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): November 26, 1997.
------------------
ACC CORP.
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(Exact name of registrant as specified in it charter)
Delaware 0-14567 16-1175232
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
400 WEST AVENUE, ROCHESTER, NEW YORK 14611
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (716) 987-3000
Not Applicable
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(Former name or former address, if changed since last report)
Exhibit Index appears at Page ___
<PAGE>
ITEM 5. OTHER EVENTS
On November 26, 1997, ACC Corp. ("the Registrant") announced that it
had entered into an Agreement and Plan of Merger, dated as of November 26, 1997
("the Merger Agreement"), among the Registrant, Teleport Communications Group
Inc. ("TCG"), a Delaware corporation, and TCG Merger Co., Inc., a Delaware
corporation. Pursuant to the Merger Agreement, each share of the Registrant's
Class A Common Stock (collectively, "the Common Stock") issued and outstanding
prior to the effective time of the merger ("the Merger") will be converted into
shares of TCG Class A Common Stock having an aggregate value of $50 subject to
the following: if the average closing price of TCG Class A Common Stock during
the ten day trading period prior to closing is below $45 or above $55, the
exchange ratio will be fixed at 1.11111 shares of TCG Class A Common Stock or
0.90909 shares, respectively. The closing of the transaction contemplated by
the Merger Agreement is subject to the satisfaction or waiver of several
conditions including, without limitation, approval of the Merger Agreement and
the Merger by the requisite vote of the holders of the Common Stock, the
approval of various regulatory agencies in the United States and certain
foreign jurisdictions and compliance with the Hart-Scott-Rodino Antitrust
-2-
<PAGE>
Improvements Act of 1976, as amended. The parties anticipate closing the
transaction prior to June 30, 1998.
On December 5, 1997, the Registrant announced that David K. Laniak,
the Chairman of the Board of Directors and Chief Executive Officer of the
Registrant, had died that day, unexpectedly.
Registrant's press releases dated November 26, 1997 and December 5,
1997 are filed herewith as Exhibits 99.2 and 99.3, the Merger Agreement
mentioned therein is filed herewith as Exhibit 99.1. All are incorporated
herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
99.1 Agreement and Plan of Merger By and Among Teleport
Communications Group Inc., TCG Merger Co., Inc. and ACC Corp.,
Dated as of November 26, 1997.
99.2 Press Release dated November 26, 1997.
99.3 Press Release dated December 5, 1997.
-3-
<PAGE>
SIGNATURES
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 thereunto duly authorized.
Dated: December 10, 1997 ACC Corp.
By: /s/ Michael R. Daley
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Michael R. Daley
Chief Financial Officer
-4-
<PAGE>
EXHIBIT INDEX
Sequentially
Numbered
Exhibit No. Description Page
- ----------- --------------------------------- --------------
99.1 Agreement and Plan of Merger By 6
and Among Teleport Communications
Group Inc., TCG Merger Co., Inc.
and ACC Corp., Dated as of
November 26, 1997.
99.2 Press Release dated November 26, 1997
99.3 Press Release dated December 5, 1997
-5-
<PAGE>
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
By and Among
TELEPORT COMMUNICATIONS GROUP INC.,
TCG MERGER CO., INC.
and
ACC CORP.
Dated As Of
November 26, 1997
<PAGE>
TABLE OF CONTENTS
ARTICLE I TERMS OF THE MERGER. . . . . . . . . . . . . . . . . . . . 1
1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Merger Consideration . . . . . . . . . . . . . . . . . . . . . 2
1.4 Stockholders' Rights upon Merger . . . . . . . . . . . . . . . 3
1.5 Surrender and Exchange of Shares . . . . . . . . . . . . . . . 3
1.6 Options and Stock Incentive Rights . . . . . . . . . . . . . . 5
1.7 Certificate of Incorporation . . . . . . . . . . . . . . . . . 5
1.8 Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.9 Other Effects of Merger. . . . . . . . . . . . . . . . . . . . 5
1.10 Registration Statement; Prospectus/Proxy Statement . . . . . . 5
1.11 Tax-Free Reorganization. . . . . . . . . . . . . . . . . . . . 7
1.12 Additional Actions . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE II REPRESENTATIONS, WARRANTIES
AND CERTAIN COVENANTS OF ACC . . . . . . . . . . . . . . . 7
2.1 Organization and Good Standing . . . . . . . . . . . . . . . . 7
2.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4 Authorization; Binding Agreement . . . . . . . . . . . . . . . 9
2.5 Governmental Approvals . . . . . . . . . . . . . . . . . . . . 10
2.6 No Violations. . . . . . . . . . . . . . . . . . . . . . . . . 10
2.7 Securities Filings and Litigation. . . . . . . . . . . . . . . 11
2.8 ACC Financial Statements . . . . . . . . . . . . . . . . . . . 12
2.9 Absence of Certain Changes or Events . . . . . . . . . . . . . 12
2.10 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . 12
2.11 Permits. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.12 Finders and Investment Bankers . . . . . . . . . . . . . . . . 13
2.13 Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.14 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . 13
2.15 Taxes and Returns. . . . . . . . . . . . . . . . . . . . . . . 16
2.16 Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . 17
2.17 Takeover Statutes. . . . . . . . . . . . . . . . . . . . . . . 17
2.18 No Undisclosed Liabilities . . . . . . . . . . . . . . . . . . 18
2.19 Title to Property. . . . . . . . . . . . . . . . . . . . . . . 18
2.20 Intellectual Property. . . . . . . . . . . . . . . . . . . . . 18
2.21 Interested Party Transactions. . . . . . . . . . . . . . . . . 18
2.22 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.23 Pooling Matters. . . . . . . . . . . . . . . . . . . . . . . . 19
2.24 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.25 Employees and Independent Contractors. . . . . . . . . . . . . 19
2.26 Rights Plan. . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE III REPRESENTATIONS, WARRANTIES AND
CERTAIN COVENANTS OF TCG . . . . . . . . . . . . . . . . . 20
3.1 Organization and Good Standing . . . . . . . . . . . . . . . . 20
3.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 20
3.3 Authorization; Binding Agreement . . . . . . . . . . . . . . . 21
3.4 Governmental Approvals . . . . . . . . . . . . . . . . . . . . 21
3.5 No Violations. . . . . . . . . . . . . . . . . . . . . . . . . 22
3.6 Securities Filings and Litigation. . . . . . . . . . . . . . . 22
3.7 TCG Financial Statements . . . . . . . . . . . . . . . . . . . 23
3.8 Absence of Certain Changes or Events . . . . . . . . . . . . . 23
3.9 No Undisclosed Liabilities . . . . . . . . . . . . . . . . . . 24
ARTICLE IV ADDITIONAL COVENANTS OF ACC. . . . . . . . . . . . . . . . 24
4.1 Conduct of Business of ACC and ACC Subsidiaries. . . . . . . . 24
4.2 Notification of Certain Matters. . . . . . . . . . . . . . . . 27
4.3 Access and Information . . . . . . . . . . . . . . . . . . . . 27
4.4 Stockholder Approval . . . . . . . . . . . . . . . . . . . . . 28
4.5 Commercially Reasonable Efforts. . . . . . . . . . . . . . . . 28
4.6 Public Announcements . . . . . . . . . . . . . . . . . . . . . 28
4.7 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.8 No Solicitation. . . . . . . . . . . . . . . . . . . . . . . . 29
4.9 SEC and Stockholder Filings. . . . . . . . . . . . . . . . . . 31
4.10 Tax Opinion Certification. . . . . . . . . . . . . . . . . . . 31
4.11 Affiliate Agreements . . . . . . . . . . . . . . . . . . . . . 31
4.12 Takeover Statutes. . . . . . . . . . . . . . . . . . . . . . . 32
4.13 Pooling Accounting Treatment . . . . . . . . . . . . . . . . . 32
ARTICLE V ADDITIONAL COVENANTS OF TCG. . . . . . . . . . . . . . . . 32
5.1 Access and Information . . . . . . . . . . . . . . . . . . . . 32
5.2 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . 32
5.3 Commercially Reasonable Efforts. . . . . . . . . . . . . . . . 33
5.4 Public Announcements . . . . . . . . . . . . . . . . . . . . . 34
5.5 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.6 SEC and Stockholder Filings. . . . . . . . . . . . . . . . . . 34
5.7 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 34
5.8 Affiliate Agreements . . . . . . . . . . . . . . . . . . . . . 35
5.9 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . 35
5.10 Preparation of Tax Returns . . . . . . . . . . . . . . . . . . 35
5.11 Tax Opinion Certification. . . . . . . . . . . . . . . . . . . 35
5.12 Notification of Certain Matters. . . . . . . . . . . . . . . 35
ARTICLE VI CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . 36
6.1 Conditions to Each Party's Obligations . . . . . . . . . . . . 36
6.1.1 Stockholder Approval . . . . . . . . . . . . . . . . . . . . . 36
6.1.2 No Injunction or Action. . . . . . . . . . . . . . . . . . . . 36
6.1.3 HSR Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.1.4 Registration Statement . . . . . . . . . . . . . . . . . . . . 36
6.1.5 Quotation of TCG Stock . . . . . . . . . . . . . . . . . . . . 36
6.2 Conditions to Obligations of ACC . . . . . . . . . . . . . . . 36
6.2.1 TCG Representations and Warranties . . . . . . . . . . . . . . 36
6.2.2 Performance by TCG . . . . . . . . . . . . . . . . . . . . . . 37
6.2.3 [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . . 37
6.2.4 Certificates and Other Deliveries. . . . . . . . . . . . . . . 37
6.2.5 Tax Opinion. . . . . . . . . . . . . . . . . . . . . . . . . 37
6.3 Conditions to Obligations of TCG . . . . . . . . . . . . . . . 37
6.3.1 ACC Representations and Warranties . . . . . . . . . . . . . . 37
6.3.2 Performance by ACC . . . . . . . . . . . . . . . . . . . . . . 37
6.3.3 [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . . 37
6.3.4 Governmental Approvals . . . . . . . . . . . . . . . . . . . . 38
6.3.5 Certificates and Other Deliveries. . . . . . . . . . . . . . . 38
6.3.6 Opinion of ACC Counsel . . . . . . . . . . . . . . . . . . . . 38
6.3.7 Tax Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE VII TERMINATION AND ABANDONMENT. . . . . . . . . . . . . . . . 39
7.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.2 Effect of Termination and Abandonment. . . . . . . . . . . . . 40
7.3 Procedure Upon Termination . . . . . . . . . . . . . . . . . . 41
ARTICLE VIII MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . 42
8.1 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . 42
8.2 Amendment and Modification . . . . . . . . . . . . . . . . . . 42
8.3 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . 43
8.4 Survival of Representations and Warranties . . . . . . . . . . 43
8.5 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.6 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . 44
8.7 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.8 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 44
8.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.10 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . 44
8.11 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 45
8.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.13 Specific Performance . . . . . . . . . . . . . . . . . . . . . 45
8.14 Third Parties. . . . . . . . . . . . . . . . . . . . . . . . . 45
8.15 Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
<PAGE>
LIST OF SCHEDULES
SCHEDULE DESCRIPTION
2.1 Organization and Good Standing
2.2 Capitalization
2.3 Subsidiaries
2.6 No Violations
2.7 Litigation
2.9 Absence of Certain Changes or Events
2.13 Contracts
2.14(a) Employee Benefit Plans
2.14(g) Employee Benefit Plans
2.14(h) Employee Benefit Plans
2.14(i) Employee Benefit Plans
2.14(k) Employee Benefit Plans
2.15 Taxes and Returns
2.18 No Undisclosed Liabilities
2.19 Title to Property
2.21 Interested Party Transactions
2.22 Insurance
2.25(a) Employees and Independent Contractors
2.25(b) Employees and Independent Contractors
2.25(c) Employees and Independent Contractors
3.2 Capitalization
3.5 No Violations
3.8 Absence of Certain Changes or Events
3.9 No Undisclosed Liabilities
4.1 Conduct of Business of ACC and ACC Subsidiaries
4.11 Affiliate Agreements
5.8 Affiliate Agreements
6.3.5 Required Consents
<PAGE>
GLOSSARY OF DEFINED TERMS
PAGE WHERE
TERM DEFINED
Acquisition Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . .1
Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ACC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ACC Acquisition Agreement. . . . . . . . . . . . . . . . . . . . . . . . 30
ACC Class A Common Stock . . . . . . . . . . . . . . . . . . . . . . . . .2
ACC Class B Common Stock . . . . . . . . . . . . . . . . . . . . . . . . .8
ACC Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 12
ACC Material Adverse Effect. . . . . . . . . . . . . . . . . . . . . . . .8
ACC Material Contract. . . . . . . . . . . . . . . . . . . . . . . . . . 13
ACC Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
ACC Permits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ACC Preferred Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . .8
ACC Proposals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
ACC Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ACC Securities Filings . . . . . . . . . . . . . . . . . . . . . . . . . 11
ACC SIRs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
ACC Stockholders Meeting . . . . . . . . . . . . . . . . . . . . . . . . 39
ACC Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
ACC Superior Proposal. . . . . . . . . . . . . . . . . . . . . . . . . . 31
ACC Takeover Proposal. . . . . . . . . . . . . . . . . . . . . . . . . . 30
Aquisition Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . 26
Certificate of Merger. . . . . . . . . . . . . . . . . . . . . . . . . . .1
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Comfort Letters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Compensation Arrangement . . . . . . . . . . . . . . . . . . . . . . . . 16
Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Control Share Acquisition. . . . . . . . . . . . . . . . . . . . . . . . 32
Credit Facility Increase . . . . . . . . . . . . . . . . . . . . . . . . 25
Delaware Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Employee Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Enforceability Exceptions. . . . . . . . . . . . . . . . . . . . . . . . .9
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ERISA Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Event. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Exchange Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Fair Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Final Order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Financial Advisor. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Governmental Authority . . . . . . . . . . . . . . . . . . . . . . . . . 10
Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
HSR Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . 18
Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Merger Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Merger Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Merger Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Moratorium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Multiemployer Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
NASD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Nasdaq . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Prospectus/Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . .6
Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . .6
Restrictive Provision. . . . . . . . . . . . . . . . . . . . . . . . . . 38
SEC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Securities Exchange Act. . . . . . . . . . . . . . . . . . . . . . . . . .6
Significant Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . .8
Stop-transfer list . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Surviving Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . .1
Surviving Corporation Common Stock . . . . . . . . . . . . . . . . . . . .3
Surviving Corporation Material Adverse Effect. . . . . . . . . . . . . . 38
Takeover Statute . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Takeover Statutes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Tax Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Termination Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
TCG. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
TCG Class B Common Stock . . . . . . . . . . . . . . . . . . . . . . . . 20
TCG Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 23
TCG Material Contract. . . . . . . . . . . . . . . . . . . . . . . . . . 22
TCG Material Adverse Effect. . . . . . . . . . . . . . . . . . . . . . . 20
TCG Preferred Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
TCG Securities Filings . . . . . . . . . . . . . . . . . . . . . . . . . 22
TCG Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
TCG Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Termination Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Withdrawal Liability . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1996 Company Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . 18
1996 TCG Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . 24
<PAGE>
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "Agreement") is made
and entered into as of November 26, 1997, by and among TELEPORT
COMMUNICATIONS GROUP INC., a Delaware corporation ("TCG"), TCG
MERGER CO., INC., a Delaware corporation and wholly-owned
subsidiary of TCG ("Acquisition Subsidiary"), and ACC CORP., a
Delaware corporation ("ACC").
RECITALS
A. The respective Boards of Directors of ACC, Acquisition
Subsidiary and TCG have approved the merger (the "Merger") of
Acquisition Subsidiary with and into ACC in accordance with the
laws of the State of Delaware and the provisions of this Agreement.
