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): July 18, 1999
COMMNET CELLULAR INC.
(Exact name of registrant as specified in charter)
Colorado 0-15056 84-0924904
(State or other (Commission (I.R.S. Employer
Jurisdiction File Number) Identification No.)
of Incorporation)
8350 East Crescent Parkway 80111
Suite 400 (Zip Code)
Englewood, Colorado
(Address of Principal
Executive Offices)
Registrant's telephone number, including area code: (303) 694-3234
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Item 5. Other Events.
CommNet Cellular Inc. ("CommNet"), Vodafone Airtouch Plc
("Vodafone") and Pacific Telecom Cellular of Colorado, Inc., a wholly owned
subsidiary of Vodafone ("Pacific Telecom"), have entered into an Agreement
and Plan of Merger dated as of July 18, 1999 (the "Merger Agreement")
providing for the merger of Pacific Telecom with and into CommNet. The
Merger Agreement provides that the owner of each outstanding share of CommNet
common stock, par value $.001 per share (the "CCI Common Stock"), will
receive $31.00 per share in cash, plus 8% annual interest from July 18, 1999
to the closing of the transaction. Upon completion of the transaction,
Vodafone will own all the outstanding shares of CommNet. The Merger
Agreement is filed herewith as Exhibit 2.1 and is incorporated by reference
herein.
In connection with the execution and delivery of the Merger
Agreement and the transactions contemplated thereby, Vodafone and BCP CommNet
L.P. ("BCP"), the owner of approximately 86% of the CCI Common Stock, have
entered into a Voting Agreement, dated as of July 18, 1999, pursuant to which
BCP has agreed to vote all the shares of CCI Common Stock owned by it in
favor of the merger upon the terms and subject to the conditions set forth in
the Voting Agreement. The Voting Agreement is filed herewith as Exhibit 10.1
and is incorporated by reference herein.
The merger is subject to certain conditions, including approval
from the Federal Communications Commission.
In connection with the execution and delivery of the Merger
Agreement and the transactions contemplated thereby, the Board of Directors
of CommNet authorized the execution and delivery of an amendment, dated as of
July 18, 1999, to CommNet's Rights Agreement dated as of December 10, 1990,
as amended, which is filed herewith as Exhibit 4.1 and is incorporated by
reference herein.
CommNet and Vodafone have issued a joint press release announcing
the execution of the Merger Agreement, which is filed herewith as Exhibit
99.1 and is incorporated by reference herein.
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Item 7. Financial Statements and Exhibits.
(c) The following exhibits are filed with this report:
2.1 Agreement and Plan of Merger dated as of July 18, 1999 between
Vodafone Airtouch Plc, Pacific Telecom Cellular of Colorado, Inc. and CommNet
Cellular Inc.
4.1 Rights Agreement Amendment dated as of July 18, 1999 between
CommNet Cellular Inc. and State Street Bank and Trust Company
10.1 Voting Agreement, dated as of July 18, 1999 between Vodafone
Airtouch Plc and BCP CommNet L.P.
99.1 Press Release dated July 19, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
COMMNET CELLULAR INC.
Dated: July 20, 1999 By: /s/ Andrew J. Gardner
------------------------
Chief Financial Officer
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AGREEMENT AND PLAN OF MERGER, dated as of July 18, 1999 (this
"Agreement"), among COMMNET CELLULAR INC., a Colorado corporation ("CCI"),
VODAFONE AIRTOUCH PLC, a British corporation ("Parent"), and PACIFIC TELECOM
CELLULAR OF COLORADO, INC., a Colorado corporation and a wholly-owned
subsidiary of Parent ("Merger Sub").
W I T N E S S E T H :
WHEREAS, the Board of Directors of CCI has (i) determined that this
Agreement and the transactions contemplated hereby, including the Merger (as
defined below), taken together are fair to and in the best interests of the
shareholders of CCI and (ii) resolved to recommend that the holders of the
shares of common stock, par value $.001 per share of CCI ("CCI Common
Stock"), approve this Agreement and the transactions contemplated herein,
including the Merger;
WHEREAS, the Boards of Directors of Parent and Merger Sub have each
determined that this Agreement and the transactions contemplated hereby,
including the Merger, taken together are fair to and in the best interests of
their respective shareholders;
WHEREAS, concurrently with the execution and delivery of this
Agreement, Parent and Merger Sub are entering into a Voting Agreement (the
"Voting Agreement") with BCP CommNet L.P., a Delaware limited partnership and
the owner of approximately 86% of the CCI Common Stock ("Stockholder"),
pursuant to which Stockholder has agreed to vote all the shares of CCI Common
Stock owned by it in favor of the Merger upon the terms and subject to the
conditions set forth in the Voting Agreement;
WHEREAS, in order to effectuate the foregoing, Merger Sub, upon the
terms and subject to the conditions of this Agreement and in accordance with
the Colorado Business Corporation Act (the "CBCA"), will merge with and into
CCI (the "Merger"); and
WHEREAS, CCI, Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I.
THE MERGER
1.1. The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the CBCA, Merger Sub shall be
merged with and into CCI at the Effective Time (as defined below). At the
Effective Time, the separate corporate existence of Merger Sub shall cease
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and CCI shall continue as the surviving corporation (the "Surviving
Corporation").
1.2. Closing. The closing of the Merger (the "Closing") will take
place on the fifth Business Day after satisfaction or waiver (as permitted by
this Agreement and applicable law) of the conditions (excluding conditions
that, by their terms, cannot be satisfied until the Closing Date) set forth
in Article VI (the "Closing Date"), unless another time or date is agreed to
in writing by the parties hereto. The Closing shall be held at the offices of
Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York, unless
another place is agreed to in writing by the parties hereto.
1.3. Effective Time. As soon as practicable following the Closing,
the parties shall (i) file articles of merger (the "Colorado Articles of
Merger") in such form as is required by and executed in accordance with the
CBCA and (ii) make all other filings or recordings required under the CBCA.
The Merger shall become effective at the later of (i) such time as the
Colorado Articles of Merger are duly filed with the Colorado Secretary of
State or (ii) such other time as Parent, Merger Sub and CCI shall agree in
writing should be specified in the Colorado Articles of Merger (the date and
time the Merger becomes effective being the "Effective Time").
1.4. Effects of the Merger. At and after the Effective Time, the
Merger will have the effects set forth in the CBCA. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time all
the property, rights, privileges, powers and franchises of CCI and Merger Sub
shall be vested in the Surviving Corporation, and all debts, liabilities and
duties of CCI and Merger Sub shall become the debts, liabilities and duties
of the Surviving Corporation.
1.5. Articles of Incorporation. The articles of incorporation of
Merger Sub, as in effect immediately prior to the Effective Time, shall be
the articles of incorporation of the Surviving Corporation, until thereafter
changed or amended as provided therein or by applicable law.
1.6. By-Laws. The by-laws of Merger Sub as in effect at the
Effective Time shall be the by-laws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
1.7. Officers and Directors of Surviving Corporation. The
directors of Merger Sub shall be the directors of the Surviving Corporation
and the officers of the Surviving Corporation shall be those designated by
Merger Sub prior to the Effective Time, until the earlier of their
resignation or removal or otherwise ceasing to be an officer or director or
until their respective successors are duly elected and qualified, as the case
may be.
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1.8. Effect on Capital Stock. As of the Effective Time, by virtue
of the Merger and without any action on the part of CCI, Parent, Merger Sub
or the holders of any shares of CCI Common Stock or any shares of capital
stock of Merger Sub:
(a) Each share of CCI Common Stock that is owned by Parent or any
Subsidiary of Parent (including Merger Sub) or of CCI (together, in each
case, with the associated Right), shall automatically be cancelled and
retired and shall cease to exist and no consideration shall be delivered
in exchange therefor.
(b) Except as otherwise provided herein, each issued and
outstanding share of CCI Common Stock issued and outstanding immediately
prior to the Effective Time (other than any shares to be cancelled in
accordance with Section 1.8(a) and Dissenting Shares (as defined below))
together with the associated Right shall be converted into the right to
receive an amount equal to $31 per share in cash, plus interest thereon
for the period commencing on the date of this Agreement until, but not
including, the Closing Date at a rate of eight percent (8%) per annum
compounded daily calculated on the basis of a 360-day year for the
actual number of days elapsed (the "Merger Consideration").
(c) As of the Effective Time, all shares of CCI Common Stock (and
the associated Rights) issued and outstanding immediately prior to the
Effective Time shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist, and each holder of a
certificate representing any such shares of CCI Common Stock (and the
associated Rights) shall cease to have any rights with respect thereto,
except (i) the right to receive cash to be paid in consideration
therefor upon surrender of such certificate in accordance with Article
II, or (ii) in the case of Dissenting Shares, any rights under Article
113 of the CBCA.
(d) Each share of common, preferred or other capital stock of
Merger Sub issued and outstanding immediately prior to the Effective
Time shall be converted into one validly issued, fully paid and
nonassessable share of identical common, preferred or other capital
stock of the Surviving Corporation.
ARTICLE II.
PAYMENT FOR SHARES
2.1. Exchange Fund. Prior to the mailing of the Proxy Statement
(as defined below), Merger Sub shall appoint a bank or trust company which is
reasonably satisfactory to CCI to act as paying agent for the payment of the
Merger Consideration (the "Paying Agent"). At or prior to the Effective
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Time, Parent or Merger Sub shall deposit the Merger Consideration with the
Paying Agent for the benefit of the holders of the shares of CCI Common Stock
(and the associated Rights) for payment pursuant to this Agreement. The
Paying Agent shall deliver such cash (such cash being hereinafter referred to
as the "Exchange Fund") in payment for outstanding shares of CCI Common Stock
(and the associated Rights).
2.2. Exchange Procedures. As soon as reasonably practicable after
the Effective Time, each holder of an outstanding certificate or certificates
which prior thereto represented shares of CCI Common Stock (and the
associated Rights) shall, upon surrender to the Paying Agent of such
certificate or certificates and acceptance thereof by the Paying Agent, be
entitled to the amount of cash into which the number of shares of CCI Common
Stock (and the associated Rights) previously represented by such certificate
or certificates surrendered shall have been converted pursuant to this
Agreement. The Paying Agent shall accept such certificates upon compliance
with such reasonable terms and conditions as the Paying Agent may impose to
effect an orderly exchange thereof in accordance with normal exchange
practices. After the Effective Time there shall be no further transfer on the
records of CCI or its transfer agent of certificates representing shares of
CCI Common Stock (and the associated Rights) which have been converted
pursuant to this Agreement into the right to receive cash, and if such
certificates are presented to CCI for transfer, they shall be cancelled
against delivery of cash. If payment of the Merger Consideration is to be
remitted to a Person other than the Person in whose name the certificate for
CCI Common Stock surrendered for payment is registered, it shall be a
condition of such payment that the certificate so surrendered shall be
properly endorsed, with signature guaranteed by a firm which is an "eligible
guarantor institution" (as defined in Rule 17Ad-15 under the Exchange Act, as
defined below), or otherwise in proper form for transfer and that the Person
requesting such payment shall have paid any transfer or other taxes required
by reason of the payment of the Merger Consideration to a Person other than
the registered holder of the certificate surrendered or shall have
established to the satisfaction of the Surviving Corporation that such tax
either has been paid or is not applicable. Until surrendered as contemplated
by this Section 2.2, each certificate for shares of CCI Common Stock shall be
deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the Merger Consideration as contemplated by
Section 1.8. Except as provided in Section 1.8(b), no interest will be paid
or will accrue on any cash payable as Merger Consideration.
2.3. No Further Ownership Rights in CCI Common Stock Exchanged for
Cash. All cash paid upon the surrender for conversion of certificates
representing shares of CCI Common Stock (and the associated Rights) in
accordance with the terms of Article I and this Article II shall be deemed to
have been issued (and paid) in full satisfaction of all rights pertaining to
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the shares of CCI Common Stock (and the associated Rights) surrendered for
conversion for cash theretofore represented by such certificates.
2.4. Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the holders of certificates representing
shares of CCI Common Stock (and the associated Rights) for six months after
the Effective Time shall be delivered to the Surviving Corporation or
otherwise on the instruction of the Surviving Corporation, and any holders of
such certificates who have not theretofore complied with this Article II
shall thereafter look only to the Surviving Corporation for the Merger
Consideration with respect to the shares of CCI Common Stock (and the
associated Rights) formerly represented thereby to which such holders are
entitled pursuant to Section 2.2 and only as general creditors thereof for
payment of their claim for the Merger Consideration.
2.5. No Liability. None of Parent, Merger Sub, CCI, the Surviving
Corporation or the Paying Agent shall be liable to any Person in respect of
any cash from the Exchange Fund delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law. If any
certificates representing shares of CCI Common Stock (and the associated
Rights) shall not have been surrendered prior to six months after the
Effective Time (or immediately prior to such earlier date on which any cash
would otherwise escheat to or become the property of any Governmental Entity
(as defined below)), any such cash shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and
clear of all claims or interest of any Person previously entitled thereto.
2.6. Investment of Exchange Fund. The Paying Agent shall invest
any cash included in the Exchange Fund as directed by the Surviving
Corporation on a daily basis. Any interest and other income resulting from
such investments shall promptly be paid to the Surviving Corporation.
2.7. Lost Certificates. If any certificate of CCI Common Stock
(and the associated Right) shall have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the Person claiming such
certificate to be lost, stolen or destroyed and, if required by CCI, the
posting by such Person of a bond in such reasonable amount as CCI may direct
as indemnity against any claim that may be made against it with respect to
such certificate, the Paying Agent will deliver in exchange for such lost,
stolen or destroyed certificate the applicable Merger Consideration with
respect to the shares of CCI Common Stock (and the associated Rights)
formerly represented thereby, pursuant to this Agreement.
2.8. Withholding Rights. CCI and the Paying Agent shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of CCI Common Stock (and
the associated Rights) such amounts as CCI or the Paying Agent, as
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applicable, is required to deduct and withhold with respect to the making of
such payment under the Internal Revenue Code of 1986, as amended (the
"Code"), or any provision of state, local or foreign tax law. To the extent
that amounts are so withheld by CCI or the Paying Agent, such withheld
amounts shall be treated for all purposes of this Agreement as having been
paid to the holder of the shares of CCI Common Stock (and the associated
Rights) in respect of which such deduction and withholding was made by such
party.
2.9. Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of CCI or Merger Sub, any
deeds, bills of sale, assignments or assurances and to take and do, in the
name and on behalf of CCI or Merger Sub, any other actions and things to
vest, perfect or confirm of record or otherwise in the Surviving Corporation
any and all right, title and interest in, to and under any of the rights,
properties or assets acquired or to be acquired by the Surviving Corporation
as a result of, or in connection with, the Merger.
2.10. Shares of Dissenting Shareholders. Notwithstanding
anything in this Agreement to the contrary, any shares of CCI Common Stock
(and the associated Rights) that are issued and outstanding immediately prior
to the Effective Time and that are held by shareholders who shall not have
voted in favor of the Merger and who shall have demanded properly in writing
payment for such shares in accordance with Article 113 of the CBCA
(collectively, the "Dissenting Shares") shall not be converted into or
represent the right to receive the Merger Consideration. Such shareholders
shall be entitled to receive payment of the fair value (as defined in Article
113) of such shares of CCI Common Stock (and the associated Rights) held by
them in accordance with the provisions of Article 113 of the CBCA, except
that all Dissenting Shares held by shareholders who shall have failed to
perfect or who effectively shall have withdrawn or lost their rights to
payment for such shares of CCI Common Stock (and the associated Rights) under
such Article 113 shall thereupon be deemed to have been converted, as of the
Effective Time, into the right to receive the Merger Consideration, without
any interest thereon (except as provided in Section 1.8(b)). CCI shall give
Merger Sub prompt notice of any notice or demands for payment in accordance
with Article 113 of the CBCA for shares of CCI Common Stock received by CCI
and Merger Sub shall have the right to participate in and approve all
negotiations and proceedings with respect to such demands. CCI shall not,
except with the prior written consent of Merger Sub, make any payment with
respect to, or settle or offer to settle, any such demands.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of CCI. Except as set forth in
the CCI Disclosure Schedule delivered by CCI to Merger Sub at or prior to the
execution of this Agreement (the "CCI Disclosure Schedule"), CCI represents
and warrants to Parent and Merger Sub as follows:
(a) Organization, Standing and Power.
(i) Each of CCI and each of the Consolidated Subsidiaries
that is a corporation has been duly organized and is validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Each of the Consolidated Subsidiaries that is a
partnership or limited liability company has been duly formed and
is validly existing under the laws of the jurisdiction of its
formation. Each of CCI and each of the Consolidated Subsidiaries is
duly qualified and in good standing to do business in each
jurisdiction in which the nature of its business or the ownership
or leasing of its properties makes such qualification necessary,
other than in such jurisdictions where the failure so to qualify
could not reasonably be expected, either individually or in the
aggregate, to have a Material Adverse Effect on CCI. The copies of
the Organizational Documents of CCI and the Consolidated
Subsidiaries which were previously furnished to Merger Sub are
true, complete and correct copies of such documents as in effect on
the date of this Agreement. As used herein, "Consolidated
Subsidiaries" means the corporations, partnerships and limited
liability companies which are, or which in accordance with
generally accepted accounting principles ("GAAP") should be,
consolidated for purposes of CCI's financial reporting, exclusive
of partnerships unless CCI or an entity which it controls is the
controlling general partner of such partnership.
