all obligations of such Person for borrowed money, or with respect to
deposits or advances of any kind to such Person, (B) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (C) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person, (D) all obligations of
such Person issued or assumed as the deferred purchase price of property or
services (excluding obligations of such Person to creditors for raw materials,
inventory, services and supplies incurred in the ordinary course of such
Person's business), (E) all capitalized lease obligations of such Person, (F)
all obligations of others secured by any Lien on property or assets owned or
acquired by such Person, whether or not the obligations secured thereby have
been assumed, (G) all obligations of such Person under interest rate or currency
hedging transactions (valued at the termination value thereof), (H) all letters
of credit issued for the account of such Person and (I) all guarantees and
arrangements having the economic effect of a guarantee of such Person or any
indebtedness of any other Person.
INDEMNIFIED PARTIES shall have the meaning given to it in Section 6.12(b).
LAW shall mean any (a) administrative, judicial, legislative or other
action, code, consent decree, constitution, decree, directive, enactment,
finding, guideline, law, injunction, interpretation, judgment, order, ordinance,
proclamation, promulgation, regulation, requirement, rule, rule of law, rule of
public policy, settlement agreement, statute, or writ of any Authority, domestic
or foreign; (b) the common law, or other legal or quasi-legal precedent; or (c)
arbitrator's, mediator's or referee's award, decision, finding or
recommendation.
LEGAL ACTION shall mean, with respect to any Person, any and all litigation
or legal or other actions, arbitrations, counterclaims, hearings,
investigations, proceedings or suits, at law or in arbitration, equity or
admiralty, whether or not purported to be brought on behalf of such Person, by
or before any Authority, against such Person or involving any of such Person's
business or assets.
LIABILITIES shall have the meaning given to it in Section 6.18(b).
LIEN shall mean any of the following: mortgage; lien (statutory or other)
or other security agreement, arrangement or interest; hypothecation, pledge or
other deposit arrangement; assignment; charge; levy; executory seizure;
attachment; garnishment; encumbrance (including any easement, exception,
reservation or limitation, right of way, and the like); conditional sale, title
retention or other similar agreement, arrangement, device or restriction; any
financing lease involving substantially the same economic effect as any of the
foregoing; the filing of any financing statement under the Uniform Commercial
Code or comparable law of any jurisdiction; or restriction on sale, transfer,
assignment, disposition or other alienation.
MATERIAL, MATERIALLY OR MATERIALITY for the purposes of this Agreement,
shall, unless specifically stated to the contrary, be determined without regard
to the fact that various provisions of this Agreement set forth specific dollar
amounts.
MATERIAL AGREEMENT shall mean, with respect to any Person, any agreement,
arrangement, contract, undertaking, understanding or other obligation or
liability which (a) was not entered into in the ordinary course of business, it
being understood and agreed by the parties that the acquisition, disposition or
exchange of radio stations is in the ordinary course of business, (b) was
entered into in the ordinary course of business which (i) involved the purchase,
sale or lease of goods or materials, or purchase of services, aggregating more
than $10,000,000 during any of the last three fiscal years of such Person, (ii)
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extends for more than six (6) months from the date of the Original Merger
Agreement, or (iii) is not terminable on thirty (30) days or less notice without
material penalty or other payment, (c) involves indebtedness aggregating more
than $10,000,000, (d) is or otherwise constitutes a written agency, broker,
dealer, license, distributorship, sales representative or similar written
agreement, or (e) accounted for more than ten percent (10%) of the revenues of
Mergeparty or American Stations, as the case may be, in the last fiscal year of
such Person or is likely to account for more than ten percent (10%) of revenues
of Mergeparty or American, as the case may be, during the current fiscal year of
such Person.
MAXIMUM PREMIUM shall have the meaning given to it in Section 6.12(c).
MERGER CONSIDERATION shall have the meaning given to it in Section 3.1(d).
MERGEPARTY shall have the meaning given to it in the Preamble.
MERGEPARTY BROKERED STATIONS shall mean the radio broadcast stations which
Mergeparty has the right to acquire but which as of the date of the Original
Merger Agreement it is operating pursuant to time brokerage, local marketing or
other similar agreements.
MERGEPARTY DISCLOSURE SCHEDULE shall mean the Mergeparty Disclosure
Schedule dated as of the date of the Original Merger Agreement delivered by
Mergeparty to American simultaneously with the execution and delivery of the
Original Merger Agreement.
MERGEPARTY STATIONS means the radio broadcast stations owned by Mergeparty,
or which it has the right to acquire (and acquires prior to the Closing Date but
only from and after such acquisition) as of the date of the Original Merger
Agreement; provided, however, that Mergeparty Stations shall not include any
Mergeparty Station disposed of by Mergeparty subsequent to the date of the
Original Merger Agreement not in violation of the provisions of this Agreement;
provided further, however, that the term Mergeparty Stations shall include
Mergeparty Brokered Stations if the context so requires.
