SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) DECEMBER 11, 1998
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CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-19363 13-3221852
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(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
110 East 59th Street, New York, New York 10022
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code (212)906-8480
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On December 11, 1998, Cellular Communications International, Inc. (the
"Company"), Olivetti S.p.A. and Mannesmann AG announced that they have signed a
definitive merger agreement for Olivetti and Mannesmann to acquire through a
newly formed entity (Kensington Acquisition Sub, Inc.) all the outstanding
common stock of the Company.
Under the agreement, Olivetti and Mannesmann will commence, on or before
December 18, 1998, a US$65.75 per share cash tender offer for all the
outstanding shares of common stock of the Company. Following the consummation of
the tender offer, Olivetti and Mannesmann will acquire through a merger all
shares not purchased in the tender offer at the same price. This would result in
an aggregate equity purchase price on a fully diluted basis of approximately
US$1.4 billion.
The Board of Directors of each of the companies has approved the tender
offer and the related transactions. Goldman, Sachs & Co. advised Olivetti and
Mannesmann on the transaction. The Company's Board has determined that the terms
of the tender offer and merger are fair to, and in the best interests of, the
Company and its stockholders, and has recommended that all stockholders accept
the offer. The Board of Directors of the Company has received an opinion from
its financial advisor, Wasserstein Perella & Co., Inc. to the effect that the
consideration proposed to be paid in the transaction is fair to the Company's
stockholders from a financial point of view.
The tender offer will be conditioned upon, among other things, the tender
of a number of shares which represents a majority of the outstanding shares of
common stock on a fully diluted basis. The tender offer will not be subject to a
financing contingency.
Item 7. Financial Statements and Exhibits.
Exhibits
99.1 Press Release issued December 11, 1998.
99.2 Agreement and Plan of Merger, dated as of December 11, 1998
between the Company and Kensington Acquisition Sub, Inc.
99.3 Stock Option Agreement, dated as of December 11, 1998 between
Kensington Acquisition Sub, Inc. and the Company
99.4 Stockholders Agreement, dated as of December 11, 1998 between
Kensington Acquisition Sub, Inc. and the Company
99.5 Guarantee, dated as of December 11, 1998 between Kensington
Acquisition Sub, Inc. and the Company
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
(Registrant)
By: \s\ Richard J. Lubasch
-------------------------------------------
Name: Richard J. Lubasch
Title: Senior Vice President, Treasurer,
Secretary and General Counsel
Dated: December 14, 1998
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EXHIBIT INDEX
Exhibit Page
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99.1 Press Release issued December 11, 1998.
99.2 Agreement and Plan of Merger, dated as of December 11, 1998
between the Company and Kensington Acquisition Sub, Inc.
99.3 Stock Option Agreement, dated as of December 11, 1998 between
Kensington Acquisition Sub, Inc. and the Company
99.4 Stockholders Agreement, dated as of December 11, 1998 between
Kensington Acquisition Sub, Inc. and the Company
99.5 Guarantee, dated as of December 11, 1998 between Kensington
Acquisition Sub, Inc. and the Company
NEWS RELEASE:
FOR IMMEDIATE RELEASE:
OLIVETTI S.p.A. AND MANNESMANN AG ANNOUNCE PLANS TO ACQUIRE
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
New York, New York, December 11, 1998 -- Cellular Communications International,
Inc. (NNM: CCIL), Olivetti S.p.A. and Mannesmann AG announced today that they
have signed a definitive merger agreement for Olivetti and Mannesmann to acquire
through a newly formed entity (Kensington Acquisition Sub, Inc.) all the
outstanding common stock of CCIL.
Under the agreement, Olivetti and Mannesmann will commence, on or before
December 18, 1998, a US$65.75 per share cash tender offer for all the
outstanding shares of common stock of CCIL. Following the consummation of the
tender offer, Olivetti and Mannesmann will acquire through a merger all shares
not purchased in the tender offer at the same price. This would result in an
aggregate equity purchase price on a fully diluted basis of approximately US$1.4
billion.
The Board of Directors of each of the companies has approved the tender offer
and the related transactions. Goldman, Sachs & Co. advised Olivetti and
Mannesmann on the transaction. CCIL's Board has determined that the terms of the
tender offer and merger are fair to, and in the best interests of, CCIL and its
stockholders, and has recommended that all stockholders accept the offer. The
Board of Directors of CCIL has received an opinion from its financial advisor,
Wasserstein Perella & Co., Inc., to the effect that the consideration proposed
to be paid in the transaction is fair to CCIL's stockholders from a financial
point of view.
The tender offer will be conditioned upon, among other things, the tender of a
number of shares which represents a majority of the outstanding shares of common
stock on a fully diluted basis. The tender offer will not be subject to a
financing contingency.
William Ginsberg, chief executive officer of CCIL, stated, "In 1988, we formed a
relationship with Olivetti, in order to leverage our U.S. cellular experience
and knowledge by means of pursuing analogous opportunities in other countries.
We were instrumental in the creation and subsequent development of
Omnitel-Pronto Italia S.p.A., which has evolved into one of the largest and most
rapidly growing cellular operations in the world. During this time, the market
value of CCIL has grown from under $50 million at the time CCIL became a
separate public company in 1991 to approximately $1.4 billion on a fully diluted
basis at the $65.75 per share price announced today."
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"We are pleased to enter into this transaction with Olivetti and Mannesmann and
to recommend it to stockholders. We also recognize and appreciate the efforts of
the many people who have contributed to CCIL's success."
CCIL's primary asset is an approximate 14.667% interest in Omnitel Sistemi
Radiocellulari Italiani S.p.A. (OSR), a strategic joint venture which holds a
70% interest in Omnitel-Pronto Italia S.p.A. (Omnitel). Omnitel is Italy's
second leading mobile operator with over 5.0 million subscribers.
In the autumn of 1997, Olivetti and Mannesmann formed a joint venture, Oliman
Holding B.V., to cooperate in the area of telecommunications in Italy with the
objective to expand their leading position as a private competitor in the
Italian telecommunications market. Olivetti currently holds a 62.5% interest in
Oliman and Mannesmann holds a 37.5% interest. Mannesmann will raise its stake in
Oliman to 49.9% by February 1999. Oliman currently holds an indirect 40%
interest in Omnitel and a 100% stake in the fixed line operator Infostrada. With
this acquisition, Oliman will further strengthen its majority position in
Omnitel. CCIL currently holds an indirect stake of approximately 10.3% in
Omnitel.
Mannesmann operates in Telecommunications, Engineering, Automotive and Tubes &
Trading and generated sales of around DM 39 billion in 1997. The Group is one of
the leading alternative telecommunication operators in the recently liberalized
European market.
The Olivetti Group is a leading international player operating through
subsidiaries and affiliates in the telecommunications and information technology
sectors. In telecommunications, Olivetti operates both in the wireless and
wireline markets through Omnitel and Infostrada, respectively. In the
Information Technology sector, Olivetti wholly owns Olivetti Lexikon, which
specializes in I.T. products for the office and the consumer markets. It also
has a 18.5% ownership in Wang Global, a United States publicly traded company.
Conference Call: A telephone conference call will be held at 2:00 p.m. New York
time today to discuss this transaction. Persons wishing to participate in this
call can do so by calling the following numbers:
U.S. callers: (800) 865-4460
International callers: (973) 321-1100
The callers should ask for the "Cellular Communications International" call upon
dialing.
A digital replay will be available for one week at the following numbers:
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U.S. callers: (888) 371-8504
International callers: (402) 220-1435
Contact information:
At CCIL: Richard J. Lubasch, Senior Vice President-General Counsel, (212)
906-8470.
At Mannesmann: Ms. Magdalena Moll, telephone 49-211-820-2161, facsimile
49-211-820-2384.
At Olivetti: Mr. Vittorio Meloni, telephone 39-01-2552-2639, facsimile
39-01-2552-3884.
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CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
and
KENSINGTON ACQUISITION SUB, INC.
========================================
AGREEMENT AND PLAN OF MERGER
========================================
Dated as of December 11, 1998
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<PAGE>
TABLE OF CONTENTS
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PAGE
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ARTICLE I. THE TENDER OFFER
SECTION 1.1. The Offer.................................................. 2
SECTION 1.2. Company Action............................................. 4
SECTION 1.3. Directors.................................................. 6
ARTICLE II. THE MERGER
SECTION 2.1. The Merger................................................. 8
SECTION 2.2. Effective Time............................................. 8
SECTION 2.3. Closing.................................................... 8
SECTION 2.4. Effect of the Merger....................................... 8
SECTION 2.5. Subsequent Actions......................................... 8
SECTION 2.6. Certificate of Incorporation; By-Laws;
Directors and Officers................................... 9
SECTION 2.7. Stockholders' Meeting...................................... 9
SECTION 2.8. Merger Without Meeting of Stockholders..................... 10
SECTION 2.9. Conversion of Securities................................... 10
SECTION 2.10. Dissenting Shares.......................................... 11
SECTION 2.11. Surrender of Shares; Stock Transfer Books.................. 12
SECTION 2.12. Stock Plans................................................ 13
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
SECTION 3.1. Corporate Organization..................................... 14
SECTION 3.2. Authority Relative to this Agreement....................... 15
SECTION 3.3. No Conflict; Required Filings and Consents................. 15
SECTION 3.4. Financing Arrangements..................................... 16
SECTION 3.5. No Prior Activities........................................ 16
SECTION 3.6. Brokers.................................................... 16
SECTION 3.7. Proxy Statement............................................ 16
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.1. Organization and Qualification; Subsidiaries............... 17
SECTION 4.2. Capitalization............................................. 17
SECTION 4.3. Authority Relative to this Agreement; Company Action....... 18
SECTION 4.4. No Conflict; Required Filings and Consents................. 19
SECTION 4.5. SEC Filings; Financial Statements.......................... 20
SECTION 4.6. Undisclosed Liabilities.................................... 21
SECTION 4.7. Absence of Certain Changes or Events....................... 21
SECTION 4.8. Litigation................................................. 21
SECTION 4.9. Employee Benefit Plans..................................... 22
SECTION 4.10. Proxy Statement............................................ 24
SECTION 4.11. Brokers.................................................... 24
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SECTION 4.12. Conduct of Business........................................ 24
SECTION 4.13. Compliance with Law........................................ 25
SECTION 4.14. Taxes...................................................... 26
SECTION 4.15. Intellectual Property...................................... 28
SECTION 4.16. Employment Matters......................................... 30
SECTION 4.17. Vote Required.............................................. 31
SECTION 4.18. Environmental Matters...................................... 31
SECTION 4.19. Real Property.............................................. 32
SECTION 4.20. Title and Condition of Properties.......................... 32
SECTION 4.21. Contracts.................................................. 33
SECTION 4.22. Potential Conflicts of Interest............................ 33
SECTION 4.23. Insurance.................................................. 33
SECTION 4.24. Opinion of Financial Advisor............................... 34
SECTION 4.25. Investment Company......................................... 34
SECTION 4.26. Full Disclosure............................................ 34
ARTICLE V. CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1. Acquisition Proposals...................................... 34
SECTION 5.2. Conduct of Business by the Company Pending the Merger...... 35
SECTION 5.3. No Solicitation; Board Recommendation...................... 37
ARTICLE VI. ADDITIONAL AGREEMENTS
SECTION 6.1. Proxy Statement............................................ 39
SECTION 6.2. Meeting of Stockholders of the Company..................... 39
SECTION 6.3. Additional Agreements...................................... 40
SECTION 6.4. Notification of Certain Matters............................ 40
SECTION 6.5. Access to Information...................................... 40
SECTION 6.6. Public Announcements....................................... 41
SECTION 6.7. Best Efforts; Cooperation.................................. 41
SECTION 6.8. Agreement to Defend and Indemnify.......................... 41
SECTION 6.9. Debt Offer................................................. 43
SECTION 6.10. Qualified Electing Fund Documentation...................... 44
SECTION 6.11. Omnitel Agreement.......................................... 44
ARTICLE VII. CONDITIONS OF MERGER
SECTION 7.1. Offer...................................................... 45
SECTION 7.2. Stockholder Approval....................................... 45
SECTION 7.3. No Challenge............................................... 45
ARTICLE VIII. TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1. Termination................................................ 45
SECTION 8.2. Effect of Termination...................................... 47
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ARTICLE IX. GENERAL PROVISIONS
SECTION 9.1. Non-Survival of Representations, Warranties and
Agreements............................................... 48
SECTION 9.2. Notices.................................................... 48
SECTION 9.3. Expenses................................................... 49
SECTION 9.4. Certain Definitions........................................ 49
SECTION 9.5. Headings................................................... 50
SECTION 9.6. Severability............................................... 50
SECTION 9.7. Entire Agreement; No Third-Party Beneficiaries............. 50
SECTION 9.8. Assignment................................................. 50
SECTION 9.9. Governing Law.............................................. 51
SECTION 9.10. Amendment.................................................. 51
SECTION 9.11. Waiver..................................................... 51
SECTION 9.12. Counterparts............................................... 51
ANNEX I Conditions to the Offer
Exhibit A Option Agreement
Exhibit B Stockholders Agreement
SCHEDULES
Schedule 4.1 Equity Interests
Schedule 4.2 Capitalization
Schedule 4.4 No Conflict; Required Filings and Consents
Schedule 4.6 Liabilities
Schedule 4.7 Conduct of Business; Certain Changes or Events
Schedule 4.8 Litigation
Schedule 4.9 Employment Plans
Schedule 4.12 Licenses and Permits
Schedule 4.13 Compliance with Law
Schedule 4.14 Net Operating Loss and Credit
Schedule 4.15 Intellectual Property
Schedule 4.18 Environmental Matters
Schedule 4.21 Contracts
Schedule 4.22 Potential Conflicts of Interest
Schedule 5.2 Conduct of Business