(ii) Each of the Managed Affiliates (as defined below) that is
a corporation has been duly organized and is validly existing and
in good standing under the laws of its jurisdiction of
incorporation or organization. Each of the Managed Affiliates that
is a partnership has been duly formed and is validly existing under
the laws of the jurisdiction of its formation. Each of the Managed
Affiliates is duly qualified and in good standing to do business in
each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification
necessary, other than in such jurisdictions where the failure so to
qualify could not reasonably be expected, either individually or in
the aggregate, to have a Material Adverse Effect on CCI.
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(b) Capital Structure.
(i) As of the date of this Agreement (the "Share Reference
Date"), the authorized capital stock of CCI consisted of (A)
40,000,000 shares of CCI Common Stock, of which 22,853,345 shares
were outstanding and (B) 1,000,000 shares of preferred stock, of
which 150,000 shares of Series A Preferred Stock have been
designated (none of which have been issued) and were reserved for
issuance upon exercise of the rights (the "Rights") distributed to
the holders of CCI Common Stock pursuant to the Rights Agreement
dated as of December 10, 1990, as amended, between CCI and State
Street Bank and Trust Company, as successor to The Bank of New
York, as rights agent (the "Rights Agreement"). Since the Share
Reference Date, to the date of this Agreement, there have been no
issuances of shares of the capital stock of CCI or any other
securities of CCI other than issuances of shares pursuant to
options or rights outstanding as of the Share Reference Date under
the CCI Benefit Plans (as defined below). All issued and
outstanding shares of the capital stock of CCI are duly authorized,
validly issued, fully paid and non-assessable, and no class of
capital stock is entitled to preemptive rights. There were
outstanding as of the Share Reference Date no options, warrants or
other rights to acquire capital stock from CCI other than the
options specified in Section 5.5(a). No options or warrants or
other rights to acquire capital stock from CCI have been issued or
granted since the Share Reference Date to the date of this
Agreement.
(ii) Except as set forth in Section 3.1(b) of the CCI
Disclosure Schedule, all of the issued and outstanding shares of
capital stock of each Consolidated Subsidiary that is a corporation
are duly authorized, validly issued, fully paid and non-assessable
and are owned, directly or indirectly, by CCI and, where owned by
CCI or a Consolidated Subsidiary, are owned free and clear of any
liens, claims, encumbrances, restrictions, preemptive rights or any
other claims of any third party ("Liens"). Except as set forth in
Section 3.1(b) of the CCI Disclosure Schedule, all of the
partnership or limited liability company interests of each
Consolidated Subsidiary that is a partnership or a limited
liability company have been validly created pursuant to its
partnership agreement or limited liability company agreement, as
applicable, and all of the partnership or limited liability
interests of each such Consolidated Subsidiary are owned, directly
or indirectly, by CCI and, where owned by CCI or a Consolidated
Subsidiary, are owned free and clear of any Liens.
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(iii) Except as set forth in Section 3.1(b) of the CCI
Disclosure Schedule, all of the issued and outstanding shares of
capital stock owned by CCI or a Consolidated Subsidiary in each
Managed Affiliate or CCI Affiliate which is a corporation are duly
authorized, validly issued, fully paid and non-assessable and,
where owned directly by CCI or a Consolidated Subsidiary, as
applicable, are owned free and clear of any Liens. Except as set
forth in Section 3.1(b) of the CCI Disclosure Schedule, all of the
partnership interests of each Managed Affiliate or CCI Affiliate
which is a partnership in which CCI or a Consolidated Subsidiary
has a direct partnership interest have been validly created
pursuant to such partnership's partnership agreement and all of the
partnership interests of each partnership Managed Affiliate or CCI
Affiliate directly owned by CCI or a Consolidated Subsidiary, as
applicable, are free and clear of any Liens.
(iv) As of the date of this Agreement, no bonds, debentures,
notes or other indebtedness of CCI having the right to vote on any
matters on which shareholders may vote ("CCI Voting Debt") are
issued or outstanding.
(v) Except as otherwise set forth in this Section 3.1(b), as
of the date of this Agreement, there are no securities, options,
warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind to which CCI or any of the Consolidated
Subsidiaries is a party or by which any of them is bound obligating
CCI or any of the Consolidated Subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares
of capital stock or other voting securities of CCI or any of the
Consolidated Subsidiaries or obligating CCI or any of the
Consolidated Subsidiaries to issue, grant, extend or enter into any
such security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. As of the date of this Agreement, there
are no outstanding obligations of CCI or any of the Consolidated
Subsidiaries to repurchase, redeem or otherwise acquire any shares
of capital stock of CCI or any of the Consolidated Subsidiaries.
(vi) As of July 16, 1999, the only outstanding indebtedness
for borrowed money of CCI, the Consolidated Subsidiaries and the
Managed Affiliates is (a) indebtedness under a Senior Bank Credit
Facility dated September 18, 1997 with The Chase Manhattan Bank, as
administrative agent and collateral agent, Chase Manhattan Bank
Delaware, as fronting bank, and the other lenders named therein
(the "Chase Facility") not exceeding $739,000,000, (b) indebtedness
owed to CIFC by Consolidated Subsidiaries or Managed Affiliates
under the credit facilities set forth on Section 3.1(i) of the CCI
Disclosure Schedule (the "CIFC Facilities"), (c) indebtedness to
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CoreStates Bank (now known as First Union National Bank) under the
Credit Agreement dated as of September 4, 1996 between Sioux Falls
Cellular Limited Partnership and CoreStates Bank, N.A. (the
"CoreStates Facility") not exceeding $2,916,332, (d) indebtedness
to CoBank ACB ("CoBank") under the Credit Agreement dated as of
July 31, 1997 between Eastern South Dakota Cellular of South Dakota
LP and CoBank not exceeding $0, (e) indebtedness to CoBank under
the Credit Agreement dated as of July 31, 1997 between Sanborn
Cellular of South Dakota Limited Partnership and CoBank not
exceeding $3,939,888, (f) indebtedness to CoBank under the Credit
Agreement dated as of July 31, 1997 between Missouri Valley
Cellular of South Dakota Limited Partnership and CoBank not
exceeding $3,172,258, (g) indebtedness to CoBank under the Credit
Agreement dated as of June 14, 1998 between Pueblo Cellular, Inc.
and CoBank not exceeding $5,604,851, and (h) other indebtedness for
borrowed money not exceeding $100,000. Other than any loans and
other extensions of credit under the facilities referred to in
clauses (a) through (g) above, all of which are prepayable in full
in accordance with their terms (without penalty other than break
funding costs), no indebtedness for borrowed money of CCI or the
Consolidated Subsidiaries contains any restriction upon the
incurrence of indebtedness for borrowed money by CCI or any
Consolidated Subsidiary or any Managed Affiliate or restricts the
ability of any of the foregoing to grant any Liens on its
properties or assets. There are no agreements or arrangements
pursuant to which CCI or the Consolidated Subsidiaries has
guaranteed or agreed to be liable for the obligations of another
Person for borrowed money, other than CCI and its wholly owned
Subsidiaries.
(vii) There are no agreements or arrangements pursuant to
which (i) except as set forth on Section 3.1(b) of the CCI
Disclosure Schedule, CCI is or could be required to register shares
of CCI Common Stock or other securities under the Securities Act of
1933, as amended (the "Securities Act"), or (ii) CCI is a party and
which restricts the voting or disposition of any CCI Common Stock.
(c) Authority; No Conflicts.
(i) CCI has all requisite corporate power and authority to
enter into this Agreement and, subject to the adoption of this
Agreement by the requisite vote of the holders of CCI Common Stock,
to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of CCI, subject in the case
of the consummation of the Merger to the adoption of this Agreement
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by the shareholders of CCI. This Agreement has been duly executed
and delivered by CCI and constitutes a valid and binding agreement
of CCI, enforceable against it in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or
affecting creditors generally, by general equity principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) or by an implied covenant of good
faith and fair dealing.
(ii) Except as set forth in Section 3.1(c)(ii) of the CCI
Disclosure Schedule, the execution and delivery of this Agreement
does not or will not, as the case may be, and the consummation of
the transactions contemplated hereby will not, conflict with, or
result in any violation of, or constitute a default (with or
without notice or lapse of time, or both) under, or give rise to a
right of termination, amendment, cancellation or acceleration of
any obligation or the loss of a material benefit under, or the
creation of a lien, pledge, security interest, charge or other
encumbrance on any assets (any such conflict, violation, default,
right of termination, amendment, cancellation or acceleration, loss
or creation, a "Violation") pursuant to: (A) any provision of the
Organizational Documents of CCI, any Consolidated Subsidiary or
Managed Affiliate that is a corporation or (B) except as could not
reasonably be expected to have a Material Adverse Effect on CCI or
to prevent or materially delay the performance of this Agreement by
CCI and, subject to obtaining or making the consents, approvals,
orders, authorizations, registrations, declarations and filings
referred to in paragraph (iii) below, any loan or credit agreement,
note, mortgage, bond, indenture, lease, benefit plan or other
agreement, obligation, instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to CCI or any of the Consolidated
Subsidiaries or their properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any supranational,
national, state, municipal or local government, any
instrumentality, subdivision, court, administrative agency or
commission or other authority thereof, or any quasi-governmental or
private body exercising any regulatory, taxing, importing or other
governmental or quasi-governmental authority (a "Governmental
Entity"), is required by or with respect to CCI, any Consolidated
Subsidiary or, to the knowledge of CCI, any Managed Affiliate, in
connection with the execution and delivery of this Agreement by CCI
or the consummation by CCI of the transactions contemplated hereby,
except for (x) the filing with the SEC of (i) a proxy statement
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relating to the Required CCI Votes at the CCI Shareholders Meeting
(as defined below) (such proxy statement as amended or supplemented
from time to time, the "Proxy Statement") and (ii) such reports
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as may be required in connection with this
Agreement and the transactions contemplated by this Agreement, (y)
those required under or in relation to (A) the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (B)
the Communications Act of 1934, as amended (the "Communications
Act"), and any rules and regulations promulgated by the Federal
Communications Commission ("FCC"), (C) state securities or "blue
sky" laws, (D) the CBCA with respect to the filing and recordation
of appropriate merger or other documents, (E) rules and regulations
of the Nasdaq National Market ("Nasdaq"), and (F) antitrust or
other competition laws of other jurisdictions, and (z) such
consents, approvals, orders, authorizations, registrations,
declarations and filings the failure of which to make or obtain
could not reasonably be expected to have a Material Adverse Effect
on CCI or to prevent or materially delay the performance of this
Agreement by CCI. Consents, approvals, orders, authorizations,
registrations, declarations and filings required under or in
relation to clause (x) or (y) are hereinafter referred to as
"Required Consents."
(d) Reports and Financial Statements.
(i) CCI has filed all required reports, schedules, forms,
statements and other documents required to be filed by it with the
Securities and Exchange Commission (the "SEC") since September 30,
1996 (collectively, including all exhibits thereto, the "CCI SEC
Reports"). No Consolidated Subsidiary of CCI is required to file
any form, report or other document with the SEC. None of the CCI
SEC Reports, as of their respective dates (and, if amended or
superseded by a filing prior to the date of this Agreement or of
the Closing Date, then on the date of such filing), contained or
will contain any untrue statement of a material fact or omitted or
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 financial statements (including the related notes) included in
the CCI SEC Reports presents fairly, in all material respects, the
consolidated financial position and consolidated results of
operations and cash flows of CCI as of the respective dates or for
the respective periods set forth therein, all in conformity with
GAAP consistently applied during the periods involved except as
otherwise noted therein, and subject, in the case of the unaudited
interim financial statements, to normal and recurring year-end
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adjustments that have not been and are not expected to be material
in amount. All of such CCI SEC Reports, as of their respective
dates (and as of the date of any amendment to the respective CCI
SEC Report), complied as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act
and the rules and regulations promulgated thereunder.
(ii) Except as set forth in the CCI SEC Reports filed prior to
the date of this Agreement, and except for liabilities and
obligations incurred in the ordinary course of business consistent
with past practice since March 31, 1999, as of the date of this
Agreement neither CCI nor any of the Consolidated Subsidiaries has
any liabilities or obligations (other than arising under this
Agreement) of any nature which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect on
CCI or could reasonably be expected to prevent or materially delay
the performance of this Agreement by CCI.
(e) Proxy Statement. The Proxy Statement will not, at the date it
is first mailed to CCI's shareholders or at the time of the CCI
Shareholders Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading, and the Proxy
Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
promulgated thereunder, except that in each case no representation is
made by CCI with respect to statements made or incorporated by reference
therein based on information supplied in writing by Merger Sub
specifically for inclusion therein.
(f) Compliance with Applicable Laws; Regulatory Matters. CCI, the
Consolidated Subsidiaries, the CCI Affiliates which hold FCC Licenses
for which CCI serves (pursuant to contract or otherwise) as managing
agent (the "Managed Affiliates"), the partnerships which hold FCC
licenses to operate cellular telephone systems ("FCC Licenses") for
which a Consolidated Subsidiary is the managing or majority general
partner (the "General Partner Licensees") and, to the knowledge of CCI,
the CCI Affiliates for which CCI does not serve as managing agent (the
"Nonmanaged Affiliates") and the partnerships which hold FCC Licenses
for which Consolidated Subsidiaries are non-managing general partners or
are limited partners (the "Limited Partner Licensees") hold all permits,
licenses, certificates, franchises, registrations, variances,
exemptions, orders and approvals of all Governmental Entities which are
material to the operation of the businesses of CCI, taken as a whole
(the "CCI Permits"). CCI, the Consolidated Subsidiaries, the Managed
Affiliates, the General Partner Licensees and, to the knowledge of CCI,
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the Nonmanaged Affiliates and the Limited Partner Licensees are in
compliance with the terms of the CCI Permits, except where the failure
so to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect on CCI or to prevent or
materially delay the performance of this Agreement by CCI. Except as
disclosed in the CCI SEC Reports, the businesses of CCI, the
Consolidated Subsidiaries, the Managed Affiliates, the General Partner
Licensees and, to the knowledge of CCI, the Nonmanaged Affiliates and
the Limited Partner Licensees are not being and have not been conducted
in violation of any law, ordinance, regulation, judgment, decree,
injunction, rule or order of any Governmental Entity, except for
violations which, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect on CCI or to prevent or
materially delay the performance of this Agreement by CCI. As of the
date of this Agreement, no investigation (other than with respect to
Taxes) by any Governmental Entity with respect to CCI or any of the
Consolidated Subsidiaries, the Managed Affiliates, the General Partner
Licensees and, to the knowledge of CCI, the Nonmanaged Affiliates and
the Limited Partner Licensees is pending or, to the knowledge of CCI,
threatened, other than investigations which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect on CCI or to prevent or materially delay the performance of this
Agreement by CCI. CCI and each of the Consolidated Subsidiaries, the
Managed Affiliates, the General Partner Licensees and, to the knowledge
of CCI, the Nonmanaged Affiliates and the Limited Partner Licensees have
filed with all applicable Governmental Entities all forms, statements,
reports and documents (including exhibits, annexes and any amendments
thereto) required to be filed by them, and each such filing complied
with all applicable laws, rules and regulations, except for such
nonfiling or noncompliance which could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on
CCI or to prevent or materially delay the performance of this Agreement
by CCI. Set forth in Section 3.1(f) of the CCI Disclosure Schedule is a
true and complete list of all cellular FCC Licenses held by CCI, any
Consolidated Subsidiary, or any Managed Affiliate.
(g) Litigation. Except as set forth in Section 3.1(g) of the CCI
Disclosure Schedule and other than rulemaking or other proceedings of
general applicability affecting the cellular telephone industry and
except as disclosed in the CCI SEC Reports, there is no litigation,
arbitration, claim, suit, action, investigation or proceeding pending
or, to the knowledge of CCI, threatened, against or affecting CCI or any
Consolidated Subsidiary or, to CCI's knowledge, Managed Affiliate which,
individually or in the aggregate, has had or could reasonably be
expected to have a Material Adverse Effect on CCI, nor is there any
judgment, award, decree, injunction, rule or order of any Governmental
Entity or arbitrator outstanding against CCI or any Consolidated
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Subsidiary or, to CCI's knowledge, Managed Affiliate which, individually
or in the aggregate, has had or could reasonably be expected to have a
Material Adverse Effect on CCI or to prevent or materially delay the
performance of this Agreement by CCI.