B. ACC, Acquisition Subsidiary and TCG desire to make
certain representations, warranties and agreements in connection
with, and establish various conditions precedent to, the Merger.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements hereinafter
set forth, the parties hereto agree as follows:
ARTICLE I TERMS OF THE MERGER
1.1 The Merger. Upon the terms and subject to the
conditions of this Agreement, the Merger shall be consummated in
accordance with the Delaware General Corporation Law (the "Delaware
Code"). At the Effective Time (as defined in Section 1.2, below),
upon the terms and subject to the conditions of this Agreement,
Acquisition Subsidiary shall be merged with and into ACC in
accordance with the Delaware Code and the separate existence of
Acquisition Subsidiary shall thereupon cease, and ACC, as the
surviving corporation in the Merger (the "Surviving Corporation"),
shall continue its corporate existence under the laws of the State
of Delaware as a subsidiary of TCG. The parties shall prepare and
execute a certificate of merger (the "Certificate of Merger") in
order to comply in all respects with the requirements of the
Delaware Code and with the provisions of this Agreement.
1.2 Effective Time. The Merger shall become effective at
the time of the filing of the Certificate of Merger with the
Secretary of State of Delaware in accordance with the applicable
provisions of the Delaware Code or at such later time as may be
specified in the Certificate of Merger. The Certificate of Merger
shall be filed as soon as practicable (but in any event within five
(5) business days) after all of the conditions (other than those to
be satisfied at the Effective Time (as hereinafter defined)) set
forth in this Agreement have been satisfied or waived by the party
or parties entitled to the benefit of the same. TCG and ACC shall
mutually determine the time of such filing and the place where the
closing of the Merger (the "Closing") shall occur. The time when
the Merger shall become effective is herein referred to as the
"Effective Time" and the date on which the Effective Time occurs is
herein referred to as the "Closing Date."
1.3 Merger Consideration.
(a) Subject to the provisions of this Agreement, each of
the issued and outstanding shares of Class A Common Stock, par
value $.015 per share, of ACC (the "ACC Class A Common Stock") as
of the Effective Time shall be converted into the right to receive
(subject to any applicable backup or other withholding
requirements), and there shall be issued by virtue of the Merger
and without any action on the part of the holder thereof or any
other person, except as hereinafter provided, in exchange for each
of the shares of ACC Class A Common Stock, that number of shares of
Class A Common Stock, par value $.01 per share, of TCG (the "TCG
Stock") equal to the product of one (1), multiplied by the Exchange
Ratio. For purposes hereof, the "Exchange Ratio" shall mean:
(i) if the average of the last reported sales prices
per share of the TCG Common Stock as reported on
the Nasdaq National Market ("Nasdaq")for the ten
consecutive trading days immediately preceding the
trading day immediately prior to the Closing Date
(the "Average Price") is less than $45.00,
1.11111;
(ii) if the Average Price is equal to or greater than
$45.00, but not in excess of $55.00, a fraction,
the numerator of which shall be $50.00 and the
denominator of which shall be the Average Price;
or
(iii) if the Average Price is greater than $55.00,
0.90909;
subject to payment of cash in lieu of any fractional share as
hereinafter provided (the "Merger Consideration"). The Exchange
Ratio shall be subject to appropriate adjustment in the event of a
stock split, stock dividend or recapitalization after the date of
this Agreement applicable to shares of the TCG Stock or the ACC
Class A Common Stock.
(b) No fractional shares of TCG Stock shall be issued
pursuant to the Merger nor will any fractional share interest
involved entitle the holder thereof to vote, to receive dividends
or to exercise any other rights of a stockholder of TCG. In lieu
thereof, any person who would otherwise be entitled to a fractional
share of TCG Stock pursuant to the provisions hereof shall receive
an amount in cash equal to the value of such fractional share. The
value of such fractional share shall be the product of such
fraction multiplied by the last sales price of TCG Stock as
reported on the Nasdaq on the business day immediately prior to the
Closing Date, subject to appropriate adjustment in the event of a
stock split, stock dividend or recapitalization after the date of
this Agreement applicable to shares of the TCG Stock.
(c) Each share of ACC Class A Common Stock held in the
treasury of ACC or by a wholly owned subsidiary of ACC shall be
canceled as of the Effective Time and no Merger Consideration shall
be payable with respect thereto.
(d) Subject to the provisions of this Agreement, at the
Effective Time, the shares of Acquisition Subsidiary common stock
outstanding immediately prior to the Merger shall be converted, by
virtue of the Merger and without any action on the part of the
holder thereof, into one share of the common stock of the Surviving
Corporation (the "Surviving Corporation Common Stock"), which one
share of the Surviving Corporation Common Stock shall constitute
all of the issued and outstanding capital stock of the Surviving
Corporation and shall be owned by TCG.
1.4 Stockholders' Rights upon Merger. Upon consummation of
the Merger, the certificates which theretofore represented shares
of ACC Class A Common Stock (the "Certificates") shall cease to
represent any rights with respect thereto, and, subject to
applicable law and this Agreement, shall only represent the right
to receive the Merger Consideration, including the amount of cash,
if any, payable in lieu of fractional shares of TCG Stock into
which the shares of ACC Class A Common Stock have been converted
pursuant to this Agreement.
1.5 Surrender and Exchange of Shares.
(a) Prior to the Closing Date, TCG shall appoint an
agent reasonably acceptable to ACC to act as exchange agent (the
"Exchange Agent") for the Merger. Promptly after the Effective
Time, TCG shall make available, or cause to be made available, to
the Exchange Agent such certificates evidencing such number of
shares of TCG Stock and such amount of cash, as and when necessary,
in order to enable the Exchange Agent to effect the exchange of
certificates and make the cash payments in respect of fractional
shares contemplated by Section 1.5(c) below.
(b) On the Closing Date, TCG shall instruct the Exchange
Agent to mail to each holder of record of a Certificate within five
business days of receiving from ACC a list of such holders of
record, (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to
the Exchange Agent and shall be in such form and have such other
provisions as TCG may reasonably specify) and (ii) instructions for
use in effecting the surrender of the Certificates in exchange for
certificates representing the Merger Consideration consisting of
TCG Stock and any cash payable pursuant to Section 1.3(b) above.
(c) After the Effective Time, each holder of a share of
ACC Class A Common Stock shall surrender and deliver the
Certificates to the Exchange Agent together with a duly completed
and executed transmittal letter. Upon such surrender and delivery,
the holder shall receive a certificate representing the number of
whole shares of TCG Stock into which such holder's shares of ACC
Class A Common Stock have been converted pursuant to this
Agreement, subject to payment of cash in lieu of any fractional
share. Until so surrendered and exchanged, each outstanding
Certificate after the Effective Time shall be deemed for all
purposes to evidence the right to receive that number of whole
shares of TCG Stock into which the shares of ACC Class A Common
Stock have been converted pursuant to this Agreement, subject to
payment of cash in lieu of any fractional share; provided, however,
that no dividends or other distributions, if any, in respect of the
shares of TCG Stock, declared after the Effective Time and payable
to holders of record after the Effective Time, shall be paid to the
holders of any unsurrendered Certificates until such Certificates
and transmittal letters are surrendered and delivered as provided
herein. Subject to applicable Law, after the surrender and exchange
of Certificates, the record holders thereof will be entitled to
receive any such dividends or other distributions without interest
thereon, which theretofore have become payable with respect to the
number of shares of TCG Stock for which such Certificates were
exchangeable. Holders of any unsurrendered Certificates shall not
be entitled to any rights as a holder of TCG Stock, including,
without limitation, the right to vote TCG Stock, until such
Certificates are exchanged pursuant to this Agreement.
(d) At the Effective Time, the stock transfer books of
ACC shall be closed and no transfer of shares of ACC Class A Common
Stock shall be made thereafter, other than transfers of shares of
ACC Class A Common Stock that have occurred prior to the Effective
Time. In the event that, after the Effective Time, Certificates are
presented to the Surviving Corporation, they shall be canceled and
exchanged for shares of TCG Stock or cash as provided in Section
1.3.
(e) Neither ACC nor TCG nor the Exchange Agent shall be
liable to any holder of shares of ACC Class A Common Stock for any
such shares of TCG Stock (or dividends or distributions with
respect thereto), or cash delivered to a public official pursuant
to any abandoned property, escheat or similar law, rule,
regulation, statute, order, judgment or decree.
1.6 Options and Stock Incentive Rights. At the Effective
Time, TCG shall cause each holder of a then-outstanding and
unexercised option (the "ACC Options") or stock incentive right
(the "ACC SIRs") exercisable for shares of ACC Class A Common Stock
to receive, by virtue of the Merger and without any action on the
part of the holder thereof, options or stock incentive rights,
respectively, exercisable for shares of TCG Stock having the same
terms and conditions as the ACC Options and ACC SIRs (including
such terms and conditions as may be incorporated by reference into
the agreements evidencing ACC Options and ACC SIRs pursuant to the
plans or arrangements pursuant to which such ACC Options and ACC
SIRs were granted), except that the exercise price and the number
of shares issuable upon exercise shall be divided and multiplied,
respectively, by the Exchange Ratio. TCG shall take all corporate
action necessary to reserve for issuance a sufficient number of
shares of TCG Stock for delivery upon the exercise of ACC Options
and ACC SIRs after the Effective Time. Immediately after the
Effective Time, TCG shall file or cause to be filed all
registration statements on Form S-8 or other appropriate form as
may be necessary in connection with the purchase and sale of TCG
Stock contemplated by such ACC Options and ACC SIRs subsequent to
the Effective Time.
1.7 Certificate of Incorporation. At and after the Effective
Time, the Certificate of Incorporation of the Surviving Corporation
shall be amended to be identical to the Certificate of
Incorporation of Acquisition Subsidiary in effect at the Effective
Time (subject to any subsequent amendment thereof, including,
without limitation, any amendment thereof required in order to
comply with Section 5.7).
1.8 Bylaws. Subject to Section 5.7 below, at and after the
Effective Time, the Bylaws of Acquisition Subsidiary in effect at
the Effective Time shall be the Bylaws of the Surviving Corporation
(subject to any subsequent amendment thereof, including, without
limitation, any amendment thereof required in order to comply with
Section 5.7).
1.9 Other Effects of Merger. The Merger shall have all
further effects as specified in the applicable provisions of the
Delaware Code.
1.10 Registration Statement; Prospectus/Proxy Statement.
(a) For the purposes of (i) registering the issuance of
TCG Stock to holders of the shares of ACC Class A Common Stock in
connection with the Merger with the Securities and Exchange
Commission ("SEC") under the Securities Act of 1933, as amended,
and the rules and regulations thereunder (the "Securities Act"),
and complying with applicable state securities Laws and (ii)
holding the meeting of ACC stockholders to approve the Merger (the
"ACC Proposals"), TCG and ACC will cooperate in the preparation of
a registration statement on Form S-4 (such registration statement,
together with any and all amendments and supplements thereto, being
herein referred to as the "Registration Statement"), including a
prospectus/proxy statement satisfying all requirements of
applicable state securities Laws, the Securities Act and the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (the "Securities Exchange Act"). Such
prospectus/proxy statement in the form mailed by ACC and, if
required, TCG to their respective stockholders, together with any
and all amendments or supplements thereto, is herein referred to as
the "Prospectus/Proxy Statement."
(b) ACC will furnish TCG with such information
concerning ACC and its subsidiaries as is necessary in order to
cause the Prospectus/Proxy Statement, insofar as it relates to ACC
and its subsidiaries, to comply with applicable Law. None of the
information relating to ACC and its subsidiaries supplied by ACC
for inclusion in the Prospectus/Proxy Statement will be false or
misleading with respect to any material fact or will 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. ACC agrees promptly to
advise TCG if, at any time prior to the respective meetings of the
stockholders of ACC or TCG referenced herein, any information
provided by it in the Prospectus/Proxy Statement is or becomes
incorrect or incomplete in any material respect and to provide TCG
with the information needed to correct such inaccuracy or omission.
ACC will furnish TCG with such supplemental information as may be
necessary in order to cause the Prospectus/Proxy Statement, insofar
as it relates to ACC and its subsidiaries, to comply with
applicable Law after the mailing thereof to the stockholders of ACC
or TCG.
(c) ACC and TCG agree to cooperate in making any
preliminary filings of the Prospectus/Proxy Statement with the SEC,
as promptly as practicable, pursuant to Rule 14a-6 under the
Securities Exchange Act, and shall cooperate in responding to any
comments with respect thereto received from the SEC.
(d) TCG will file the Registration Statement with the
SEC and appropriate materials with applicable state securities
agencies as promptly as practicable and will use all reasonable
efforts to cause the Registration Statement to become effective
under the Securities Act and all such state filed materials to
comply with applicable state securities Laws. ACC authorizes TCG to
utilize in the Registration Statement and in all such state filed
materials, the information concerning ACC and its subsidiaries
provided to TCG in connection with, or contained in, the
Prospectus/Proxy Statement. TCG promptly will advise ACC when the
Registration Statement has become effective and of any supplements
or amendments thereto, and TCG will furnish ACC with copies of all
such documents. Except for the Prospectus/Proxy Statement or the
preliminary prospectus/proxy statement, neither TCG nor ACC shall
distribute any written material that might constitute a
"prospectus" relating to the Merger or the ACC Proposals within the
meaning of the Securities Act or any applicable state securities
Law without the prior written consent of the other party.
(e) ACC shall mail the Prospectus/Proxy Statement to its
stockholders as promptly as practicable after the date the
Registration Statement is declared effective under the Securities
Act.
1.11 Tax-Free Reorganization. The parties intend that the
Merger qualify (a) as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended,
and the regulations thereunder (the "Code") and (b) for accounting
treatment as a pooling of interests. None of the parties will
knowingly take any action that would cause the Merger to fail to
qualify as a reorganization within the meaning of Section 368(a) of
the Code. Each of the parties shall report the Merger for income
tax purposes as a reorganization within the meaning of
Section 368(a) of the Code (and any comparable state or local tax
statute).
1.12 Additional Actions. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be
advised that any deeds, bills of sale, assignments, assurances or
any other actions or things are necessary or desirable to vest,
perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the
rights, properties or assets of Acquisition Subsidiary or ACC or
otherwise to carry out this Agreement, the officers and directors
of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of Acquisition Subsidiary or
ACC, all such deeds, bills of sale, assignments and assurances and
to take and do, in the name and on behalf of Acquisition Subsidiary
or ACC, all such other actions and things as may be necessary or
desirable to vest, perfect or confirm any and all right, title and
interest in, to and under such rights, properties or assets in the
Surviving Corporation or otherwise to carry out this Agreement.
ARTICLE II REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS
OF ACC
ACC represents, warrants and/or covenants to and with TCG as
follows:
2.1 Organization and Good Standing. ACC and each of the ACC
Subsidiaries is a corporation or partnership duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has all
requisite corporate or partnership power and authority to own,
lease and operate its properties and to carry on its business as
now being conducted. ACC and each of the ACC Subsidiaries is duly
qualified or licensed and in good standing to do business in each
jurisdiction in which the character of the property owned, leased
or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except where the
failure to be so duly qualified or licensed and in good standing
would not materially adversely affect the business, assets
(including, but not limited to, intangible assets), financial
condition, liabilities or the results of operations of ACC and its
subsidiaries taken as a whole ("ACC Material Adverse Effect").