MERGEPARTY SUBSIDIARY shall have the meaning given to it in the Preamble.
MERGEPARTY'S KNOWLEDGE (including the term "to the knowledge of
Mergeparty") means the actual knowledge of the Chief Executive Officer or the
Chief Financial Officer of Mergeparty, and that such Officer shall have reason
to believe and shall believe that the subject representation or warranty is true
and accurate as stated.
MERGER shall have the meaning given to it in the third "Whereas" paragraph.
MERGER CONSIDERATION shall have the meaning given to it in Section 3.1(d).
MULTIEMPLOYER PLAN shall mean a Plan which is a "multiemployer plan" within
the meaning of Section 4001(a)(3) of ERISA.
NET DEBT shall have the meaning given to it in Section 6.18(c).
NOTICE OF DISAGREEMENT shall have the meaning given to it in Section 6.18.
NYSE shall mean the New York Stock Exchange.
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OPTION SECURITIES shall mean all rights, options, calls, contracts,
agreements, warrants, understandings, restrictions, arrangements or commitments,
including without limitation, any rights plan or other anti-takeover agreement
or arrangement, evidencing the right to subscribe for, purchase or otherwise
acquire, or otherwise providing for the issuance of shares of capital stock,
voting securities or Convertible Securities, whether or not the right to
subscribe for, purchase or otherwise acquire, or otherwise providing for the
issuance, is immediately exercisable or is conditioned upon the passage of time,
the occurrence or non-occurrence or the existence or non-existence of some other
Event.
OPTIONHOLDER shall have the meaning given to it in Section 6.8(a).
ORGANIC DOCUMENT shall mean, with respect to a Person which is a
corporation, its charter, its by-laws and all stockholder agreements, voting
trusts and similar arrangements applicable to any of its capital stock and, with
respect to a Person which is a partnership, its agreement and certificate of
partnership, any agreements among partners, and any management and similar
agreements between the partnership and any general partners (or any Affiliate
thereof).
ORIGINAL MERGER AGREEMENT shall have the meaning given to it in the first
"Whereas" paragraph.
PERMITTED LIENS shall mean (a) Liens for current Taxes not yet due and
payable, and (b) such imperfections of title, easements, encumbrances and
mortgages or other Liens, if any, as are not, individually or in the aggregate,
substantial in character, amount or extent and do not materially detract from
the value, or materially interfere with the present use, of the property subject
thereto or affected thereby, or otherwise materially impair the business or
operations of the American Stations or the Mergeparty Stations, as the case may
be.
PERSON shall mean any natural individual or any Entity.
PLAN shall mean, with respect to any Person and at a particular time, any
employee benefit plan which is covered by ERISA and in respect of which such
Person or an ERISA Affiliate is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA, which American or any ERISA Affiliate maintains,
contributes to or is required to contribute to for the benefit of any current or
former officers, employees, agents, directors or independent contractors of
American or any of its ERISA Affiliates.
POST-CLOSING AMERICAN GROUP shall have the meaning given to it in
Section 6.18
PRIVATE AUTHORIZATIONS shall mean all approvals, concessions, consents,
franchises, licenses, permits, and other authorizations of all Persons (other
than Authorities) including without limitation those with respect to copyrights,
computer software programs, patents, service marks, trademarks, trade names,
technology and know-how.
PROHIBITED TRANSACTION shall have the meaning given to it in
Section 6.2(a).
PROXY STATEMENT shall have the meaning given to it in Section 6.6(a).
REGISTRATION STATEMENT shall have the meaning given to it in
Section 6.6(b).
REGULATIONS shall mean the federal income tax regulations promulgated under
the Code, as such Regulations may be amended from time to time. All references
herein to specific sections of the
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Regulations shall be deemed also to refer to any corresponding provisions of
succeeding Regulations, and all references to temporary Regulations shall be
deemed also to refer to any corresponding provisions of final Regulations.
REPRESENTATIVES shall have the meaning given to it in Section 6.1.
REQUIRED DIVESTITURES means all divestitures, terminations, arrangements
and restructurings identified in Section 5.2c) of the Mergeparty Disclosure
Schedule, if any, and all other divestitures, terminations, arrangements or
restructurings, if any, arising after the date of the Original Merger Agreement
that would have been required to be listed on Section 5.2c) of the Mergeparty
Disclosure Schedule if known to be in existence as of such date or that are
necessary to satisfy any and all Divestiture Conditions.
REQUIRED TOWER VOTE shall have the meaning given to it in Section 4.13.
REQUIRED VOTE shall have the meaning given to it in Section 4.13.