(h) Taxes. (i) CCI and each of the Consolidated Subsidiaries and
Managed Affiliates have duly and timely filed (taking into account any
extension of time within which to file) all material Tax Returns
required to be filed by any of them and all such filed Tax Returns are
complete and accurate in all material respects; (ii) CCI and each of the
Consolidated Subsidiaries and Managed Affiliates have paid all Taxes
that are shown as due on such filed Tax Returns or that CCI or any of
the Consolidated Subsidiaries or Managed Affiliates is obligated to
withhold from amounts owing to any employee, creditor or third party,
except with respect to matters contested in good faith or for such
amounts that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect on CCI; (iii) as of the date
of this Agreement, there are no pending or, to the knowledge of CCI,
threatened in writing audits, examinations, investigations or other
proceedings in respect of Taxes or Tax matters relating to CCI or any of
the Consolidated Subsidiaries or Managed Affiliates which, if determined
adversely to CCI or such Consolidated Subsidiary or Managed Affiliate,
could reasonably be expected to have a Material Adverse Effect on CCI;
(iv) there are no deficiencies or claims for any Taxes that have been
proposed, asserted or assessed against CCI or any of the Consolidated
Subsidiaries or Managed Affiliates which, if such deficiencies or claims
were finally resolved against CCI or any of the Consolidated
Subsidiaries or Managed Affiliates, could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect on
CCI; (v) there are no material Liens for Taxes upon the assets of CCI or
any of the Consolidated Subsidiaries or Managed Affiliates, other than
Liens for current Taxes not yet due and payable and Liens for Taxes that
are being contested in good faith by appropriate proceedings; (vi) none
of CCI or any of the Consolidated Subsidiaries or Managed Affiliates has
made an election under Section 341(f) of the Code; (vii) except as set
forth in Section 3.1(h) of the CCI Disclosure Schedule, no extension of
the statute of limitations on the assessment of any Taxes has been
granted by CCI or any of its Consolidated Subsidiaries or Managed
Affiliates and is currently in effect; (viii) except as set forth in
Section 3.1(h) of the CCI Disclosure Schedule, none of CCI, its
Consolidated Subsidiaries or Managed Affiliates is a party to any
agreement or arrangement that could reasonably be expected to result,
separately or in the aggregate, in the actual or deemed payment by CCI
or a subsidiary of any "excess parachute payments" within the meaning of
Section 280G or 162(m) of the Code; (ix) none of CCI, its Consolidated
Subsidiaries and Managed Affiliates has been a United States real
property holding corporation within the meaning of Section 897(c)(2) of
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the Code during the applicable period specified in Section
897(c)(l)(A)(ii) of the Code; (x) all Taxes required to be withheld,
collected or deposited by or with respect to CCI, its Consolidated
Subsidiaries and Managed Affiliates have been timely withheld, collected
or deposited, as the case may be, and, to the extent required, have been
paid to the relevant taxing authority; (xi) none of CCI, its
Consolidated Subsidiaries and Managed Affiliates has issued or assumed
(A) any obligations described in Section 279(A) of the Code, (B) except
as set forth in Section 3.1(h) of the CCI Disclosure Schedule, any
applicable high yield discount obligations, as defined in Section 163(i)
of the Code, or (C) any registration-required obligations, within the
meaning of Section 163(f)(2) of the Code, that is not in registered
form; (xii) there are no requests for information currently outstanding
that could affect the Taxes of CCI, its Consolidated Subsidiaries and
Managed Affiliates; and (xiii) there are no proposed reassessments of
any property owned by CCI, its Consolidated Subsidiaries and Managed
Affiliates or other proposals that could increase the amount of any Tax
to which CCI or any such Person would be subject.
(i) Subsidiaries and Affiliates. Section 3.1(b) of the CCI
Disclosure Schedule lists CCI's ownership interests in all the
Consolidated Subsidiaries, the Managed Affiliates, the General Partner
Licensees, the Nonmanaged Affiliates and the Limited Partner Licensees
as of the date of this Agreement. Section 3.1(i) of the CCI Disclosure
Schedule lists all outstanding contractual agreements of CCI or any of
the Consolidated Subsidiaries to provide funds to, or make any
investment (in the form of a loan, capital contribution or otherwise)
in, any Consolidated Subsidiary, Managed Affiliate, General Partner
Licensee, Nonmanaged Affiliate and Limited Partner Licensee, except such
agreements as would not require any investment or provision of funds or
assets in an amount or having a fair market value in excess of
$1,000,000 for any such agreement or $2,500,000 in the aggregate for all
such agreements.
(j) Absence of Certain Changes or Events. Except as disclosed in
the CCI SEC Reports: (A) since March 31, 1999, CCI and the Consolidated
Subsidiaries and Managed Affiliates have conducted their respective
businesses in the ordinary course consistent with their past practices
and have not incurred any material liability or obligation, except in
the ordinary course of their respective businesses consistent with their
past practices; and (B) since March 31, 1999 to the date of this
Agreement, there has not been any Material Adverse Change.
(k) Vote Required. The affirmative vote of the holders of a
majority of the outstanding shares of CCI Common Stock (the "Required
CCI Vote") is the only vote of the holders of any class or series of CCI
capital stock necessary to approve this Agreement and the transactions
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contemplated hereby (assuming for purposes of this representation the
accuracy of the representations contained in Section 3.2(f), without
giving effect to the knowledge qualification thereto).
(l) Certain Agreements.
(i) All contracts (A) listed or which would be required to be
listed as an exhibit to CCI's Annual Report on Form 10-K under the
rules and regulations of the SEC relating to the business of CCI
and the Consolidated Subsidiaries and any contracts that would be
required to be so listed but for the exception with respect to
listing contracts made in the ordinary course of business, (B) to
which CCI or a Consolidated Subsidiary is a party providing for
payments or the receipt of payments or the sale, purchase or
exchange of goods or services worth in excess of $5,000,000 (or in
fact resulting in such payments for the twelve months ended June
30, 1999), which contracts described in this clause (B) are listed
on Section 3.1(l) of the CCI Disclosure Schedule or (C) to which
CCI or a Consolidated Subsidiary is a party which are partnership,
limited liability company, joint venture or similar agreements or
management agreements (the "CCI Material Contracts") are valid and
in full force and effect except to the extent they have previously
expired in accordance with their terms, and neither CCI nor any of
the Consolidated Subsidiaries has violated any provision of, or
committed or failed to perform any act which, with or without
notice, lapse of time, or both, could reasonably be expected to
constitute a default under the provisions of, any such CCI Material
Contract, except for defaults which, individually or in the
aggregate, could not reasonably be expected to have a Material
Adverse Effect on CCI. To the knowledge of CCI, no counterparty to
any such CCI Material Contract has violated any provision of, or
committed or failed to perform any act which, with or without
notice, lapse of time, or both, could reasonably be expected to
constitute a default or other breach under the provisions of, such
CCI Material Contract, except for defaults or breaches which,
individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect on CCI.
(ii) Except as set forth in Section 3.1(l)(ii) of the CCI
Disclosure Schedule, as of the date of this Agreement none of CCI
or any of the Consolidated Subsidiaries or, to the knowledge of
CCI, any of the Managed Affiliates has entered into any agreement
or arrangement: (A) limiting or otherwise restricting CCI or any
of the Consolidated Subsidiaries or any of the Managed Affiliates
from engaging or competing in any line of business or in any
geographic area or (B) with any Person who owns more than 5% of the
CCI Common Stock.
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(m) Employee Benefit Plans; Labor Matters.
(i) With respect to each employee benefit plan, program,
arrangement and contract (including, without limitation, any
"employee benefit plan," as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and
any bonus, deferred compensation, stock bonus, stock purchase,
restricted stock, stock option, employment, termination, change in
control and severance plan, program, arrangement and contract),
whether or not subject to ERISA, to which CCI or any of the
Consolidated Subsidiaries is a party or has any liability in
respect of or which is maintained or contributed to by CCI or any
of the Consolidated Subsidiaries (the "CCI Benefit Plans"), CCI has
made available to Parent a true and complete copy of (A) such CCI
Benefit Plan, (B) the two most recent annual reports (Form 5500)
filed with the Internal Revenue Service (the "IRS"), (C) each trust
or other funding arrangement relating to such CCI Benefit Plan, (D)
the most recent summary plan description related to each CCI
Benefit Plan for which a summary plan description is required, (E)
the most recent actuarial report (if applicable) relating to a CCI
Benefit Plan and (F) the most recent determination letter, if any,
issued by the IRS with respect to any CCI Benefit Plan qualified
under Section 401(a) of the Code.
(ii) Each of the CCI Benefit Plans that is an "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA
and that is intended to be qualified under Section 401(a) of the
Code has received a favorable determination letter from the IRS,
and CCI is not aware, after reasonable inquiry, of any
circumstances likely to result in the revocation of any such
favorable determination letter that could reasonably be expected to
have a Material Adverse Effect on CCI.
(iii) No event has occurred and, to the knowledge of CCI,
after reasonable inquiry, there exists no condition or set of
circumstances, in connection with which CCI or any of the
Consolidated Subsidiaries could be subject to any liability under
the terms of any CCI Benefit Plans, ERISA, the Code or any other
applicable law which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on CCI.
(iv) None of CCI, any of the Consolidated Subsidiaries or any
of the Managed Affiliates is a party to any collective bargaining
or other labor union contracts and no collective bargaining
agreement is being negotiated by CCI or any of the Consolidated
Subsidiaries or Managed Affiliates. There is no pending labor
dispute, strike or work stoppage against CCI or any of the
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Consolidated Subsidiaries or Managed Affiliates which may interfere
with the respective business activities of CCI or any of the
Consolidated Subsidiaries or Managed Affiliates, except where such
dispute, strike or work stoppage could not reasonably be expected
to have a Material Adverse Effect on CCI. There is no pending
charge or complaint against CCI or any of the Consolidated
Subsidiaries or Managed Affiliates by the National Labor Relations
Board or any comparable state agency, except where such unfair
labor practice, charge or complaint could not reasonably be
expected to have a Material Adverse Effect on CCI. Neither CCI nor
any of the Consolidated Subsidiaries has any present or future
obligation to contribute to, or any liability in respect of, any
"multiemployer plan" as described in Section 3(37) of ERISA.
(v) Except as set forth in Section 3.1(m)(v) of the CCI
Disclosure Schedule, no CCI Benefit Plan exists which could result
in the payment to any employee of CCI or any of the Consolidated
Subsidiaries of any money or other property or rights or accelerate
or provide any other rights or benefits to any such employee as a
result of the transactions contemplated by this Agreement, whether
or not such payment would constitute a parachute payment within the
meaning of Code Section 280G.
(n) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in
connection with any of the transactions contemplated by this Agreement,
based on arrangements made by or on behalf of CCI, except Morgan Stanley
& Co. Incorporated, whose fees and expenses will be paid by CCI in
accordance with CCI's agreement with such firm. A true and complete
copy of such agreement has been delivered to Parent prior to the date
hereof.
(o) Opinion of Financial Advisor. CCI has received the opinion of
Morgan Stanley & Co. Incorporated dated the date of this Agreement, to
the effect that, as of such date, the Merger Consideration is fair from
a financial point of view to the holders of CCI Common Stock (other than
Parent or its Affiliates).
(p) Board Recommendation. As of the date hereof, the Board of
Directors of CCI, at a meeting duly called and held, has by unanimous
vote of those directors present (who constituted 100% of the directors
then in office) (i) determined that this Agreement and the transactions
contemplated hereby, including the Merger, taken together are fair to
and in the best interests of the shareholders of CCI and (ii) resolved
to recommend that the holders of the shares of CCI Common Stock approve
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this Agreement and the transactions contemplated herein, including the
Merger.
(q) Rights Agreement. Under the Rights Agreement, (i) none of
the approval, execution or delivery of this Agreement or the
consummation of the Merger or the other transactions contemplated hereby
will cause (1) the Rights to become exercisable, (2) Merger Sub or
Parent to be deemed an "Acquiring Person" (as defined in the Rights
Agreement), or (3) the "Stock Acquisition Date" (as defined in the
Rights Agreement) to occur upon any such event. The "Distribution Date"
(as defined in the Rights Agreement) has not occurred.
(r) Takeover Statutes. No Colorado state takeover statute or
similar statute or regulation of the State of Colorado applies or
purports to apply to the Agreement or any of the transactions
contemplated herein, including the Merger. Subject to receipt of the
FCC consents, no provision of the Organizational Documents of CCI or
Consolidated Subsidiaries or Managed Affiliates would, as a result of
the consummation of the transactions contemplated hereby, directly or
indirectly restrict or impair the ability of Merger Sub or Parent to
vote, or otherwise to exercise the rights of a shareholder with respect
to securities of CCI or of any Consolidated Subsidiary (to the extent
securities of any Consolidated Subsidiary are owned directly or
indirectly by CCI) or permit any shareholder or general partner to
acquire securities of CCI on a basis not available to Merger Sub or
Parent.
3.2. Representations and Warranties of Parent and Merger Sub.
Parent and Merger Sub, jointly and severally, represent and warrant to CCI as
follows:
(a) Organization, Standing and Power. Each of Parent and Merger
Sub is a corporation duly organized and validly existing under the laws
of its jurisdiction of incorporation and each of Parent and Merger Sub
is in good standing under the laws of its jurisdiction of incorporation,
has all requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted and is
duly qualified and in good standing to do business in each jurisdiction
in which the nature of its business or the ownership or leasing of its
properties makes such qualification necessary other than in such
jurisdictions where the failure so to qualify could not reasonably be
expected, either individually or in the aggregate, to have a Material
Adverse Effect on Parent or Merger Sub, as the case may be.
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(b) Authority; No Conflicts.
(i) Each of Parent and Merger Sub has all requisite corporate
power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of each of Parent and Merger Sub. This
Agreement has been duly executed and delivered by each of Parent
and Merger Sub and constitutes a valid and binding agreement of
each of Parent and Merger Sub, enforceable against it in accordance
with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors generally, or by
general equity principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(ii) The execution and delivery of this Agreement does not or
will not, as the case may be, and the consummation of the
transactions contemplated hereby will not, result in any Violation
of: (A) any provision of the Organizational Documents of either
Parent or Merger Sub or (B) except as could not reasonably be
expected to have a Material Adverse Effect on either Parent or
Merger Sub, and subject to obtaining or making the consents,
approvals, orders, authorizations, registrations, declarations and
filings referred to in paragraph (iii) below, any loan or credit
agreement, note, mortgage, bond, indenture, lease, benefit plan or
other agreement, obligation, instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to either Parent or Merger
Sub or their respective properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity
is required by or with respect to either Parent or Merger Sub in
connection with the execution and delivery of this Agreement by
Parent and Merger Sub or the consummation by Parent and Merger Sub
of the transactions contemplated hereby, except for (A) the
Required Consents set forth in Section 3.1(c)(iii) and (B) such
consents, approvals, orders, authorizations, registrations,
declarations and filings the failure of which to make or obtain
could not reasonably be expected to have a Material Adverse Effect
on either Parent or Merger Sub.
(c) Proxy Statement. None of the information supplied or to be
supplied by Parent or Merger Sub in writing for inclusion or
incorporation by reference in the Proxy Statement will, at the date it
is first mailed to the shareholders of CCI or at the time of the CCI
Shareholders Meeting, contain any untrue statement of a material fact or
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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.
(d) No Vote Required. No vote or approval of (i) any holder of
any interest in Parent or (ii) the holders of any class of Merger Sub
shares is necessary to approve this Agreement and the transactions
contemplated hereby other than those already obtained by Parent and
Merger Sub on or before the date hereof.
(e) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in
connection with any of the transactions contemplated by this Agreement
based on arrangements made by or on behalf of Merger Sub or Parent.
(f) Ownership of CCI Common Stock. As of the date of this
Agreement, neither Parent or Merger Sub nor, to the knowledge of Parent,
any of Parent's affiliates or associates (as such terms are defined
under the Exchange Act) (i) beneficially owns, directly or indirectly or
(ii) is party to any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of, in case of either
clause (i) or (ii), shares of capital stock of CCI.
(g) FCC Qualification. Parent and Merger Sub are each fully
qualified under the Communications Act, and any applicable state
regulations, to control all CCI Permits (including, without limitation,
all FCC Licenses), without the requirement of divestiture of any CCI
Permits or FCC Licenses or of any interests held by Parent or Merger Sub
or any of their Affiliates.
(h) Financing. Parent and Merger Sub have or have available to
them sufficient committed funds to consummate the transactions
contemplated by this Agreement (including paying the Merger
Consideration in respect of all outstanding shares of CCI Common Stock)
and to pay all related fees and expenses.
(i) No Business Activities. Except for its ownership of a
partnership interest in Colorado RSA No. 3 Limited Partnership, Merger
Sub is not a party to any material agreements and has not conducted any
activities other than in connection with the organization of Merger Sub,
the negotiation and execution of this Agreement and the consummation of
the transactions contemplated hereby. Merger Sub has no Subsidiaries.
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ARTICLE IV.