Schedule 2.1 attached hereto contains a complete and accurate list
of the jurisdictions of incorporation or organization and
qualification or license of ACC and the ACC Subsidiaries. ACC has
heretofore made available to TCG accurate and complete copies of
the Certificate of Incorporation and Bylaws, as currently in
effect, of ACC. For purposes of this Agreement, the term "ACC
Subsidiary" shall mean any "significant subsidiary" (as such term
is defined in Rule 1-02 of Regulation S-X of the SEC) of ACC.
2.2 Capitalization. As of the date hereof, the authorized
capital stock of ACC consists of (a) 1,990,000 shares of Preferred
Stock, $1.00 par value per share ("ACC Preferred Stock"), (b)
50,000,000 shares of ACC Class A Common Stock and (c) 25,000,000
shares of Class B Common Stock, $.015 par value per share ("ACC
Class B Common Stock"). As of November 1, 1997, no shares of ACC
Preferred Stock or ACC Class B Common Stock were issued and
outstanding, and 16,984,657 shares of ACC Class A Common Stock were
issued and outstanding. No other capital stock of ACC is
authorized or issued. All issued and outstanding shares of the ACC
Class A Common Stock are duly authorized, validly issued, fully
paid and non-assessable and were issued free of preemptive rights
and in compliance with applicable securities Laws. Except as set
forth in the ACC Securities Filings (as hereinafter defined) or on
Schedule 2.2 attached hereto or as otherwise contemplated by this
Agreement, as of the date hereof, there are no outstanding rights,
subscriptions, warrants, puts, calls, unsatisfied preemptive
rights, options or other agreements of any kind relating to any of
the outstanding, authorized but unissued, unauthorized or treasury
shares of the capital stock or any other security of ACC, and there
is no authorized or outstanding security of any kind convertible
into or exchangeable for any such capital stock or other security.
Except as disclosed in the ACC Securities Filings, there are no
restrictions upon the transfer of or otherwise pertaining to the
securities (including, but not limited to, the ability to pay
dividends thereon) or retained earnings of ACC and the ACC
Subsidiaries or the ownership thereof other than those, if any,
described on Schedule 2.2 attached hereto, those imposed by this
Agreement, or those imposed by the Federal Communications Act of
1934, as amended, and the rules, regulations and policies of the
Federal Communications Commission or any successor entity
thereunder, the Securities Act, the Securities Exchange Act,
applicable state securities Laws or applicable corporate Law.
2.3 Subsidiaries. Schedule 2.3 attached hereto sets forth
the name and jurisdiction of incorporation or organization of each
ACC Subsidiary, each of which is wholly-owned by ACC. All of the
capital stock and other interests of the ACC Subsidiaries are owned
by it or an ACC Subsidiary as indicated on Schedule 2.3, free and
clear of any claim, lien, encumbrance, security interest or
agreement with respect thereto except as set forth on Schedule 2.3.
All of the outstanding shares of capital stock in each of the ACC
Subsidiaries directly or indirectly held by ACC are duly
authorized, validly issued, fully paid and non-assessable and were
issued free of preemptive rights and in compliance with applicable
Laws. Except as set forth on Schedule 2.3 attached hereto, there
are no irrevocable proxies or similar obligations with respect to
such capital stock of the ACC Subsidiaries held by ACC and no
equity securities or other interests of any of the ACC Subsidiaries
are or may become required to be issued or purchased by reason of
any options, warrants, rights to subscribe to, puts, calls or
commitments of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for, shares of any
capital stock of any ACC Subsidiary, and there are no contracts,
commitments, understandings or arrangements by which any ACC
Subsidiary is bound to issue additional shares of its capital
stock, or options, warrants or rights to purchase or acquire any
additional shares of its capital stock or securities convertible
into or exchangeable for such shares.
2.4 Authorization; Binding Agreement. ACC has all requisite
corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby, including, but not limited
to, the Merger, have been duly and validly authorized by ACC's
Board of Directors and no other corporate proceedings on the part
of ACC or any ACC Subsidiary are necessary to authorize the
execution and delivery of this Agreement or to consummate the
transactions contemplated hereby (other than the adoption of this
Agreement by the stockholders of ACC in accordance with the
Delaware Code and the Certificate of Incorporation and Bylaws of
ACC). This Agreement has been duly and validly executed and
delivered by ACC and, assuming due and valid execution and delivery
by the other parties hereto, constitutes the legal, valid and
binding agreement of ACC, enforceable against ACC in accordance
with its terms, except to the extent that enforceability hereof may
be limited by applicable bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights
generally and by principles of equity regarding the availability of
remedies ("Enforceability Exceptions"). The affirmative vote of
the holders of a majority of the outstanding shares of ACC Class A
Common Stock is the only vote of the holders of any class or series
of ACC's capital stock necessary to approve and adopt the ACC
Proposals.
2.5 Governmental Approvals. No consent, approval, waiver or
authorization of, notice to or declaration or filing with
("Consent") any nation or government, any state or other political
subdivision thereof, any entity, authority or body exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including, without
limitation, any governmental or regulatory authority, agency,
department, board, commission, administration or instrumentality,
any court, tribunal or arbitrator and any self-regulatory
organization ("Governmental Authority") on the part of ACC or any
of the ACC Subsidiaries is required in connection with the
execution or delivery by ACC of this Agreement or the consummation
by ACC of the transactions contemplated hereby other than (i) the
filing of the Certificate of Merger with the Secretary of State of
Delaware in accordance with the Delaware Code, (ii) filings with
the SEC, state securities laws administrators and the National
Association of Securities Dealers, Inc. ("NASD"), (iii) Consents
from the Federal Communications Commission, state public service or
utility commissions (or comparable state Governmental Authorities)
or foreign telephone administrations, (iv) filings under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended, and
the rules and regulations promulgated thereunder (the "HSR Act"),
and (v) those Consents that if they were not obtained or made, do
not or would not have an ACC Material Adverse Effect or materially
and adversely affect the ability of ACC to perform its obligations
set forth herein or to consummate the transactions contemplated
hereby.
2.6 No Violations. The execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby
and compliance by ACC with any of the provisions hereof will not
(i) conflict with or result in any breach of any provision of the
Certificate and/or Articles of Incorporation or Bylaws or other
governing instruments of ACC or any of the ACC Subsidiaries, (ii)
except as set forth on Schedule 2.6 attached hereto, require any
consent under or result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration
or augment the performance required) under any ACC Material
Contract (as hereinafter defined), (iii) result in the creation or
imposition of any lien or encumbrance of any kind upon any of the
assets of ACC or any ACC Subsidiary, or (iv) subject to obtaining
the Consents from Governmental Authorities referred to in Section
2.5, above, contravene any applicable provision of any
constitution, treaty, statute, law, code, rule, regulation,
ordinance, policy or order of any Governmental Authority or other
matters having the force of law including, but not limited to, any
orders, decisions, injunctions, judgments, awards and decrees of or
agreements with any court or other Governmental Authority ("Law")
currently in effect to which ACC or any ACC Subsidiary or its or
any of their respective assets or properties are subject, except in
the case of clauses (ii), (iii) and (iv), above, for any deviations
from the foregoing which do not or would not have an ACC Material
Adverse Effect.
2.7 Securities Filings and Litigation. ACC has made
available to TCG true and complete copies of (i) its Annual Reports
on Form 10-K, as amended, for the years ended December 31, 1994,
1995 and 1996, as filed with the SEC, (ii) its proxy statements
relating to all of the meetings of stockholders (whether annual or
special) of ACC since January 1, 1994, as filed with the SEC, and
(iii) all other reports, statements and registration statements and
amendments thereto (including, without limitation, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, as amended)
filed by ACC with the SEC since January 1, 1994. The reports and
statements set forth in clauses (i) through (iii), above, and those
subsequently provided or required to be provided pursuant to this
Section, are referred to collectively herein as the "ACC Securities
Filings." As of their respective dates, or as of the date of the
last amendment thereof, if amended after filing, none of the ACC
Securities Filings (including all schedules thereto and disclosure
documents incorporated by reference therein), contained or, as to
ACC Securities Filings subsequent to the date hereof, will contain
any untrue statement of a material fact or omitted or, as to ACC
Securities Filings subsequent to the date hereof, will omit to
state 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. Each of the ACC Securities
Filings at the time of filing or as of the date of the last
amendment thereof, if amended after filing, complied or, as to ACC
Securities Filings subsequent to the date hereof, will comply in
all material respects with the Securities Exchange Act or the
Securities Act, as applicable. Except as set forth on Schedule
2.7, there is no action, cause of action, claim, demand, suit,
proceeding, citation, summons, subpoena, inquiry or investigation
of any nature, civil, criminal, regulatory or otherwise, in law or
in equity, by or before any court, tribunal, arbitrator or other
Governmental Authority ("Litigation") pending or, to the knowledge
of ACC, threatened against ACC or any of its subsidiaries, any
officer, director, employee or agent thereof, in his or her
capacity as such, or as a fiduciary with respect to any ACC
Employee Plan (as hereinafter defined) or otherwise relating to ACC
or any of its subsidiaries or the securities of any of them, or any
properties or rights of ACC or any of its subsidiaries or any ACC
Employee Plan which is required to be described in any ACC
Securities Filing that is not so described. Except as set forth on
Schedule 2.7, no event has occurred as a consequence of which ACC
would be required to file a Current Report on Form 8-K pursuant to
the requirements of the Securities Exchange Act as to which such a
report has not been timely filed with the SEC. Any reports,
statements and registration statements and amendments thereof
(including, without limitation, Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, as amended)
filed by ACC with the SEC after the date hereof shall be provided
to TCG on the date of such filing.
2.8 ACC Financial Statements. The audited consolidated
financial statements and unaudited interim financial statements of
ACC included in the ACC Securities Filings (the "ACC Financial
Statements") have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis
(except as may be indicated therein or in the notes thereto) and
present fairly, in all material respects, the consolidated
financial position of ACC and its subsidiaries as at the dates
thereof and the results of their operations and cash flows for the
periods then ended subject, in the case of the unaudited interim
financial statements, to normal year-end audit adjustments, any
other adjustments described therein and the fact that certain
information and notes have been condensed or omitted in accordance
with the Securities Exchange Act.
2.9 Absence of Certain Changes or Events. Except as set
forth in the ACC Securities Filings filed with the SEC prior to the
date hereof or in Schedule 2.9 attached hereto, since December 31,
1996, ACC has conducted its business in the ordinary course, and
there has not been: (i) any event, occurrence, fact, condition,
change, development or effect ("Event") that has had or could
reasonably be expected to have an ACC Material Adverse Effect; (ii)
any material change by ACC in its accounting methods, principles or
practices, except as required by any change in generally accepted
accounting principles; or (iii) any action or event that would have
required the consent of TCG pursuant to any of the provisions of
Section 4.1 had such action or event occurred after the date of
this Agreement.
2.10 Compliance with Laws. The business of ACC and each of
its subsidiaries has been operated in compliance with all Laws and
all tariffs, except for any instances of non-compliance which do
not and will not have an ACC Material Adverse Effect. Without
limiting the generality of the foregoing, neither ACC nor any of
its subsidiaries has engaged in carrying transit or indirect
traffic in violation of applicable Laws, tariffs, rules and
regulations in any jurisdiction, foreign or domestic, which
violation could reasonably be expected to have an ACC Material
Adverse Effect.
2.11 Permits. (i) ACC and its subsidiaries have all
permits, certificates, licenses, approvals, tariffs and other
authorizations required in connection with the operation of their
respective businesses (collectively, "ACC Permits"), (ii) neither
ACC nor any of its subsidiaries is in violation of any ACC Permit,
and (iii) no proceedings are pending or, to the knowledge of ACC,
threatened, to revoke or limit any ACC Permit, except, in each
case, those the absence or violation of which do not and could not
reasonably be expected to have an ACC Material Adverse Effect.
2.12 Finders and Investment Bankers. Neither ACC nor any of
its officers or directors has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or
finders' fees in connection with the transactions contemplated
hereby, other than pursuant to the agreement with Morgan Stanley &
Co., Incorporated (the "Financial Advisor"), an accurate and
complete copy of which agreement has been provided to TCG.
2.13 Contracts. Except as set forth in Schedule 2.13
attached hereto, neither ACC nor any of its subsidiaries is a party
or is subject to any material note, bond, mortgage, indenture,
contract, lease, license, agreement, understanding, instrument, bid
or proposal that is required to be described in or filed as an
exhibit to any ACC Securities Filing ("ACC Material Contract") that
is not so described in or filed as required by the Securities Act
or the Securities Exchange Act, as the case may be. For purposes of
this Section 2.13 and Section 3.13 below, a note, bond, mortgage,
indenture, contract, lease, license, agreement, understanding,
instrument, bid or proposal shall be considered material if it is
required to be described in or filed as an exhibit to any document
filed under the Securities Act or the Securities Exchange Act, as
the case may be. ACC has made available to TCG true and accurate
copies of the ACC Material Contracts. All such ACC Material
Contracts are valid and binding and are in full force and effect
and enforceable against ACC or such subsidiary in accordance with
their respective terms, subject to the Enforceability Exceptions.
Except as set forth in Schedule 2.6 attached hereto, (i) no Consent
of any person is needed in order that each such ACC Material
Contract shall continue in full force and effect in accordance with
its terms without penalty, acceleration or rights of early
termination by reason of the consummation of the transactions
contemplated by this Agreement, except for Consents the absence of
which would not have an ACC Material Adverse Effect, and (ii)
neither ACC nor any of its subsidiaries is in violation or breach
of or default under any such ACC Material Contract; nor to ACC's
knowledge is any other party to any such ACC Material Contract in
violation or breach of or default under any such ACC Material
Contract, in each case where such violation or breach would have an
ACC Material Adverse Effect.
2.14 Employee Benefit Plans.
(a) All of ACC's Employee Plans and Compensation
Arrangements are listed and described in Schedule 2.14(a), and
complete and accurate copies of (including any amendments to) any
such written Employee Plans and Compensation Arrangements
(including related insurance policies and trusts) have been
furnished to TCG, along with copies of any employee handbooks or
similar documents describing such Employee Plans and Compensation
Arrangements. Any unwritten Employee Plans or Compensation
Arrangements also are listed in Schedule 2.14(a), and complete
descriptions have been furnished to TCG. Except as disclosed in
Schedule 2.14(a), neither ACC nor any ERISA Affiliate is a party to
and does not have in effect or to become effective after the date
of this Agreement any plan, arrangement or other scheme which will
become an Employee Plan or Compensation Arrangement (including, but
not limited to, any bonus, cash or deferred compensation,
severance, medical, pension, profit sharing or thrift, stock
option, employee stock ownership, life or group insurance, death
benefit, vacation, sick leave, disability or trust agreement or
arrangement), or any amendment to an Employee Plan or Compensation
Arrangement.
(b) ACC has furnished to TCG (i) the Forms 5500 filed
for each of the Employee Plans (including all attachments and
schedules), (ii) the actuarial reports, summaries of material
modifications, summary annual reports, and any governmental
filings, relating to the Employee Plans for the last three plan
years, and (iii) the current summary plan description of each
Employee Plan.
(c) Each Employee Plan and Compensation Arrangement has
been administered in compliance with its own terms and in material
compliance with the provisions of ERISA, the Code, the Age
Discrimination in Employment Act and any other applicable Federal
or state Laws.
(d) Neither ACC nor any ERISA Affiliate is contributing
to, is required to contribute to, or has contributed within the
last six (6) years to, any Multiemployer Plan, and neither ACC nor
any ERISA Affiliate has incurred within the last six (6) years, or
reasonably expects to incur, any "withdrawal liability," as defined
under Section 4201 et seq. of ERISA. Neither ACC nor any ERISA
Affiliate (i) is sponsoring, administering or contributing to, (ii)
is required to contribute to, or (iii) has sponsored, administered
or contributed within the last six (6) years to, any Employee Plan
subject to Title IV of ERISA.