Schedule 6.8 D & O Insurance
Schedule 6.9 Debt Offer
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Table of Definitions
--------------------
Affiliate..............................................................9.4(a)
Agreement............................................................Recitals
Appointment Date..........................................................5.2
Audit.................................................................4.14(o)
Balance Sheet.........................................................4.14(f)
Board of Directors...................................................Recitals
Certificates..........................................................2.11(b)
CCPR..................................................................4.15(a)
Closing...................................................................2.3
Closing Date..............................................................2.3
Code...................................................................4.9(a)
Company..............................................................Recitals
Company Agreement.....................................................4.12(a)
Company Common Stock.................................................Recitals
Company Preferred Stock...................................................4.2
Computer Software.....................................................4.15(a)
Confidentiality Agreement..............................................6.5(b)
Control................................................................9.4(b)
Corecomm..............................................................4.15(a)
Debt Documents............................................................6.9
Debt Offer................................................................6.9
Delaware Law.........................................................Recitals
Disclosure Schedule................................................Article IV
Dissenting Shares.....................................................2.10(a)
Distribution Date..................................................1.2(a)(ii)
Effective Time............................................................2.2
Employee Benefit Plans.................................................4.9(a)
Environmental Laws....................................................4.18(a)
ERISA..................................................................4.9(a)
ERISA Affiliate........................................................4.9(a)
Exchange Act...........................................................1.1(a)
Exchange Agent........................................................2.11(a)
Expiration Date........................................................1.1(b)
Financial Statements...................................................4.5(b)
GAAP...................................................................4.5(b)
Governmental Authority.................................................3.3(b)
HSR Act................................................................3.3(b)
Indemnified Parties....................................................6.8(a)
Independent Directors..................................................1.3(a)
Intellectual Property.................................................4.15(b)
Licenses and Permits..................................................4.12(b)
Lien...................................................................9.4(c)
Mannesmann...............................................................4.10
Material Adverse Effect...................................................4.1
Merger...............................................................Recitals
Merger Consideration...................................................2.9(a)
Minimum Condition.....................................................Annex 1
Multiemployer Plan.....................................................4.9(a)
NTL...................................................................4.15(a)
Offer................................................................Recitals
Offer Documents........................................................1.1(c)
Offer Price..........................................................Recitals
<PAGE>
Offer to Purchase......................................................1.1(c)
Olivetti.................................................................4.10
Omnitel..................................................................4.12
Option Agreement.....................................................Recitals
Option Plans..........................................................2.12(a)
Option Price..........................................................2.12(a)
Options...............................................................2.12(a)
Other Stock Plan......................................................2.12(b)
PBGC...................................................................4.9(e)
Pension Plans..........................................................4.9(a)
Person.................................................................9.4(d)
PFIC..................................................................4.14(g)
Proxy Statement....................................................2.7(a)(ii)
Purchaser............................................................Recitals
Purchaser Information.....................................................3.7
Purchaser Representatives..............................................6.5(b)
QEF Election..........................................................4.14(g)
Rights...............................................................Recitals
Rights Agreement.....................................................Recitals
Schedule 14D-1.........................................................1.1(c)
Schedule 14D-9.........................................................1.2(b)
SEC....................................................................1.1(b)
SEC Reports............................................................4.5(a)
Securities Act.........................................................4.5(a)
Senior Notes..............................................................6.9
Shares...............................................................Recitals
Special Meeting.....................................................2.7(a)(i)
Stockholders Agreement...............................................Recitals
Subsequent Determination...............................................5.3(b)
Subsidiary................................................................4.1
Superior Proposal......................................................5.3(b)
Surviving Corporation.....................................................2.1
Takeover Proposal.........................................................5.1
Takeover Proposal Interest................................................5.1
Tax Authority.........................................................4.14(o)
Tax Return............................................................4.14(p)
Taxes.................................................................4.14(o)
Termination Fee........................................................8.2(b)
Treasury Regulations..................................................4.14(m)
Voting Debt...............................................................4.2
Warrants..................................................................4.2
Wasserstein Perella...............................................1.2(a)(iii)
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<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December 11, 1998 (the
"Agreement"), between Cellular Communications International, Inc., a Delaware
corporation (the "Company"), and Kensington Acquisition Sub, Inc., a Delaware
corporation (the "Purchaser").
W I T N E S S E T H
WHEREAS, the Boards of Directors of each of the Company and the Purchaser
have determined that it is in the best interests of their respective
stockholders for the Purchaser to acquire the Company upon the terms and subject
to the conditions set forth herein; and
WHEREAS, in furtherance thereof, it is proposed that the Purchaser will
make a cash tender offer (the "Offer") to acquire all shares (the "Shares") of
the issued and outstanding common stock, par value $.01 per share, of the
Company ("Company Common Stock"), including the associated Preferred Stock
Purchase Rights (the "Rights") issued pursuant to the Rights Agreement, dated as
of December 19, 1990, between the Company and Continental Stock Transfer Trust
Company (the "Rights Agreement"), for $65.75 per Share (the "Offer Price"), or
such higher price as may be paid in the Offer, in each case net to the seller in
cash;
WHEREAS, also in furtherance of such acquisition, the Boards of Directors
of the Company and the Purchaser have each approved the merger (the "Merger") of
the Purchaser with and into the Company following the Offer in accordance with
the General Corporation Law of the State of Delaware ("Delaware Law") and upon
the terms and subject to the conditions set forth herein;
WHEREAS, the Board of Directors of the Company (the "Board of Directors")
has unanimously approved this Agreement and has resolved to recommend acceptance
of the Offer and the Merger to the holders of the Shares;
WHEREAS, as a condition and inducement to the Purchaser to enter into this
Agreement and to incur the obligations set forth herein, concurrently with the
execution and delivery of this Agreement, the Purchaser and the Company are
entering into an Option Agreement in the form of Exhibit A hereto (the "Option
Agreement"), pursuant to which, among other things, the Company has granted the
Purchaser an option to purchase certain newly-issued shares of Company Common
Stock subject to certain conditions; and
WHEREAS, as a condition and inducement to the Purchaser to enter into this
Agreement, the Board of Directors has approved the terms of a Stockholders
Agreement in the form of Exhibit B hereto (the "Stockholders Agreement") to be
entered
<PAGE>
into by the Purchaser, the Company, and the directors, officers and certain
stockholders of the Company concurrently with the execution of this Agreement,
pursuant to which each such Person (as defined below) has agreed to vote its
Shares for approval of the Merger and this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the Company and the Purchaser hereby agree
as follows:
ARTICLE I.
THE TENDER OFFER
SECTION 1.1. The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 8.1 hereof and none of the events set forth in Annex I
hereto shall have occurred and be existing, the Purchaser or a direct or
indirect subsidiary thereof shall commence (within the meaning of Rule 14d-2
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),) the
Offer as promptly as practicable, but in no event later than five business days
following the execution of this Agreement. The obligation of the Purchaser to
accept for payment any Shares tendered shall be subject to the satisfaction of
only those conditions set forth in Annex I. The Purchaser expressly reserves the
right to waive any such condition or to increase the Offer Price. The Offer
Price shall be net to the seller in cash. The Company agrees that no Shares held
by the Company will be tendered pursuant to the Offer.
(b) Without the prior written consent of the Company, the Purchaser shall
not (i) decrease the Offer Price or change the form of consideration payable in
the Offer, (ii) decrease the number of Shares sought, (iii) amend or waive
satisfaction of the Minimum Condition (as defined in Annex I) or (iv) impose
additional conditions to the Offer or amend any other term of the Offer in any
manner adverse to the holders of Shares; provided however, that if on the
initial scheduled expiration date of the Offer (the "Expiration Date") which
shall be twenty (20) business days after the date the Offer is commenced, all
conditions to the Offer shall not have been satisfied or waived, the Purchaser
may, from time to time, in its sole discretion, extend the expiration date (any
such extension to be for ten (10) business days or less); provided, however,
that the expiration date of the Offer may not be extended beyond May 15, 1999.
The Purchaser shall, on the terms and subject to the prior satisfaction or
waiver of the conditions of the Offer, accept for payment and purchase, as soon
as practicable after the expiration of the Offer, all Shares validly tendered
and not withdrawn prior to the expiration of the Offer; provided, however, that
the Purchaser may (i) extend the Expiration Date (including as it may be
extended) for up to ten
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<PAGE>
(10) business days in connection with an increase in the consideration to be
paid pursuant to the Offer so as to comply with applicable rules and regulations
of the Securities and Exchange Commission (the "SEC"), and (ii) if, immediately
prior to the Expiration Date (as it may be extended), the Shares tendered and
not withdrawn pursuant to the Offer equal less than 90% of the outstanding
Shares, the Purchaser may extend the Offer for a period not to exceed fifteen
(15) business days, notwithstanding that all conditions to the Offer are
satisfied as of such Expiration Date; provided, however, that during any such
extension of the Offer, the Purchaser irrevocably waives all of the conditions
to the Offer set forth in Annex I (other than the Minimum Condition (as defined
in Annex I)). It is agreed that the conditions to the Offer set forth in Annex I
are for the benefit of the Purchaser and may be asserted by the Purchaser
regardless of the circumstances giving rise to any such condition or, except
with respect to the Minimum Condition, may be waived by the Purchaser, in whole
or in part at any time and from time to time, in its sole discretion.
(c) The Offer shall be made by means of an offer to purchase (the "Offer to
Purchase") having only the conditions set forth in Annex I hereto. On the date
the Offer is commenced, the Purchaser shall file with the SEC a Tender Offer
Statement on Schedule 14D-1 (together with all amendments and supplements
thereto, and including the exhibits thereto, the "Schedule 14D-1"). The Schedule
14D-1 will contain (including as an exhibit) or incorporate by reference the
Offer to Purchase and forms of the related letter of transmittal and summary
advertisement (which documents, together with any supplements or amendments
thereto, and any other SEC schedule or form which is filed in connection with
the Offer and related transactions, are referred to collectively herein as the
"Offer Documents"). The Offer Documents will comply in all material respects
with the provisions of applicable Federal securities laws and, on the date filed
with the SEC and on the date first published, mailed or given to the Company's
stockholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made by the
Purchaser with respect to information furnished by the Company to the Purchaser,
in writing, expressly for inclusion in the Offer Documents. The information
supplied by the Company to the Purchaser, in writing, expressly for inclusion in
the Schedule 14D-1 will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(d) The Purchaser agrees to take all steps necessary to cause the Schedule
14D-1 to be filed with the SEC and the Offer Documents to be disseminated to
holders of Shares, in each
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<PAGE>
case as and to the extent required by applicable Federal securities laws. The
Company and its counsel shall be given a reasonable opportunity to review and
comment on any Offer Documents before they are filed with the SEC. Each of the
Purchaser and the Company agrees promptly (i) to correct any information
provided by it for use in the Schedule 14D-1 or the Offer Documents if and to
the extent that such information shall have become false or misleading in any
material respect and (ii) to supplement the information provided by it
specifically for use in the Schedule 14D-1 or the Offer Documents to include any
information that shall become necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
Purchaser further agrees to take all steps necessary to cause the Schedule 14D-1
as so corrected to be filed with the SEC and to be disseminated to the Company's
stockholders, in each case as and to the extent required by applicable Federal
securities laws. In addition, the Purchaser agrees to provide the Company and
its counsel with any comments, whether written or oral, that the Purchaser or
its counsel may receive from time to time from the SEC or its staff with respect
to the Schedule 14D-1 promptly after the receipt of such comments.