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1. Covenants of CCI. During the period from the date of this
Agreement and continuing until the Effective Time (except as expressly
contemplated or permitted by this Agreement or to the extent that Merger Sub
shall otherwise consent in writing):
(a) Ordinary Course. Except as set forth in Section 4.1(a) of the
CCI Disclosure Schedule, CCI and the Consolidated Subsidiaries and
Managed Affiliates shall carry on their respective businesses in the
usual, regular and ordinary course in all material respects, in
substantially the same manner as heretofore conducted, and shall use
reasonable best efforts to preserve intact their present lines of
business, maintain their rights and franchises and preserve their
relationships with employees, Governmental Entities, customers,
suppliers and others having business dealings with them to the end that
their ongoing businesses shall not be impaired in any material respect
at the Effective Time; provided, however, that no action by CCI or the
Consolidated Subsidiaries or Managed Affiliates with respect to matters
specifically addressed by any other provision of this Section 4.1 shall
be deemed a breach of this Section 4.1(a) unless such action would
constitute a breach of one or more of such other provisions.
(b) Dividends; Changes in Share Capital. CCI shall not, and shall
not permit any of the Consolidated Subsidiaries to, and shall not
propose to, (i) declare or pay any dividends on or make other
distributions in respect of any of its capital stock, except dividends
by the Consolidated Subsidiaries in the ordinary course of business
consistent with past practice, (ii) split, combine or reclassify any of
its capital stock or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for,
shares of its capital stock, except for any such transaction by a
wholly-owned Subsidiary of CCI which remains a wholly-owned Subsidiary
after consummation of such transaction, or (iii) repurchase, redeem or
otherwise acquire any shares of its capital stock or any securities
convertible into or exercisable for any shares of its capital stock
except for the purchase from time to time by CCI of CCI Common Stock in
the ordinary course of business consistent with past practice in
connection with the CCI Benefit Plans.
(c) Issuance of Securities. Except as set forth in Section 5.5,
CCI shall not, and shall not permit any of the Consolidated Subsidiaries
to, issue, deliver or sell, dispose, pledge or encumber or authorize or
propose the issuance, delivery, sale, disposition, pledge or encumbrance
of, any shares of its capital stock of any class, any CCI Voting Debt or
any securities convertible into or exercisable for, or any rights,
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warrants or options to acquire, any such shares or CCI Voting Debt, or
enter into any agreement with respect to any of the foregoing and shall
not amend any equity-related awards issued pursuant to the CCI Benefit
Plans, other than (i) the issuance of CCI Common Stock (and the
associated Rights) upon the exercise of stock options issued in the
ordinary course of business and consistent with past practice in
accordance with the terms of the CCI Stock Option Plan as in effect on
the date of this Agreement and (ii) issuances of shares to directors in
accordance with the Director's Compensation Plan of CCI.
(d) Organizational Documents. Except to the extent required to
comply with their respective obligations hereunder, required by law or
required by the rules and regulations of Nasdaq, CCI and the
Consolidated Subsidiaries shall not amend or propose to amend their
respective Organizational Documents.
(e) Indebtedness. CCI shall not, and shall not permit any of the
Consolidated Subsidiaries to, (i) incur or suffer to exist any
indebtedness for borrowed money or guarantee any such indebtedness or
issue or sell any debt securities or warrants or rights to acquire any
debt securities of CCI or any of the Consolidated Subsidiaries or
guarantee any debt securities of other Persons other than indebtedness
of CCI or any Consolidated Subsidiary to CCI or any wholly-owned
Subsidiary of CCI and other than in the ordinary course of business or
as permitted pursuant to Section 4.1(e) of the CCI Disclosure Schedule,
(ii) make any loans, advances or capital contributions to, or
investments in, any other Person, other than by CCI or a Consolidated
Subsidiary to or in CCI, any Consolidated Subsidiary or CCI Affiliate in
the ordinary course of business consistent with past practice or as
permitted pursuant to Section 4.1(e) of the CCI Disclosure Schedule or
(iii) subject to Section 4.1(n), pay, discharge or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than in the ordinary course of business
consistent with past practice.
(f) Benefit Plans; WARN. CCI shall not, and shall not permit any
of the Consolidated Subsidiaries to (i) increase the compensation
payable or to become payable to any of its executive officers or
employees, (ii) adopt or amend (except as may be required or prudent
under law) any bonus, profit sharing, compensation, stock option,
pension, retirement, deferred compensation, employment or other employee
benefit plan, agreement, trust, fund or other arrangement (including any
CCI Benefit Plan) for the benefit or welfare of any employee, director
or former director or employee, (iii) grant any new or modified
severance or termination arrangement or increase or accelerate any
benefits payable under its severance or termination pay policies in
effect on the date hereof, (iv) effectuate a "plant closing" or "mass
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layoff," as those terms are defined in the Worker Adjustment and
Retraining Notification Act of 1988 ("WARN"), affecting in whole or in
part any site of employment, facility, operating unit or employee of CCI
or any of the Consolidated Subsidiaries, without notifying Merger Sub in
advance and without complying with the notice requirements and other
provisions of WARN, or (v) take any action with respect to the grant of
any severance or termination pay, or stay, bonus or other incentive
arrangement (other than pursuant to benefit plans and policies in effect
on the date of this Agreement), except in each case of clauses (i) - (v)
any such increases or grants, or amendments or modifications, made in
the ordinary course of business and in accordance with past practice but
in any event, in an aggregate amount, not exceeding $1,000,000.
(g) Other Actions. CCI shall not, and shall not permit any of the
Consolidated Subsidiaries to, take any action that could reasonably be
expected to result in (i) any of the representations or warranties of
CCI set forth in this Agreement that are qualified as to materiality
becoming untrue, (ii) any of such representations or warranties that are
not so qualified becoming untrue in any material respect or (iii) except
as otherwise permitted by Section 5.4, any of the conditions to the
Merger set forth in Article VI not being satisfied.
(h) Accounting Methods; Income Tax Elections. Except as disclosed
in CCI SEC Reports filed prior to the date of this Agreement, or as
required by a Governmental Entity, CCI shall not change any of its
methods of accounting in effect at March 31, 1999, except as required by
changes in GAAP as concurred in by CCI's independent auditors. CCI shall
not (i) change its fiscal year or (ii) make or rescind any material Tax
election or settle or compromise any federal, state, local or foreign
Tax liability, other than in the ordinary course of business consistent
with past practice, without consultation with Merger Sub.
(i) Certain Agreements. Except as set forth in Section 4.1(i) of
the CCI Disclosure Schedule, CCI shall not, and shall not permit any of
the Consolidated Subsidiaries to, enter into any agreement or
arrangement: (i) that limits or otherwise restricts CCI or any of the
Consolidated Subsidiaries or any of their respective affiliates or any
successor thereto or that could, after the Closing, limit or restrict
Surviving Corporation or any of its affiliates or any successor thereto
from engaging or competing in any line of business or in any geographic
area or (ii) with any Person who owns more than 5% of the CCI Common
Stock.
(j) Acquisitions; Use of Funds. Except as set forth on Schedule
4.1(a) of the CCI Disclosure Schedule, CCI and the Consolidated
Subsidiaries shall not make any acquisition, by means of merger,
consolidation or otherwise, of (i) any direct or indirect ownership
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interest in assets comprising any business enterprise or operation or
spectrum or (ii) except in the ordinary course of business consistent
with past practices, any other asset.
(k) Wireless Assets. Except as set forth on Schedule 4.1(a) of
the CCI Disclosure Schedule, CCI and the Consolidated Subsidiaries shall
not sell, transfer, lease, license, pledge, mortgage, encumber or
otherwise dispose of any direct or indirect ownership interest in or
assets comprising any wireless system or part thereof (including any
shares of capital stock of any Subsidiary holding such interest) or
other investment or business enterprise or operation, other than (i) the
replacement or upgrade of assets, or the disposition of redundant
assets, in each case, in the ordinary course of business consistent with
past practice and (ii) sales of individual assets in the ordinary course
of business consistent with past practice.
(l) Line of Business. CCI and the Consolidated Subsidiaries shall
not, directly or indirectly, engage in the conduct of any business or in
any territory, other than the wireless telecommunications business and
related businesses conducted by CCI on the date hereof and in the
territories where so conducted.
(m) Expenditures. For any fiscal quarter commencing with the
quarter ending September 30, 1999, CCI and the Consolidated Subsidiaries
shall not make any capital expenditures, other than handsets, in excess
of $12 million per quarter; provided that any amounts not spent in prior
quarters as permitted hereunder may be spent in succeeding quarters.
CCI and the Consolidated Subsidiaries shall not enter into any
agreements, arrangements or understandings requiring capital
expenditures at times or in amounts other than as set forth in the
preceding sentence.
(n) Claims. Without the prior consent of Merger Sub (which shall
not be unreasonably withheld or delayed), CCI and the Consolidated
Subsidiaries shall not settle or compromise any material claim, action,
suit, litigation, arbitration, investigation or proceeding (in each
case, whether pending or threatened) not covered by insurance, including
any claim, action, suit, litigation, arbitration, investigation or
proceeding (in each case, whether pending or threatened) to the effect
that this Agreement or the consummation of the transactions contemplated
hereby conflicts with, or results in a Violation pursuant to, any
provision of the Organizational Documents of CCI or any Consolidated
Subsidiary or Managed Affiliate.
(o) Certain Agreements. CCI and the Consolidated Subsidiaries
shall not enter into any agreement, arrangement or understanding that
would constitute a CCI Material Contract if it were in effect on the
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date of this Agreement. CCI and the Consolidated Subsidiaries shall not
prepay, modify, amend or terminate (or waive, release or assign any
material rights or claims under) any CCI Material Contract or other
material agreement, arrangement or understanding of CCI or any
Consolidated Subsidiary, in each case, except in the ordinary course of
business consistent with past practice.
(p) Intention. CCI and the Consolidated Subsidiaries shall not
enter into any agreement, commitment or obligation to take any action
prohibited by this Section.
(q) Managed Affiliates. CCI and the Consolidated Subsidiaries
will use reasonable efforts to cause each Managed Affiliate to comply
with the provisions of this Section to the same extent as if such
Managed Affiliate were a Consolidated Subsidiary.
4.2. Covenants of Parent and Merger Sub. During the period from
the date of this Agreement and continuing until the Effective Time (except as
expressly contemplated or permitted by this Agreement or to the extent that
CCI shall otherwise consent in writing):
(a) Governing Documents. Except to the extent required to comply
with its obligations hereunder or required by law, Merger Sub shall not
amend or propose to amend its Organizational Documents in any manner
that could reasonably be expected to prevent or materially delay the
performance of this Agreement; provided, however, that (i) Merger Sub
shall not amend or propose to amend its Organizational Documents in any
way at any time following the date of the Proxy Statement and (ii)
Merger Sub shall amend its Organizational Documents prior thereto to the
extent necessary to comply with Section 5.7.
(b) Other Actions. Neither Parent nor Merger Sub shall take any
action that could reasonably be expected to result in (i) any of the
representations or warranties of either Parent or Merger Sub set forth
in this Agreement that are qualified as to materiality becoming untrue,
(ii) any of such representations or warranties that are not so qualified
becoming untrue in any material respect or (iii) any of the conditions
to the Merger set forth in Article VI not being satisfied.
4.3. Advice of Changes; Government Filings. Each party shall (a)
confer on a regular and frequent basis with the other, (b) report (to the
extent permitted by law, regulation and any applicable confidentiality
agreement) on operational matters and (c) promptly advise the other orally
and in writing of (i) any representation or warranty made by it contained in
this Agreement that is qualified as to materiality becoming untrue or
inaccurate in any respect or any such representation or warranty that is not
so qualified becoming untrue or inaccurate in any material respect, (ii) the
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failure by it (A) to comply with or satisfy in any respect any covenant,
condition or agreement required to be complied with or satisfied by it under
this Agreement that is qualified as to materiality or (B) to comply with or
satisfy in any material respect any covenant, condition or agreement required
to be complied with or satisfied by it under this Agreement that is not so
qualified as to materiality or (iii) any change, event or circumstance that
has had or could reasonably be expected to have a Material Adverse Effect on
such party; provided, however, that no such notification shall affect the
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement. CCI and
Merger Sub shall file all reports required to be filed by each of them with
the SEC (and all other Governmental Entities) between the date of this
Agreement and the Effective Time and shall (to the extent permitted by law or
regulation or any applicable confidentiality agreement) deliver to the other
party copies of all such reports promptly after the same are filed. Subject
to applicable laws relating to the exchange of information, each of CCI and
Merger Sub shall have the right to review in advance, and to the extent
practicable each will consult with the other, with respect to all the
information relating to the other party and each of their respective
Subsidiaries, which appears in any filings, announcements or publications
made with, or written materials submitted to, any third party or any
Governmental Entity in connection with the transactions contemplated by this
Agreement. In exercising the foregoing right, each of the parties hereto
agrees to act reasonably and as promptly as practicable. Each party agrees
that, to the extent practicable, it will consult with the other party with
respect to the obtaining of all permits, consents, approvals and
authorizations of all third parties and Governmental Entities necessary or
advisable to consummate the transactions contemplated by this Agreement and
each party will keep the other party apprised of the status of matters
relating to completion of the transactions contemplated hereby.
4.4. Transition Planning. Brian Shay, as President of Merger Sub,
and Arnold C. Pohs, as Chief Executive Officer of CCI, jointly shall be
responsible for coordinating all aspects of transition planning and
implementation relating to the Merger and the other transactions contemplated
hereby. If either such person ceases to be President or Chief Executive
Officer, respectively, of his company for any reason, such person's successor
shall assume his predecessor's responsibilities under this Section 4.4.
During the period between the date of this Agreement and the Effective Time,
Messrs. Shay and Pohs jointly shall coordinate policies and strategies with
respect to regulatory authorities and bodies, in all cases subject to
applicable law.
4.5. Control of Other Party's Business. Nothing contained in this
Agreement shall give CCI, directly or indirectly, the right to control or
direct Parent's operations prior to the Effective Time. Nothing contained in
this Agreement shall give Parent directly or indirectly, the right to control
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or direct CCI's operations prior to the Effective Time. Prior to the
Effective Time, each of CCI and Parent shall exercise, consistent with the
terms and conditions of this Agreement, complete control and supervision over
its respective operations.
ARTICLE V.
ADDITIONAL AGREEMENTS
5.1. Preparation of Proxy Statement; CCI Shareholder Meeting.
(a) As soon as practicable following the date of this Agreement,
CCI shall prepare the Proxy Statement. Parent and Merger Sub will cooperate
with CCI in connection with the preparation of the Proxy Statement including,
but not limited to, furnishing to CCI any and all information regarding
Parent and its affiliates as may be required to be disclosed therein. CCI
will use its best efforts to cause the Proxy Statement to be mailed to its
shareholders as promptly as practicable.
(b) CCI will as promptly as practicable notify Merger Sub of (i)
the receipt of any comments from the SEC and (ii) any request by the SEC for
any amendment to the Proxy Statement or for additional information. All
filings by CCI with the SEC, including the Proxy Statement and any amendment
thereto, and all mailings to CCI's shareholders in connection with the
Merger, including the Proxy Statement, shall be subject to the prior review,
comment and approval of Merger Sub (such approval not to be unreasonably
withheld or delayed).
(c) Unless the Board of Directors of CCI determines in good faith
after consultation with outside legal counsel that in connection with the
receipt of a Superior Proposal such action would breach its fiduciary
obligations to shareholders under applicable law, (i) CCI shall, as soon as
practicable following the date of this Agreement, duly call, give notice of,
convene and hold a meeting of its shareholders (the "CCI Shareholders
Meeting") for the purpose of obtaining the Required CCI Votes with respect to
this Agreement, (ii) the Board of Directors of CCI shall unanimously
recommend adoption of this Agreement by the shareholders of CCI as set forth
in Section 3.1(p), and (iii) CCI shall take all lawful action to solicit such
adoption. Any such recommendation, together with a copy of the opinion
referred to in Section 3.1(o) shall be included in the Proxy Statement. CCI
will use its best efforts to hold such meeting as soon as practicable after
the date hereof.
5.2. Access to Information. Upon reasonable notice, CCI shall (and
shall cause each of the Consolidated Subsidiaries and Managed Affiliates, to
the extent affording such access is permitted by the Organizational Documents
or other pertinent agreements of such entity, to) afford to the officers,
employees, accountants, counsel, financial advisors and other representatives
of Parent reasonable access during normal business hours, during the period
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prior to the Effective Time, to all its properties, books, contracts,
commitments and records and, during such period, CCI shall (and shall cause
each of the Consolidated Subsidiaries and Managed Affiliates, to the extent
causing such furnishing is permitted by the Organizational Documents or other
pertinent agreements of such entity, to) furnish promptly to Parent (a)
access to each report, schedule, registration statement and other document
filed, published, announced or received by it during such period pursuant to
the requirements of Federal or state securities laws, as applicable (other
than reports or documents which such party is not permitted to disclose under
applicable law) and (b) consistent with its legal obligations, all other
information concerning its business, properties and personnel as Parent may
reasonably request; provided, however, CCI may restrict the foregoing access
to the extent that (i) a Governmental Entity requires CCI or any of the
Consolidated Subsidiaries or Managed Affiliates to restrict access to any
properties or information reasonably related to any such contract on the
basis of applicable laws and regulations with respect to national security
matters or (ii) any law, treaty, rule or regulation of any Governmental
Entity applicable to CCI or the Consolidated Subsidiaries or Managed
Affiliates requires CCI or the Consolidated Subsidiaries or Managed
Affiliates to restrict access to any properties or information.