(e) Each Employee Plan intended to be tax-qualified under
Code Section 401(a) satisfies, and at all times has satisfied, all
minimum coverage and minimum participation requirements, if any,
imposed on such Employee Plan by the applicable terms of the Code
and ERISA.
(f) ACC is not aware of the existence of any governmental
inspection, investigation, audit or examination of any Employee
Plan or Compensation Arrangement or of any facts which would lead
it to believe that any such governmental inspection, investigation,
audit or examination is pending or threatened. There exists no
action, suit or claim (other than routine claims for benefits) with
respect to any Employee Plan or Compensation Arrangement pending
or, to the knowledge of ACC, threatened against any of such plan or
arrangement, and ACC possesses no knowledge of any facts which
could give rise to any such action, suit or claim.
(g) Except as described in Schedule 2.14(g), neither ACC
nor any ERISA Affiliate sponsors, maintains or contributes to any
Employee Plan or Compensation Arrangement that provides medical or
death benefit coverage to former employees of ACC or any of its
subsidiaries, except to the extent required by Section 4980B of the
Code. Schedule 2.14(g) lists each former employee of ACC or its
subsidiaries eligible for a benefit, if any, described in the
preceding sentence.
(h) Except as described in Schedule 2.14(h), with respect
to each Employee Plan and, to the extent applicable, each
Compensation Arrangement: (i) each Employee Plan that is intended
to be tax-qualified under Code Section 401(a), and each amendment
to such a plan is the subject of a favorable determination letter,
and no amendment that is not the subject of a favorable
determination letter would affect the validity of an Employee
Plan's letter; (ii) no condition or event exists or is expected to
occur that could subject, directly or indirectly, ACC or any ERISA
Affiliate to any liability, contingent or otherwise, or to the
imposition of any lien on the assets of ACC or any ERISA Affiliate
under the Code or ERISA, whether to the Pension Benefit Guaranty
Corporation, the Internal Revenue Service, or any other person
which could reasonably be expected to have an ACC Material Adverse
Effect; (iii) no prohibited transaction, within the definition of
section 4975 of the Code or Title 1, Part 4 of ERISA, has occurred
which would subject ACC or any ERISA Affiliate to any liability
which could reasonably be expected to have an ACC Material Adverse
Effect; and (iv) all contributions, premiums or payments accrued,
in whole or in part, under each Employee Plan or Compensation
Arrangement or with respect thereto as of the Closing will be paid
by ACC, on or prior to Closing or, if later, within the time period
permitted by ERISA and the Code which could reasonably be expected
to have an ACC Material Adverse Effect.
(i) Schedule 2.14(i) contains a complete and accurate
list of all qualified beneficiaries, as defined under Section
4980B(g)(1) of the Code, under any Employee Plan as of the date of
this Agreement (including qualified beneficiaries who are in the
election period for continuation coverage but who have not yet
elected continuation coverage), the date of the applicable
qualifying event and the nature of the qualifying event relating to
the duration of such coverage. Neither ACC nor any ERISA Affiliate
has failed to provide continuation coverage as required by Section
4980B(f) of the Code. ACC shall provide to TCG at Closing an
updated list of the qualified beneficiaries, as described above, as
of the Effective Time.
(j) For purposes of this Agreement, the following terms
shall have the meaning indicated: (i) "Employee Plan" shall mean
any retirement or welfare plan or arrangement or any other employee
benefit plan as defined in Section 3(3) of ERISA to which ACC or
any ERISA Affiliate contribute or to which ACC or any ERISA
Affiliate sponsor, maintain or otherwise are bound; (ii)
"Compensation Arrangement" shall mean any plan or compensation
arrangement other than an Employee Plan, whether written or
unwritten, which provides to employees, former employees, officers,
directors and shareholders of ACC or any ERISA Affiliate any
compensation or other benefits, whether deferred or not, in excess
of base salary or wages, including, but not limited to, any bonus
or incentive plan, stock rights plan, deferred compensation
arrangement, life insurance, stock purchase plan, severance pay
plan and any other employee fringe benefit plan; (iii) "ERISA"
shall mean the Employee Retirement Income Security Act of 1974, as
amended, any successor thereto and any regulations promulgated
thereunder; (iv) "Multiemployer Plan" means a plan, as defined in
ERISA Section 3(37), to which ACC or any ERISA Affiliate has
contributed, is contributing or is required to contribute; and (v)
"ERISA Affiliate" shall mean any trade or business related to ACC
under the terms of Sections 414(b), (c), (m) or (o) of the Code.
(k) Except as disclosed on Schedule 2.14(k), neither the
execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby, alone or in conjunction with
another event, including but not limited, a termination of any
individual's employment, will (i) result in any material payment
(including, without limitation, severance, or unemployment
compensation) becoming due to any director or employee of ACC or
its subsidiaries; (ii) result in the acceleration of vesting under
any Employee Plan or Compensation Arrangement; or (iii) materially
increase any benefits otherwise payable under any Employee Plan;
and any such payment or increase in benefits is fully deductible
under the Code, including but not limited to Code Sections 162,
280G and 404.
2.15 Taxes and Returns.
(a) Except as disclosed in Schedule 2.15 attached
hereto, ACC and each of its subsidiaries has timely filed, or
caused to be timely filed all income Tax Returns and all material
other Tax Returns required to be filed by it, and all such Tax
Returns were correct and complete in all material respects. ACC
and each of its subsidiaries has paid, collected or withheld, or
caused to be paid, collected or withheld, all material amounts of
Taxes required to be paid, collected or withheld, other than such
Taxes for which adequate reserves in the ACC Financial Statements
have been established or which are being contested in good faith.
Except as set forth in Schedule 2.15 attached hereto, there are no
claims or assessments pending against ACC or any of its
subsidiaries for any alleged deficiency in any Tax, and ACC has not
been notified in writing of any proposed Tax claims or assessments
against ACC or any of its subsidiaries (other than in each case,
claims or assessments for which adequate reserves in the ACC
Financial Statements have been established or which are being
contested in good faith or are immaterial in amount). Except as set
forth in Schedule 2.15 attached hereto, neither ACC nor any of its
subsidiaries has any waivers or extensions of any applicable
statute of limitations to assess any material amount of Taxes.
Except as set forth in Schedule 2.15 attached hereto, there are no
outstanding requests by ACC or any of its subsidiaries for any
extension of time within which to file any material Tax Return or
within which to pay any material amounts of Taxes shown to be due
on any return.
(b) No consent under Section 341(f) of the Code has ever
been filed with respect to ACC or any of its subsidiaries. Neither
ACC nor any of its subsidiaries will be required to include any
amount in its income or exclude any amount from its deductions in
any taxable period ending after the Closing Date by reason of a
change in method of accounting or use of the installment method of
accounting in any taxable period ending on or prior to the Closing
Date.
(c) To the best knowledge of ACC, there are no liens for
Taxes on the assets of ACC or any of its subsidiaries, except for
statutory liens for current Taxes not yet due and payable.
(d) For purposes of this Agreement, the term "Tax" shall
mean any federal, state, local, foreign or provincial income, gross
receipts, property, sales, use, license, excise, franchise,
employment, payroll, alternative or added minimum, ad valorem,
transfer or excise tax, or any other tax, custom, duty,
governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or penalty imposed by any
Governmental Authority. The term "Tax Return" shall mean a report,
return or other information (including any attached schedules or
any amendments to such report, return or other information)
required to be supplied to or filed with a governmental entity with
respect to any Tax, including an information return, claim for
refund, amended return or declaration or estimated Tax.
2.16 Fairness Opinion. ACC's Board of Directors has
received from the Financial Advisor, a written opinion addressed to
it for inclusion in the Prospectus/Proxy Statement to the effect
that the Exchange Ratio is fair to the holders of the shares of ACC
Class A Common Stock from a financial point of view.
2.17 Takeover Statutes. The Board of Directors of ACC has
duly and validly approved and taken all corporate action required
to be taken by the Board of Directors for the execution and
delivery of this Agreement and the consummation of the transactions
contemplated by this Agreement, including, without limitation, all
actions necessary to render the provisions of any applicable
Takeover Statute (including, without limitation, Section 203 of the
Delaware Code) inapplicable to this Agreement, the Merger and the
transactions contemplated hereby and thereby. The Board of
Directors of ACC has determined that it is advisable and in the
best interest of ACC's stockholders for ACC to enter into a
business combination with TCG upon the terms and subject to the
conditions of this Agreement and has resolved to recommend that
ACC's stockholders approve and adopt the ACC Proposals.
2.18 No Undisclosed Liabilities. Except as set forth on
Schedule 2.18, neither ACC nor any of its subsidiaries has any
liabilities (absolute, accrued, contingent or otherwise), except
liabilities (a) in the aggregate adequately provided for in ACC's
audited balance sheet (including any related notes thereto) for the
fiscal year ended December 31, 1996 included in ACC's 1996 Annual
Report on Form 10-K (the "1996 Company Balance Sheet"), (b)
incurred in the ordinary course of business and not required under
generally accepted accounting principles to be reflected on the
1996 Company Balance Sheet, (c) incurred since December 31, 1996 in
the ordinary course of business consistent with past practice, (d)
incurred in connection with this Agreement, (e) as set forth in the
ACC Securities Filings filed with the SEC prior to the date hereof
or (f) which do not constitute an ACC Material Adverse Effect.
2.19 Title to Property. Except as set forth on Schedule
2.19, ACC and each of its subsidiaries have good and defensible
title to all of their properties and assets, free and clear of all
liens, charges and encumbrances, except liens for taxes not yet due
and payable and such liens or other imperfections of title, which
do not constitute an ACC Material Adverse Effect.
2.20 Intellectual Property. ACC, directly or indirectly,
owns, or is licensed or otherwise possesses legally enforceable
rights to use, all patents, trademarks, trade names, service marks,
copyrights and any applications therefor, technology, know-how and
tangible or intangible proprietary information or material that are
to the business of ACC and its subsidiaries as currently conducted
by ACC or its subsidiaries (the "Intellectual Property Rights"),
except where the failure to own, license or possess such rights do
not constitute an ACC Material Adverse Effect.
2.21 Interested Party Transactions. Except as set forth on
Schedule 2.21, since the date of ACC's proxy statement dated
January 1, 1997, no event has occurred that would be required to be
reported as a Certain Relationship or Related Transaction, pursuant
to Item 404 of Regulation S-K promulgated by the SEC.
2.22 Insurance. ACC maintains the fire and casualty,
general liability, business interruption, product liability,
professional liability and sprinkler and water damage insurance
policies set forth on Schedule 2.22.
2.23 Pooling Matters. Neither ACC nor any of its affiliates
has taken or agreed to take any action that, to its knowledge,
could reasonably be expected to adversely affect the ability of TCG
to treat the Merger as a pooling of interests.
2.24 Expenses. ACC has provided to TCG a good faith
estimate and description of the expenses of ACC and its
subsidiaries which ACC expects to incur, or has incurred, in
connection with the transactions contemplated by this Agreement.
2.25 Employees and Independent Contractors.
(a) ACC and its subsidiaries have complied with all
applicable laws, rules and regulations relating to the employment
of labor, including, without limitation, those related to wages,
hours, collective bargaining, occupational safety, discrimination,
and the payment of social security and other payroll-related taxes,
and it has not received any notice alleging that it has failed to
comply with any of the foregoing, except where such noncompliance
could not reasonably be expected to have an ACC Material Adverse
Effect. Except as set forth on Schedule 2.25(a), there are no
controversies, disputes or proceedings pending or, to the best of
the ACC's knowledge and belief, threatened, between either ACC or
any of its subsidiaries and any of its employees, including
investigations of discrimination pending before the Equal
Employment Opportunity Commission or any other governmental
entities that could reasonably be expected to have an ACC Material
Adverse Effect. Neither ACC nor any of its subsidiaries is party to
or subject to any collective bargaining agreements. No labor union
or other collective bargaining unit represents or, to the knowledge
of ACC, claims to represent any of the employees of ACC or any of
its subsidiaries. To the best of ACC's knowledge and belief, there
is no union campaign threatened or being conducted to solicit cards
from employees to authorize a union to request a National Labor
Relations Board certification election with respect to any of the
employees of ACC or any of its subsidiaries.
(b) Except as described in Schedule 2.25(b), (i) no
regulatory authority has asserted any claim against ACC or any of
its subsidiaries challenging the characterization as an independent
contractor that could reasonably be expected to have an ACC
Material Adverse Effect, (ii) no such assertion is pending, or to
ACC's knowledge, threatened, except any such assertion which could
not reasonably be expected to have an ACC Material Adverse Effect,
and (iii) no liability exists or is pending or, to ACC's knowledge,
threatened, which results from recharacterization of any
independent contractor as an employee that could reasonably be
expected to have an ACC Material Adverse Effect.
(c) Except as set forth in Schedule 2.25(c), neither ACC
nor any subsidiary of ACC has an employment agreement of any kind,
oral or written, express or implied, that would require TCG to
employ any employee of ACC, other than on an at will basis.
2.26 Rights Plan. ACC has taken all necessary action so
that none of the execution and delivery of this Agreement or the
consummation of the Merger or any of the other transactions
contemplated hereby will (i) cause the Rights (as such term is
defined in the ACC Rights Agreement) issued pursuant to the ACC
Rights Agreement to become exercisable, (ii) cause any person to
become an Acquiring Person (as such term is defined in the ACC
Rights Agreement) or (iii) give rise to a Distribution Date (as
such term is defined in the ACC Rights Agreement). For purposes
hereof, the "ACC Rights Agreement" means the Rights Agreement dated
as of October 3, 1997 by and between ACC and First Union National
Bank as Rights Agent, as amended.
ARTICLE III REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS
OF TCG
TCG represents, warrants and/or covenants to and with ACC as
follows:
3.1 Organization and Good Standing. TCG, Acquisition
Subsidiary and each of the TCG Subsidiaries is a corporation or
partnership duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or
organization and has all requisite corporate or partnership power
and authority to own, lease and operate its properties and to carry
on its business as now being conducted. TCG and each of the TCG
Subsidiaries is duly qualified or licensed and in good standing to
do business in each jurisdiction in which the character of the
property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or licensing
necessary, except where the failure to be so duly qualified or
licensed and in good standing would not materially adversely affect
the business, assets (including, but not limited to, intangible
assets), financial condition, liabilities or the results of
operations of TCG and its subsidiaries taken as a whole ("TCG
Material Adverse Effect"). TCG has heretofore made available to ACC
accurate and complete copies of the Articles of Incorporation and
Bylaws, as currently in effect, of TCG. For purposes of this
Agreement, the term "TCG Subsidiary" shall mean any "significant
subsidiary" (as such term is defined in Rule 1-02 of Regulation S-X
of the SEC) of TCG.
3.2 Capitalization. As of the date hereof, the authorized
capital stock of TCG consists of 450,000,000 shares of TCG Stock,
300,000,000 shares of Class B Common Stock, par value $.01 per
share ("TCG Class B Common Stock"), and 150,000,000 shares of
Preferred Stock ("TCG Preferred Stock"). As of November 14, 1997,
61,222,030 shares of TCG Stock, 113,489,040 shares of TCG Class B
Common Stock and no shares of TCG Preferred Stock were issued and
outstanding and no other capital stock of TCG was authorized or
issued. All issued and outstanding shares of the TCG Stock and TCG
Class B Common Stock are duly authorized, validly issued, fully
paid and non-assessable and were issued free of preemptive rights
and in compliance with applicable securities Laws. Except as set
forth in the TCG Securities Filings (as hereinafter defined) or on
Schedule 3.2 attached hereto, or as otherwise contemplated by this
Agreement, as of the date hereof there are no outstanding rights,
subscriptions, warrants, puts, calls, unsatisfied preemptive
rights, options or other agreements of any kind relating to any of
the outstanding, authorized but unissued, unauthorized or treasury
shares of the capital stock or any other security of TCG, and there
is no authorized or outstanding security of any kind convertible
into or exchangeable for any such capital stock or other security.