REQUIRED DIVESTITURES means all divestitures, terminations, arrangements
and restructurings identified in Section 5.2c) of the Mergeparty Disclosure
Schedule, if any, and all other divestitures, terminations, arrangements or
restructurings, if any, arising after the date of the Original Merger Agreement
that would have been required to be listed on Section 5.2c) of the Mergeparty
Disclosure Schedule if known to be in existence as of such date or that are
necessary to satisfy any and all Divestiture Conditions.
RESTATED CERTIFICATE shall have the meaning given to it in Section 4.11.
SECTION 162(M) OPTIONS shall have the meaning given to it in Section
6.8(e).
SECURITIES ACT shall mean the Securities Act of 1933, and the rules and
regulations of the Commission thereunder, all as from time to time in effect, or
any successor law, rules or regulations, and any reference to any such statutory
or regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
STATIONS shall mean, collectively, the American Stations and the Mergeparty
Stations.
SUBSIDIARY shall mean, with respect to a Person, any Entity a majority of
the capital stock ordinarily entitled to vote for the election of directors of
which, or if no such voting stock is outstanding, a majority of the equity
interests of which, is owned directly or indirectly, legally or beneficially, by
such Person or any other Person controlled by such Person.
SURVIVING CORPORATION shall have the meaning given to it in Section 2.1.
TAX (and "Taxable," which shall mean subject to Tax), shall mean, with
respect to any Person, (a) all taxes (domestic or foreign), including without
limitation any income (net, gross or other, including recapture of any tax items
such as investment tax credits), alternative or add-on minimum tax, gross
income, gross receipts, gains, sales, use, leasing, lease, user, ad valorem,
transfer, recording, franchise, profits, property (real or personal, tangible or
intangible), fuel, license, withholding on amounts paid to or by such Person,
payroll, employment, unemployment, social security, excise, severance, stamp,
occupation, premium, environmental or windfall profit tax, custom, duty or other
tax, or other like
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assessment or charge of any kind whatsoever, together with any interest, levies,
assessments, charges, penalties, additions to tax or additional amounts imposed
by any Taxing Authority, (b) any joint or several liability of such Person with
any other Person for the payment of any amounts of the type described in (a) of
this definition, and (c) any liability of such Person for the payment of any
amounts of the type described in (a) as a result of any express or implied
obligation to indemnify any other Person.
TAX CLAIM shall mean any Claim which relates to Taxes.
TAX RETURN OR RETURNS shall mean all returns, consolidated or otherwise
(including without limitation information returns), required to be filed with
any Authority with respect to Taxes.
TAXING AUTHORITY shall mean any Authority responsible for the imposition of
any Tax.
TERMINATION DATE shall have the meaning given to it in Section 8.1.
TOWER BUSINESS shall mean the business conducted by the Tower Subsidiaries.
TOWER COMMON STOCK, TOWER CLASS A COMMON, TOWER CLASS B COMMON AND TOWER
CLASS C COMMON shall have the meaning given to such terms in Section 3.1(d).
TOWER DECONSOLIDATION shall have the meaning given to it in Section 6.17.
TOWER DECONSOLIDATION DATE shall have the meaning given to it in
Section 6.17.
TOWER DOCUMENTATION shall have the meaning given to it in Section 6.17.
TOWER EMPLOYEES shall have the meaning given to it in Section 6.17.
TOWER LEASES shall have the meaning given to it in Section 6.19.
TOWER MERGER shall have the meaning given to it in Section 3.5.
TOWER MERGER AGREEMENT shall have the meaning given to it in Section 3.5.
TOWER MERGER CONSIDERATION shall have the meaning given to it in
Section 3.5.
TOWER MERGER EFFECTIVE TIME shall have the meaning given to it in
Section 3.5.
TOWER MERGER TOWER CONSIDERATION shall have the meaning given to it in
Section 3.5.
TOWER PROXY STATEMENT shall have the meaning given to it in Section 6.6(a).
TOWER SEPARATION shall have the meaning given to it in Section 6.17.
TOWER STOCK CONSIDERATION shall have the meaning given to it in
Section 3.1(d).
TOWER STOCK PAYMENT shall have the meaning given to it in Section 3.4(c).
TOWERS shall have the meaning given to it in Section 6.19.
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TOWER SUBSIDIARIES shall mean American Tower and its Subsidiaries.
UNCONTROLLABLE EVENTS shall have the meaning given to it in Section 6.2(d).
WC AMOUNT shall have the meaning given to it in Section 6.18(b).
WORKING CAPITAL shall have the meaning given to it in Section 6.18(b).
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<PAGE> 1
Exhibit 2.2
FIRST AMENDMENT, dated as of December 19, 1997 (this "Amendment"), to the
Amended and Restated Agreement and Plan of Merger, dated as of December 18,
1997, by and among American Radio Systems Corporation, a Delaware corporation
("American"), CBS Corporation (formerly, Westinghouse Electric Corporation), a
Pennsylvania corporation ("Mergeparty"), and R Acquisition Corp., a Delaware
corporation ("Mergeparty Subsidiary").