5.3. Approvals and Consents; Cooperation.
(a) Subject to Section 5.3(b), each of CCI, Parent and Merger Sub
shall cooperate with each other and use (and shall cause their respective
Subsidiaries to use) its best efforts to take or cause to be taken all
actions, and do or cause to be done all things, necessary, proper or
advisable on their part under this Agreement and applicable laws (including,
without limitation, the Communications Act and the HSR Act) to consummate and
make effective the Merger and the other transactions contemplated by this
Agreement as soon as practicable, including (i) preparing and filing as
promptly as practicable all documentation to effect all necessary
applications, notices, petitions, filings, tax ruling requests and other
documents and to obtain as promptly as practicable all consents, waivers,
licenses, orders, registrations, approvals, permits, tax rulings and
authorizations necessary or advisable to be obtained from any third party
and/or any Governmental Entity in order to consummate the Merger or any of
the other transactions contemplated by this Agreement and (ii) taking all
reasonable steps as may be necessary to obtain all such consents, waivers,
licenses, registrations, permits, authorizations, tax rulings, orders and
approvals. Without limiting the generality of the foregoing, each of CCI,
Parent and Merger Sub agrees to make all necessary filings in connection with
the Required Regulatory Approvals as promptly as practicable after the date
of this Agreement, and to use its best efforts to furnish or cause to be
furnished, as promptly as practicable, all information and documents
requested with respect to such Required Regulatory Approvals and, subject to
Section 5.3(b), shall otherwise cooperate with the applicable Governmental
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Entity in order to obtain any Required Regulatory Approvals in as expeditious
a manner as possible. Subject to Section 5.3(b), each of CCI, Parent and
Merger Sub shall use its best efforts to resolve such objections, if any, as
any Governmental Entity may assert with respect to this Agreement and the
transactions contemplated hereby in connection with the Required Regulatory
Approvals. Subject to Section 5.3(b), in the event that a suit is instituted
by a Person or Governmental Entity challenging this Agreement and the
transactions contemplated hereby as violative of applicable antitrust or
competition laws or the Communications Act, each of CCI, Parent and Merger
Sub shall use its best efforts to resist or resolve such suit. Each of CCI,
Parent and Merger Sub each shall, upon request by the other party, furnish
the other with all information concerning itself, its Subsidiaries,
directors, officers and shareholders and such other matters as may reasonably
be necessary or advisable in connection with the Proxy Statement or any other
statement, filing, tax ruling request, notice or application made by or on
behalf of CCI, Parent or Merger Sub or any of their respective Subsidiaries
to any third party and/or any Governmental Entity in connection with the
Merger or the other transactions contemplated by this Agreement.
(b) Notwithstanding the provisions of Section 5.3(a) or anything
in this Agreement to the contrary, (i) neither CCI nor Parent or Merger Sub
shall be required to grant any consent under, or waive any right under or
provision of, this Agreement, (ii) neither Parent nor any of its Subsidiaries
shall be required to divest or hold separate or otherwise take (or refrain
from taking) or commit to take (or refrain from taking) any action that
limits its freedom of action with respect to, or its ability to retain, CCI
or the Consolidated Subsidiaries or any material portion of the assets of CCI
or the Consolidated Subsidiaries, or any significant business or assets of
Parent or any of its Subsidiaries and (iii) neither CCI nor any of its
Subsidiaries shall, without Parent's prior written consent, commit to any
divestiture or agreement to hold separate or similar transaction and each of
CCI and the Consolidated Subsidiaries shall commit to, and shall use best
efforts to effect, such thereof (which may, at CCI's option, be conditioned
upon and effective as of the Effective Time) as Parent shall request, and if
such consent is granted or request made, such divestiture, agreement to hold
separate or similar transaction (or commitment with respect thereto) shall
not constitute a breach of a representation or warranty or covenant
hereunder.
5.4. Acquisition Proposals.
(a) CCI agrees that neither it nor any of its Subsidiaries,
officers and directors shall, and that it shall direct and use its best
efforts to cause its employees, agents and representatives (including any
investment banker, attorney or accountant retained by it) not to, directly or
indirectly, initiate, solicit, encourage or otherwise facilitate any
inquiries or the making of any proposal or offer with respect to a merger,
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reorganization, share exchange, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving,
or any purchase of all or any significant portion of the assets or any equity
securities of, CCI (any such proposal or offer being hereinafter referred to
as an "Acquisition Proposal"). CCI further agrees that neither it nor any of
its Subsidiaries, officers and directors shall, and that it shall direct and
use its best efforts to cause its employees, agents and representatives
(including any investment banker, attorney or accountant retained by it) not
to, directly or indirectly, provide any information or data to any Person
relating to or in contemplation of an Acquisition Proposal or engage in any
discussions or negotiations relating to or in contemplation of an Acquisition
Proposal; provided, however, that nothing contained in this Agreement shall
prevent CCI or its Board of Directors from (A) complying with Rule 14e-2 and
Rule 14d-9 promulgated under the Exchange Act with regard to an Acquisition
Proposal; (B) engaging in any discussions or negotiations with, or providing
any information to, any Person in response to a bona fide written Acquisition
Proposal by any such Person; or (C) recommending such bona fide written
Acquisition Proposal to the shareholders of CCI, if and only to the extent
that, in any such case as is referred to in clause (B) or (C), (i) the Board
of Directors of CCI concludes in good faith (after consultation with its
financial advisors) that such Acquisition Proposal is reasonably capable of
being completed, taking into account all legal, financial, regulatory and
other aspects of the proposal and the Person making the proposal, and is on
terms that would, if consummated, result in a transaction more favorable to
CCI shareholders from a financial point of view than the transaction
contemplated by this Agreement (any such more favorable Acquisition Proposal
being referred to in this Agreement as a "Superior Proposal") and (ii) the
Board of Directors of CCI determines in good faith after consultation with
outside legal counsel that such action is necessary for it not to breach its
fiduciary obligations to shareholders under applicable law. CCI will notify
Parent immediately if any inquiries, proposals or offers respecting an
Acquisition Proposal are received by, any such information or data is
requested from, or any such discussions or negotiations are sought to be
initiated or continued with, it or any such Persons indicating, in connection
with such notice, the name of such Person and the material terms and
conditions of any proposals or offers, and shall keep Parent apprised with
respect to the status and terms thereof. CCI agrees that it will immediately
cease and cause to be terminated any existing activities, discussions or
negotiations with, and the provision of information and data to, any parties
conducted heretofore with respect to any Acquisition Proposal. CCI will also
promptly request each Person that has heretofore executed a confidentiality
agreement in connection with its consideration of an Acquisition Proposal to
return all confidential information heretofore furnished to such Person by or
on behalf of it or any of its Subsidiaries. CCI will provide Parent at least
two business days' advance notice of its intention to present to its Board of
Directors or accept any Superior Proposal and shall provide Parent with a
summary of the terms and conditions thereof.
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(b) Parent and Merger Sub agree that, while this Agreement remains
in effect, at any meeting of the holders of shares of CCI Common Stock at
which Parent or Merger Sub or any of their Affiliates shall have the right to
vote its shares of CCI Common Stock or at any meeting of the holders of
shares of CCI Common Stock, however called, or in connection with any written
consent of the holders of shares of CCI Common Stock, each of Parent and
Merger Sub and any such Affiliate shall vote (or cause to be voted) the
shares of CCI Common Stock held by it, to the extent voting rights exist with
respect to the proposals to be acted upon, in favor of adoption of this
Agreement and approval of the other transactions contemplated by this
Agreement.
5.5. Stock Options and Other Benefit Plans.
(a) As of the Share Reference Date, there were outstanding options
representing in the aggregate the right to purchase 1,787,790 shares of CCI
Common Stock including 82,090 restricted shares under the agreement referred
to in clause (ii) of Section 5.5(e). Options representing in the aggregate
the right to purchase 1,597,950 of such shares are subject to the terms of
both the CCI Omnibus Stock and Incentive Plan and the Replacement Stock
Option Agreement covering the optionee (the "Agreement Options"). The
remaining options, excluding the restricted shares under the agreement
referred to in clause (ii) of Section 5.5(e), representing in the aggregate
the right to purchase 107,750 of such shares, are subject only to the terms
of such Plan (the "Plan Options"; together with the Agreement Options, the
"Options").
(b) Prior to the Closing Date, CCI shall use its reasonable best
efforts to obtain from each holder of outstanding Plan Options his or her
written consent to the treatment of his or her Plan Options as set forth in
this Section.
(c) Immediately prior to the Effective Time, each outstanding
Option, whether or not then vested or exercisable, shall be cancelled by CCI,
and the holder thereof shall be entitled to receive, at the Effective Time or
as soon as practicable thereafter, from CCI in consideration for such
cancellation an amount in cash equal to the product of (i) the number of
shares of CCI Common Stock previously subject to such Option multiplied by
(ii) the excess of the Merger Consideration over the exercise price per share
of CCI Common Stock previously subject to such Option, reduced by any
applicable withholding taxes or other amounts required by law to be paid or
withheld by CCI.
(d) CCI may accelerate the vesting of any outstanding Options in
accordance with the terms thereof.
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(e) Anything to the contrary set forth herein notwithstanding,
during the period from the date of this Agreement to the Effective Time, CCI
shall not grant any Options or issue any stock to any director, officer or
employee, except that it may (i) issue stock pursuant to the exercise of
Options, (ii) grant restricted stock to Arnold C. Pohs pursuant to the terms
of the Retirement and Consulting Agreement, dated March 30, 1997, as amended,
between CCI and Mr. Pohs, and (iii) issue shares to directors under the
Director's Compensation Plan of CCI, in each case, in amounts not to exceed
the amounts set forth in Section 3.1(b) of the CCI Disclosure Schedule.
(f) Annex A hereto sets forth certain additional agreements among
the parties hereto with respect to employee benefits matters and is hereby
incorporated herein by reference.
5.6. Fees and Expenses. Whether or not the Merger is consummated,
all Expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such Expenses,
except (a) if the Merger is consummated, the Surviving Corporation shall pay,
or cause to be paid, any and all property or transfer taxes imposed on CCI,
the Consolidated Subsidiaries or the CCI Affiliates and any real property
transfer tax imposed on any holder of shares of capital stock of CCI
resulting from the Merger, and (b) as provided in Section 7.2. As used in
this Agreement, "Expenses" of a party includes all out-of-pocket expenses
(including, without limitation, all fees and expenses of all banks,
investment banking firms and other financial institutions, and their
respective agents and counsel, accountants, experts and consultants to a
party hereto and its Affiliates) incurred by a party or on its behalf,
whether incurred prior to, on or after the date of this Agreement, in
connection with or related to the authorization, preparation, negotiation,
execution and performance of this Agreement and the transactions contemplated
hereby and the financing thereof, including the preparation, printing, filing
and mailing of the Proxy Statement and the solicitation of shareholder
approvals and all other matters related to the transactions contemplated
hereby.
5.7. Indemnification; Directors' and Officers' Insurance. The
Surviving Corporation shall cause to be maintained in effect (i) for a period
of six years after the Effective Time, the current provisions regarding
indemnification of officers and directors contained in the Organizational
Documents of CCI and (ii) for a period of six years after the Effective Time,
the current policies of directors' and officers' liability insurance and
fiduciary liability insurance maintained by CCI (provided that the Surviving
Corporation may substitute therefor policies of at least the same coverage
and amounts containing terms and conditions which are, in the aggregate, no
less advantageous to the insured) with respect to claims arising from facts
or events that occurred on or before the Effective Time.
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5.8. Rights Agreement. The Board of Directors of CCI shall take all
action necessary (including redeeming the Rights immediately prior to the
Effective Time or amending the Rights Agreement) in order to render the
Rights inapplicable to the Merger and the other transactions contemplated by
this Agreement.
5.9. Public Announcements. CCI and Merger Sub shall use all
reasonable efforts to develop a joint communications plan and each party
shall use all reasonable efforts (i) to ensure that all press releases and
other public statements with respect to the transactions contemplated hereby
shall be consistent with such joint communications plan, and (ii) unless
otherwise required by applicable law or by obligations pursuant to any
listing agreement with or rules of any securities exchange, to consult with
each other before issuing any press release or otherwise making any public
statement with respect to this Agreement or the transactions contemplated
hereby.
5.10. Certain Agreements. Neither CCI nor any subsidiary of CCI
will waive or fail to enforce any provision of any confidentiality or
standstill or similar agreement to which it is a party entered into in
connection with a possible sale of CCI, without the prior written consent of
Merger Sub (which shall not be unreasonably withheld or delayed).
ARTICLE VI.
CONDITIONS PRECEDENT
6.1. Conditions to Each Party's Obligation to Effect the Merger.
The obligations of CCI and Merger Sub to effect the Merger are subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Shareholder Approval. CCI shall have obtained all approvals of
holders of shares of capital stock of CCI necessary to approve this
Agreement and all the transactions contemplated hereby (including the
Merger).
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or
shall have expired.
(c) Required Regulatory Approvals. All Required Consents and all
other authorizations, consents, orders and approvals of, and
declarations and filings with, and all expirations of waiting periods
imposed by, any Governmental Entity which, if not obtained in connection
with the consummation of the transactions contemplated hereby, could
reasonably be expected to have a Material Adverse Effect on CCI
(collectively, "Required Regulatory Approvals") shall have been
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obtained, have been declared or filed or have occurred, as the case may
be, and all such Required Regulatory Approvals shall be in full force
and effect; provided that if the condition set forth in Section 6.2(c)
is waived by Merger Sub, then this condition will be deemed to have been
satisfied with respect to FCC Consents.
(d) No Injunctions or Restraints, Illegality. No temporary
restraining order, preliminary or permanent injunction or other order
issued by a court or other Governmental Entity of competent jurisdiction
shall be in effect and have the effect of making the Merger illegal or
otherwise prohibiting consummation of the Merger.
6.2. Additional Conditions to Obligations of Parent and Merger Sub.
The obligations of Parent and Merger Sub to effect the Merger are subject to
the satisfaction, or waiver by Merger Sub, on or prior to the Closing Date,
of the following additional conditions:
(a) Representations and Warranties. Each of the representations
and warranties of CCI set forth in this Agreement that is qualified as
to materiality shall have been true and correct when made and shall be
true and correct on and as of the Closing Date as if made on and as of
such date (other than representations and warranties which address
matters only as of a certain date which shall be true and correct as of
such certain date), and each of the representations and warranties of
CCI that is not so qualified shall have been true and correct in all
material respects when made and shall be true and correct in all
material respects on and as of the Closing Date as if made on and as of
such date (other than representations and warranties which address
matters only as of a certain date which shall be true and correct in all
material respects as of such certain date), and Merger Sub shall have
received a certificate of the chief executive officer and the chief
financial officer of CCI to such effect.
(b) Performance of Obligations of CCI. CCI shall have performed
or complied with all agreements and covenants required to be performed
by it under this Agreement at or prior to the Closing Date that are
qualified as to materiality and shall have performed or complied in all
material respects with all other agreements and covenants required to be
performed by it under this Agreement at or prior to the Closing Date
that are not so qualified as to materiality, and Merger Sub shall have
received a certificate of the chief executive officer and the chief
financial officer of CCI to such effect.
(c) FCC Consents. The FCC shall have granted its consent to the
consummation of the transactions contemplated hereby ("FCC Consents").
No timely request for stay, motion or petition for reconsideration or
rehearing, application or request for review, or notice of appeal or
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other judicial petition for review of the FCC Consents shall be pending,
and the time for filing any such request, motion, petition, application,
appeal, or notice, and for the entry of an order staying, reconsidering,
or reviewing on the FCC's own motion, shall have expired.
(d) No Litigation. There shall not be pending any suit, action,
investigation or proceeding by any Governmental Entity (an "Action") (i)
seeking to restrain or prohibit the consummation of the Merger or any of
the other transactions contemplated by this Agreement or seeking to
obtain damages from CCI or Parent or any of their respective
Subsidiaries or the Managed Affiliates, which if determined adversely to
CCI, would be reasonably likely to have a Material Adverse Effect on
CCI, (ii) seeking to prohibit or limit the ownership or operation by CCI
or any of the Consolidated Subsidiaries or Managed Affiliates or Parent
of any material portion of the business or assets of CCI, the
Consolidated Subsidiaries and the Managed Affiliates (taking CCI, the
Consolidated Subsidiaries and the Managed Affiliates as a whole), or
seeking to require CCI or any of the Consolidated Subsidiaries or
Managed Affiliates or Parent to dispose of or hold separate any material
portion of the business or assets of CCI, the Consolidated Subsidiaries
and the Managed Affiliates (taking CCI, the Consolidated Subsidiaries
and the Managed Affiliates as a whole) as a result of the Merger or any
of the other transactions contemplated by this Agreement, (iii) seeking
to prohibit Parent from effectively controlling in any material respect
the business or operations of CCI, the Consolidated Subsidiaries and the
Managed Affiliates, taken as a whole, or (iv) seeking to impose
limitations on the ability of Parent or Merger Sub to acquire or hold,
or exercise full rights of ownership of, any shares of CCI Common Stock,
including, without limitation, the right to vote CCI Common Stock on all
matters properly presented to the shareholders of CCI or which otherwise
would have a Material Adverse Effect on CCI; provided, however, that the
provisions of this Section 6.2(d) shall not be available to Merger Sub
if it has failed to fulfill its obligations pursuant to Section 5.3 (or
other breach of a representation, warranty or covenant hereof) shall
have been the cause of, or shall have resulted in, such suit, action,
investigation or proceeding.