(e) The Purchaser shall have available on a timely basis the funds
necessary to accept for payment, and pay for, any Shares that the Purchaser
becomes obligated to pay for pursuant to the Offer or pursuant to Article II
hereof.
SECTION 1.2. Company Action.
(a) The Company hereby approves of and consents to the Offer and represents
and warrants that:
(i) the Board of Directors, at a meeting duly called and held on
December 10, 1998, at which a majority of the Directors were present: duly
and unanimously approved and adopted this Agreement, the Option Agreement,
the Stockholders Agreement and the transactions contemplated hereby and
thereby, including the Offer and the Merger, resolved to recommend that the
stockholders of the Company accept the Offer, tender their Shares pursuant
to the Offer and approve this Agreement and the transactions contemplated
hereby, including the Merger; and determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, are
fair to and in the best interests of the holders of Shares; provided,
however, that prior to the purchase by the Purchaser of Shares pursuant to
the Offer, the Company may modify, withdraw or change such recommendation
to the extent that the Board of Directors determines, after consultation
with outside legal counsel to the Company, that the failure to so withdraw,
modify or change such recommendation would likely breach the fiduciary
duties of the Board of Directors under applicable laws;
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(ii) with respect to the Rights Agreement, the Company has duly
amended the Rights Agreement to provide that (A) neither this Agreement nor
any of the transactions contemplated hereby, including the Offer and the
Merger, will result in the occurrence of a "Distribution Date" (as such
term is defined in the Rights Agreement) or otherwise cause the Rights to
become exercisable by the holders thereof, and (B) the Rights shall
automatically on and as of the Effective Time (as defined below) be void
and of no further force or effect; and
(iii) Wasserstein Perella & Co., Inc. ("Wasserstein Perella") has
delivered to the Board of Directors its written opinion that as of the date
hereof the consideration to be received by the stockholders of the Company
pursuant to each of the Offer and the Merger is fair to the stockholders of
the Company from a financial point of view. The Company has been authorized
by Wasserstein Perella to permit the inclusion of such fairness opinion (or
a reference thereto) in the Offer Documents and in the Schedule 14D-9
referred to below. The Company hereby consents to the inclusion in the
Offer Documents of the recommendations of the Board of Directors described
in this Section 1.2(a).
(b) The Company shall file with the SEC, no later than the fifth business
day following the public announcement of this Agreement, a Tender Offer
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any and
all amendments or supplements thereto, and including the exhibits thereto, the
"Schedule 14D-9"). The Schedule 14D-9 will comply in all material respects with
the provisions of all applicable law, including Federal securities law and, on
the date filed with the SEC and on the date first published, sent or given to
the Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation is
made by the Company with respect to information furnished by the Purchaser, in
writing, expressly for inclusion in the Schedule 14D-9. The Company further
agrees to take all steps necessary to cause the Schedule 14D-9 to be filed with
the SEC and to be disseminated to holders of the Shares, in each case as and to
the extent required by applicable Federal securities laws. The Company shall
mail, or cause to be mailed, such Schedule 14D-9 to the stockholders of the
Company at the same time the Offer Documents are first mailed to the
stockholders of the Company together with such Offer Documents. The Schedule
14D-9 and the Offer Documents shall contain the recommendations of the Board of
Directors described in Section 1.2(a) hereof. The Company agrees promptly to
correct the Schedule 14D-9 if and to the extent that it shall have become false
or misleading in any material respect (and the Purchaser, with respect to
written information supplied
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by it specifically for use in the Schedule 14D-9, shall promptly notify the
Company of any required corrections of such information and cooperate with the
Company with respect to correcting such information) and to supplement the
information contained in the Schedule 14D-9 to include any information that
shall become necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company further
agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected
to be filed with the SEC and to be disseminated to the stockholders of the
Company, in each case as and to the extent required by applicable law, including
Federal securities laws. The Purchaser and its counsel shall be given a
reasonable opportunity to review and comment on the Schedule 14D-9 before it is
filed with the SEC. In addition, the Company agrees to provide the Purchaser and
its counsel with any comments, whether written or oral, that the Company or its
counsel may receive from time to time from the SEC or its staff with respect to
the Schedule 14D-9 promptly after the receipt of such comments.
(c) In connection with the Offer, the Company, promptly upon execution of
this Agreement, shall furnish or cause to be furnished to the Purchaser mailing
labels containing the names and addresses of all record holders of Shares,
non-objecting beneficial owner lists and security position listings of Shares
held in stock depositories, each as of a recent date, and shall promptly furnish
the Purchaser with such additional information (including, but not limited to,
updated lists and computer files containing the names of stockholders and their
addresses, mailing labels and security position listings) and such other
information and assistance as the Purchaser or its agents may reasonably request
for the purpose of communicating the Offer to the record and beneficial holders
of Shares.
SECTION 1.3. Directors.
(a) Promptly upon the purchase by the Purchaser of any Shares pursuant to
the Offer, and from time to time thereafter as Shares are acquired by the
Purchaser, the Purchaser shall be entitled to designate such number of
directors, rounded up to the next whole number, on the Board of Directors as
will give the Purchaser, subject to compliance with Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder, representation on the Board
of Directors equal to at least that number of directors which equals the product
of the total number of directors on the Board of Directors (giving effect to the
directors appointed or elected pursuant to this sentence and including current
directors serving as officers of the Company) multiplied by the percentage that
the aggregate number of Shares beneficially owned by the Purchaser or any
affiliate of the Purchaser (including for purposes of this Section 1.3 such
Shares as are accepted for payment pursuant to the Offer, but excluding Shares
held by the Company and excluding Shares beneficially owned by the Purchaser by
virtue of the Option Agreement) bears
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to the number of Shares outstanding. At such times, the Company will also cause
each committee of the Board of Directors to include Persons designated by the
Purchaser constituting at least the same percentage of each such committee or
board as the Purchaser's designees are of the Board of Directors. The Company
shall, upon request by the Purchaser, promptly increase the size of the Board of
Directors or exercise its best efforts to secure the resignations of such number
of incumbent directors as is necessary to enable the Purchaser's designees to be
elected to the Board of Directors in accordance with the terms of this Section
1.3 and shall cause the Purchaser's designees to be so elected; provided,
however, that, in the event that the Purchaser's designees are appointed or
elected to the Board of Directors, until the Effective Time (as defined below)
the Board of Directors shall have at least one director who is a director on the
date hereof and who is neither an officer of the Company nor a designee,
stockholder, affiliate or associate (within the meaning of the Federal
securities laws) of the Purchaser (one or more of such directors, the
"Independent Directors"); provided, further, that if no Independent Directors
remain, the other directors shall designate one Person to fill one of the
vacancies who shall not be either an officer of the Company or a designee,
stockholder, affiliate or associate of the Purchaser, and such Person shall be
deemed to be an Independent Director for purposes of this Agreement.
(b) Subject to applicable law, the Company shall promptly take all action
necessary pursuant to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder in order to fulfill its obligations under this Section
1.3 and shall include in the Schedule 14D-9 mailed to stockholders promptly
after the commencement of the Offer (or an amendment thereof or an information
statement pursuant to Rule 14f-1 if the Purchaser has not theretofore designated
directors) such information with respect to the Company and its officers and
directors as is required under Section 14(f) and Rule 14f-1 in order to fulfill
its obligations under this Section 1.3. The Purchaser will supply the Company
and be solely responsible for any information with respect to itself and its
nominees, officers, directors and affiliates required by Section 14(f) and Rule
14f-1. Notwithstanding anything in this Agreement to the contrary, in the event
that the Purchaser's designees are elected to the Board of Directors, after the
acceptance for payment and purchase of Shares pursuant to the Offer and prior to
the Effective Time, the affirmative vote of a majority of the Independent
Directors shall be required to (i) amend or terminate this Agreement on behalf
of the Company, (ii) exercise or waive any of the Company's rights or remedies
hereunder, (iii) extend the time for performance of the Purchaser's obligations
hereunder or (iv) take any other action by the Company in connection with this
Agreement required to be taken by the Board of Directors.
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ARTICLE II.
THE MERGER
SECTION 2.1. The Merger. At the Effective Time and subject to and upon the
terms and conditions of this Agreement and Delaware Law, the Purchaser shall be
merged with and into the Company, the separate corporate existence of the
Purchaser shall cease and the Company shall continue as the surviving
corporation. The Company as the surviving corporation after the Merger
hereinafter sometimes is referred to as the "Surviving Corporation."
SECTION 2.2. Effective Time. The parties hereto shall cause a Certificate
of Merger to be executed and filed on the Closing Date (as defined below) (or on
such other date as the Purchaser and the Company may agree) with the Secretary
of State of the State of Delaware, in such form as required by, and executed in
accordance with the relevant provisions of, Delaware Law. The Merger shall
become effective on the date on which the Certificate of Merger is duly filed
with the Secretary of State of the State of Delaware or such time as is agreed
upon by the parties and specified in the Certificate of Merger, and such time is
hereinafter referred to as the "Effective Time."
SECTION 2.3. Closing. The closing of the Merger (the "Closing") shall take
place at 10:00 a.m. on a date to be specified by the parties, which shall be no
later than the third business day after satisfaction or waiver of all of the
conditions set forth in Article VII hereof (the "Closing Date"), at the offices
of Willkie Farr & Gallagher, 787 Seventh Avenue, New York, New York, unless
another date or place is agreed to in writing by the parties hereto.
SECTION 2.4. Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of Delaware Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises of
the Company and the Purchaser shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and the Purchaser shall become the
debts, liabilities and duties of the Surviving Corporation.
SECTION 2.5. Subsequent Actions. If, at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
businesses, properties or assets of either of the Company or the Purchaser
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger or otherwise to
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carry out this Agreement, the officers and directors of the Surviving
Corporation shall be authorized to execute and deliver, in the name and on
behalf of either the Company or the Purchaser, all such deeds, bills of sale,
assignments and assurances and to take and do, in the name and on behalf of each
of such corporations or otherwise, all such other actions and things as may be
necessary or desirable to vest, perfect or confirm any and all right, title and
interest in, to and under such rights, businesses, properties or assets in the
Surviving Corporation or otherwise to carry out this Agreement.
SECTION 2.6. Certificate of Incorporation; By-Laws; Directors and Officers.
(a) Unless otherwise determined by the Purchaser before the Effective Time,
at the Effective Time the Certificate of Incorporation of the Purchaser, as in
effect immediately before the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law and such Certificate of Incorporation.
(b) The By-Laws of the Purchaser, as in effect immediately before the
Effective Time, shall be the By-Laws of the Surviving Corporation until
thereafter amended as provided by law, the Certificate of Incorporation of the
Surviving Corporation and such By-Laws.
(c) The directors of the Purchaser immediately before the Effective Time
will be the initial directors of the Surviving Corporation, and the officers of
the Company immediately before the Effective Time will be the initial officers
of the Surviving Corporation, in each case until their successors are elected or
appointed and qualified. If, at the Effective Time, a vacancy shall exist on the
Board of Directors or in any office of the Surviving Corporation, such vacancy
may thereafter be filled in the manner provided by law.
SECTION 2.7. Stockholders' Meeting.
(a) If required by applicable law in order to consummate the Merger, the
Company, acting through its Board of Directors, shall, in accordance with
applicable law:
(i) duly call, give notice of, convene and hold a special meeting of
its stockholders (the "Special Meeting") as promptly as practicable
following the acceptance for payment and purchase of Shares by the
Purchaser pursuant to the Offer for the purpose of considering and taking
action upon the approval of the Merger and the adoption of this Agreement;
(ii) prepare and file with the SEC a preliminary proxy or information
statement relating to the Merger and this Agreement and use its best
efforts (x) to obtain and
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furnish the information required to be included by the SEC in the Proxy
Statement (as defined below) and, after consultation with the Purchaser, to
respond promptly to any comments made by the SEC with respect to the
preliminary proxy or information statement and cause a definitive proxy or
information statement, including any amendment or supplement thereto (the
"Proxy Statement"), to be mailed to its stockholders, provided that no
amendment or supplement to the Proxy Statement will be made by the Company
without consultation with the Purchaser and its counsel and (y) to obtain
the necessary approvals of the Merger and this Agreement by its
stockholders; and
(iii) notwithstanding the provisions of Section 2.7(a)(ii)(y), unless
the Board of Directors, after consultation with outside legal counsel to
the Company, determines that to do so would likely breach the fiduciary
duties of the Board of Directors under applicable law, include in the Proxy
Statement the recommendation of the Board of Directors that stockholders of
the Company vote in favor of the approval of the Merger and the adoption of
this Agreement.
(b) The Purchaser shall vote, or cause to be voted, all of the Shares then
owned by it or any of its subsidiaries and affiliates in favor of the approval
of the Merger and the adoption of this Agreement.