Except as disclosed in the TCG Securities Filings, there are no
restrictions upon the transfer of or otherwise pertaining to the
securities (including, but not limited to, the ability to pay
dividends thereon) or retained earnings of TCG and the TCG
Subsidiaries or the ownership thereof other than those, if any,
described on Schedule 3.2, those imposed by this Agreement or those
imposed by the Securities Act, the Securities Exchange Act,
applicable state securities Laws or applicable corporate Law.
3.3 Authorization; Binding Agreement. TCG and Acquisition
Subsidiary have all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby, including, but not limited to, the Merger,
have been duly and validly authorized by the respective Boards of
Directors of TCG and Acquisition Subsidiary, as appropriate, and by
the sole stockholder of Acquisition Subsidiary, and no other
corporate proceedings on the part of TCG, Acquisition Subsidiary or
any TCG Subsidiary are necessary to authorize the execution and
delivery of this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of TCG and Acquisition Subsidiary
and, assuming due and valid execution and delivery by the other
parties hereto, constitutes the legal, valid and binding agreement
of TCG and Acquisition Subsidiary, enforceable against each of TCG
and Acquisition Subsidiary in accordance with its terms, subject to
the Enforceability Exceptions. No vote of the holders of any class
of capital stock of TCG is required to approve the execution,
delivery and performance of this Agreement by TCG.
3.4 Governmental Approvals. No Consent from or with any
Governmental Authority on the part of TCG or any of the TCG
Subsidiaries is required in connection with the execution or
delivery by TCG of this Agreement or the consummation by TCG of the
transactions contemplated hereby other than (i)the filing of the
Certificate of Merger with the Secretary of State of Delaware in
accordance with the Delaware Code, (ii) filings with the SEC, state
securities laws administrators and the NASD, (iii) Consents from
the Federal Communications Commission, state public service or
utility commissions (or comparable state Governmental Authorities)
or foreign telephone administrations, (iv) filings under the HSR
Act, and (v) those Consents that, if they were not obtained or
made, do not or would not have a TCG Material Adverse Effect or
materially and adversely affect the ability of TCG to perform its
obligations set forth herein or to consummate the transactions
contemplated hereby.
3.5 No Violations. The execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby
and the compliance by TCG with any of the provisions hereof will
not (i) conflict with or result in any breach of any provision of
the Certificate and/or Articles of Incorporation or Bylaws or other
governing instruments of TCG or any of the TCG Subsidiaries, (ii)
except as set forth on Schedule 3.5, require any consent under or
result in a violation or breach of, or constitute (with or without
due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration or augment the
performance required) under any of the terms, conditions or
provisions of any TCG Material Contract (as hereinafter defined),
(iii) result in the creation or imposition of any lien or
encumbrance of any kind upon any of the assets of TCG or any TCG
Subsidiary, or (iv) subject to obtaining the Consents from
Governmental Authorities referred to in Section 3.4, above,
contravene any Law currently in effect to which TCG or any TCG
Subsidiary or its or any of their respective assets or properties
are subject, except in the case of clauses (ii), (iii) and (iv),
above, for any deviations from the foregoing which do not or would
not have a TCG Material Adverse Effect. For purposes hereof, "TCG
Material Contract" shall mean any material note, bond, mortgage,
indenture, contract, lease, license, agreement, understanding,
instrument, bid or proposal that is required to be described in or
filed as an exhibit to any TCG Securities Filing.
3.6 Securities Filings and Litigation. TCG has made
available to ACC true and complete copies of (i) its Annual
Reports on Form 10-K, as amended, for the year ended December 31,
1996, as filed with the SEC, (ii) its proxy statements relating to
all of the meetings of stockholders (whether annual or special) of
TCG since July 2, 1996, as filed with the SEC, and (iii) all other
reports, statements and registration statements and amendments
thereto (including, without limitation, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K, as amended) filed by TCG with
the SEC since July 2, 1996. The reports and statements set forth in
clauses (i) through (iii), above, and those subsequently provided
or required to be provided pursuant to this Section, are referred
to collectively as the "TCG Securities Filings"). As of their
respective dates, or as of the date of the last amendment thereof,
if amended after filing, none of the TCG Securities Filings
(including all schedules thereto and disclosure documents
incorporated by reference therein), contained or, as to TCG
Securities Filings subsequent to the date hereof, will contain any
untrue statement of a material fact or omitted or, as to TCG
Securities Filings subsequent to the date hereof, will omit to
state 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. Each of the TCG Securities
Filings at the time of filing or as of the date of the last
amendment thereof, if amended after filing, complied or, as to TCG
Securities Filings subsequent to the date hereof, will comply in
all material respects with the Securities Exchange Act or the
Securities Act, as applicable. There is no Litigation pending or,
to the knowledge of TCG, threatened against TCG or any of its
subsidiaries, any officer, director, employee or agent thereof, in
his or her capacity as such, or as a fiduciary with respect to any
TCG Benefit Plan (as hereinafter defined) or otherwise relating to
TCG or any of its subsidiaries or the securities of any of them, or
any properties or rights of TCG or any of its subsidiaries or any
TCG Benefit Plan which is required to be described in any TCG
Securities Filing that is not so described. No event has occurred
as a consequence of which TCG would be required to file a Current
Report on Form 8-K pursuant to the requirements of the Securities
Exchange Act as to which such a report has not been timely filed
with the SEC. Any reports, statements and registration statements
and amendments thereof (including, without limitation, Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K, as amended) filed by TCG with the SEC after the date
hereof shall be provided to ACC on the date of such filing.
3.7 TCG Financial Statements. The audited consolidated
financial statements and unaudited interim financial statements of
TCG included in the TCG Securities Filings (the "TCG Financial
Statements") have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis
(except as may be indicated therein or in the notes thereto) and
present fairly, in all material respects, the financial position of
TCG and its subsidiaries as at the dates thereof and the results of
their operations and cash flows for the periods then ended subject,
in the case of the unaudited interim financial statements, to
normal year-end audit adjustments, any other adjustments described
therein and the fact that certain information and notes have been
condensed or omitted in accordance with the Securities Exchange
Act.
3.8 Absence of Certain Changes or Events. Except as set
forth in the TCG Securities Filings or in Schedule 3.8, since
December 31, 1996, there has not been: (a) any Event that has had
or could reasonably be expected to have a TCG Material Adverse
Effect, (b) any material change by TCG in its accounting methods,
principles or practices, except as required by any change in
generally accepted accounting principles, and (c) other than
changes after the date hereof (which do not materially and
adversely affect the ability of TCG to perform its obligations set
forth herein or to consummate the transactions contemplated
hereby), any amendments or changes to the Certificate of
Incorporation or Bylaws of TCG.
3.9 No Undisclosed Liabilities. Except as forth in
Schedule 3.9, neither TCG nor any of its subsidiaries has any
liabilities (absolute, accrued, contingent or otherwise), except
liabilities (a) in the aggregate adequately provided for in TCG's
audited balance sheet (including any related notes thereto) for the
fiscal year ended December 31, 1996 included in TCG's 1996 Annual
Report on Form 10-K (the "1996 TCG Balance Sheet"), (b) incurred in
the ordinary course of business and not required under generally
accepted accounting principles to be reflected on the 1996 TCG
Balance Sheet, (c) incurred since December 31, 1996 in the ordinary
course of business consistent with past practice, (d) incurred in
connection with this Agreement, (e) which do not constitute a TCG
Material Adverse Effect or (f) which do not materially and
adversely affect the ability of TCG to perform its obligations set
forth herein or to consummate the transactions contemplated hereby.
ARTICLE IV ADDITIONAL COVENANTS OF ACC
ACC covenants and agrees as follows:
4.1 Conduct of Business of ACC and ACC Subsidiaries. Except
as expressly contemplated by this Agreement or set forth on
Schedule 4.1, during the period from the date of this Agreement to
the Effective Time, ACC shall conduct, and it shall cause its
subsidiaries to conduct, its or their businesses in the ordinary
course and consistent with past practice, subject to the
limitations contained in this Agreement, and ACC shall, and it
shall cause its subsidiaries to, use its or their commercially
reasonable efforts to preserve intact its business organization, to
keep available the services of its officers and employees and to
maintain satisfactory relationships with all persons with whom it
does business. Without limiting the generality of the foregoing,
and except as otherwise expressly provided in this Agreement, after
the date of this Agreement and prior to the Effective Time, neither
ACC nor any of its subsidiaries will, without the prior written
consent of TCG:
(i) amend or propose to amend its Certificate or
Articles of Incorporation or Bylaws (or comparable governing
instruments) in any material respect;
(ii) issue, grant, sell, pledge, dispose of or
propose to grant, sell, pledge or dispose of any shares of, or any
options, warrants, commitments, subscriptions or rights of any kind
to acquire or sell any shares of, the capital stock or other
securities of ACC or any of its subsidiaries, including, but not
limited to, any securities convertible into or exchangeable for
shares of stock of any class of ACC or any of its subsidiaries, or
authorize for issuance or propose to issue any of the foregoing
except for options, except (A) for the issuance of shares of ACC
Class A Common Stock pursuant to the exercise of stock options or
stock incentive rights, (B) the conversion of convertible
securities outstanding on the date of this Agreement in accordance
with their present terms, (C) the issuance of shares of ACC Class
A Common Stock in accordance with the terms of acquisitions
approved by TCG and (D) the issuance and sale of shares of ACC
Class A Common Stock purchased in respect of the calendar quarter
ended December 31, 1997 pursuant to the ACC Corp. Employee Stock
Purchase Plan;
(iii) split, combine or reclassify any shares of
its capital stock or declare, pay or set aside any dividend or
other distribution (whether in cash, stock or property or any
combination thereof) in respect of its capital stock, other than
dividends or distributions to ACC or a subsidiary of ACC, or
directly or indirectly redeem, purchase or otherwise acquire or
offer to acquire any shares of its capital stock or other
securities;
(iv) other than in the ordinary course of business
consistent with past practice, (a) except in connection with a
$50 million increase in the principal amount of the credit facility
pursuant to the Amended and Restated Credit Agreement dated as of
January 14, 1997 by and among ACC and certain of its subsidiaries
as Borrower, ACC as Guarantor, First Union National Bank of
North Carolina as Managing Agent and Administrative Agent, and
Fleet National Bank, as Managing Agent and Documentation Agent, as
it may have been amended through the date hereof (the "Credit
Facility Increase"), create, incur or assume any debt or
obligations in respect of capital leases, except refinancings of
existing obligations on terms that are no less favorable to ACC or
its subsidiaries than the existing terms; (b) except in connection
with the Credit Facility Increase, assume, guarantee, endorse or
otherwise become liable or responsible (whether directly,
indirectly, contingently or otherwise) for the obligations of any
person; (c) make any capital expenditures or make any loans,
advances or capital contributions to, or investments in, any other
person (other than to a subsidiary of ACC and customary travel,
relocation or business advances to employees made in the ordinary
course of business consistent with past practice), except for
capital expenditures not to exceed $60 million pursuant to ACC's
budget for fiscal year 1998, a copy of which has been provided to
TCG by ACC prior to the date hereof; (d) acquire the stock or
assets of, or merge or consolidate with, any other person other
than transactions contemplated by agreements which have been
executed and delivered by ACC as of the date hereof; provided that
ACC will not amend, modify or waive any provision of any such
agreement, or terminate any such agreement, without the prior
written consent of TCG; (e) voluntarily incur any material
liability or obligation (absolute, accrued, contingent or
otherwise); or (f) sell, transfer, mortgage, pledge or otherwise
dispose of, or encumber, or agree to sell, transfer, mortgage,
pledge or otherwise dispose of or encumber, any assets or
properties, real, personal or mixed material to ACC and its
subsidiaries taken as a whole, other than to secure debt permitted
under sub-clause (a) of this clause (iv);
(v) other than as required by law or pursuant to
the terms of agreements in effect on the date of this Agreement and
in the ordinary course of business, consistent with past practice
(a) increase in any manner the compensation paid to any of its
officers in excess of 5% of the compensation of such officers for
the prior year, (b) increase in any manner the compensation of any
employees, other than officers, other than in the ordinary course,
(c) enter into, establish, amend or terminate any employment or
consulting agreement for a term of more than one year or for
compensation in excess of $50,000, (d) enter into, establish, amend
or terminate any retention, change in control, collective
bargaining, bonus, incentive compensation, stock option, stock
incentive right, stock purchase, severance, deferred compensation,
non-qualified retirement or welfare plan, policy, agreement, trust,
fund or arrangement with, for or in respect of, any stockholder,
officer, director, other employee, agent, consultant or affiliate,
(e) enter into, establish, terminate or materially amend any tax-
qualified retirement plan or welfare plan (not including any
severance plan) except as may be required by ERISA, or (f) permit
the exercise of any stock option, or the payment of any taxes
relating to the exercise of such options, by any means other than
cash, except to the extent the optionee currently has the
unrestricted right to exercise other than for cash pursuant to any
Employee Plan or Compensation Arrangement; provided, however, with
respect to all of the foregoing matters in this Section 4.1(v), TCG
and ACC will consult with each other regarding any request made by
ACC pertaining to such matters and TCG shall not unreasonably
withhold its consent as to matters requested by ACC; and
(vi) enter into any lease or amend any lease of
real property other than in the ordinary course of business
consistent with past practice.
Furthermore, ACC covenants that from and after the date of
this Agreement, unless TCG shall otherwise expressly consent in
writing, ACC shall, and ACC shall cause each of its subsidiaries
to, use its or their reasonable efforts to comply in all material
respects with all Laws applicable to it or any of its properties,
assets or business and maintain in full force and effect all ACC
Permits necessary for, or otherwise material to, such business.
4.2 Notification of Certain Matters. ACC shall give prompt
notice to TCG if any of the following occur after the date of this
Agreement: (i) its receipt of any notice of, or other communication
relating to, a default or Event which, with notice or lapse of time
or both, would become a material default under any ACC Material
Contract; (ii) its receipt of any notice or other communication in
writing from any third party alleging that the Consent of such
third party is or may be required in connection with the
transactions contemplated by this Agreement, provided that such
Consent would have been required to have been disclosed in this
Agreement; (iii) its receipt of any material notice or other
communication from any Governmental Authority (including, but not
limited to, the NASD or any securities exchange) in connection with
the transactions contemplated by this Agreement; (iv) the
occurrence of an Event which could reasonably be expected to have
an ACC Material Adverse Effect; (v) the commencement or threat of
any Litigation involving or affecting ACC or any of its
subsidiaries, or any of their respective properties or assets, or,
to its knowledge, any employee, agent, director or officer, in his
or her capacity as such, of ACC or any of its subsidiaries which,
if pending on the date hereof, would have been required to have
been disclosed in this Agreement or which relates to the
consummation of the Merger or any material development in
connection with any Litigation disclosed by ACC in or pursuant to
this Agreement or the ACC Securities Filings; and (vi) the
occurrence of any Event that could cause a breach by ACC of any
provision of this Agreement, including such a breach that could
occur if such Event had taken place on or prior to the date of this
Agreement.