(e) Material Adverse Change. Since the date of this Agreement, no
Material Adverse Change shall have occurred and not been cured.
6.3. Additional Conditions to Obligations of CCI. The obligations
of CCI to effect the Merger are subject to the satisfaction, or waiver by CCI
on or prior to the Closing Date, of the following additional conditions:
(a) Representations and Warranties. Each of the representations
and warranties of Parent and Merger Sub set forth in this Agreement that
is qualified as to materiality shall have been true and correct when
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made and shall be true and correct on and as of the Closing Date as if
made on and as of such date (other than representations and warranties
which address matters only as of a certain date which shall be true and
correct as of such certain date), and each of the representations and
warranties of Parent and Merger Sub that is not so qualified shall have
been true and correct in all material respects when made and shall be
true and correct in all material respects on and as of the Closing Date
as if made on and as of such date (other than representations and
warranties which address matters only as of a certain date which shall
be true and correct in all material respects as of such certain date),
and CCI shall have received a certificate of the chief executive officer
and the chief financial officer of each of Parent and Merger Sub to such
effect.
(b) Performance of Obligations of Parent and Merger Sub. Each of
Parent and Merger Sub shall have performed or complied with all
agreements and covenants required to be performed by it under this
Agreement at or prior to the Closing Date that are qualified as to
materiality and shall have performed or complied in all material
respects with all agreements and covenants required to be performed by
it under this Agreement at or prior to the Closing Date that are not so
qualified as to materiality, and CCI shall have received a certificate
of the chief executive officer and the chief financial officer of each
of Parent and Merger Sub to such effect.
ARTICLE VII.
TERMINATION AND AMENDMENT
7.1. Termination. This Agreement may be terminated at any time
prior to the Effective Time, by action taken or authorized by the Board of
Directors of the terminating party or parties, whether before or after
approval of the matters presented in connection with the Merger by the
shareholders of CCI:
(a) By mutual written consent of Parent and CCI;
(b) By either CCI or Parent if the Effective Time shall not have
occurred on or before the six-month anniversary of the date of this
Agreement (the "Termination Date"); provided, however, that the right to
terminate this Agreement under this Section 7.1(b) shall not be
available to any party whose failure (or if Parent is the terminating
party, the failure of Parent or Merger Sub) to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the failure
of the Effective Time to occur on or before the Termination Date; and
provided, further, that if on the Termination Date any conditions to the
Closing set forth in Section 6.1(b), 6.1(c), 6.1(d), 6.2(c) or 6.2(d)
shall not have been fulfilled, but all other conditions to the Closing
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shall be fulfilled or shall be reasonably capable of being fulfilled,
then the Termination Date shall be extended to the twelve-month
anniversary of the date of this Agreement;
(c) By either CCI or Parent if any Governmental Entity shall have
issued an order, decree or ruling or taken any other action (which
order, decree, ruling or other action CCI (if it is the terminating
party) or Parent and Merger Sub (if Parent is the terminating party)
shall have used their best efforts to resist, resolve or lift, as
applicable, subject to the provisions of Section 5.3) permanently
restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such order, decree, ruling or other
action shall have become final and nonappealable;
(d) By either Parent or CCI if the approval by the shareholders of
CCI required for the consummation of the Merger or the other
transactions contemplated hereby shall not have been obtained by reason
of the failure to obtain the required vote at a duly held meeting of
shareholders or at any adjournment thereof;
(e) By Parent if the Board of Directors of CCI (i) shall withdraw
or modify in any manner adverse to Merger Sub its approval or
recommendation of this Agreement or the Merger, (ii) failed as promptly
as practicable to mail the Proxy Statement to its shareholders or failed
to include in such statement such recommendation, (iii) in response to
the commencement of any tender offer or exchange offer for more than 20%
of the outstanding shares of CCI Common Stock, shall have not
recommended rejection of such tender offer or exchange offer by the date
required for such recommendation under Rule 14e-2 of the Exchange Act,
(iv) shall approve or recommend any Acquisition Proposal other than that
contemplated by this Agreement, (v) shall resolve to take any of the
actions specified in clauses (i) or (iv) above, (vi) any Person (other
than Parent or an Affiliate of Parent or BCP CommNet L.P. or an
Affiliate of BCP CommNet L.P.) or "group" becomes the "beneficial owner"
(such terms having the meaning in this Agreement ascribed under
regulation 13D under the Exchange Act) of more than 25% of the
outstanding shares of CCI Common Stock, or (vii) for any reason the
Company fails to call or hold the CCI Shareholders Meeting before the
Termination Date (provided that Parent's right to terminate this
Agreement under such clause (vii) shall not be available if at such time
Parent would not be entitled to terminate this Agreement under Section
7.1(b));
(f) By CCI, prior to the Required CCI Vote having been obtained if
the Board of Directors of CCI determines to accept a Superior Proposal
after determining in good faith after consultation with legal counsel as
to its fiduciary obligations under applicable law, that the failure to
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accept such Superior Proposal would constitute a breach of its fiduciary
duties, but only after CCI provides Parent with not less than two
business days' advance notice of its determination to accept such
Superior Proposal including all material terms and conditions thereof;
(g) By Parent, upon a material breach of any covenant or agreement
on the part of CCI set forth in this Agreement, or if (i) any
representation or warranty of CCI that is qualified as to materiality
shall have become untrue or (ii) any representation or warranty of CCI
that is not so qualified shall have become untrue in any material
respect, in each case such that the conditions set forth in Section
6.2(a) or Section 6.2(b) would not be satisfied (a "Terminating CCI
Breach"); provided, however, that, if such Terminating CCI Breach is
reasonably capable of being cured by CCI through the exercise of its
best efforts prior to the 60th day following CCI's obtaining notice of
such breach (or, if earlier, the Termination Date) and for so long as
CCI continues to exercise such best efforts, Parent may not terminate
this Agreement under this Section 7.1(g); or
(h) By CCI, upon a material breach of any covenant or agreement on
the part of Parent or Merger Sub set forth in this Agreement, or if (i)
any representation or warranty of Parent or Merger Sub that is qualified
as to materiality shall have become untrue or (ii) any representation or
warranty of Parent or Merger Sub that is not so qualified shall have
become untrue in any material respect, in each case such that the
conditions set forth in Section 6.3(a) or Section 6.3(b) would not be
satisfied (a "Terminating Parent/Merger Sub Breach"); provided, however,
that, if such Terminating Parent/Merger Sub Breach is reasonably capable
of being cured by Parent or Merger Sub, as applicable, through the
exercise of its best efforts prior to the 60th day following Parent's
obtaining notice of such breach (or, if earlier, the Termination Date)
and for so long as Parent or Merger Sub, as applicable, continues to
exercise such best efforts, CCI may not terminate this Agreement under
this Section 7.1(h).
7.2. Effect of Termination.
(a) In the event of termination of this Agreement by either CCI or
Parent as provided in Section 7.1, this Agreement shall forthwith become void
and there shall be no liability or obligation on the part of Parent, Merger
Sub or CCI or their respective officers or directors except (i) with respect
to Sections 3.1(n), 3.2(e), Section 5.6, this Section 7.2 and Article VIII
and (ii) with respect to any liabilities or damages incurred or suffered by a
party as a result of the willful breach by the other party of any of its
representations, warranties, covenants or other agreements set forth in this
Agreement.
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(b) Subject to Sections 7.2(c) and 7.2(d), in the event of any
termination of this Agreement, in addition to any other amounts which may be
payable or become payable pursuant to any other paragraph of this Section
7.2, CCI shall reimburse Merger Sub for all Expenses of Parent and Merger
Sub; provided that in no event shall CCI be required to pay in excess of an
aggregate of $4,000,000 pursuant to this Section 7.2(b). Payment of Expenses
pursuant to this Section 7.2(b) shall be made not later than two Business
Days after delivery to CCI of notice of demand for payment and a documented
itemization setting forth in reasonable detail all Expenses of Merger Sub
(which itemization may be supplemented and updated from time to time by such
party until the 60th day after such party delivers such notice of demand for
payment).
(c) (i) If this Agreement shall have been terminated pursuant to
Sections 7.1(b) or 7.1(g) and either of the following shall have occurred
prior to such termination: (A) any Person (including CCI or any of its
Subsidiaries or CCI Affiliates, but excluding Parent, Merger Sub or any of
their Affiliates) shall have become the beneficial owner of more than 25% of
the outstanding shares of CCI Common Stock, or (B)(x) on or after the date of
this Agreement any Person (other than Parent, Merger Sub or any of their
Affiliates) shall have made, or proposed, communicated or disclosed a bona
fide intention to make a Control Proposal (including by making such a Control
Proposal), and (y) on or prior to the twelve-month anniversary of the date of
such termination, CCI either consummates with any Person a transaction the
proposal of which would otherwise qualify as a Control Proposal or enters
into a definitive agreement with any Person with respect to a transaction the
proposal of which would otherwise qualify as a Control Proposal (whether or
not such Person is the Person referred to in clause (x) above); or
(ii) if this Agreement is terminated pursuant to Section 7.1(d),
Section 7.1(e) or Section 7.1(f);
then CCI shall, (1) in the case of clause (c)(i)(A) and (c)(ii) above,
promptly, but in no event later than one Business Day after the termination
of this Agreement and (2) in the case of clause (c)(i)(B) above, promptly,
but in no event later than one Business Day after an event specified in
subclause (y) thereof shall have occurred, pay Merger Sub a fee equal to $35
million less amounts paid pursuant to Section 7.2(b), in cash, which amount
shall be payable in same day funds. No termination of this Agreement at a
time when a fee is payable pursuant to this Section 7.2(c) following
termination of this Agreement shall be effective until such fee is paid. Only
one fee shall be payable pursuant to this Section 7.2(c).
(d) Notwithstanding the foregoing, no amount shall be payable
pursuant to Section 7.2(b) or 7.2(c) if (i)(x) this Agreement shall have been
terminated pursuant to Section 7.1(b), (y) at the time of such termination
CCI is not in material breach of its obligations or representations and
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warranties under this Agreement and (z) at the time of such termination any
of the conditions set forth in Sections 6.1(b), 6.1(c), 6.2(c) and 6.2(d),
shall not have been satisfied or waived or (ii) this Agreement shall have
been terminated pursuant to (x) Section 7.1(c) and at the time of such
termination CCI is not in material breach of its obligations or
representations and warranties under this Agreement, or (y) Section 7.1(a) or
7.1(h).
7.3. Amendment. This Agreement (including the Annexes and Schedules
hereto) may be amended by the parties hereto, by action taken or authorized
by their respective Boards of Directors, at any time before or after approval
of the matters presented in connection with the Merger by the shareholders of
CCI, but, after any such approval, no amendment shall be made which by law or
in accordance with the rules of Nasdaq requires further approval by such
shareholders without such further approval. This Agreement (including the
Annexes and Schedules hereto) may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
7.4. Extension; Waiver. At any time prior to the Effective Time,
the parties hereto, by action taken or authorized by their respective Boards
of Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall
be valid only if set forth in a written instrument signed on behalf of such
party. The failure of any party to this Agreement to assert any of its rights
under this Agreement or otherwise shall not constitute a waiver of those
rights.
ARTICLE VIII.
GENERAL PROVISIONS
8.1. Non-Survival of Representations, Warranties and Agreements.
None of the representations, warranties, covenants and other agreements in
this Agreement or in any instrument delivered pursuant to this Agreement,
including any rights arising out of any breach of such representations,
warranties, covenants and other agreements, shall survive the Effective Time,
except for those covenants and agreements contained herein and therein that
by their terms apply or are to be performed in whole or in part after the
Effective Time and for the provisions of this Article VIII. Nothing in this
Section 8.1 shall relieve any party for any breach of any representation,
warranty, covenant or other agreement in this Agreement occurring prior to
termination.
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8.2. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed duly given (a) on the date of delivery if
delivered personally or delivered by facsimile (but in the case of facsimile
transmission, transmitted on the same day by the method described in clause
(b)), (b) on the first Business Day following the date of dispatch if
delivered by a recognized next-day courier service, or (c) on the tenth
Business Day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid. All notices
hereunder shall be delivered as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice:
(i) if to Parent or Merger Sub, to Vodafone Airtouch PLC, 1
California Street, 18th Floor, San Francisco, California 94111,
Attention: David Bagley, Director, Corporate Development, Facsimile No.
(415) 658-5239.
(ii) if to CCI, to CommNet Cellular Inc., 8350 East Crescent
Parkway, Suite 400, Englewood, Colorado 80111, Attention: President,
Facsimile No.: (303) 694-5590, with copies to Blackstone Management
Associates II L.L.C., 345 Park Avenue, 31st Floor, New York, New York
10154, Attention: Mark T. Gallogly, Facsimile No. (212) 754-8704, and to
Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York
10017, Attention: Brian M. Stadler, Esq., Facsimile No. (212) 455-2502.
8.3. Interpretation. When a reference is made in this Agreement to
Sections, Annexes or Schedules, such reference shall be to a Section of or
Annex or Schedule to this Agreement unless otherwise indicated. The table of
contents, glossary of defined terms and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement. Whenever the words "include", "includes"
or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation".
8.4. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that
both parties need not sign the same counterpart.
8.5. Entire Agreement; No Third Party Beneficiaries.
(a) This Agreement constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof, other than the Voting
Agreement and the Confidentiality Agreement dated May 12, 1999 entered into
by Airtouch Communications, Inc. and CCI in connection with the transactions
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contemplated hereby, which shall survive the execution and delivery of this
Agreement.
(b) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right,
benefit or remedy of any nature whatsoever under or by reason of this
Agreement, other than Section 5.7 (which is intended to be for the benefit of
the Persons covered thereby and may be enforced by such Persons).
8.6. Governing Law. Except to the extent the CBCA shall govern the
Merger, this Agreement shall be governed and construed in accordance with the
laws of the State of New York.
8.7. Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any law or public
policy, all other terms and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.
8.8. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise),
without the prior written consent of the other party, and any attempt to make
any such assignment without such consent shall be null and void, except that
Merger Sub may assign, in its sole discretion, any or all of its rights,
interests and obligations under this Agreement to any direct or indirect
wholly-owned Subsidiary of Parent without the consent of CCI, but no such
assignment shall relieve Merger Sub of any of its obligations under this
Agreement. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
8.9. Enforcement. The parties 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. It is accordingly agreed
that the parties shall be entitled to specific performance of the terms
hereof, this being in addition to any other remedy to which they are entitled
at law or in equity.
8.10. Definitions. As used in this Agreement:
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(a) "Affiliate" shall have the meaning ascribed to such term under
Rule 12b-2 under the Exchange Act.
(b) "Board of Directors" means the Board of Directors of any
specified Person and any properly serving and acting committees thereof.
(c) "Business Day" means any day on which banks are not required
or authorized to close in the City of New York.
(d) "CCI Affiliates" means each of the corporations and
partnerships through which CCI holds indirect ownership interests in
cellular licensees and those cellular licensees in which CCI holds an
ownership interest which is not a Consolidated Subsidiary.
(e) "Control Proposal" means an Acquisition Proposal which seeks
to acquire a significant portion of the assets or more than 25% of the
equity securities of CCI.
(f) "Material Adverse Change" means any change in the business,
financial condition or results of operations of CCI or any of the
Consolidated Subsidiaries or Managed Affiliates that has had, or could
reasonably be expected to have, a Material Adverse Effect on CCI.
(g) "Material Adverse Effect" means, with respect to any entity,
any adverse change, circumstance or effect that, individually or in the
aggregate with all other adverse changes, circumstances and effects, is
or is reasonably likely to be materially adverse to the business,
operations, assets, liabilities (including, without limitation,
contingent liabilities), financial condition or results of operations of
such entity and its Subsidiaries taken as a whole, other than any
change, circumstance or effect (i) affecting companies in the cellular
telephone industry generally, (ii) resulting from general economic
conditions or (iii) resulting from the announcement or performance of
this Agreement and the transactions contemplated hereby.
(h) "Organizational Documents" means, with respect to any entity,
the charter, by-laws or other governing documents of such entity.
(i) "Person" means an individual, corporation, partnership,
limited liability company, association, trust, unincorporated
organization, entity or "group" (as referred to in Section 13(d)(3) of
the Exchange Act).
(j) "Subsidiary" when used with respect to any party means any
corporation or other organization, whether incorporated or
unincorporated, (i) of which such party or any other Subsidiary of such
party is a general partner (excluding partnerships, the general
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<PAGE>
partnership interests of which held by such party or any Subsidiary of
such party do not have a majority of the general partner interests or
the ordinary voting interests in such partnership) or (ii) at least a
majority of the securities or other interests of which having by their
terms ordinary voting power to elect a majority of the Board of
Directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or
controlled by such party or by any one or more of its Subsidiaries, or
by such party and one or more of its Subsidiaries.