SECTION 2.8. Merger Without Meeting of Stockholders. Notwithstanding
Section 2.7 hereof, in the event that the Purchaser or any subsidiary of the
Purchaser shall acquire at least 90% of the outstanding Shares, pursuant to the
Offer or otherwise, the parties hereto shall, at the request of the Purchaser
and subject to Article VII hereof, take all necessary and appropriate action to
cause the Merger to become effective as soon as practicable after such
acquisition, without a meeting of stockholders of the Company, in accordance
with Section 253 of Delaware Law.
SECTION 2.9. Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of the Purchaser, the Company or
the holder of any of the following securities:
(a) Each Share issued and outstanding immediately before the Effective Time
(other than any Shares to be cancelled pursuant to Section 2.9(b) and any
Dissenting Shares (as defined in Section 2.10(a)) shall be cancelled and
extinguished and be converted into the right to receive the Offer Price in cash
payable to the holder thereof, without interest (the "Merger Consideration"),
upon surrender of the certificate formerly representing such Share in the manner
provided in Section 2.11 hereof. All such Shares, when so converted, shall no
longer be outstanding and shall automatically be cancelled and retired and
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shall cease to exist, and each holder of a certificate representing any such
Shares shall cease to have any rights with respect thereto, except the right to
receive the Merger Consideration therefor upon the surrender of such certificate
in accordance with Section 2.11 hereof, without interest.
(b) Each Share held in the treasury of the Company and each Share owned by
the Purchaser or any direct or indirect wholly owned subsidiary of the Purchaser
immediately before the Effective Time shall be cancelled and extinguished and no
payment or other consideration shall be made with respect thereto.
(c) Each share of common stock, par value $.01 per share, of the Purchaser
issued and outstanding immediately before the Effective Time shall thereafter
represent one validly issued, fully paid and nonassessable share of common
stock, par value $.01 per share, of the Surviving Corporation.
SECTION 2.10. Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the contrary, any
Shares held by a holder who has demanded and perfected his demand for appraisal
of his Shares in accordance with Delaware Law (including but not limited to
Section 262 thereof) and as of the Effective Time has neither effectively
withdrawn nor lost his right to such appraisal ("Dissenting Shares"), shall not
be converted into or represent the right to receive the Merger Consideration
pursuant to Section 2.9, but the holder thereof shall be entitled to only such
rights as are granted by Delaware Law.
(b) Notwithstanding the provisions of Section 2.7(a), if any holder of
Shares who demands appraisal of his Shares under Delaware Law shall effectively
withdraw or lose (through failure to perfect or otherwise) his right to
appraisal, then as of the Effective Time or the occurrence of such event,
whichever later occurs, such holder's Shares shall automatically be converted
into and represent only the right to receive the Merger Consideration as
provided in Section 2.9(a), without interest thereon, upon surrender of the
certificate or certificates representing such Shares pursuant to Section 2.11
hereof.
(c) The Company shall give the Purchaser (i) prompt notice of any written
demands for appraisal or payment of the fair value of any Shares, withdrawals of
such demands, and any other instruments served pursuant to Delaware Law received
by the Company and (ii) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal under Delaware Law. The
Company shall not voluntarily make any payment with respect to any demands for
appraisal and shall not, except with the prior written consent of the Purchaser,
settle or offer to settle any such demands.
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SECTION 2.11. Surrender of Shares; Stock Transfer Books.
(a) Before the Effective Time, the Purchaser shall designate a bank or
trust company reasonably acceptable to the Company to act as agent for the
holders of Shares in connection with the Merger (the "Exchange Agent") to
receive the funds necessary to make the payments contemplated by Section 2.9. At
the Effective Time, the Purchaser shall deposit, or cause to be deposited, in
trust with the Exchange Agent for the benefit of holders of Shares the aggregate
consideration to which such holders shall be entitled at the Effective Time
pursuant to Section 2.9.
(b) Each holder of certificates representing any Shares cancelled upon the
Merger, which immediately prior to the Effective Time represented outstanding
Shares (the "Certificates") whose Shares were converted pursuant to Section
2.9(a), may thereafter surrender such Certificate or Certificates to the
Exchange Agent, as agent for such holder, to effect the surrender of such
Certificate or Certificates on such holder's behalf for a period ending one year
after the Effective Time. The Purchaser agrees that promptly after the Effective
Time it shall cause the distribution to holders of record of Shares as of the
Effective Time of appropriate materials to facilitate such surrender. Upon the
surrender of Certificates, the Purchaser shall cause the Exchange Agent to pay
the holder of such Certificates in exchange therefor cash in an amount equal to
the Merger Consideration multiplied by the number of Shares represented by such
Certificate. Until so surrendered, each Certificate (other than Certificates
representing Dissenting Shares and Certificates representing Shares held by the
Purchaser or any direct or indirect wholly owned subsidiary of the Purchaser or
in the treasury of the Company) shall represent solely the right to receive the
aggregate Merger Consideration relating thereto.
(c) If payment of the Merger Consideration in respect of cancelled Shares
is to be made to a Person other than the Person in whose name a surrendered
Certificate or instrument is registered, it shall be a condition to such payment
that the Certificate or instrument so surrendered shall be properly endorsed or
shall be otherwise in proper form for transfer and that the Person requesting
such payment shall have paid any transfer and other taxes required by reason of
such payment in a name other than that of the registered holder of the
Certificate or instrument surrendered or shall have established to the
satisfaction of the Purchaser or the Exchange Agent that such tax either has
been paid or is not applicable.
(d) At the Effective Time, the stock transfer books of the Company shall be
closed and there shall not be any further registration of transfers of Shares or
any shares of capital stock thereafter on the records of the Company. From and
after
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the Effective Time, the holders of certificates evidencing ownership of the
Shares outstanding immediately prior to the Effective Time shall cease to have
any rights with respect to such Shares, except as otherwise provided for herein
or by applicable law. If, after the Effective Time, Certificates are presented
to the Surviving Corporation, they shall be cancelled and exchanged for the
Merger Consideration as provided in this Article II. No interest shall accrue or
be paid on any cash payable upon the surrender of a Certificate or Certificates
which immediately before the Effective Time represented outstanding Shares.
(e) Promptly following the date which is one year after the Effective Time,
the Surviving Corporation shall be entitled to require the Exchange Agent to
deliver to it any cash (including any interest received with respect thereto),
Certificates and other documents in its possession relating to the transactions
contemplated hereby, which had been made available to the Exchange Agent and
which have not been disbursed to holders of Certificates, and thereafter such
holders shall be entitled to look to the Surviving Corporation (subject to
abandoned property, escheat or similar laws) only as general creditors thereof
with respect to the Merger Consideration payable upon due surrender of their
Certificates, without any interest thereon. Notwithstanding the foregoing,
neither the Surviving Corporation nor the Exchange Agent shall be liable to any
holder of a Certificate for Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(f) The Merger Consideration paid in the Merger shall be net to the holder
of Shares in cash, subject to reduction only for any applicable Federal backup
withholding or, as set forth in Section 2.8(c), stock transfer taxes payable by
such holder.
SECTION 2.12. Stock Plans.
(a) The Company shall take all actions necessary to provide that, at the
Effective Time, (i) each then outstanding option to purchase shares of Company
Common Stock (the "Options") granted under any of the Company's stock option
plans referred to in Section 4.2 hereof, each as amended (collectively, the
"Option Plans"), whether or not then exercisable or vested, shall be cancelled
and (ii) in consideration of such cancellation, such holders of Options shall
receive for each Share subject to such Option an amount (subject to any
applicable withholding tax) in cash equal to the product of (A) the excess, if
any, of the Offer Price over the per share exercise price of such Option and (B)
the number of Shares subject to such Option (such amount being herein referred
to as the "Option Price"); provided, however, that the Company shall obtain all
necessary consents or releases from holders of Options to effect the foregoing.
Upon receipt of the Option Price, the Option shall be cancelled. The surrender
of an Option to the Company shall be deemed a release of any and
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all rights the holder had or may have had in respect of such Option. As promptly
as practicable following the consummation of the Merger, the Purchaser shall
provide the Company with the funds necessary to satisfy its obligations under
this Section 2.12(a).
(b) Except as provided herein or as otherwise agreed to by the parties and
to the extent permitted by the Option Plans, (i) the Company shall cause the
Option Plans to terminate as of the Effective Time and shall provide for the
payment of any benefit due under such Option Plans in cash; (ii) the Company
shall cause the provisions in any other plan, program or arrangement, which
currently provides or previously provided for the issuance or grant by the
Company of any interest in respect of the capital stock of the Company, or for
payments based on the value of the capital stock of the Company (each such other
plan being referred to as an "Other Stock Plan") to terminate as of the
Effective Time and shall provide for the payment of any benefit due under such
plans in cash; and (iii) the Company shall take all action necessary to ensure
that following the Effective Time no holder of Options or any participant in the
Option Plans or in any Other Stock Plan shall have any right thereunder to
acquire any equity securities of the Company, the Surviving Corporation or any
subsidiary thereof, and to terminate all such plans. The Purchaser shall assure
that the Company has the funds necessary to meet its obligations under this
Section 2.12(b).
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company as follows:
SECTION 3.1. Corporate Organization. The Purchaser is a corporation duly
organized under the laws of the State of Delaware. The Purchaser has the
requisite corporate power and authority and any necessary governmental approvals
to own, operate or lease the properties that it purports to own, operate or
lease and to carry on its business as it is now being conducted, except where
the failure to be so organized, existing and in good standing or to have such
power, authority, and governmental approvals would not have, individually or in
the aggregate, a material adverse effect on the Purchaser or on the ability of
the Purchaser to consummate any of the transactions contemplated by this
Agreement or to perform its obligations under this Agreement.
SECTION 3.2. Authority Relative to this Agreement. The execution and
delivery of this Agreement by the Purchaser and the consummation by the
Purchaser of the Merger and the transactions contemplated hereby and thereby
have been duly authorized by all necessary action on the part of the Purchaser
and no other proceeding is necessary for the execution and
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delivery of this Agreement by the Purchaser, the performance by the Purchaser of
its obligations hereunder and the consummation by the Purchaser of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Purchaser and, assuming due and valid authorization, execution
and delivery hereof by the Company, constitutes a legal, valid and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms.
SECTION 3.3. No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Purchaser do not,
and the performance of this Agreement by the Purchaser will not, (i) conflict
with or violate any law, regulation, court order, judgment or decree applicable
to the Purchaser or by which any of its property is bound or affected, (ii)
violate or conflict with the Certificate of Incorporation or By-Laws of the
Purchaser, or (iii) result in a violation or breach of or constitute a default
under (with or without due notice or lapse of time, or both), or give to others
any rights of termination or cancellation of, or result in the creation of a
Lien on any of the property or assets of the Purchaser pursuant to, any
contract, instrument, permit, license or franchise to which the Purchaser is a
party or by which the Purchaser or any of its property is bound or affected.
(b) Except for applicable requirements, if any, of the Exchange Act, the
pre-merger notification requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and filing and recordation
of appropriate merger documents as required by Delaware Law, the Purchaser is
not required to submit any notice, report or other filing with any court,
arbitrable tribunal, administrative agency or commission or other governmental
or other regulatory authority or agency, domestic or foreign (a "Governmental
Authority"), in connection with the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby. No
waiver, consent, approval or authorization of any Governmental Authority is
required to be obtained or made by the Purchaser in connection with its
execution, delivery or performance of this Agreement.
SECTION 3.4. Financing Arrangements. At the Expiration Date, the Purchaser
will have funds available to it sufficient to purchase the Shares in accordance
with the terms of this Agreement.
SECTION 3.5. No Prior Activities. Except for obligations or liabilities
incurred in connection with its incorporation or organization or the negotiation
and consummation of this Agreement and the transactions contemplated hereby, the
Purchaser has not incurred any obligations or liabilities, and has not engaged
in any business or activities of any type or kind
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whatsoever, or entered into any agreements or arrangements with any Person or
entity.
SECTION 3.6. Brokers. Except as to Goldman, Sachs & Co., no broker, finder
or investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by and on behalf of the Purchaser.