4.3 Access and Information. Between the date of this
Agreement and the Effective Time, ACC and its subsidiaries will
give, and shall direct their accountants and legal counsel to give,
TCG, its lenders and their respective authorized representatives
(including, without limitation, financial advisors, accountants and
legal counsel) at all reasonable times access as reasonably
requested to all offices and other facilities and to all contracts,
agreements, commitments, books and records (including, but not
limited to, Tax Returns) of or pertaining to ACC and its
subsidiaries, will permit the foregoing to make such reasonable
inspections as they may require and will cause its officers
promptly to furnish TCG with (a) such financial and operating data
and other information with respect to the business and properties
of ACC and its subsidiaries as TCG may from time to time reasonably
request, and (b) a copy of each material report, schedule and other
document filed or received by ACC or any of its subsidiaries
pursuant to the requirements of applicable securities Laws or the
NASD. ACC shall, upon request, furnish TCG with all information
concerning itself, its subsidiaries, directors, officers and
stockholders and such other matters as may be reasonably necessary
or advisable in connection with the Prospectus/Proxy Statement or
any other statement, filing, notice or application made by or on
behalf of TCG, ACC or Acquisition Subsidiary or any of their
respective subsidiaries to any Governmental Authority in connection
with the Merger and the other transactions contemplated by this
Agreement.
4.4 Stockholder Approval. As soon as practicable, ACC will
take all steps necessary to duly call, give notice of, convene and
hold a meeting of its stockholders for the purpose of approving the
ACC Proposals and for such other purposes as may be necessary or
desirable in connection with effectuating the transactions
contemplated hereby. Except as otherwise contemplated by this
Agreement (including, without limitation, Section 4.8 hereof), the
Board of Directors of ACC (i) will recommend to the stockholders of
ACC that it approves the ACC Proposals, and (ii) will use its
commercially reasonable efforts to obtain any necessary approval by
ACC's stockholders of the ACC Proposals, including, without
limitation, voting the shares of ACC Class A Common Stock held by
such Directors for such adoption and approval.
4.5 Commercially Reasonable Efforts. Subject to the terms
and conditions herein provided, ACC agrees to use its commercially
reasonable efforts 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 and make effective as promptly as
practicable the Merger and the transactions contemplated by this
Agreement including, but not limited to (i) obtaining the Consent
of ACC's lenders and others to this Agreement and the transactions
contemplated hereby, (ii) the defending of any Litigation against
ACC or any of its subsidiaries challenging this Agreement or the
consummation of the transactions contemplated hereby, (iii)
obtaining all Consents from Governmental Authorities required for
the consummation of the Merger and the transactions contemplated
thereby, and (iv) timely making all necessary filings under the HSR
Act. Upon the terms and subject to the conditions hereof, ACC
agrees to use commercially reasonable efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things
necessary to satisfy the other conditions of the Closing set forth
herein.
4.6 Public Announcements. So long as this Agreement is in
effect, ACC shall not, and shall cause its affiliates not to, issue
or cause the publication of any press release or any other
announcement with respect to the Merger, the ACC Proposals or the
transactions contemplated hereby or thereby without the consent of
TCG, except where such release or announcement is required by
applicable Law or pursuant to any applicable listing agreement
with, or rules or regulations of, the NASD, in which case ACC,
prior to making such announcement, shall consult with TCG regarding
the same.
4.7 Compliance. In consummating the Merger and the
transactions contemplated hereby, ACC shall comply in all material
respects with the provisions of the Securities Exchange Act and the
Securities Act and shall comply, and cause its subsidiaries to
comply or to be in compliance, in all material respects, with all
other applicable Laws.
4.8 No Solicitation.
(a) ACC shall, and shall direct and use commercially
reasonable efforts to cause its officers, directors, employees,
representatives and agents to, immediately cease any discussions or
negotiations with any parties that may be ongoing with respect to
an ACC Takeover Proposal (as hereinafter defined). ACC shall not,
nor shall it permit any of its subsidiaries to, nor shall it
authorize or permit any of its officers, directors or employees or
any investment banker, financial advisor, attorney, accountant or
other representative retained by it or any of its subsidiaries to,
directly or indirectly, (i) solicit, initiate or encourage
(including by way of furnishing information), or take any other
action designed or reasonably likely to facilitate, including,
without limitation, any amendment, modification or termination, or
any agreement to do any of the foregoing, to the ACC Rights Plan or
any redemption of the Rights, any inquiries or the making of any
proposal which constitutes, or may reasonably be expected to lead
to, any ACC Takeover Proposal or (ii) participate in any
discussions or negotiations regarding any ACC Takeover Proposal;
provided, however, that if, at any time prior to the time of the
ACC Stockholders Meeting, the Board of Directors of ACC determines
in good faith, upon advice from outside counsel, that it is
necessary to do so in order to comply with its fiduciary duties to
ACC's stockholders under applicable law, ACC may, in response to an
ACC Takeover Proposal or material modification to an ACC Takeover
Proposal, which ACC Takeover Proposal or material modification was
made after the date hereof and was not solicited after the date
hereof, and subject to compliance with Section 4.8(c), (x) furnish
information with respect to ACC to any person pursuant to a
confidentiality agreement, which either was executed prior to the
date hereof or is substantially similar to the Confidentiality
Agreement dated as of November 13, 1997 by and between ACC and TCG
and (y) participate in negotiations regarding such ACC Takeover
Proposal or material modification made after the date hereof. "ACC
Takeover Proposal" means any inquiry, proposal or offer from any
person relating to any direct or indirect acquisition or purchase
of 15% or more of the assets of ACC and its subsidiaries or 15% or
more of any class of equity securities of ACC or any of its
subsidiaries, any tender offer or exchange offer that if
consummated would result in any person beneficially owning 15% or
more of any class of equity securities of ACC or any of its
subsidiaries, any merger, consolidation, share exchange, business
combination, recapitalization, liquidation, dissolution or similar
transaction involving ACC or any of its subsidiaries (other than
the transactions contemplated by this Agreement) or any other
transaction the consummation of which could reasonably be expected
to impede, interfere with, prevent or materially delay the Merger
or which would reasonably be expected to diminish materially the
benefits to TCG of the transactions contemplated by this Agreement.
(b) Except as set forth in this Section 4.8, neither the
Board of Directors of ACC nor any committee thereof shall (i)
withdraw or modify, or propose publicly to withdraw or modify, in
a manner adverse to TCG, or take any action not explicitly
permitted by this Agreement that would be inconsistent with, the
approval or recommendation by such Board of Directors or such
committee of the ACC Proposals, (ii) approve or recommend, or
propose publicly to approve or recommend, any ACC Takeover Proposal
or (iii) cause ACC to enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement (each,
an "ACC Acquisition Agreement") related to any ACC Takeover
Proposal. Notwithstanding the foregoing, in the event that prior to
the time of the ACC Stockholders Meeting, the Board of Directors of
ACC determines in good faith, after receipt of advice from outside
counsel, that it is necessary to do so in order to comply with
applicable law, the Board of Directors of ACC may (subject to this
and the following sentences) (x) withdraw or modify its approval or
recommendation of the ACC Proposals or (y) approve or recommend an
ACC Superior Proposal (as defined below) or, subject to payment of
any Termination Fee (as hereinafter defined) then required pursuant
to Section 7.2(b), terminate this Agreement (and concurrently with
or after such termination, if it so chooses, cause ACC to enter
into any ACC Acquisition Agreement with respect to any ACC Superior
Proposal), but in each of the cases set forth in this clause (y),
only at a time that is after the third (3rd) day following TCG's
receipt of written notice advising TCG that the Board of Directors
of ACC has received an ACC Superior Proposal, specifying the
material terms and conditions of such ACC Superior Proposal and
identifying the person making such ACC Superior Proposal; provided,
however, that if the Board of Directors of ACC determines in good
faith, upon advice from outside counsel, that in order to comply
with its fiduciary duties to ACC's stockholders under applicable
law it cannot specify such material terms and conditions or
identify the person making the ACC Superior Proposal, then such
notice may omit to specify such material terms and conditions or
identify the person to the extent so required. ACC hereby
acknowledges and agrees that any such withdrawal or modification of
the recommendation of the ACC Proposals shall not change the
approval of the Board of Directors of ACC for purposes of causing
Section 203 of the Delaware Code to be inapplicable to this
Agreement and the transactions contemplated hereby. For purposes
of this Agreement, an "ACC Superior Proposal" means any bona fide
proposal made by a third party to acquire, directly or indirectly,
for consideration consisting of cash and/or securities, more than
15% of the voting power of the shares of ACC Class A Common Stock
then outstanding or all or substantially all the assets of ACC and
otherwise on terms which the Board of Directors of ACC determines
in its good faith judgment (based on the advice of a financial
advisor of nationally recognized reputation) to be materially more
favorable to ACC's stockholders than the Merger and for which
financing, to the extent required, is then committed or which, in
the good faith judgment of the Board of Directors of ACC, is
reasonably capable of being financed by such third party.
(c) In addition to the obligations of ACC set forth in
paragraphs (a) and (b) of this Section 4.8, ACC shall immediately
advise TCG orally and in writing of any request by any person for
information about ACC or of any ACC Takeover Proposal, the material
terms and conditions of such request or ACC Takeover Proposal and
the identity of the person making such request or ACC Takeover
Proposal; provided, however, that if the Board of Directors of ACC
determines in good faith, upon advice from outside counsel, that in
order to comply with its fiduciary duties to ACC's stockholders
under applicable law it cannot specify such material terms and
conditions or identify the person making the ACC Superior Proposal,
then such notice may omit to specify such material terms and
conditions or to identify the person to the extent so required.
(d) Nothing contained in this Section 4.8 shall prohibit
ACC from taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Securities
Exchange Act or from making any disclosure to ACC's stockholders
if, in the good faith judgment of the Board of Directors of ACC,
after consultation with outside counsel, failure so to disclose
would be inconsistent with applicable law; provided, however,
neither ACC nor its Board of Directors nor any committee thereof
shall, except as permitted by Section 4.8(b), withdraw or modify,
or propose publicly to withdraw or modify, its position with
respect to the ACC Proposals or approve or recommend, or propose
publicly to approve or recommend, an ACC Takeover Proposal.
4.9 SEC and Stockholder Filings. ACC shall send to TCG for
review, before distribution to its stockholders, the SEC or any
state or foreign securities commission, copies of all material
public reports and materials and, promptly upon distribution
thereof, copies of all such reports and materials as so
distributed.
4.10 Tax Opinion Certification. ACC shall execute and
deliver a certificate, in a form satisfactory to the counsel of
both ACC and TCG, signed by an officer of ACC setting forth factual
representations and covenants that will serve as a basis for the
tax opinions required pursuant to Section 6.3.7 of this Agreement.
4.11 Affiliate Agreements. ACC shall use commercially
reasonable efforts to ensure that each person who is or may be an
"affiliate" of ACC within the meaning of Rule 145 promulgated under
the Securities Act shall enter into an agreement in the form
attached hereto as Schedule 4.11 as soon as practicable after the
date hereof.
4.12 Takeover Statutes. If any "fair price," "moratorium,"
"control share acquisition" or other similar antitakeover statute
or regulation enacted under state or federal laws in the United
States, including, without limitation, Section 203 of the Delaware
Code (each, a "Takeover Statute" and, collectively, "Takeover
Statutes"), is or may become applicable to the Merger, the ACC
Proposals or the transactions contemplated hereby and thereby, ACC
and the members of its Board of Directors will grant such
approvals, and take such actions, as are necessary so that the
transactions contemplated by this Agreement and the ACC Proposals
may be consummated as promptly as practicable on the terms
contemplated hereby and thereby and otherwise act to eliminate or
minimize the effects of any Takeover Statute on any of the
transactions contemplated hereby or thereby.
4.13 Pooling Accounting Treatment. ACC agrees not to take
any action that to its knowledge could reasonably be expected to
adversely affect the ability of TCG to treat the Merger as a
pooling of interests, and ACC agrees to take such action as may be
reasonably required to negate the impact of any past actions which
to its knowledge could reasonably be expected to adversely impact
the ability of TCG to treat the Merger as a pooling of interests.
ARTICLE V ADDITIONAL COVENANTS OF TCG
5.1 Access and Information. Between the date of this
Agreement and the Effective Time, TCG and its subsidiaries will
give, and shall direct their respective accountants and legal
counsel to give ACC, and its authorized representatives (including,
without limitation, its lenders, financial advisors, accountants
and legal counsel) at all reasonable times access as reasonably
requested to all offices and other facilities and to all contracts,
agreements, commitments, books and records (including, but not
limited to, Tax Returns) of or pertaining to TCG and its
subsidiaries, will permit the foregoing to make such reasonable
inspections as they may require and will cause its officers
promptly to furnish ACC with (a) such financial and operating data
and other information with respect to the business and properties
of TCG and its subsidiaries as ACC may from time to time reasonably
request, and (b) a copy of each material report, schedule and other
document filed or received by TCG or any of its subsidiaries
pursuant to the requirements of applicable securities Laws or the
NASD.
5.2 Employee Matters.
(a) On and after the Effective Time TCG agrees that
employees of ACC and its subsidiaries prior to the Effective Time
who are employees of the Surviving Corporation or its subsidiaries
shall be provided with and permitted to participate in all Employee
Plans and Compensation Arrangements provided to similarly situated
employees of TCG and/or its subsidiaries, which Employee Plans and
Compensation Arrangements may, in TCG's sole discretion, include
Employee Plans and Compensation Arrangements of ACC. For purposes
of eligibility to participate in and vesting in benefits provided
under such Employee Plans and Compensation Arrangements, and for
determining benefits or accruals under such Employee Plans and
Compensation Arrangements, all employees of ACC and its
subsidiaries prior to the Effective Time who become employees of
the Surviving Corporation or its subsidiaries, shall be credited
with their years of service with ACC and its subsidiaries prior to
the Effective Time to the same extent as credited by ACC under the
Employee Plans and Compensation Arrangements of ACC and to the
extent permitted under applicable law.
(b) TCG acknowledges and agrees that, pursuant to the
terms thereof on the date of this Agreement, the vesting of all
outstanding ACC Options and warrants or arrangements to acquire
capital stock of ACC as set forth on the Schedules to this
Agreement and all ACC SIRs shall accelerate immediately upon the
Effective Time.
5.3 Commercially Reasonable Efforts.
(a) Subject to the terms and conditions herein provided,
TCG agrees to use its commercially reasonable efforts 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 and make
effective as promptly as practicable the Merger and the
transactions contemplated by this Agreement including, but not
limited to (i) obtaining all Consents from Governmental Authorities
required for the consummation of the Merger and the transactions
contemplated thereby, (ii) timely making all necessary filings
under the HSR Act and (iii) causing the shares of TCG Stock
comprising the Merger Consideration to be approved for listing on
the Nasdaq as promptly as practicable. Upon the terms and subject
to the conditions hereof, TCG agrees to use commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary to satisfy the other
conditions of the Closing set forth herein.
(b) Notwithstanding anything to the contrary contained
in this Agreement, TCG shall not be required to agree to any
prohibition, limitation or other requirements that would (i)
prohibit or limit the ownership or operation by TCG or any of its
subsidiaries or affiliates of any material portion of the business
or assets of TCG or any of such subsidiaries or affiliates, or
compel TCG or any of its subsidiaries or affiliates to dispose of
or hold separate any material portion of its business or assets or
any of its subsidiaries or affiliates, (ii) impose limitations on
TCG's ability to acquire or hold, or exercise full rights of
ownership of, any shares of capital stock, including, without
limitation, the right to vote any capital stock on all matters
properly presented to stockholders, (iii) prohibit TCG or any of
its subsidiaries or affiliates from effectively controlling in any
material respect the business or operations of TCG or any of its
subsidiaries or affiliates, or (iv) otherwise materially adversely
affect TCG or any of its subsidiaries or affiliates. For purposes
hereof, "subsidiaries" or "affiliates" TCG shall include, without
limitation, ACC or any of its subsidiaries or affiliates from and
after the Effective Time.