(k) (i) "Tax" (including, with correlative meaning, the terms
"Taxes" and "Taxable") means all federal, state, local and foreign
income, profits, franchise, gross receipts, environmental, customs duty,
capital stock, severance, stamp, payroll, sales, employment,
unemployment disability, use, property, withholding, excise, production,
value added, occupancy and other taxes, duties or assessments of any
nature whatsoever, together with all interest, penalties, fines and
additions to tax imposed with respect to such amounts and any interest
in respect of such penalties and additions to tax, and (ii) "Tax Return"
means all returns and reports (including elections, claims,
declarations, disclosures, schedules, estimates, computations and
information returns) required to be supplied to a Tax authority in any
jurisdiction relating to Taxes.
(l) "the other party" means, with respect to CCI, Parent and
Merger Sub and means, with respect to Parent or Merger Sub, CCI.
8.11. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
AND FOR ANY COUNTERCLAIM THEREIN.
8.12 Submission to Jurisdiction. Parent irrevocably submits to the
non-exclusive jurisdiction of the United States District Court for the
Southern District of New York located in the borough of Manhattan in the City
of New York, or if such court does not have jurisdiction, the Supreme Court
of the State of New York, New York County, for the purposes of any suit,
action or other proceeding arising out of this Agreement (and agrees not to
commence any action, suit or proceeding relating hereto except in such
courts). Parent irrevocably and unconditionally waives any objection to the
laying of venue of any action, suit or proceeding arising out of this
Agreement or the transactions contemplated hereby in (a) the Supreme Court of
the State of New York, New York County, or (b) the United States District
Court for the Southern District of New York (each, a "New York Court"), and
hereby further irrevocably and unconditionally waives and agrees not to plead
or claim in any such court that any such action, suit or proceeding brought
in any such court has been brought in an inconvenient forum. Parent hereby
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<PAGE>
appoints CT Corporation System, 1633 Broadway, New York, New York 10019, as
its authorized agent upon which process may be served in any action arising
out of or based on this Agreement which may be instituted in any New York
Court. Such appointment shall be irrevocable until all obligations of Parent
under this Agreement have been performed. Parent shall take any and all
action, including the filing of any and all documents and instruments, that
may be necessary to continue such appointment or appointments in full force
and effect as aforesaid. Service of process upon the authorized agent at the
address indicated above, as such address may be changed by notice given by
the authorized agent to Parent and CCI, shall be deemed, in every respect,
effective service of process upon Parent.
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<PAGE>
IN WITNESS WHEREOF, CCI, Parent and Merger Sub have caused this
Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
COMMNET CELLULAR INC.
By: /s/ Arnold C. Pohs
------------------------
Name: Arnold C. Pohs
Title: CEO
VODAFONE AIRTOUCH PLC
By: /s/ Mohan S. Gyani
-------------------------
Name: Mohan S. Gyani
Title: Chief Financial Officer
PACIFIC TELECOM CELLULAR OF
COLORADO, INC.
By: /s/ Mohan S. Gyani
------------------------
Name: Mohan S. Gyani
Title: Chief Financial Officer
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<PAGE>
ANNEX A
EMPLOYEE BENEFITS MATTERS
Parent and Merger Sub agree to the following with respect to the
compensation and benefits program of CCI and its Subsidiaries:
Survival of Plans. The following employee benefit plans and
policies of CCI existing on the date of this Agreement shall be kept in full
force and effect for the benefit of the CCI employees (or former employees)
then entitled to such benefits under the terms of such plans and policies for
a period of one year following the Closing:
The CommNet Cellular Inc. Exclusive Provider Program
The CommNet Cellular Inc. Preferred Provider Organization/Conventional
Medical Plan
The CommNet Cellular Inc. Basic Medical Plan
The CommNet Cellular Inc. Dental Plan
The CommNet Cellular Inc. Employee Assistance Plan
The CommNet Cellular Inc. Basic Life and Accidental Death and
Dismemberment Insurance Plan
The CommNet Cellular Inc. Business Travel Accident Plan
The CommNet Cellular Inc. Voluntary Life Insurance Plan
The CommNet Cellular Inc. Sick Pay and Long-Term Disability Plan
The CommNet Cellular Inc. Flexible Spending Accounts
Health and Welfare Benefit Option Plans at Termination, including
Medical, Outpatient Prescription Drug, Dental, Employee Assistance,
and Flexible Spending Account Plans, Basic Life and AD&D and Voluntary
Life Insurance Plans, Business travel Accident, Exempt Basic and
Extended Sick Pay, Nonexempt Sick Pay/Personal Time and Short-Term
Disability Plans, Long-Term Disability Conversion Option, Vision Plan,
Long Term Care Insurance Plan and Flexible Spending Accounts
The CommNet Cellular Inc. 401(k) Plan (including the profit sharing
portion of the Plan)
CommNet Cellular Inc. Short-Term Incentive Plan
Exec-u-care Group Medical Reimbursement Insurance Trust coverage for
Executive Vice Presidents, President and Chief Executive Officer of
CCI Enhanced Long-Term Disability Policy coverage for Vice Presidents
and senior management of CCI
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<PAGE>
Vacation and severance policies set forth in the CCI Employee Handbook
The CommNet Cellular Inc. Vision Plan
The CommNet Cellular Inc. Long Term Care Insurance Plan
-50-
<PAGE>
AGREEMENT AND PLAN OF MERGER
DATED AS OF JULY 18, 1999
AMONG
COMMNET CELLULAR INC.
VODAFONE AIRTOUCH PLC
AND
PACIFIC TELECOM CELLULAR OF COLORADO, INC.
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<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. THE MERGER . . . . . . . . . . . . . . . . . . . . 1
1.1. The Merger . . . . . . . . . . . . . . . . . . . . 1
1.2. Closing . . . . . . . . . . . . . . . . . . . . . . 2
1.3. Effective Time . . . . . . . . . . . . . . . . . . 2
1.4. Effects of the Merger . . . . . . . . . . . . . . . 2
1.5. Articles of Incorporation . . . . . . . . . . . . . 2
1.6. By-Laws . . . . . . . . . . . . . . . . . . . . . . 2
1.7. Officers and Directors of Surviving Corporation . . 2
1.8. Effect on Capital Stock . . . . . . . . . . . . . . 3
ARTICLE II. PAYMENT FOR SHARES . . . . . . . . . . . . . . . . 4
2.1. Exchange Fund . . . . . . . . . . . . . . . . . . . 4
2.2. Exchange Procedures. . . . . . . . . . . . . . . . 4
2.3. No Further Ownership Rights in CCI Common Stock
Exchanged for Cash. . . . . . . . . . . . . . . . . 5
2.4. Termination of Exchange Fund . . . . . . . . . . . 5
2.5. No Liability . . . . . . . . . . . . . . . . . . . 5
2.6. Investment of Exchange Fund . . . . . . . . . . . . 5
2.7. Lost Certificates . . . . . . . . . . . . . . . . . 5
2.8. Withholding Rights . . . . . . . . . . . . . . . . 6
2.9. Further Assurances . . . . . . . . . . . . . . . . 6
2.10. Shares of Dissenting Shareholders . . . . . . . . . 6
ARTICLE III. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 7
3.1. Representations and Warranties of CCI . . . . . . . 7
3.2. Representations and Warranties of Parent and
Merger Sub . . . . . . . . . . . . . . . . . . . . 20
ARTICLE IV. COVENANTS RELATING TO CONDUCT OF BUSINESS . . . . . 23
4.1. Covenants of CCI . . . . . . . . . . . . . . . . . 23
4.2. Covenants of Parent and Merger Sub . . . . . . . . 27
4.3. Advice of Changes; Government Filings . . . . . . . 27
4.4. Transition Planning . . . . . . . . . . . . . . . . 28
4.5. Control of Other Party's Business . . . . . . . . . 28
ARTICLE V. ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . 29
5.1. Preparation of Proxy Statement; CCI Shareholder
Meeting . . . . . . . . . . . . . . . . . . . . . . 29
5.2. Access to Information . . . . . . . . . . . . . . . 29
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<PAGE>
5.3. Approvals and Consents; Cooperation . . . . . . . . 30
5.4. Acquisition Proposals . . . . . . . . . . . . . . . 31
5.5. Stock Options and Other Benefit Plans . . . . . . . 33
5.6. Fees and Expenses . . . . . . . . . . . . . . . . . 34
5.7. Indemnification; Directors' and Officers'
Insurance . . . . . . . . . . . . . . . . . . . . . 34
5.8. Rights Agreement . . . . . . . . . . . . . . . . . 35
5.9. Public Announcements . . . . . . . . . . . . . . . 35
5.10. Certain Agreements . . . . . . . . . . . . . . . . 35
ARTICLE VI. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . 35
6.1. Conditions to Each Party's Obligation to Effect
the Merger . . . . . . . . . . . . . . . . . . . . 35
6.2. Additional Conditions to Obligations of Parent
and Merger Sub . . . . . . . . . . . . . . . . . . 36
6.3. Additional Conditions to Obligations of CCI . . . . 37
ARTICLE VII. TERMINATION AND AMENDMENT . . . . . . . . . . . . . 38
7.1. Termination . . . . . . . . . . . . . . . . . . . . 38
7.2. Effect of Termination . . . . . . . . . . . . . . . 40
7.3. Amendment . . . . . . . . . . . . . . . . . . . . . 42
7.4. Extension; Waiver . . . . . . . . . . . . . . . . . 42
ARTICLE VIII. GENERAL PROVISIONS . . . . . . . . . . . . . . . . 42
8.1. Non-Survival of Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . . . . . 42
8.2. Notices . . . . . . . . . . . . . . . . . . . . . . 43
8.3. Interpretation . . . . . . . . . . . . . . . . . . 43
8.4. Counterparts . . . . . . . . . . . . . . . . . . . 43
8.5. Entire Agreement; No Third Party Beneficiaries . . 43
8.6. Governing Law . . . . . . . . . . . . . . . . . . . 44
8.7. Severability . . . . . . . . . . . . . . . . . . . 44
8.8. Assignment . . . . . . . . . . . . . . . . . . . . 44
8.9. Enforcement . . . . . . . . . . . . . . . . . . . . 44
8.10. Definitions . . . . . . . . . . . . . . . . . . . . 44
8.11. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . 46
ANNEX AND CCI DISCLOSURE SCHEDULE
Annex
A. Employee Benefits Matters
CCI Disclosure Schedule
-ii-
<PAGE>
GLOSSARY OF DEFINED TERMS
Location of
Definition Defined Terms
Acquiring Person . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(q)
Acquisition Proposal . . . . . . . . . . . . . . . . . . . . . . . . . 5.4(a)
Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2(d)
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10(a)
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Agreement Options . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5(a)
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . 8.10(b)
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10(c)
CBCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
CCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
CCI Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10(d)
CCI Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(m)
CCI Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
CCI Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . . . . 3.1
CCI Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . 3.1(l)
CCI Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(f)
CCI SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
CCI Shareholders Meeting . . . . . . . . . . . . . . . . . . . . . . . 5.1(c)
CCI Voting Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(b)
Chase Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(b)
CIFC Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(b)
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
CoBank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(b)
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8
Colorado Articles of Merger . . . . . . . . . . . . . . . . . . . . . . . 1.3
Communications Act . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(c)
Consolidated Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 3.1(a)
Control Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10(e)
CoreStates Facility . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(b)
Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.10
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(q)
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(m)
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(c)
Exchange Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6
FCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(c)
FCC Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1(c)
FCC Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(f)
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(a)
General Partner Licensees . . . . . . . . . . . . . . . . . . . . . . . 3.1(f)
Governmental Entity . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(c)
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<PAGE>
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(c)
IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(m)
Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(b)
Limited Partner Licensees . . . . . . . . . . . . . . . . . . . . . . . 3.1(f)
Managed Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(f)
Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . 8.10(f)
Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . 8.10(g)
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Merger Consideration . . . . . . . . . . . . . . . . . . . . . . . . . 1.8(b)
Merger Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Nasdaq . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(c)
Nonmanaged Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(f)
Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5(a)
Organizational Documents . . . . . . . . . . . . . . . . . . . . . . 8.10(h)
Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10(i)
Plan Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5(a)
Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(c)
Required CCI Votes . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(k)
Required Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(c)
Required Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . 6.2(c)
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(b)
Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(b)
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(b)
Share Reference Date . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(b)
Stock Acquisition Date . . . . . . . . . . . . . . . . . . . . . . . . 3.1(q)
Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10(j)
Superior Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4(a)
Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.10(k)
Tax Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.10(k)
Taxable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10(k)
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10(k)
Terminating CCI Breach . . . . . . . . . . . . . . . . . . . . . . . . 7.1(g)
Terminating Merger Sub/Parent Breach . . . . . . . . . . . . . . . . . 7.1(h)
Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(b)
the other party . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10(l)
Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(c)
Voting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
WARN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(f)
-iv-
RIGHTS AGREEMENT AMENDMENT
AMENDMENT, dated as of July 18, 1999, to the Rights Agreement,
dated as of December 10, 1990 as amended (the "Rights Agreement"), between
CommNet Cellular Inc., a Colorado corporation, formerly Cellular, Inc. (the
"Company"), and State Street Bank and Trust Company, as successor to The Bank
of New York (the "Rights Agent").
The Company and the Rights Agent have heretofore executed and
entered into the Rights Agreement. Pursuant to Section 26 of the Rights
Agreement, the Company and the Rights Agent may from time to time supplement
or amend the Rights Agreement in accordance with the provisions of Section 26
thereof. All acts and things necessary to make this Amendment a valid
agreement according to its terms have been done and performed, and the
execution and delivery of this Agreement by the Company and the Rights Agent
have been in all respects authorized by the Company and the Rights Agent.
In consideration of the foregoing premises and mutual agreements
set forth in the Rights Agreement and this Amendment, the parties hereto
agree as follows:
1. Section 1(a) of the Rights Agreement is hereby modified and
amended to read in its entirety as follows:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall be
the Beneficial Owner (as such term is hereinafter defined) of 25% or more of
the Common Stock of the Company then outstanding, but shall not include (i)
the Company, (ii) any Subsidiary (as such term is hereinafter defined) of the
Company, (iii) any employee benefit plan of the Company or any Subsidiary of
the Company, (iv) any entity holding Common Stock for or pursuant to the
terms of any such plan, or (v) Pacific Telecom Cellular of Colorado, Inc., a
Colorado corporation ("Pacific Telecom")(together with any assignee thereof
pursuant to the Merger Agreement (as defined below)) and Vodafone Airtouch
Plc, a British corporation ("Vodafone" and together with Pacific Telecom,
"Acquiror") or any Affiliate thereof; provided, however, that Acquiror will
not be excepted from this definition of "Acquiring Person" in the event that
Acquiror becomes the Beneficial Owner of 25% or more of the Common Stock of
the Company then outstanding other than pursuant to the terms of the
Agreement and Plan of Merger, dated as of July 18, 1999 (the "Merger
Agreement"), between the Company, Pacific Telecom and Vodafone or the Voting
Agreement, dated as of July 18, 1999, between Vodafone and BCP CommNet L.P.
2. Section 3(a) of the Rights Agreement is hereby amended by
adding as the final sentence thereto the following:
<PAGE>
"Notwithstanding anything in this Agreement to the contrary, a
Distribution Date shall not be deemed to have occurred solely
as a result of (i) the approval, execution or delivery of the
Merger Agreement, or (ii) the consummation of the Merger (as
defined in the Merger Agreement)."
3. Section 11(a) of the Rights Agreement is hereby amended by
adding to the final sentence thereto the following:
"Notwithstanding anything in this Agreement to the contrary, a
Section 11(a)(ii) Event shall not be deemed to have occurred
solely as a result of (i) the approval, execution or delivery
of the Merger Agreement, or (ii) the consummation of the
Merger (as defined in the Merger Agreement)."
4. Section 13(a) of the Rights Agreement is hereby amended by
adding as the final sentence thereto the following:
"Notwithstanding anything in this Agreement to the contrary, a
Section 13 Event shall not be deemed to have occurred solely
as a result of (i) the approval, execution or delivery of the
Merger Agreement, or (ii) the consummation of the Merger (as
defined in the Merger Agreement)."
5. Except as expressly amended hereby, the Rights Agreement
remains in full force and effect in accordance with its terms.
6. The Rights Agreement, as amended by this Amendment, and each
Right and each Rights Certificate exist under and pursuant to the Colorado
Business Corporation Act.
7. This Amendment to the Rights Agreement shall be governed by
and construed in accordance with the laws of the State of Colorado.
8. This Amendment to the Rights Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed an original, and all such counterparts shall together constitute
but one and the same instrument.
9. Except as expressly set forth herein, this Amendment to the
Rights Agreement shall not by implication or otherwise alter, modify, amend
or in any way affect any of the terms, conditions, obligations, covenants or
agreements contained in the Rights Agreement, all of which are ratified and
affirmed in all respects and shall continue in full force and effect.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to the Rights Agreement to be duly executed as of the day and year first
above written.