SECTION 3.7. Proxy Statement. None of the information supplied by the
Purchaser, the stockholders of the Purchaser or their respective officers,
directors, representatives, agents or employees (the "Purchaser Information"),
in writing, expressly for inclusion in the Proxy Statement, if any, or in any
amendments thereof or supplements thereto, will, on the date the Proxy Statement
is mailed to stockholders and at the time of the meeting of stockholders, if
any, to be held in connection with the Merger, contain any untrue statement of a
material fact or contain or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. Notwithstanding the
foregoing, the Purchaser does not make any representation or warranty with
respect to any information that has been supplied by the Company or its
accountants, counsel or other authorized representatives for use in any of the
foregoing documents.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the Disclosure Schedule delivered to the Purchaser
prior to the execution of this Agreement (the "Disclosure Schedule"), the
Company hereby represents and warrants to the Purchaser as follows:
SECTION 4.1. Organization and Qualification; Subsidiaries. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the requisite corporate power and authority and
any necessary governmental approvals to own, operate or lease the properties
that it purports to own, operate or lease and to carry on its business as it is
now being conducted, and is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned, operated or leased or the nature of its activities makes
such qualification necessary, except for such failure which, when taken together
with all other such failures, would not have a Material Adverse Effect (as
defined below). Except as disclosed on Schedule 4.1 of the Disclosure Schedule,
the Company does not own any Subsidiaries and does not otherwise have an equity
interest in any other Person. The Subsidiaries listed on Schedule 4.1 do not
have any assets, obligations or liabilities of any type or kind and will be
dissolved prior to
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December 31, 1998. The term "Subsidiary" means any corporation or other legal
entity of which the Company (either alone or through or together with any other
Subsidiary) owns, directly or indirectly, more than 50% of the capital stock or
other equity interests the holders of which are generally entitled to vote for
the election of the board of directors or other governing body of such
corporation or other legal entity. The term "Material Adverse Effect" means any
change in or effect on the business of the Company that is not a result of the
business operations of Omnitel (as defined below) or of general changes in the
economy or the industries in which the Company operates or results from
regulatory changes generally applicable to cellular operators in Europe or Italy
(including, without limitation, the issuance of a fourth Italian cellular
license or rules with respect to interconnections or pricing for incoming calls)
or a result of this Agreement that is or could reasonably be expected to be
materially adverse to (x) the business, operations, properties (including
intangible properties), condition (financial or otherwise), results of
operations, assets, liabilities, regulatory status or prospects of the Company
or (y) the ability of the Company to consummate any transactions contemplated by
this Agreement or the Option Agreement or to perform its obligations under this
Agreement or the Option Agreement.
SECTION 4.2. Capitalization. The authorized capital stock of the Company
consists of 75,000,000 shares of Company Common Stock and 2,500,000 shares of
Preferred Stock, $.01 par value per share ("Company Preferred Stock"), 1,000,000
shares of which have been designated "Series A Preferred Stock". As of November
30, 1998, (i) 16,715,306 shares of Company Common Stock and no shares of Company
Preferred Stock were issued and outstanding, (ii) 2,274,140 shares of Company
Common Stock were reserved for issuance in connection with the exercise of
outstanding options under the Option Plans, (iii) 651,091 shares of Company
Common Stock were reserved for issuance in connection with the exercise of
currently outstanding warrants ("Warrants") and (iv) 2,159,129 shares of Company
Common Stock were reserved for issuance in connection with the conversion of
currently outstanding Voting Debt (as defined below). All of the issued and
outstanding shares of the Company's capital stock are, and all Shares which may
be issued pursuant to the exercise or conversion of outstanding Options,
Warrants and Voting Debt will be, when issued in accordance with the respective
terms thereof, duly authorized, validly issued, fully paid and nonassessable and
free of preemptive or similar rights. Except as disclosed on Schedule 4.2 of the
Disclosure Schedule, there are no bonds, debentures, notes or other indebtedness
having general voting rights (or convertible into securities having such rights)
("Voting Debt") of the Company issued and outstanding. There are no voting
trusts or other agreements or understandings to which the Company is a party
with respect to the voting of the capital stock of the Company. Except as
disclosed on Schedule 4.2 of the Disclosure Schedule, as of the date hereof
there are no, and as of the Expiration Date there will be no, other options,
warrants,
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puts, calls, preemptive rights, subscriptions or other rights, agreements,
arrangements or commitments of any character relating to the issued, unissued or
treasury shares of the capital stock or any other interest in the ownership or
earnings of the Company or other security of the Company obligating the Company
to issue or sell any shares of capital stock or Voting Debt of, or other equity
interests in, the Company. Except as disclosed on Schedule 4.2 of the Disclosure
Schedule, there are no outstanding contractual obligations of the Company or any
of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or to provide funds to or make any investment (in
the form of a loan, capital contribution or otherwise) in any other entity.
SECTION 4.3. Authority Relative to this Agreement; Company Action.
(a) The Company has the necessary corporate power and authority to enter
into this Agreement, the Option Agreement and the Stockholders Agreement and,
subject to obtaining any necessary stockholder approval of the Merger, to carry
out its obligations hereunder and thereunder. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated by this Agreement, the Option Agreement and the Stockholders
Agreement have been duly authorized by all necessary corporate action on the
part of the Company, subject to the approval, if necessary, of the Merger by the
Company's stockholders in accordance with Delaware Law. Each of this Agreement,
the Option Agreement and the Stockholders Agreement has been duly executed and
delivered by the Company and, assuming due and valid authorization, execution
and delivery hereof and thereof by the other parties hereto and thereto, each of
this Agreement and the Stockholders Agreement constitutes a legal, valid and
binding obligation of the Company, enforceable against it in accordance with its
terms.
(b) The Company has taken all action which may be necessary under the
Rights Agreement, so that (i) the execution of this Agreement, the Option
Agreement and the Stockholders Agreement and any amendments hereto and thereto
by the parties hereto and thereto and the consummation of the transactions
contemplated hereby and thereby shall not cause (A) the Purchaser to become an
Acquiring Person (as defined in the Rights Agreement) or (B) a Distribution
Date, a Stock Acquisition Date or a Triggering Event (as such terms are defined
in the Rights Agreement) to occur, irrespective of the number of Shares acquired
pursuant to the Offer or exercise of the option granted under the Option
Agreement, and (ii) the Rights (as defined in the Rights Agreement) shall expire
upon the acceptance of Shares for payment pursuant to the Offer.
(c) The Board of Directors has approved this Agreement, the Option
Agreement, the Stockholders Agreement and the transactions contemplated hereby
and thereby (including but
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not limited to the Offer, the Merger and the matters provided for in the Option
Agreement) so as to render inapplicable hereto and thereto the limitation on
business combinations contained in (i) Section 203 of Delaware Law (or any
similar provision) and (ii) Article Ninth of the Restated Certificate of
Incorporation of the Company. As a result, the only vote of holders of any class
or series of the capital stock of the Company required to adopt this Agreement
and the transactions contemplated hereby, including the Merger, is the
affirmative vote of a majority of the outstanding Shares, and if Section 253 of
Delaware Law is applicable to the Merger, no such vote will be required. Neither
Section 203 of Delaware Law nor any other state takeover or control share
statute or similar statute or regulation applies or purports to apply to the
Offer, the Merger or any of the transactions contemplated hereby or thereby.
SECTION 4.4. No Conflict; Required Filings and Consents.
(a) Except as disclosed on Schedule 4.4 of the Disclosure Schedule, to the
Company's knowledge, the execution and delivery of this Agreement, the Option
Agreement and the Stockholders Agreement by the Company do not, and the
performance of this Agreement, the Option Agreement and the Stockholders
Agreement by the Company will not, (i) conflict with or violate any law, order,
writ, injunction, decree, statute, rule or regulation, court order or judgment
applicable to the Company or by which its property is bound or affected, (ii)
violate or conflict with the Restated Certificate of Incorporation or By-Laws of
the Company, or (iii) result in a violation or breach of, constitute a default
under (with or without due notice or lapse of time or both), give to others any
rights of termination or cancellation of, or result in the creation of a Lien on
any of the properties or assets of the Company pursuant to, any contract,
instrument, permit, license or franchise to which the Company is a party or by
which the Company or its property is bound or affected, excluding from the
foregoing clauses (i) and (iii) such violations, breaches or defaults which, in
the aggregate, would not have a Material Adverse Effect. For purposes of this
Agreement, "to the knowledge of the Company" or "to the Company's knowledge"
shall be limited to the knowledge of a current director or officer of the
Company.
(b) Except for applicable requirements of the Exchange Act, the pre-merger
notification requirements of the HSR Act, and the filing and recordation of
appropriate merger or other documents as required by Delaware Law, or "blue sky"
laws of various states, the Company is not required to submit any notice,
report, permit, authorization or other filing with any Governmental Authority in
connection with the execution, delivery or performance of this Agreement. No
waiver, consent, approval or authorization of any Governmental Authority is
required to be obtained or made by the Company in connection with its execution,
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delivery or performance of this Agreement, the Option Agreement or the
Stockholders Agreement.
SECTION 4.5. SEC Filings; Financial Statements.
(a) The Company has filed all forms, reports and documents required to be
filed with the SEC since January 1, 1997 (as such documents have been amended
since the time of their filing, collectively, the "SEC Reports"). As of their
respective dates, or, if amended, as of the date of the last such amendment, the
SEC Reports, including without limitation, any financial statements or schedules
included therein (i) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act of 1933, as amended (the
"Securities Act"), as the case may be, and the applicable rules and regulations
of the SEC promulgated thereunder, and (ii) did not contain any untrue statement
of a material fact or omit to state a 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 were made, not misleading. The Company has
heretofore furnished or made available to the Purchaser a complete and correct
copy of any amendments or modifications which have not yet been filed with the
SEC to executed agreements, documents or other instruments which previously had
been filed by the Company with the SEC pursuant to the Securities Act or the
Exchange Act.
(b) The consolidated financial statements of the Company contained in the
SEC Reports (the "Financial Statements") have been prepared from, and are in
accordance with the books and records of the Company, comply in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with United States generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto) and fairly presented the consolidated financial
position of the Company and the consolidated results of operation, cash flows
and changes in financial position of the Company as of and for the periods
indicated, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments.
SECTION 4.6. Undisclosed Liabilities.
(a) Except (a) as disclosed in the Financial Statements and (b) for
liabilities and obligations (i) incurred in the ordinary course of business and
consistent with past practice since September 30, 1998, (ii) pursuant to the
terms of this Agreement, or (iii) as disclosed on Schedule 4.6 of the Disclosure
Schedule, the Company has no material liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise, that would be required by GAAP
to be reflected in, reserved against or otherwise described in the balance sheet
of
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the Company included in the Financial Statements (including the notes thereto)
or which would have a Material Adverse Effect.
SECTION 4.7. Absence of Certain Changes or Events.
Since December 31, 1997, except as disclosed on Schedule 4.7 of the
Disclosure Schedule or in the SEC Reports filed prior to the date hereof, the
Company has conducted its business only in the ordinary and usual course in
accordance with past practice, and:
(a) there have not occurred any events or changes (including the incurrence
of any liabilities of any nature, whether or not accrued, contingent or
otherwise) that have had, or are reasonably likely in the future to have,
individually or in the aggregate, a Material Adverse Effect; and
(b) the Company has not taken any action which would have been prohibited
under Section 5.2 hereof.
SECTION 4.8. Litigation. Except as disclosed in the SEC Reports filed prior
to the date hereof, or as disclosed on Schedule 4.8 of the Disclosure Schedule,
there are no claims, actions, suits, proceedings (including, without limitation,
arbitration proceedings) or other alternative dispute resolution proceedings, or
investigations pending or, to the knowledge of the Company, threatened against
the Company, or any properties or rights of the Company, before any Governmental
Authority that, either individually or in the aggregate, would be reasonably
likely to have a Material Adverse Effect or prevent or delay the consummation of
the Offer or the Merger. As of the date hereof, the Company is not subject to
any outstanding court order, judgment, injunction or decree.
SECTION 4.9. Employee Benefit Plans.
(a) Schedule 4.9(a) of the Disclosure Schedule sets forth: (i) all
"employee benefit plans", as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and all other material
employee benefit arrangements or payroll practices, including, without
limitation, any such arrangements or payroll practices providing severance pay,
sick leave, vacation pay, salary continuation for disability, retirement
benefits, deferred compensation, bonus pay, incentive pay, stock options,
hospitalization insurance, medical insurance, life insurance, scholarships or
tuition reimbursements, maintained by the Company or to which the Company is
obligated to contribute thereunder for current or former employees or directors
of the Company (the "Employee Benefit Plans"). Neither the Company nor any trade
or business (whether or not incorporated) which is or has ever been under
control or treated as a single employer with the Company under Section 414(b),
(c), (m), or (o) of the Internal Revenue Code of 1986, as amended (the "Code")
("ERISA Affiliate") has ever maintained,
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contributed to or been obligated to contribute to an "employee pension plan", as
defined in Section 3(2) of ERISA.