5.4 Public Announcements. So long as this Agreement is in
effect, TCG shall not, and shall cause its affiliates not to, issue
or cause the publication of any press release or any other
announcement with respect to the Merger, the ACC Proposals or the
transactions contemplated hereby or thereby without the consent of
ACC, except as may be required by the Securities Act in connection
with the offer and sale of any securities by TCG or where such
release or announcement is required by applicable Law or pursuant
to any applicable listing agreement with, or rules or regulations
of, the NASD, in which case TCG, prior to making such announcement,
will consult with ACC regarding the same.
5.5 Compliance. In consummating the Merger and the
transactions contemplated hereby, TCG shall comply in all material
respects with the provisions of the Securities Exchange Act and the
Securities Act and shall comply, and/or cause its subsidiaries to
comply or to be in compliance, in all material respects, with all
other applicable Laws.
5.6 SEC and Stockholder Filings. TCG shall send to ACC a
copy of all material public reports and materials as and when it
sends the same to its stockholders, the SEC or any state or foreign
securities commission.
5.7 Indemnification. The indemnification provisions of the
By-laws and the Certificate of Incorporation of the Surviving
Corporation shall not be amended, repealed or otherwise modified
for a period of six years after the Closing Date in any manner that
would adversely affect the rights thereunder of individuals who
immediately prior to the Closing Date were directors, officers,
agents or employees of ACC unless otherwise required by applicable
Law. From and after the Effective Time, TCG and the Surviving
Corporation shall jointly and severally indemnify, defend and hold
harmless the directors, officers and agents of ACC as provided in
ACC's Certificate of Incorporation, By-Laws or indemnification
agreements, as in effect as of the date hereof, with respect to
matters occurring through the Closing Date. To the extent
available, TCG agrees to cause the Surviving Corporation to
maintain in effect for not less than three years after the Closing
Date policies of directors' and officers' liability insurance
comparable to those maintained by ACC with carriers comparable to
ACC's existing carriers and containing terms and conditions which
are no less advantageous in any material respect to the officers,
directors and employees of ACC; provided, however, that the
Surviving Corporation shall not be required to pay an annual
premium for such insurance in excess of two times the last annual
premium paid prior to the date hereof, but in such case shall
purchase as much coverage as possible for such amount.
5.8 Affiliate Agreements. TCG shall use commercially
reasonable efforts to ensure that each person who is or may be an
"affiliate" of TCG within the meaning of Rule 145 promulgated under
the Securities Act shall enter into an agreement in the form
attached hereto as Schedule 5.8 as soon as practicable after the
date hereof.
5.9 Negative Covenants. Between the date of this Agreement
and the Effective Time, TCG shall not declare, pay or set aside any
dividend or other distribution (whether in cash, stock or property
or any combination thereof) in respect of its equity securities or
directly or indirectly redeem, purchase or otherwise acquire or
offer to acquire any shares of its equity securities, other than
any such action which would result in an adjustment to the Merger
Consideration pursuant to the last sentence of Section 1.3(a) or
any such action pursuant to any employment agreement, Employee Plan
or Compensation Arrangement.
5.10 Preparation of Tax Returns. TCG shall prepare and
file, or cause to be prepared and filed, in accordance with ACC's
past custom and practice, all Tax Returns for ACC and its
subsidiaries for all taxable periods ending on or prior to the
Closing Date for which Tax Returns have not been filed prior to the
Closing Date, and the Surviving Corporation shall pay all Taxes
shown to be due on such Tax Returns.
5.11 Tax Opinion Certification. TCG shall execute and
deliver a certificate, in a form satisfactory to the counsel of
both ACC and TCG, signed by an officer of TCG setting forth factual
representations and covenants that will serve as a basis for the
tax opinions required pursuant to Section 6.2.5 of this Agreement.
5.12 Notification of Certain Matters. TCG shall give prompt
notice to ACC if any of the following occur after the date of this
Agreement: (i) its receipt of any material notice or other
communication from any Governmental Authority (including, without
limitation, the NASD or any securities exchange) in connection with
the transactions contemplated by this Agreement, (ii) the
occurrence of an Event which could reasonably be expected to have
a TCG Material Adverse Effect; and (iii) the occurrence of any
Event that could cause a breach by TCG of any provision of this
Agreement, including such a breach that could occur if such Event
had taken place on or prior to the date of this Agreement.
ARTICLE VI CONDITIONS
6.1 Conditions to Each Party's Obligations. The respective
obligations of each party to effect the Merger shall be subject to
the fulfillment or waiver at or prior to the Effective Time of the
following conditions:
6.1.1 Stockholder Approval. The ACC Proposals shall
have been approved at or prior to the Effective Time by the
requisite vote of the stockholders of ACC in accordance with the
Delaware Code and the rules and regulations of the NASD.
6.1.2 No Injunction or Action. No order, statute,
rule, regulation, executive order, stay, decree, judgment or
injunction shall have been enacted, entered, promulgated or
enforced by any court or other Governmental Authority which
prohibits or prevents the consummation of the Merger which has not
been vacated, dismissed or withdrawn by the Effective Time. ACC and
TCG shall use their reasonable best efforts to have any of the
foregoing vacated, dismissed or withdrawn by the Effective Time.
6.1.3 HSR Act. Any waiting period applicable to the
Merger under the HSR Act shall have expired or earlier termination
thereof shall have been granted and no action, suit, proceeding or
investigation shall have been instituted by either the United
States Department of Justice or the Federal Trade Commission to
prevent the consummation of the transactions contemplated by this
Agreement or to modify or amend such transactions in any material
manner, or if any such action, suit, proceeding or investigation
shall have been instituted, it shall have been withdrawn or a final
judgment shall have been entered against such Department or
Commission, as the case may be.
6.1.4 Registration Statement. The Registration
Statement shall have been declared effective and no stop order
suspending the effectiveness of the Registration Statement shall
have been issued and no action, suit, proceeding or investigation
for that purpose shall have been initiated or threatened by any
Governmental Authority.
6.1.5 Quotation of TCG Stock. The shares of TCG
Stock comprising the Merger Consideration shall have been approved
for listing on the Nasdaq.
6.2 Conditions to Obligations of ACC. The obligation of ACC
to effect the Merger shall be subject to the fulfillment at or
prior to the Effective Time of the following additional conditions,
any one or more of which may be waived by ACC:
6.2.1 TCG Representations and Warranties. The
representations and warranties of TCG contained in this Agreement
that are modified by materiality or TCG Material Adverse Effect
shall be true and correct in all respects and those that are not so
modified shall be true and correct in all material respects, on the
date hereof and as of the Effective Time as if made at the
Effective Time, except to the extent a representation and warranty
speaks as of a particular date, in which case such representation
and warranty shall have been so true and correct as of such
particular date.
6.2.2 Performance by TCG. TCG shall have performed
and complied with all of the covenants and agreements in all
material respects and satisfied in all material respects all of the
conditions required by this Agreement to be performed or complied
with or satisfied by TCG at or prior to the Effective Time.
6.2.3 [Intentionally Omitted]
6.2.4 Certificates and Other Deliveries. TCG shall
have delivered to ACC a certificate executed on its behalf by its
President or another authorized officer to the effect that the
conditions set forth in Subsections 6.2.1 and 6.2.2 above, have
been satisfied.
6.2.5 Tax Opinion. ACC shall have received an
opinion from ACC's tax counsel substantially to the effect that, if
the Merger is consummated in accordance with the provisions of this
Agreement, under current law, for federal income tax purposes, the
Merger will qualify as a reorganization within the meaning of
Section 368(a) of the Code.
6.3 Conditions to Obligations of TCG. The obligations of
TCG to effect the Merger shall be subject to the fulfillment at or
prior to the Effective Time of the following additional conditions,
any one or more of which may be waived by TCG:
6.3.1 ACC Representations and Warranties. The
representations and warranties of ACC contained in this Agreement
that are modified by materiality or ACC Material Adverse Effect
shall be true and correct in all respects, and those that are not
so modified shall be true and correct in all material respects, on
the date hereof and as of the Effective Time as if made at the
Effective Time, except to the extent a representation and warranty
speaks as of a particular date, in which case such representation
and warranty shall have been so true and correct as of such
particular date.
6.3.2 Performance by ACC. ACC shall have performed
and complied with all the covenants and agreements in all material
respects and satisfied in all material respects all the conditions
required by this Agreement to be performed or complied with or
satisfied by ACC at or prior to the Effective Time.
6.3.3 [Intentionally Omitted]
6.3.4 Governmental Approvals. All Consents of any
Governmental Authority required for the consummation of the Merger
and the transactions contemplated by this Agreement shall have been
obtained by Final Order (as hereafter defined), except as may be
waived by TCG or those Consents the failure of which to be obtained
will not materially adversely affect the business, assets
(including, but not limited to, intangible assets), financial
condition, liabilities or the results of operations of the
Surviving Corporation and its subsidiaries taken as a whole
("Surviving Corporation Material Adverse Effect") and such Consents
shall not contain any Restrictive Provision. The term "Final
Order" with respect to any Consent of a Governmental Authority
shall mean an action by the appropriate Governmental Authority as
to which: (i) no request for stay by such Governmental Authority of
the action is pending, no such stay is in effect, and, if any
deadline for filing any such request is designated by statute or
regulation, it has passed; (ii) no petition for rehearing or
reconsideration of the action is pending before such Governmental
Authority, and no appeal or comparable administrative remedy with
such or any other Governmental Authority is pending before such
Governmental Authority, and the time for filing any such petition,
appeal or administrative remedy has passed; (iii) such Governmental
Authority does not have the action under reconsideration on its own
motion and the time for such reconsideration has passed; and (iv)
no appeal to a court, or request for stay by a court, of the
Governmental Authority action is pending or in effect, and if any
deadline for filing any such appeal or request is designated by
statute or rule, it has passed. The term "Restrictive Provision"
shall mean any prohibition, limitation or other requirements that
could reasonably be expected to have a Surviving Corporation
Material Adverse Effect.
6.3.5 Certificates and Other Deliveries. ACC shall
have delivered, or caused to be delivered, to TCG a certificate
executed on its behalf by its President or another duly authorized
officer to the effect that the conditions set forth in Subsections
6.3.1 and 6.3.2 above, have been satisfied.
6.3.6 Opinion of ACC Counsel. TCG shall have
received the opinion of special telecommunications counsel to ACC,
in form and substance reasonably satisfactory to TCG and customary
for similar transactions in such jurisdictions, covering regulatory
matters in the Federal Republic of Germany, the United Kingdom,
Canada, Massachusetts, New York, the United States and any other
national or state jurisdiction in which ACC owns, leases or
operates one or more telecommunications switching devices.
6.3.7 Tax Opinion. TCG shall have received an
opinion from TCG's tax counsel substantially to the effect that, if
the Merger is consummated in accordance with the provisions of this
Agreement, under current law, for federal income tax purposes, the
Merger will qualify as a reorganization within the meaning of
Section 368(a) of the Code.
ARTICLE VII TERMINATION AND ABANDONMENT
7.1 Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after approval
of the stockholders of ACC and TCG described herein:
(a) by mutual written consent of TCG and ACC;
(b) by either TCG or ACC if:
(i) the Merger shall not have been consummated on
or prior to the first anniversary of the date hereof; provided,
however, that the right to terminate this Agreement pursuant to
this Section 7.1(b)(i) shall not be available to any party whose
breach of any of its representations, warranties, covenants or
other agreements under this Agreement or failure to perform any of
its obligations under this Agreement results in the failure of the
Merger to be consummated by such time;
(ii) the approval of ACC's stockholders required by
Section 6.1.1 shall not have been obtained at a meeting duly
convened therefor or at any adjournment or postponement thereof
(the "ACC Stockholders Meeting"); or
(iii) any Governmental Authority shall have issued
an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the consummation of
the Merger and such order, decree or ruling or other action shall
have become final and nonappealable;
(c) by TCG, if:
(i) ACC shall have breached in any material
respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to
perform is incapable of being cured or has not been cured within 20
days after the giving of written notice thereof to ACC;
(ii) Section 4.8 shall be breached by ACC in any
material respect and ACC shall have failed to promptly terminate
the activity giving rise to such breach and use commercially
reasonable best efforts to cure such breach upon notice thereof
from TCG, or ACC shall breach Section 4.8 by failing to promptly
notify TCG as required thereunder;
(iii) (A) the Board of Directors of ACC or any
committee thereof shall have withdrawn or modified in a manner
adverse to TCG its approval or recommendation of the ACC Proposals,
or approved or recommended any ACC Takeover Proposal or (B) the
Board of Directors of ACC or any committee thereof shall have
resolved to take any of the foregoing actions; or
(iv) Any person (other than TCG or any of its
affiliates or associates) shall have acquired beneficial ownership
(as such term is defined in Rule 13d-3 promulgated under the
Securities Exchange Act), or any "group" (as such term is defined
in Section 13(d)(3) of the Securities Exchange Act) (other than a
group of which TCG or any of its affiliates or associates is a
member) shall have been formed which beneficially owns, 10% or more
of the voting power of ACC; or
(d) by ACC:
(i) if TCG shall have breached in any material
respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to
perform is incapable of being cured or has not been cured within 20
days after the giving of written notice thereof to TCG; or
(ii) prior to the time of the ACC Stockholders
Meeting, in accordance with Section 4.8(b), provided that it has
complied with all provisions thereof, including the notice
provisions therein, and that it complies with applicable
requirements relating to the payment (including the timing of any
payment) of the Termination Fee.
The party desiring to terminate this Agreement pursuant to the
preceding paragraphs (b), (c)(i), (c)(ii), (c)(iii), (c)(iv),
(d)(i) or (d)(ii) shall give written notice of such termination to
the other party in accordance with Section 8.5 below.
7.2 Effect of Termination and Abandonment.
(a) In the event of termination of this Agreement and
the abandonment of the Merger pursuant to this Article VII, this
Agreement (other than as set forth in this Section 7.2, Section
7.3, Section 8.1 and Section 8.7) shall become void and of no
effect with no liability on the part of any party hereto (or of any
of its directors, officers, employees, agents, legal or financial
advisors or other representatives); provided, however, that no such
termination shall relieve any party hereto from any liability for
any breach of this Agreement.