Attest: COMMNET CELLULAR INC.
By: /s/ James C. Everson By: /s/ Arnold C. Pohs
------------------------ ---------------------------
Title: James C. Everson Title: Arnold C. Pohs
Secretary CEO
Attest: STATE STREET BANK AND TRUST COMPANY
By: /s/ Tina Goon By: /s/ Charles Rossi
------------------------ ---------------------------
Title: Tina Goon Title: Charles Rossi
Account Manager Vice President
-3-
VOTING AGREEMENT
VOTING AGREEMENT, dated as of July 18, 1999 (this "Agreement"),
between VODAFONE AIRTOUCH PLC, a British corporation ("Parent"), and BCP
COMMNET L.P., a Delaware limited partnership ("Stockholder").
W I T N E S S E T H:
WHEREAS, concurrently herewith, Parent, Pacific Telecom Cellular of
Colorado, Inc., a Colorado corporation and a wholly-owned subsidiary of
Parent ("Merger Sub"), and CommNet Cellular Inc., a Colorado corporation
("CCI"), are entering into an Agreement and Plan of Merger dated as of the
date hereof (the "Merger Agreement"; capitalized terms used but not defined
herein shall have the meanings set forth in the Merger Agreement), pursuant
to which, and subject to the terms and conditions thereof, Merger Sub will
merge with and into CCI (the "Merger");
WHEREAS, as of the date hereof, Stockholder owns of record or
beneficially 19,695,835 shares of common stock, par value $.001 per share, of
CCI ("CCI Common Stock") (such 19,695,835 shares, the "Existing Shares" and,
together with any shares of CCI Common Stock acquired after the date hereof,
whether upon the exercise of options, conversion of convertible securities or
otherwise, the "Shares"); and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement and to consummate the transactions contemplated thereby, Parent has
required that Stockholder agree (i) simultaneously with the execution of the
Merger Agreement, to execute and deliver this Agreement and (ii) to grant a
proxy to vote all of the Shares owned by Stockholder on the terms and
conditions provided for herein.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, and intending to be legally bound hereby, the parties agree as
follows:
1. Agreement to Vote; Proxy.
(a) Stockholder agrees that, during the time this Agreement is in
effect, at any meeting of the stockholders of CCI, however called or at
any adjournment thereof, or in connection with any written consent of
the stockholders of CCI, Stockholder shall be present (in person or by
proxy) and vote (or cause to be voted) all of the Shares (i) in favor of
the Merger, the execution and delivery by CCI of the Merger Agreement
and the approval of the terms thereof and each of the other actions
<PAGE>
contemplated by the Merger Agreement and this Agreement; (ii) against
any action or agreement that would result in a breach in any material
respect of any covenant, representation or warranty or any other
obligation or agreement of the CCI under the Merger Agreement; and (iii)
against any action or agreement (other than the Merger Agreement or the
transactions contemplated thereby) that, could reasonably be expected to
impede, interfere with or delay the Merger or this Agreement (or is
otherwise inconsistent therewith), including, but not limited to: (A)
any extraordinary corporate transaction, such as a merger, consolidation
or other business combination involving CCI or its subsidiaries (other
than a transaction involving Parent or its Affiliates); (B) a sale,
lease or transfer of a material amount of assets of CCI and its
subsidiaries or a reorganization, recapitalization or liquidation of CCI
or its subsidiaries (other than a transaction involving Parent or its
Affiliates); (C) any change in the management or board of directors of
CCI, except as otherwise agreed to in writing by Parent; (D) any
material change in the present capitalization or dividend policy of CCI
or any amendment of CCI's articles of incorporation; or (E) any other
material change in CCI's corporate structure or business. Stockholder
agrees not to enter into any agreement or understanding with any Person
the effect of which would be inconsistent with any of the foregoing.
(b) STOCKHOLDER HEREBY GRANTS TO, AND APPOINTS, PARENT AND MEGAN
PIERSON OF PARENT AND DAVID BAGLEY OF PARENT, IN THEIR RESPECTIVE
CAPACITIES AS OFFICERS OF PARENT, AND ANY INDIVIDUAL WHO SHALL HEREAFTER
SUCCEED TO ANY SUCH OFFICE OF PARENT, AND ANY OTHER DESIGNEE OF PARENT,
EACH OF THEM INDIVIDUALLY, THE STOCKHOLDER'S IRREVOCABLE (UNTIL THE
TERMINATION DATE) PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER OF
SUBSTITUTION) TO VOTE THE SHARES AS INDICATED IN SECTION 1(A) OF THIS
AGREEMENT. STOCKHOLDER INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE
TERMINATION DATE) AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH
FURTHER ACTION OR EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO
EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY
PREVIOUSLY GRANTED BY STOCKHOLDER WITH RESPECT TO THE SHARES.
2. Termination. This Agreement, the proxy contained herein and
Parent's right to vote the Shares shall terminate on the Termination Date.
As used herein, the term "Termination Date" means the first to occur of (a)
the Effective Time and (b) termination of the Merger Agreement in accordance
with its terms.
3. Representation and Warranties of Parent. Parent hereby
represents and warrants to Stockholder as follows:
(a) Organization, Standing and Power. Parent is a corporation
duly organized, validly existing and in good standing under the laws of
its jurisdiction of incorporation and has all requisite power and
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<PAGE>
authority to own, lease and operate its properties and to carry on its
business as now being conducted.
(b) Authority. Parent has all requisite corporate power and
authority to enter into this Agreement and to perform its obligations
hereunder. The execution and delivery of this Agreement by Parent and
the performance by Parent of its obligations hereunder have been duly
authorized by all necessary corporate action on the part of Parent. This
Agreement has been duly executed and delivered by Parent and constitutes
a valid and binding agreement of Parent, enforceable against it in
accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors generally, or by general equity
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(c) No Conflicts. The execution and delivery of this Agreement
does not or will not, as the case may be, and the performance by Parent
of its obligations hereunder will not, result in any Violation of: (A)
any provision of the Organizational Documents of Parent or (B) any loan
or credit agreement, note, mortgage, bond, indenture, lease, benefit
plan or other agreement, obligation, instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to Parent or its properties or assets.
(d) No Consents. No consent, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Entity is
required by or with respect to Parent in connection with the execution
and delivery of this Agreement by Parent or the performance by Parent of
its obligations hereunder.
4. Representations and Warranties of Stockholder. Stockholder
hereby represents and warrants to Parent as follows:
(a) Ownership of Shares. On the date hereof, the Existing Shares
are owned of record or beneficially by the Stockholder, and, on the date
hereof, the Existing Shares constitute all of the shares of Company
Common Stock owned of record or beneficially by Stockholder.
Stockholder has sole voting power and sole power of disposition with
respect to all of the Existing Shares, with no restrictions, subject to
applicable federal securities laws on Stockholder's rights of
disposition pertaining thereto. Stockholder has not granted any proxy
which is still in effect with respect to the Existing Shares.
(b) Organization, Standing and Power. Stockholder is a limited
partnership duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has all requisite
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<PAGE>
power and authority to own, lease and operate its properties and to
carry on its business as now being conducted.
(c) Authority. Stockholder has all requisite partnership power
and authority to enter into this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement by
Stockholder and the performance by Stockholder of its obligations
hereunder have been duly authorized by all necessary action on the part
of Stockholder. This Agreement has been duly executed and delivered by
Stockholder and constitutes a valid and binding agreement of
Stockholder, enforceable against it in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors generally, or by general equity principles
(regardless of whether such enforceability is considered in a proceeding
in equity or at law).
(d) No Conflicts. The execution and delivery of this Agreement
does not or will not, as the case may be, and the performance by
Stockholder of its obligations hereunder will not, result in any
Violation of: (A) any provision of the Organizational Documents of
Stockholder or (B) any loan or credit agreement, note, mortgage, bond,
indenture, lease, benefit plan or other agreement, obligation,
instrument, permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to
Stockholder or its properties or assets.
(e) No Consents. No consent, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Entity is
required by or with respect to Stockholder in connection with the
execution and delivery of this Agreement by Stockholder or the
performance by Stockholder of its obligations hereunder.
5. Certain Covenants of Stockholder. In accordance with the terms
of this Agreement, Stockholder hereby covenants and agrees as follows:
(a) Restriction on Transfer, Proxies and Non-Interference.
Stockholder hereby agrees, while this Agreement is in effect, and except
as contemplated hereby, not to (i) sell, transfer, pledge, encumber,
assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer,
pledge, encumbrance, assignment or other disposition of, any of the
Existing Shares or Shares acquired after the date hereof, or any
interest in any of the foregoing or (ii) grant any proxies or powers of
attorney, deposit any Shares into a voting trust or enter into a voting
agreement with respect to any Shares.
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<PAGE>
(b) Additional Shares. Stockholder hereby agrees, while this
Agreement is in effect, to promptly notify Parent of the number of any
new Shares of CCI Common Stock acquired by Stockholder, if any, after
the date hereof.
(c) No Solicitations. Stockholder agrees that neither it nor any
of its Affiliates, officers, directors, employees, agents or
representatives (collectively, "Representatives") shall, directly or
indirectly: (i) initiate, solicit, encourage or otherwise facilitate
any inquiries or the making of any Acquisition Proposal or (ii) provide
any information or data to, or engage in any discussions or negotiations
with, any Person (other than Parent) relating to or in contemplation of
an Acquisition Proposal. Stockholder will notify Parent immediately if
any inquiries, proposals or offers respecting an Acquisition Proposal
are received by, or any such information or data is requested from, or
any such discussions or negotiations are sought to be initiated or
continued with Stockholder or its Representatives indicating, in
connection with such notice, the name of such Person and the material
terms and conditions of any proposals or offers, and keep Parent
apprised with respect to the status and terms thereof. The provisions
of this Section 5(c) shall not restrict activities of CCI or any other
Person permitted in accordance with Section 5.4 of the Merger Agreement.
6. Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute
and deliver such additional documents and take all such further action as may
be necessary or desirable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this
Agreement.
7. General Provisions.
(a) Notices. All notices and other communications hereunder shall
be in writing and shall be deemed duly given (a) on the date of delivery
if delivered personally or delivered by facsimile (but in the case of
facsimile transmission, transmitted on the same day by the method
described in clause (b)), (b) on the first Business Day following the
date of dispatch if delivered by a recognized next-day courier service,
or (c) on the tenth Business Day following the date of mailing if
delivered by registered or certified mail, return receipt requested,
postage prepaid. All notices hereunder shall be delivered as set forth
below, or pursuant to such other instructions as may be designated in
writing by the party to receive such notice:
(i) If to Parent, to Vodafone Airtouch PLC, 1 California Street,
18th Floor, San Francisco, California 94111, Attention: David
Bagley, Director, Corporate Development, Facsimile
No. (415) 658-5239.
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<PAGE>
(ii) If to Shareholder, to BCP CommNet L.P., c/o Blackstone
Management Associates II L.L.C., 345 Park Avenue, 31st Floor, New
York, New York 10154, Attention: Mark T. Gallogly, Facsimile No.
(212) 754-8704 with a copy to Simpson Thacher & Bartlett, 425
Lexington Avenue, New York, New York 10017, Attention: Brian M.
Stadler, Esq., Facsimile No. (212) 455-2502.
(b) Descriptive Headings. The descriptive headings used herein
are inserted for convenience of reference only and are not intended to
be part of or to affect the meaning or interpretation of this Agreement.
(c) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other party, it
being understood that both parties need not sign the same counterpart.
(d) Entire Agreement; No Third Party Beneficiaries. This
Agreement (i) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof and (ii) shall be
binding upon and inure solely to the benefit of each party hereto, and
nothing in this Agreement, express or implied, is intended to or shall
confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
(e) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(f) Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law
or public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected
in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of
being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties
as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
(g) Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the
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<PAGE>
parties hereto, in whole or in part (whether by operation of law or
otherwise), without the prior written consent of the other party, and
any attempt to make any such assignment without such consent shall be
null and void.
(h) Enforcement. The parties 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. It is accordingly
agreed that the parties shall be entitled to specific performance of the
terms hereof, this being in addition to any other remedy to which they
are entitled at law or in equity.
(i) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY AND FOR ANY COUNTERCLAIM THEREIN.
(j) Amendments. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
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<PAGE>
IN WITNESS WHEREOF, Parent and Stockholder have caused this
Agreement to be duly executed as of the day and year first above written.
VODAFONE AIRTOUCH PLC
By: /s/ Mohan S. Gyani
-----------------------------
Name: Mohan S. Gyani
Title: Chief Financial Officer
BCP COMMNET L.P.
By: Blackstone CCI Capital
Partners L.P., general partner
By: Blackstone Management
Associates II L.L.C., general partner
By: /s/ Mark T. Gallogly
----------------------------
Name: Mark T. Gallogly
Title: Member
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Monday July 19, 8:24 am Eastern Time
Company Press Release
Vodafone AirTouch Acquisition of CommNet Cellular to Expand AirTouch's
Footprint in 9 Western States
SAN FRANCISCO and ENGLEWOOD, Colo.-- (BUSINESS WIRE)--July 19, 1999--
Vodafone AirTouch Plc (NYSE:VOD - news) and CommNet Cellular Inc.
(Nasdaq:CELS - news) today announced that Vodafone AirTouch has agreed,
through its subsidiary AirTouch Cellular, to purchase CommNet, based in
Englewood, CO, for $764 million in cash, plus debt which is expected to be
about $600 million at the close of the transaction. CommNet is controlled by
Blackstone Capital Partners II, a private equity fund of The Blackstone
Group, a private investment bank in New York.
The deal, which is expected to close in four to five months, will add vast
new regions to AirTouch Cellular's coverage area in the Western United
States. CommNet offers service in most of Colorado, Montana, North Dakota,
South Dakota, Utah and Wyoming and parts of Idaho, Iowa and New Mexico. It
also owns minority interests in operations in three other states.
CommNet's share of those markets gives it access to about 3.6 million
potential customers. It has about 360,000 proportionate customers.
The purchase fills gaps in AirTouch's coverage area which until now have
been served through costly roaming agreements. AirTouch will now be able to
extend service to communities such as Rapid City and Sioux Falls, South
Dakota; Sioux City, Iowa; Bismarck, North Dakota; Great Falls and Billings,
Montana; and Pueblo, Colorado.
"CommNet's markets are well managed and fit ours like hand in glove," said
Chris Gent, CEO of Vodafone AirTouch Plc. "This deal will allow customers to
enjoy the benefits of AirTouch quality over a much broader area. It will cut
our roaming costs and offer significant marketing synergies, which will
enable us improve the value we offer customers."
Under the terms of the agreement, shareholders of CommNet will receive $31
per share in cash, plus 8 percent annual interest from July 18, 1999 until
closing.
Arnold C. Pohs, Chairman and CEO of CommNet, said, "This transaction joining
CommNet with the world's largest wireless telecommunications company is a
true benefit for our shareholders, subscribers, telephone company partners,
employees and future customers. As the definitive provider of cellular
telephony to rural America, we know that our heritage of service and quality
is now firmly secure for the future."
<PAGE>
Mark T. Gallogly, Senior Managing Director at The Blackstone Group who is
responsible for the firm's cable, communications and media investments,
observed, "We have been privileged to partner with an outstanding team at
CommNet. Arnold Pohs, Dan Dwyer and their team have done a tremendous job to
maximize value for all CommNet shareholders. AirTouch is a world-class
company with the capability to grow CommNet to compete effectively on a
national basis."
The transaction is subject to customary conditions including receipt of
approval from the Federal Communications Commission. Blackstone has agreed
to vote in favor of the transaction. CommNet was advised by Morgan Stanley
Dean Witter, which delivered a fairness opinion, and the law firm of Simpson
Thacher & Bartlett.
AirTouch serves 9 million U.S. cellular and PCS customers on a proportionate
basis. Its ventures operate in 25 states and 22 of the top 30 U.S. markets,
including Atlanta, Chicago, Dallas, Detroit, Houston, Los Angeles, Miami,
Phoenix, San Diego, San Francisco and Seattle. AirTouch is part of the
Vodafone AirTouch Plc, the world's largest wireless communications firm,
based in the United Kingdom. It has mobile operations in 24 countries on
five continents, with more than 28 million proportionate cellular customers.
For more information, visit the AirTouch web site at www.airtouch.com.
The Blackstone Group is a private investment bank based in New York City. It
was founded in 1985 by its Chairman, Peter G. Peterson, and its President and
CEO, Stephen A. Schwarzman. Blackstone is a leader in private equity
investing, and is currently in the process of investing its Blackstone
Capital Partners III fund, which represents approximately $4 billion of
equity capital. The Blackstone Group is also engaged in five other business
areas including Mergers and Acquisitions Advisory, Restructuring and
Reorganization Advisory, Private Equity Real Estate Investing, Private
Mezzanine Investing, and Liquid Alternative Asset Investing.
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Contact:
Vodafone AirTouch
Jonathan Marshall, 415/658-2209
or
CommNet Cellular
Dan Dwyer, 303/694-8568
or
The Blackstone Group
Maryfrances Metrick, 212/583-5837
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