(b) All contributions (including all employer contributions and employee
salary reduction contributions) required to have been made under any of the
Employee Benefit Plans or by law to any funds or trusts established thereunder
or in connection therewith have been made by the due date thereof (including any
valid extension), and all contributions for any period ending on or before the
Effective Time which are not yet due will have been paid or accrued on or prior
to the Effective Time.
(c) True, correct and complete copies of the following documents, with
respect to each of the Employee Benefit Plans and Pension Plans, have been
delivered or made available to the Purchaser by the Company: (i) all plans and
related trust documents, and amendments thereto; (ii) the most recent Forms
5500; (iii) the last Internal Revenue Service determination letter; (iv) summary
plan descriptions; (v) the most recent actuarial report relating to the Employee
Benefit Plans and the Pension Plans; and (vi) written descriptions of all
non-written agreements relating to the Employee Benefit Plans.
(d) There are no pending actions, claims or lawsuits which have been
asserted or instituted against the Employee Benefit Plans, the assets of any of
the trusts under such plans or the plan sponsor or the plan administrator, or
against any fiduciary of the Employee Benefit Plans with respect to the
operation of such plans (other than routine benefit claims), nor does the
Company have knowledge of facts which could form a valid basis for any such
claim or lawsuit.
(e) The Employee Benefit Plans have been maintained, in all material
respects, in accordance with their terms and with all provisions of ERISA and
the Code (including rules and regulations thereunder) and other applicable
federal and state laws and regulations, and neither the Company, any Subsidiary
of the Company nor any "party in interest" or "disqualified Person" with respect
to the Employee Benefit Plans has engaged in a "prohibited transaction" within
the meaning of Section 406 of ERISA or 4975 of the Code. No fiduciary to any
Employee Benefit Plan has any current liability for breach of fiduciary duty or
any other failure to act or comply in connection with the administration or
investment of the assets of any Employee Benefit Plan.
(f) None of the Employee Benefit Plans provide retiree life or retiree
health benefits except as may be required under Section 4980B of the Code or
Section 601 of ERISA and at the expense of the participant or the participant's
beneficiary. The Company and the ERISA Affiliates have at all times complied
with the notice and health care continuation requirements of Section 4980B of
the Code and Sections 601 through 608 of ERISA.
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(g) Except as disclosed on Schedule 4.9(g) of the Disclosure Schedule,
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment becoming due to
any employee or director (current, former or retired) of the Company,
(ii) increase any benefits otherwise payable under any Employee Benefit Plan,
(iii) result in the acceleration of the time of payment or vesting of any
benefits under any Employee Benefit Plan or (iv) constitute a "change in
control" or similar event under any Employee Benefit Plan. Except as disclosed
on Schedule 4.9(g) of the Disclosure Schedule, no payment under any Employee
Benefit Plan will fail to be deductible by reason of Section 280G of the Code.
(h) Except as disclosed on Schedule 4.9(h) of the Disclosure Schedule, no
stock or other security issued by the Company or any Affiliate of the Company
forms or has formed a material part of the assets of any Employee Benefit Plan.
(i) There has been no "mass layoff" or "plant closing" as defined by the
Worker Adjustment and Retraining Notification Act or any similar state or local
"plant closing" law with respect to the current or former employees of the
Company.
SECTION 4.10. Proxy Statement. The Proxy Statement, if any (or any
amendment thereof or supplement thereto), to be sent to the stockholders of the
Company in connection with the Special Meeting or the information statement, if
any, to be sent to such stockholders, as appropriate, will comply in all
material respects with the applicable requirements of the Exchange Act and the
rules and regulations thereunder. The Proxy Statement will not, at the time the
Proxy Statement is mailed to stockholders and at the time of the Special
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 light of the circumstances under which they were made,
not misleading, or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the meeting of the
Company's stockholders held for approval of the Merger which has become false or
misleading, except that no representation or warranty is being made by the
Company with respect to any information expressly concerning the Purchaser,
Mannesmann AG ("Mannesmann") or Olivetti S.p.A. ("Olivetti"), which has been
supplied by such entities or which the Purchaser has had a prior opportunity to
review.
SECTION 4.11. Brokers. Except as to Wasserstein Perella and Donaldson
Lufkin & Jenrette Securities Corporation ("DLJ"), no broker, finder or
investment banker or other financial advisor is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company. The Company has heretofore furnished
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to the Purchaser true and complete information concerning the financial
arrangements between the Company and Wasserstein Perella and DLJ pursuant to
which such firms would be entitled to any payment as a result of the
transactions contemplated by this Agreement.
SECTION 4.12. Conduct of Business; Licenses and Permits.
(a) Except as disclosed in the SEC Reports filed prior to the date hereof,
the business of the Company (which shall be deemed to exclude the operations of
Omnitel Sistemi Radiocellulari Italiani S.p.A. and Omnitel Pronto Italia S.p.A.
(collectively, "Omnitel")) is not being conducted in default or violation of
(with or without due notice or lapse of time or both) any term, condition or
provision of (i) its Restated Certificate of Incorporation or By-Laws, or (ii)
any note, bond, mortgage, indenture, contract, agreement, lease or other
instrument or agreement of any kind to which the Company is a party or by which
the Company or any of its properties or assets may be bound (each, a "Company
Agreement"), or (iii) any Federal, state, local or foreign statute, law,
ordinance, rule, regulation, judgment, decree, order, concession, grant,
franchise, permit or license or other governmental authorization or approval
applicable to the Company, and no notice, charge, claim, action or assertion has
been received by the Company or has been filed, commenced or, to the Company's
knowledge, threatened against the Company alleging any such violation except,
with respect to the foregoing clauses (ii) and (iii), defaults or violations
that would not, individually or in the aggregate, have a Material Adverse
Effect. To the Company's knowledge, no other party to any Company Agreement is
in default or violation in respect thereof, and no event has occurred which,
with due notice or lapse of time or both, would constitute such a default or
violation. The Company has delivered to the Purchaser or its representatives
true and complete originals or copies of all the Company Agreements.
(b) Schedule 4.12 of the Disclosure Schedule sets forth a true and complete
list of all licenses, permits, franchises, authorizations and approvals issued
or granted to the Company by any Governmental Authority (the "Licenses and
Permits"), and all pending applications therefor. Such list contains a summary
description of each such item and, where applicable, specifies the date issued,
granted or applied for, the expiration date and the current status thereof. Each
License and Permit has been duly obtained, is valid and in full force and
effect, and is not subject to any pending or, to the Company's knowledge,
threatened administrative or judicial proceeding to revoke, cancel, suspend or
declare such License and Permit invalid in any respect. To the Company's
knowledge, the Licenses and Permits are sufficient and adequate in all material
respects to permit the continued lawful conduct of the Company's business (which
shall be deemed to exclude the operations of Omnitel) in
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the manner now conducted and as proposed to be conducted, and none of the
operations of the Company are being conducted in a manner that violates in any
material respect any of the terms or conditions under which any License and
Permit was granted. Except as disclosed on Schedule 4.12 of the Disclosure
Schedule, no such License and Permit will be affected by, or terminate or lapse
by reason of, the transactions contemplated by this Agreement.
SECTION 4.13. Compliance with Law. Except as disclosed on Schedule 4.8 (as
applicable) and Schedule 4.13 of the Disclosure Schedule, the operations of the
Company (which shall be deemed to exclude the operations of Omnitel) have been
conducted in accordance with all applicable laws, regulations, orders and other
requirements of all Governmental Authorities having jurisdiction over the
Company and its assets, properties and operations. Except as disclosed on
Schedule 4.8 (as applicable) and Schedule 4.13 of the Disclosure Schedule, the
Company has not received notice of any violation of any such law, regulation,
order or other legal requirement, and is not in default with respect to any
order, writ, judgment, award, injunction or decree of any Governmental
Authority. The Company has no knowledge of any proposed change in any such laws,
rules or regulations (other than laws of general applicability) that would
materially and adversely affect the transactions contemplated by this Agreement
or would have a Material Adverse Effect. To the Company's knowledge, neither the
Company nor any director, officer, agent, employee or other Person associated
with or acting on behalf of the Company has: used any funds for any unlawful
contribution, gift, entertainment or other unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; made any
direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment.
SECTION 4.14. Taxes. Except as disclosed on Schedule 4.14 of the Disclosure
Schedule:
(a) Except as would not, either individually or in the aggregate, have a
Material Adverse Effect: (i) the Company has timely filed with the appropriate
Tax Authority (as defined below) all Tax Returns (as defined below) required to
be filed by or with respect to the Company, and such Tax Returns are true,
correct and complete in all material respects; (ii) all Taxes (as defined below)
due and payable by the Company with respect to the taxable years or other
taxable periods ending on or prior to the Effective Time have been, or on or
prior to the Effective Time will be, paid or adequately disclosed and fully
provided for; (iii) no Audits (as defined below) are pending or, to the
Company's knowledge, threatened with regard to any Taxes or Tax Returns of the
Company, and there are no outstanding deficiencies
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or assessments asserted or proposed; (iv) no issue has been raised by any Taxing
Authority in any Audit of the Company that if raised with respect to any other
period not so audited could be expected to result in a proposed deficiency of
any period not so audited; (v) there are no outstanding agreements, consents or
waivers extending the statutory period of limitations applicable to the
assessment of any Taxes or deficiencies against the Company, and the Company is
not a party to any agreement providing for the allocation or sharing of Taxes;
(vi) no powers of attorney with respect to Taxes of the Company have been
executed that will be outstanding as of the Effective Time; (vii) there are no
Liens for Taxes upon any of the assets of the Company, except for Liens for
Taxes not yet due and payable for which adequate reserves have been established
on the Company's balance sheet at September 30, 1998 included in the Company's
Quarterly Report on Form 10-Q filed with the SEC prior to the date hereof (the
"Balance Sheet") in accordance with GAAP and (viii) the Company has complied in
all respects with all applicable laws, rules and regulations relating to the
payment and withholding of Taxes (including, without limitation, withholding of
Taxes pursuant to Sections 1441 and 1442 of the Code or similar provisions under
any foreign laws) and has, within the time and in the manner prescribed by law,
withheld and paid over to the proper Tax Authorities all amounts required to be
so withheld and paid over under applicable laws.
(b) The Company has not filed a consent to the application of Section
341(f) of the Code.
(c) The Company is not and has not been a United States real property
holding company (as defined in Section 897(c)(2) of the Code) during the
applicable period specified in Section 897(c)(1)(ii) of the Code.
(d) No indebtedness of the Company is "corporate acquisition indebtedness"
within the meaning of Section 279(b) of the Code.
(e) The Company has not entered into any agreements that would result in
the disallowance of any tax deductions pursuant to Section 280G of the Code.
(f) Subject to the Purchaser's consent under Section 6.10 of this
Agreement, the Company has made or will by the Effective Time make, a valid
"qualified electing fund" election ("QEF Election"), pursuant to Section 1295 of
the Code with respect to all stock which it owns, or is considered to own, in
any corporation which meets the definition of "passive foreign investment
company" ("PFIC") set forth in Section 1297 of the Code. Such QEF Election or
elections are, or will be, effective for all periods in which the Company is
considered to own the stock to which the election relates. Any PFIC is, or will
be, a qualified electing fund with respect to the Company for all taxable years
that the Company has held the PFIC stock.
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(g) The Company has not made any change in accounting methods or received a
ruling from any taxing authority, other than with respect to a PFIC, likely to
have a material adverse effect on the Company.
(h) The deductibility of compensation paid by the Company will not be
limited by Section 162(m) of the Code.
(i) All transactions that could give rise to an understatement of the
federal income tax liability of the Company within the meaning of Section
6662(d) of the Code are adequately disclosed on Tax Returns in accordance with
Section 6662(d)(2)(B) of the Code and the taxpayer reasonably believed that the
tax treatment of such item was more likely than not to be the proper treatment.
(j) No excess loss accounts or deferred intercompany gains as defined in
the consolidated return regulations promulgated under the Code exist with
respect to the Company.
(k) For purposes of this Agreement, "Taxes" means any Federal, state, local
and foreign taxes, and other assessments of a similar nature (whether imposed
directly or through withholding), including any interest, additions to tax, or
penalties applicable thereto, imposed by any Tax Authority; "Tax Authority"
means the Internal Revenue Service and any other domestic or foreign
Governmental Authority responsible for the administration of any Taxes; and
"Audit" means any audit, assessment or other examination relating to Taxes by
any Tax Authority or any judicial or administrative proceedings relating to
Taxes.
(l) For purposes of this Agreement, "Tax Return" means any return, report,
information return or other document (including any related or supporting
information and, where applicable, profit and loss accounts and balance sheets)
with respect to Taxes.