WITNESSETH:
WHEREAS, American, Mergeparty and Mergeparty Subsidiary are parties to an
Agreement and Plan of Merger, dated as of September 19, 1997 (the "Original
Merger Agreement"), providing for the merger of Mergeparty Subsidiary with and
into American on the terms and conditions set forth therein; and
WHEREAS, American, Mergeparty and Mergeparty Subsidiary have entered into
an Amended and Restated Agreement and Plan of Merger, dated as of December 18,
1997 (the "Restated Merger Agreement"), to make certain changes to the Original
Merger Agreement; and
WHEREAS, American, Mergeparty and Mergeparty Subsidiary desire to amend the
Restated Merger Agreement.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained and other valuable
consideration, the receipt and adequacy whereof are hereby acknowledged, the
parties hereto hereby, intending to be legally bound, represent, warrant,
covenant and agree as follows:
1. Capitalized terms used and not defined herein shall have the meanings
given to such terms in the Restated Merger Agreement.
2. American hereby represents and warrants to Mergeparty and Mergeparty
Subsidiary as follows, which representations and warranties shall be deemed to
form part of the representations and warranties of American included in Article
Four of the Restated Merger Agreement for all purposes of the Restated Merger
Agreement: (a) Annex 1 to this Amendment sets forth a list of certain
stockholders of American (the "Consenting Stockholders") and the number of
shares of American Class A Common and American Class B Common owned of record by
each such stockholder on the date hereof, (b) on the date hereof, 29,966,377
votes constituted a majority of the outstanding voting power of American Common
Stock and (c) on the date hereof the Consenting Stockholders have delivered
written consents to American approving and adopting the Restated Merger
Agreement and the Tower Merger Agreement in accordance with Applicable Law,
including without limitation the DCL, such consents will, upon mailing by
American of the notice as described in paragraph 3 below, constitute the
Required Vote and no other approvals of the stockholders of American other than
such consents are required to effect either the Merger or the Tower Merger.
3. American will, promptly after the execution of this Amendment, mail, in
accordance with Section 228(d) of the DCL, notice of the corporate action
without a meeting taken by the Consenting Stockholders to those American
stockholders who have not consented to such action in writing and who, if the
action had been taken at a meeting of American
<PAGE> 2
stockholders, would have been entitled to notice of the meeting if the record
date for such meeting had been the date that written consents signed by a
sufficient number of holders to take such action were delivered to American in
accordance with Section 228(c) of the DCL. The covenant of American in this
Section 3 shall be deemed to form part of the covenants of American included in
Article Six of the Restated Merger Agreement for all purposes of the Restated
Merger Agreement.
4. All references to "Proxy Statement" in the Restated Merger Agreement
shall be deemed in all cases in the Restated Merger Agreement to be references
to "Information Statement" and all references to "Tower Proxy Statement" shall
be deemed in all cases in the Restated Merger Agreement to be references to
"Tower Information Statement."
5. Notwithstanding anything contained in the Restated Merger Agreement to
the contrary, including without limitation Section 6.5 thereof, American shall
not be required to hold either the American Stockholders Meeting or the American
Stockholders Tower Meeting.
6. This Amendment shall constitute a Collateral Document for all purposes
of the Restated Merger Agreement.
7. The validity, interpretation, construction and performance of this
Amendment shall be governed by, and construed in accordance with, the Applicable
Laws of the United States of America and the laws of the State of New York
applicable to contracts made and performed in such State and, in any event,
without giving effect to any choice or conflict of laws provision or rule that
would cause the application of domestic substantive laws of any other
jurisdiction, except to the extent the corporate laws of the State of Delaware
are applicable.
8. This Amendment may be executed in one or more counterparts, all of which
shall be considered one and the same agreement, and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other parties.
9. Except as expressly modified and amended by this Amendment, the Restated
Merger Agreement shall continue in full force and effect and is hereby ratified
and confirmed in all respects.
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<PAGE> 3
IN WITNESS WHEREOF, American, Mergeparty and Mergeparty Subsidiary have
caused this Amendment to be executed, pursuant to the authority and approval of
each of their respective Boards of Directors, as of the date first written above
by their respective officers thereunto duly authorized.
American Radio Systems Corporation
By:
-------------------------------------
Name: Steven B. Dodge
Title: Chairman of the Board,
President and Chief Executive Officer
CBS Corporation
By:
-------------------------------------
Name: Frederic G. Reynolds
Title:
Acquisition Corp.
By:
-------------------------------------
Name: Frederic G. Reynolds
Title:
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