(b) In the event that this Agreement (i) is terminated
by TCG pursuant to Section 7.1(c)(i) or 7.1.(c)(ii) or by TCG or
ACC pursuant to Section 7.1(b)(ii), and (ii) a bona fide ACC
Takeover Proposal shall have been made known to ACC or any of its
subsidiaries or made known to its stockholders generally or
publicly announced or any Person shall have publicly announced an
intention (whether or not conditional) to make a bona fide ACC
Takeover Proposal, in each case before any such termination, and
such ACC Takeover Proposal shall have been consummated or an
agreement with respect to such ACC Takeover Proposal (whether or
not binding) shall have been executed by ACC within twelve (12)
months of the date of such termination, then ACC shall, on the date
such ACC Takeover Proposal is consummated, pay TCG a fee equal to
Thirty Two Million Five Hundred Thousand Dollars ($32,500,000) (the
"Termination Fee"), payable by wire transfer of same day funds. In
the event that this Agreement is terminated by TCG pursuant to
Section 7.1(c)(iii), then ACC shall pay TCG the Termination Fee,
payable by wire transfer of same day funds, within one (1) business
day of the date of such termination. In the event that this
Agreement is terminated by ACC pursuant to Section 7.1(d)(ii), then
ACC shall pay TCG the Termination Fee, by wire transfer of same day
funds, concurrently with its notice of termination (and such
termination shall not be effective until TCG shall have received
such Termination Fee). In the event that the Termination Fee
becomes due and payable by ACC to TCG pursuant to this
Section 7.2(b), ACC shall promptly pay, upon TCG's request, all
out-of-pocket charges and expenses incurred by TCG in connection
with this Agreement and the transactions contemplated hereby in an
amount not to exceed Seven Million Five Hundred Thousand Dollars
($7,500,000), which payments shall be credited against any
Termination Fee that may subsequently become payable. ACC
acknowledges that the agreements contained in this Section 7.2(b)
are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, TCG would not enter
into this Agreement; accordingly, if ACC fails to promptly pay the
amount due pursuant to this Section 7.2(b), and, in order to obtain
such payment, TCG commences a suit which results in a judgment
against ACC for the Termination Fee set forth in this paragraph
(b), ACC shall also pay to TCG its costs and expenses (including
attorneys' fees) in connection with such suit, together with
interest on the amount of the Termination Fee at the prime rate of
Citibank N.A. in effect on the date such payment was required to be
made.
7.3 Procedure Upon Termination. In the event of termination
and abandonment pursuant to this Article VII, this Agreement shall
terminate and the Merger shall be abandoned without further action
by ACC or TCG, provided that the agreements contained in Sections
7.2, 8.1 and 8.7 hereof shall remain in full force and effect. If
this Agreement is terminated as provided herein, each party shall
use its reasonable best efforts to redeliver all documents, work
papers and other material (including any copies thereof) of any
other party relating to the transactions contemplated hereby,
whether obtained before or after the execution hereof, to the party
furnishing the same. Nothing contained in this Agreement shall
relieve any party from any liability for any inaccuracy,
misrepresentation or breach of this Agreement prior to termination.
ARTICLE VIII MISCELLANEOUS
8.1 Confidentiality. Unless (i) otherwise expressly provided
in this Agreement, (ii) required by applicable Law or any listing
agreement with, or the rules and regulations of, any applicable
securities exchange or the NASD, (iii) necessary to secure any
required Consents as to which the other party has been advised, or
(iv) consented to in writing by TCG and ACC, any information or
documents furnished in connection herewith shall be kept strictly
confidential by ACC, TCG and their respective officers, directors,
employees and agents. Prior to any disclosure pursuant to the
preceding sentence, the party intending to make such disclosure
shall consult with the other party regarding the nature and extent
of the disclosure. Nothing contained herein shall preclude
disclosures to the extent necessary to comply with accounting, SEC
and other disclosure obligations imposed by applicable Law. To the
extent required by such disclosure obligations, TCG or ACC, after
consultation with the other party, may file with the SEC a Report
on Form 8-K pursuant to the Securities Exchange Act with respect to
the Merger, which report may include, among other things, financial
statements and pro forma financial information with respect to the
other party. Notwithstanding the foregoing, in connection with any
filing with the SEC of a registration statement or amendment
thereto under the Securities Act, including, without limitation, in
connection with the offer and sale of any securities by TCG, ACC or
TCG, after consultation with the other party, may include a
prospectus containing any information required to be included
therein describing the Merger, including, but not limited to,
financial statements and pro forma financial information with
respect to the other party, and thereafter distribute said
prospectus. TCG and ACC shall cooperate with the other and provide
such information and documents as may be required in connection
with any such filings. In the event the Merger is not consummated,
each party shall return to the other any documents furnished by the
other and all copies thereof any of them may have made and will
hold in absolute confidence any information obtained from the other
party except to the extent (i) such party is required to disclose
such information by Law or such disclosure is necessary or
desirable in connection with the pursuit or defense of a claim,
(ii) such information was known by such party prior to such
disclosure or was thereafter developed or obtained by such party
independent of such disclosure, or (iii) such information becomes
generally available to the public or is otherwise no longer
confidential. Prior to any disclosure of information pursuant to
the exception in clause (i) of the preceding sentence, the party
intending to disclose the same shall so notify the party which
provided the same in order that such party may seek a protective
order or other appropriate remedy should it choose to do so.
8.2 Amendment and Modification. To the extent permitted by
applicable law, this Agreement may be amended, modified or
supplemented only by a written agreement among ACC, TCG and
Acquisition Subsidiary, whether before or after approval of this
Agreement and the transactions contemplated hereby by the
stockholders of ACC, Acquisition Subsidiary and TCG.
8.3 Waiver of Compliance; Consents. Any failure of ACC on
the one hand, or TCG on the other hand, to comply with any
obligation, covenant, agreement or condition herein may be waived
by TCG on the one hand, or ACC on the other hand, only by a written
instrument signed by the party granting such waiver, but such
waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as
a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or
on behalf of any party hereto, such consent shall be given in
writing in a manner consistent with the requirements for a waiver
of compliance as set forth in this Section 8.3.
8.4 Survival of Representations and Warranties. The
respective representations, warranties, covenants and agreements of
ACC and TCG contained herein or in any certificates or other
documents delivered prior to or at the Closing shall survive the
execution and delivery of this Agreement, notwithstanding any
investigation made or information obtained by the other party, but
shall terminate at the Effective Time, except for those contained
in Section, 5.7 and except for the agreements delivered pursuant to
Section 4.11 hereof.
8.5 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given
when delivered in person, by facsimile, receipt confirmed, or on
the next business day when sent by overnight courier or on the
second succeeding business day when sent by registered or certified
mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a
party as shall be specified by like notice):
(i) if to ACC, to:
400 West Avenue
Rochester, New York 14611
Attention: Michael R. Daley
Telecopy: (716) 987-3335
with a copy to:
Nixon, Hargrave, Devans & Doyle LLP
Clinton Square
P.O. Box 1051
Rochester, New York 14603
Attention: James A. Locke, III, Esq.
Telecopy: (716) 263-1600
and
(ii) if to TCG or Acquisition Subsidiary, to:
429 Ridge Road
Dayton, New Jersey 08810
Attention: Chairman, President and CEO
Telecopy: (732) 392-3600
with copies to:
Dow, Lohnes Albertson, PLLC
1200 New Hampshire Avenue, N.W.
Washington, D.C. 20036
Attention: Timothy J. Kelley, Esq.
Telecopy: (202) 776-2222
8.6 Binding Effect; Assignment. This Agreement and all of
the provisions hereof shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
permitted assigns. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the
parties hereto prior to the Effective Time without the prior
written consent of the other party hereto, except that Acquisition
Subsidiary may assign to TCG or any other direct subsidiary of TCG
any and all rights, interests and obligations of Acquisition
Subsidiary under this Agreement; provided that any assignment by
Acquisition Subsidiary of any or all of its rights, interests and
obligations under this Agreement to TCG shall require that the
Merger contemplated by this Agreement shall then be structured as
a direct merger of ACC with and into TCG or any other structure
approved by ACC.
8.7 Expenses. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such costs or expenses, subject to
the rights of such party contemplated under Section 7.2, above.
8.8 Governing Law. This Agreement shall be deemed to be
made in, and in all respects shall be interpreted, construed and
governed by and in accordance with the internal laws of, the State
of Delaware.
8.9 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
8.10 Interpretation. The article and section headings
contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the parties and shall
not in any way affect the meaning or interpretation of this
Agreement. As used in this Agreement, (i) the term "person" or
"Person" shall mean and include an individual, a partnership, a
joint venture, a corporation, a limited liability company, a trust,
an association, an unincorporated organization, a Governmental
Authority and any other entity; (ii) the term "affiliate," with
respect to any person, shall mean and include any person
controlling, controlled by or under common control with such
person; and (iii) the term "subsidiary" of any specified person
shall mean any corporation 50 percent or more of the outstanding
voting power of which, or any partnership, joint venture, limited
liability company or other entity 50 percent or more of the total
equity interest of which, is directly or indirectly owned by such
specified person.
8.11 Entire Agreement. This Agreement and the documents or
instruments referred to herein, including, but not limited to, the
Schedules attached hereto, which Schedules are incorporated herein
by reference, embody the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein.
There are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or
referred to herein or therein. This Agreement and the documents or
instruments referred to herein supersede all prior agreements and
the understandings between the parties with respect to such subject
matter.
8.12 Severability. In case any provision in this Agreement
shall be held invalid, illegal or unenforceable in a jurisdiction,
such provision shall be modified or deleted, as to the jurisdiction
involved, only to the extent necessary to render the same valid,
legal and enforceable, and the validity, legality and
enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby nor shall the validity,
legality or enforceability of such provision be affected thereby in
any other jurisdiction.
8.13 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. Accordingly, the
parties further agree that each party shall be entitled to an
injunction or restraining order to prevent breaches of this
Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other right or remedy
to which such party may be entitled under this Agreement, at law or
in equity.
8.14 Third Parties. Nothing contained in this Agreement or
in any instrument or document executed by any party in connection
with the transactions contemplated hereby shall create any rights
in, or be deemed to have been executed for the benefit of, any
person or entity that is not a party hereto or thereto or a
successor or permitted assign of such a party.
8.15 Schedules. ACC and TCG acknowledge that the Schedules
to this Agreement (i) relate to certain matters concerning the
disclosures required and transactions contemplated by this
Agreement, (ii) are qualified in their entirety by reference to
specific provisions of this Agreement, (iii) are not intended to
constitute and shall not be construed as indicating that such
matter is required to be disclosed, nor shall such disclosure be
construed as an admission that such information is material with
respect to ACC or TCG, as the case may be, except to the extent
required by this Agreement, and (iv) disclosure of the information
contained in one ACC or TCG Schedule shall be deemed as proper
disclosure for all ACC or TCG Schedules, as the case may be.
<PAGE>
IN WITNESS WHEREOF, TCG, Acquisition Subsidiary and ACC have
caused this Agreement to be signed and delivered by their
respective duly authorized officers as of the date first above
written.
TELEPORT COMMUNICATIONS GROUP INC.
By: /s/ Robert Annunziata
--------------------------
Name: Robert Annunziata
Title: Chairman, President and
Chief Exeuctive Officer
TCG MERGER CO., INC.
By: /s/ Wayne G. Fox
---------------------------
Name: Wayne G. Fox
Title: Treasurer
ACC CORP.
By: /s/ David K. Laniak
----------------------------
Name: David K. Laniak
Title: Chairman and Chief
Executive Officer
Teleport Communications Group (TCG) to Acquire ACC Corp.
ROCHESTER, NY (November 26, 1997) ACC Corp. (Nasdaq NMS: ACCC) announced it
has reached a definitive agreement to be acquired by Teleport Communications
Group Inc. (Nasdaq NMS: TCGI), the largest Competitive Local Exchange Carrier
(CLEC) in the United States, in a stock-for-stock merger.
Under the agreement, ACC's shareholders will receive $50 in value of TCG Class
A Common Stock for each share of ACC stock, based upon the average closing
price of TCG stock for a ten trading day period preceding the date of the
merger. The total value of the transaction would be approximately $1 billion.
However, if TCG's average closing price during the ten day trading period prior
to closing is below $45 or above $55, the exchange ratios will be fixed at
1.11111 shares of TCG stock or 0.90909 shares of TCG stock, respectively.
It is anticipated that the merger will be treated as a tax-free exchange. The
merger is subject to the approval of the holders of a majority of the
outstanding shares of ACC and to other customary conditions, including various
regulatory consents in the United States and certain foreign jurisdictions. It
is expected that the merger will be consummated by mid-1998.
ACC's Board of Directors has agreed to recommend the merger to its shareholders
and has agreed not to solicit or take other actions with respect to any
competing proposal, subject to compliance with fiduciary duties. ACC has also
agreed to pay TCG a break-up fee of $32.5 million plus up to $7.5 million for
expenses if the merger agreement is terminated under certain conditions.
ACC's Board of Directors also has amended the company's shareowner rights plan,
to exempt TCG from the 7.5% threshold by which the rights become exercisable.
The amendment will remain in effect until December 31, 1998.
"This combination will support TCG as a premier full service telecommunications
and information services provider to leading businesses in the United States
and now Canada and western Europe," said Bob Annunziata, TCG's Chairman,
President and Chief Executive Officer.
"TCG's existing infrastructure, financial strength and commitment to growth
combined with ACC's international assets and strengths in sales and marketing
makes for a very compelling strategic business combination," said David K.
Laniak, ACC's Chairman and Chief Executive Officer.
"This acquisition is part of the normal growth program that has served TCG's
customers and investors so well for over a decade," Annunziata added. "Our
consistent strategy has been to expand TCG to markets where two prerequisites
exist: strong customer demand and a welcoming regulatory climate. For the
past ten years, we steadily expanded our US markets in response to demand from
business customers in one market who wanted us to bring TCG's high quality,
reasonably priced services to new markets. Many of TCG's traditional customers
have operations in Canada, Britain and western Europe and they have been asking
us to
<PAGE>
bring TCG to these markets as well. With the liberalization of
telecommunications regulation in these countries, it is now possible for TCG to
respond to these customer's demands."
"As with our previous strategic acquisitions," Annunziata observed, "we only
considered buying an international company which matched TCG in critical areas
such as having an entrepreneurial culture, a commitment to quality services and
strong financial performance."
TCG is the nation's first and largest provider of competitive local
telecommunications services, using both fiber-optic and broadband wireless
facilities to serve information-intensive businesses in 57 major markets in the
United States. With the completion of initial construction by TCG in eight new
markets, TCG will serve 65 major markets with an array of advanced voice, data,
video and Internet services. Visit TCG on the World Wide Web at: www.tcg.com.
ACC Corp. is an international telecommunications holding company headquartered
in Rochester, New York. ACC subsidiaries provide telecommunications services
to business, residential, and student customers in the United States, Canada,
the United Kingdom, and Germany, as well as specialized programs for colleges,
universities, and other carriers. ACC Corp. has annualized revenue in excess
of $380 million.
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EXHIBIT 99.3
ACC Corp. Chairman and Chief Executive Officer Passes Away
ROCHESTER, NY (December 5, 1997) ACC Corp. (Nasdaq NMS: ACCC) today announced
that its chairman of the board and chief executive officer, David K. Laniak,
62, passed away unexpectedly Friday due to complications from a blood clot
affecting his lungs.
The following statement can be attributed to ACC's board of directors and
senior management team: "We send our thoughts and prayers to Dave's family.
Dave's vision over the past two years was instrumental to ACC's expansion in
Europe and North America, and his leadership greatly contributed to the
significant growth of the company."
Laniak joined ACC's board of directors in 1989 and became chief executive
officer in October 1995. He was appointed to the position of chairman of the
board in October 1996. Prior to joining ACC, he served with Rochester Gas and
Electric Company for 37 years, most recently as executive vice president.
ACC's board of directors has named Robert M. Van Degna chairman of the board.
Mr. Van Degna, 53, has been an outside director of ACC Corp. since 1995. He is
managing partner at Fleet Equity Partners.
On November 26, ACC signed a definitive merger agreement with Teleport
Communications Group. The merger is expected to be completed in the middle of
next year. The executive team responsible for day-to-day operations of ACC's
various business units will work closely with the ACC board of directors to
manage the activities of the business and the merger process with Teleport.
ACC Corp. is an international telecommunications holding company headquartered
in Rochester, New York. ACC subsidiaries provide telecommunications services
to business, residential, and student customers in the United States, Canada,
the United Kingdom, and Germany, as well as specialized programs for colleges,
universities, and other carriers. ACC Corp. has annualized revenue in excess
of $380 million.