SECTION 4.15. Intellectual Property. Schedule 4.15 of the Disclosure
Schedule contains a true and complete list of all (i) patents and patent
applications, (ii) trademark and service mark registrations and applications,
(iii) Computer Software (as defined below), (iv) copyright registrations and
applications, (v) material unregistered trademarks, service marks and
copyrights, and (vi) Internet domain names used or held for use in connection
with the business of the Company, together with all licenses related to the
foregoing.
(a) For purposes of this Agreement, "Computer Software" means (i) any and
all computer programs and applications consisting of sets of statements and
instructions to be used directly or indirectly in computer software or firmware
whether in source code or object code form, (ii) databases and compilations,
including without limitation any and all data and
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collections of data, whether machine readable or otherwise, (iii) all versions
of the foregoing including, without limitation, all screen displays and designs
thereof, and all component modules of source code or object code or natural
language code therefor, and whether recorded on papers, magnetic media or other
electronic or non-electronic device, (iv) all descriptions, flowcharts and other
work product used to design, plan, organize and develop any of the foregoing,
(v) all documentation including, without limitation, all technical and user
manuals and training materials relating to the foregoing, and all Internet
domain names and content contained on all World Wide Web sites of the Company or
any Subsidiary; provided, however, that "Computer Software" shall not include
(x) "shrink-wrap" or other similar off-the-shelf software generally available or
(y) software provided to, or used to provide services to the Company by NTL
Incorporated ("NTL"), Corecomm Limited ("Corecomm") or Cellular Communications
of Puerto Rico, Inc. ("CCPR").
(b) Except as disclosed on Schedule 4.15 of the Disclosure Schedule, the
Company is the sole and exclusive owner of all patents, patent applications,
patent rights, copyrights, trademarks, trademark rights, trade names, trade name
rights, service marks, service mark rights and all goodwill of the business
associated therewith, trade secrets, registrations for and applications for
registration of trademarks, service marks and copyrights, technology and
know-how, Computer Software other than off-the-shelf applications, and other
confidential or proprietary rights and information and all technical and user
manuals and documentation made or used in connection with any of the foregoing,
used or held for use anywhere in the world in connection with the business of
the Company (which shall be deemed to exclude the operations of Omnitel) as
currently conducted (collectively, the "Intellectual Property"), free and clear
of all Liens. The Liens disclosed on Schedule 4.15 of the Disclosure Schedule do
not materially detract from the value of the Intellectual Property subject
thereto and do not materially impair the operations of the Company.
(c) Except disclosed on Schedule 4.15 of the Disclosure Schedule, all
grants, registrations and applications for Intellectual Property that are used
in the business of the Company as currently conducted (i) are valid, subsisting,
in proper form and enforceable, and have been duly maintained, including the
submission of all necessary filings and fees in accordance with the legal and
administrative requirements of the appropriate jurisdictions, and (ii) have not
lapsed, expired or been abandoned, and no application or registration therefor
is the subject of any legal or governmental proceeding before any governmental,
registration or other authority in any jurisdiction.
(d) The Company owns or has the valid right to use all of the material
Intellectual Property used by it or held for use by it in connection with its
business (which shall be deemed to
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exclude the operations of Omnitel). To the Company's knowledge, there are no
conflicts with or infringements of any Intellectual Property by any third party.
The business of the Company (which shall be deemed to exclude the operations of
Omnitel) as currently conducted does not conflict with or infringe in any way on
any proprietary right of any third party. There is no claim, suit, action or
proceeding pending or, to the Company's knowledge, threatened against the
Company (i) alleging any such conflict or infringement with any third party's
proprietary rights, or (ii) challenging the ownership, use, validity or
enforceability of the Intellectual Property.
(e) The Computer Software used by the Company in the conduct of its
business (which shall be deemed to exclude the operations of Omnitel) was
either: (i) developed by employees of the Company within the scope of their
employment; (ii) developed on behalf of the Company by a third party, and all
ownership rights therein have been assigned or otherwise transferred to or
vested in the Company, pursuant to written agreements; or (iii) as disclosed on
Schedule 4.15 of the Disclosure Schedule, licensed or acquired from a third
party pursuant to a written license, assignment, or other contract which is in
full force and effect and of which the Company is not in material breach. Except
as disclosed on Schedule 4.15 of the Disclosure Schedule, (x) no third party has
had access to any of the source codes for any of the Computer Software described
in clause (i) or (ii) hereof and (y) no act has been done or omitted to be done
by the Company to impair or dedicate to the public or entitle any Governmental
Authority to hold abandoned any of such Computer Software.
(f) Except as disclosed on Schedule 4.15 of the Disclosure Schedule, all
consents, filings, and authorizations by or with Governmental Authorities or
third parties necessary with respect to the consummation of the transactions
contemplated by this Agreement as they may affect the Intellectual Property have
been obtained.
(g) The Company has not entered into any material consent, indemnification,
forbearance to sue, settlement agreement or cross-licensing arrangement with any
Person relating to the Intellectual Property or the intellectual property of any
third party other than as may be contained in the license agreements disclosed
on Schedule 4.15 of the Disclosure Schedule.
(h) Except as disclosed on Schedule 4.15 of the Disclosure Schedule, the
Company is not, nor will it be as a result of the execution and delivery of this
Agreement or the performance of its obligations under this Agreement, in breach
of any license, sublicense or other agreement relating to the Intellectual
Property.
(i) No former or present employees, officers or directors of the Company
hold any right, title or interest,
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directly or indirectly, in whole or in part, in or to any Intellectual Property.
SECTION 4.16. Employment Matters. No employee of the Company has entered
into a Company Agreement and the employment of all employees of the Company may
be terminated at will. The Company has not experienced any strikes, collective
labor grievances, other collective bargaining disputes or claims of unfair labor
practices in the last five years. To the Company's knowledge, there is no
organizational effort presently being made or threatened by or on behalf of any
labor union with respect to employees of the Company.
SECTION 4.17. Vote Required. The affirmative vote of the holders of a
majority of the outstanding shares of Company Common Stock is the only vote of
the holders of any class or series of the Company's capital stock which may be
necessary to approve this Agreement and the transactions contemplated hereby,
including the Merger.
SECTION 4.18. Environmental Matters.
(a) Except as disclosed on Schedule 4.18(a) of the Disclosure Schedule: (i)
the Company is and has been in compliance with all applicable laws, statutes,
rules, regulations, common law, ordinances, decrees, orders, judgments, permits,
licenses, registration and other governmental authorizations or approvals or
other legal or regulatory requirements relating to pollution or the protection
of human health, natural resources or the environment ("Environmental Laws"),
and there are no outstanding allegations by any Person that the Company is not
or has not been in compliance with any Environmental Laws, and (ii) the Company
currently holds all permits, licenses, registrations and other governmental
authorizations or approvals (including without limitation exemptions, waivers,
and the like) and financial assurances required under any Environmental Laws for
the Company to operate its business.
(b) Except as disclosed on Schedule 4.18(b) of the Disclosure Schedule, (i)
there is no asbestos or asbestos-containing materials in or on any real
property, buildings, structures or components thereof currently owned, leased or
operated by the Company, and (ii) there are and have been no underground or
aboveground storage tanks (whether or not required to be registered under any
applicable law), dumps, landfills, lagoons, surface impoundments, sumps,
injection wells or other disposal or storage sites or locations in or on any
property currently owned, leased or operated by the Company.
(c) Except as disclosed on Schedule 4.18(c) of the Disclosure Schedule, (i)
the Company has not received (x) any communication from any Person stating or
alleging that the Company is or may be liable under any Environmental Law
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(including without limitation the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, and any foreign or state
analog thereto) with respect to any actual or alleged environmental
contamination, (y) any request for information under any Environmental Law from
any Governmental Authority or any other Person with respect to any actual or
alleged environmental contamination or (z) notice of any actual or alleged
violation of Environmental Law, (ii) none of the Company, any Governmental
Authority or any other Person is conducting or has conducted (or is proposing or
threatening to conduct) any environmental remediation or investigation which
could result in a material liability of the Company under any Environmental Law
or otherwise require disclosure in any SEC Report, and (iii) the Company is not
subject to any judicial or administrative proceeding alleging a violation or
liability under any Environmental Law.
(d) Except as disclosed on Schedule 4.18(d) of the Disclosure Schedule, to
the Company's knowledge, (i) no party to any Company Agreement and no other
Person whose ability, in whole or in part, may be attributable to or asserted
against the Company, has received any notice, claim, demand or request for
information from any Governmental Authority or any other Person with respect to
any actual or potential liability under any Environmental Law, and (ii) no event
has occurred with respect to the Company or such parties which, with due notice
or the lapse of time or both, would give rise to any liability to the Company
under any Environmental Law.
SECTION 4.19. Real Property. The Company occupies space in New York and
London pursuant to an agreement with NTL. As of the date hereof, the Company
does not own or lease, have an option to purchase or lease or have any interest
in any real property.
SECTION 4.20. Title and Condition of Properties. The Company owns good and
marketable title, free and clear of all Liens, to all of the personal property
and assets shown on the Balance Sheet or acquired after September 30, 1998,
except for (a) assets which have been disposed of to nonaffiliated third parties
since September 30, 1998 in the ordinary course of business, (b) Liens reflected
in the Balance Sheet, (c) Liens or imperfections of title which are not,
individually or in the aggregate, material in character, amount or extent and
which do not materially detract from the value or materially interfere with the
present or presently contemplated use of the assets subject thereto or affected
thereby, and (d) Liens for current Taxes not yet due and payable. All of the
machinery, equipment and other tangible personal property and assets owned or
used by the Company are in good condition and repair, except for ordinary wear
and tear not caused by neglect, and are usable in the ordinary course of
business, except for any matter otherwise covered by this sentence which does
not have, individually or in the aggregate, a Material Adverse Effect. The
personal property
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and assets reflected on the Balance Sheet or acquired after September 30, 1998,
the rights under the Company Agreements and the Intellectual Property owned or
used by the Company under valid licenses, collectively include all assets
necessary to provide, produce, sell and license the services and products
currently provided, produced, sold and licensed by the Company and to conduct
the business of the Company as presently conducted or as currently contemplated
to be conducted.
SECTION 4.21. Contracts. Each Company Agreement is legally valid and
binding and in full force and effect, except where failure to be legally valid
and binding and in full force and effect would not have a Material Adverse
Effect. Schedule 4.21 of the Disclosure Schedule sets forth a true and complete
list of (i) all material Company Agreements entered into by the Company since
December 31, 1997 and all amendments to any Company Agreements included as an
exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 and (ii) all non-competition agreements imposing restrictions
on the ability of the Company to conduct business in any jurisdiction or
territory.
SECTION 4.22. Potential Conflicts of Interest. Except as disclosed on
Schedule 4.22 of the Disclosure Schedule or in the SEC Reports filed prior to
the date hereof, since December 31, 1997, there have been no transactions,
agreements, arrangements or understandings between the Company and its
affiliates that would be required to be disclosed under Item 404 of Regulation
S-K under the Securities Act. Except as disclosed on Schedule 4.22 of the
Disclosure Schedule, no officer of the Company owns, directly or indirectly, any
interest in (excepting not more than 1% stock holdings for investment purposes
in securities of publicly held and traded companies) or is an officer, director,
employee or consultant of any Person which is a competitor, lessor, lessee,
customer or supplier of the Company; and no officer or director of the Company
(i) owns, directly or indirectly, in whole or in part, any Intellectual Property
which the Company is using or the use of which is necessary for the business of
the Company; (ii) has any claim, charge, action or cause of action against the
Company, except for claims for accrued vacation pay and accrued benefits under
the Employee Plans; (iii) has made, on behalf of the Company, any payment or
commitment to pay any commission, fee or other amount to, or to purchase or
obtain or otherwise contract to purchase or obtain any goods or services from,
any other Person of which any officer or director of the Company, or, to the
Company's knowledge, a relative of any of the foregoing, is a partner or
stockholder (except stock holdings solely for investment purposes in securities
of publicly held and traded companies); or (iv) owes any money to the Company.
SECTION 4.23. Insurance. The Company has policies of insurance and bonds of
the type and in amounts customarily carried by Persons conducting businesses or
owning assets similar
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to those of the Company. There is no material claim pending under any of such
policies or bonds as to which coverage has been questioned, denied or disputed
by the underwriters of such policies or bonds. All premiums due and payable
under all such policies and bonds have been paid by the Company and the Company
is otherwise in compliance in all material respects with the terms of such
policies and bonds. The Company has no knowledge of any threatened termination
of, or material premium increase with respect to, any of such policies.
SECTION 4.24. Opinion of Financial Advisor. The Company has received an
opinion from Wasserstein Perella, financial advisor to the Company, to the
effect that the consideration to be received in the Offer and the Merger by the
holders of the Shares is fair to such holders from a financial point of view, a
copy of which opinion has been delivered to the Purchaser.
SECTION 4.25. Investment Company. The Company is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
SECTION 4.26. Full Disclosure. The Company has not knowingly failed to
disclose to the Purchaser any facts material to the Company's business, results
of operations, assets, liabilities, financial condition or prospects (in each
case excluding those relating to Omnitel). No representation or warranty by the
Company in this Agreement and no statement by the Company in any document
referred to herein (including the Schedules and Exhibits hereto), contains any
untrue statement of a material fact or omits to state any material fact
necessary, in order to make the statement made herein or therein, in light of
the circumstances under which they were made, not misleading.
ARTICLE V.
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1. Acquisition Proposals. The Company will notify the Purchaser
immediately, but in any event within 24 hours, if any proposals, inquiries or
expressions of interest are received by, any information is requested from, or
any negotiations or discussions are sought to be initiated or continued with the
Company or its representatives, in each case in connection with any Takeover
Proposal (as defined below) or the possibility or consideration of making a
Takeover Proposal ("Takeover Proposal Interest") indicating, in connection with
such notice, the name of the Person indicating such Takeover Proposal Interest
and the terms and conditions of any proposals or offers. The Company agrees that
it will immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any Takeover Proposal Interest. The Company agrees that it will take the
necessary steps promptly to inform the Persons
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referred to in the first sentence hereof of the obligations undertaken in this
Section 5.1. The Company agrees that it shall keep the Purchaser informed, on a
current basis, of the status and terms of any Takeover Proposal Interest. As
used in this Agreement, "Takeover Proposal" shall mean any tender or exchange
offer involving the Company, any proposal for a merger, consolidation or other
business combination involving the Company, any proposal or offer to acquire in
any manner a significant equity interest in, or a significant portion of the
business or assets of, the Company (other than immaterial or insubstantial
assets or inventory in the ordinary course of business or assets held for sale),
any proposal or offer with respect to any recapitalization or restructuring with
respect to the Company or any proposal or offer with respect to any other
transaction similar to any of the foregoing with respect to the Company other
than pursuant to the transactions to be effected pursuant to this Agreement.
SECTION 5.2. Conduct of Business by the Company Pending the Merger. The
Company covenants and agrees that, (i) except as expressly contemplated by this
Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as
disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in
writing by the Purchaser, after the date hereof, and prior to the time the
directors of the Purchaser have been elected to and shall constitute a majority
of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only in the ordinary and
usual course and, to the extent consistent therewith, the Company shall use its
best reasonable efforts to preserve its business organization intact and
maintain its existing relations with customers, suppliers, employees, creditors
and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise
of stock options or other rights to purchase shares of Company Common Stock
pursuant to the Option Plans outstanding on the date hereof or upon exercise of
outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or
pledge or agree to sell, transfer or pledge any treasury stock of the Company
beneficially owned by it, (ii) amend its Restated Certificate of Incorporation
or Bylaws or similar organizational documents; or (iii) split, combine or
reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or
other distribution payable in cash, stock or property with respect to its
capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional
shares of, or securities convertible into or exchangeable for, or options,
warrants, calls, commitments or rights of any kind to acquire, any shares of
capital stock of any class of the Company, other than shares of Company Common
Stock reserved for issuance on the
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date hereof pursuant to the exercise of Options or Warrants or conversion of
Voting Debt outstanding on the date hereof; (iii) transfer, lease, license,
sell, mortgage, pledge, dispose of, or encumber any assets other than in the
ordinary and usual course of business and consistent with past practice, or
incur or modify any indebtedness or other liability, other than in the ordinary
and usual course of business and consistent with past practice; or (iv) redeem,
purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation
payable or to become payable by the Company to any of its executive officers;
(ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the
payment or vesting of the amounts payable or to become payable under, any
existing bonus, incentive compensation, deferred compensation, severance, profit
sharing, stock option, stock purchase, insurance, pension, retirement or other
employee benefit plan, agreement or arrangement; or (iii) enter into any
employment or severance agreement with or, except in accordance with the
existing written policies of the Company, grant any severance or termination pay
to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material
contracts or waive, release or assign any material rights or claims, except in
the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a
beneficiary or a loss payable payee to be cancelled or terminated without notice
to the Purchaser, except in the ordinary course of business and consistent with
past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or,
except in the ordinary course of business, incur or assume any short-term
indebtedness in amounts not consistent with past practice; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person, except in
the ordinary course of business and consistent with past practice; (iii) other
than ordinary course expense advances, make any loans, advances or capital
contributions to, or investments in, any other Person; or (iv) enter into any
material commitment or transaction (including, but not limited to, any
borrowing, capital expenditure or purchase, sale or lease of assets or real
estate);
(h) the Company shall not (i) change any of the accounting methods used by
it unless required by GAAP; or (ii) other than related to a QEF Election, make
any material Tax election, change any material Tax election already made, adopt
any material Tax accounting method, change any material Tax accounting method
unless required by GAAP, enter into any closing
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agreement, settle any material Tax claim or assessment or consent to any
material Tax claim or assessment or any waiver of the statute of limitations for
any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction of any such
claims, liabilities or obligations, in the ordinary course of business and
consistent with past practice, or claims, liabilities or obligations reflected
or reserved against in, or contemplated by, the consolidated financial
statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that
would, or is reasonably likely to, result in any of the conditions to the Merger
set forth in Article VII not being satisfied, or would make many representation
or warranty of the Company contained herein inaccurate in any respect at, or as
of any time prior to, the Effective Time, or that would materially impair the
ability of the Company to consummate the Merger in accordance with the terms
hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or
otherwise modify the Rights Agreement prior to the consummation of the Offer
unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or
arrangement to do any of the foregoing, or to authorize, recommend, propose or
announce an intention to do any of the foregoing.
SECTION 5.3. No Solicitation; Board Recommendation.
(a) The Company will not, and will use its best efforts to ensure that its
officers, directors, employees, investment bankers, attorneys, accountants and
other agents do not, directly or indirectly: (i) initiate, solicit or encourage,
or take any action to facilitate (including by the furnishing of information)
the making of, any offer or proposal which constitutes or is reasonably likely
to lead to any Takeover Proposal, (ii) enter into any agreement with respect to
any Takeover Proposal, or (iii) in the event of an unsolicited Takeover Proposal
for the Company engage in negotiations or discussions with, or provide any
information or data to, any Person (other than the Purchaser, any of its
affiliates or representatives and except for information which has been
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previously publicly disseminated by the Company) relating to any Takeover
Proposal; provided however, that nothing contained in this Section 5.3 or any
other provision hereof shall prohibit the Company or the Board of Directors from
(i) taking and disclosing to the Company's stockholders a position with respect
to a tender or exchange offer by a third party pursuant to Rules 14d-9 and 14e-2
promulgated under the Exchange Act or (ii) making such disclosure to the
Company's stockholders as, in the good faith judgment of the Board of Directors
after receiving advice from outside counsel, the Company deems necessary to
comply with its fiduciary duties to the Company's stockholders under applicable
law.
(b) Notwithstanding the foregoing, prior to the acceptance of Shares
pursuant to the Offer, the Company may furnish information concerning its
business, properties or assets to any Person pursuant to appropriate
confidentiality agreements, and may negotiate and participate in discussions and
negotiations with such Person concerning a Takeover Proposal (provided that the
Company shall not agree to any exclusive right to negotiate with the Company) if
(x) such entity or group has on an unsolicited basis submitted a bona fide
written proposal to the Company relating to any such transaction that provides
for consideration which the Board of Directors determines in good faith, after
receiving advice from a nationally recognized investment banking firm, is more
favorable to the Company and its stockholders than the Offer and the Merger
(taking into account all relevant factors) and which is not conditioned upon
obtaining additional financing not fully committed at such time or, in the view
of a nationally recognized investment banking firm, is reasonably likely to be
obtained under then existing market conditions, and (y) in the opinion of the
Board of Directors, after receiving advice from outside legal counsel to the
Company, the failure to provide such information or access or to engage in such
discussions or negotiations would likely cause the Board of Directors to breach
its fiduciary duties to the Company's stockholders under applicable law (a
Takeover Proposal which satisfies clauses (x) and (y) being referred to herein
as a "Superior Proposal"). The Company shall promptly provide to the Purchaser
any nonpublic information regarding the Company provided to any other party
which was not previously provided to the Purchaser. If the Company, after
consultation with outside legal counsel, believes that a breach of its fiduciary
duties to the Company's stockholders would likely occur, the Board of Directors
may (subject to this and the following sentences) inform the Company's
stockholders that it no longer believes that the Offer and the Merger is
advisable and no longer recommends approval (a "Subsequent Determination"), but
only at a time that is after the fifth business day following the Purchaser's
receipt of written notice advising the Purchaser that the Board of Directors has
received a Superior Proposal specifying the material terms and conditions of
such Superior Proposal (and including a copy thereof with all accompanying
documentation), identifying the Person making such Superior Proposal and stating
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that it intends to make a Subsequent Determination. Notwithstanding anything
herein to the contrary, prior to and including such fifth day the Company may
make such public disclosure that is in its view required under the Federal
securities laws, as evidenced by an opinion from outside counsel to the Company,
a copy of which shall be provided to Purchaser prior to such disclosure. After
providing such notice, the Company shall provide a reasonable opportunity to the
Purchaser to make such adjustments in the terms and conditions of this Agreement
and/or of the Option Agreement as would enable the Company to proceed with its
recommendation to its stockholders without a Subsequent Determination. At any
time after five business days following notification to the Purchaser of the
Company's intent to do so and if the Company has otherwise complied with the
terms of this Section 5.3(b), the Board of Directors may terminate this
Agreement pursuant to clause (ii) of Section 8.1(f) and enter into an agreement
with respect to a Superior Proposal; provided that the Company shall,
concurrently with entering into such agreement, pay or cause to be paid to the
Purchaser the Termination Fee (as defined in Section 8.2(b) hereof).
Notwithstanding any other provision of this Agreement, the Company shall submit
this Agreement to its stockholders, whether or not the Board of Directors makes
a Subsequent Determination.
(c) Except as set forth in Section 5.3(b), neither the Board of Directors
nor any committee thereof shall (i) withdraw or modify, or propose to withdraw
or modify, in a manner adverse to the Purchaser, the approval or recommendation
by the Board of Directors or any such committee of the Offer, this Agreement or
the Merger, (ii) approve or recommend, or propose to approve or recommend, any
Takeover Proposal or (iii) enter into any agreement with respect to any Takeover
Proposal.
ARTICLE VI.
ADDITIONAL AGREEMENTS
SECTION 6.1. Proxy Statement. If required by the Exchange Act, as promptly
as practicable after the consummation of the Offer, the Company shall prepare
and file with the SEC, and shall use all reasonable efforts to have cleared by
the SEC, and promptly thereafter shall mail to stockholders, the Proxy
Statement. Except as set forth in Section 5.3(b), the Proxy Statement shall
contain the recommendation of the Board of Directors in favor of the Merger.
SECTION 6.2. Meeting of Stockholders of the Company. At the Special
Meeting, if any, the Company shall use its best efforts to solicit from
stockholders of the Company proxies in favor of the Merger. The Purchaser agrees
that it shall vote, or cause to be voted, in favor of the Merger all Shares
directly or indirectly beneficially owned by it.
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SECTION 6.3. Additional Agreements. Subject to the terms and conditions
herein provided, the Company and the Purchaser will each comply in all material
respects with all applicable laws and with all applicable rules and regulations
of any Governmental Authority to achieve the satisfaction of the Minimum
Condition and all conditions set forth in Annex I hereto and Article VII hereof,
and to consummate and make effective the Merger and the other transactions
contemplated hereby. Each of the parties hereto agrees to use all reasonable
efforts to obtain in a timely manner all necessary waivers, consents and
approvals and to effect all necessary registrations and filings, and to use all
reasonable efforts to take, or cause to be taken, all other actions and to do,
or cause to be done, all other things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement. In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of the Company and the Purchaser
shall use all reasonable efforts to take, or cause to be taken, all such
necessary actions.
SECTION 6.4. Notification of Certain Matters. The Company shall give prompt
notice to the Purchaser and the Purchaser shall give prompt notice to the
Company, of (a) the occurrence, or nonoccurrence, of any event whose occurrence,
or nonoccurrence, would be likely to cause either (i) any representation or
warranty contained in this Agreement to be untrue or inaccurate in any material
respect at any time from the date hereof to the Effective Time or (ii) any
condition set forth in Annex I hereto to be unsatisfied in any material respect
at any time from the date hereof to the date the Purchaser purchases Shares
pursuant to the Offer and (b) any material failure of the Company or the
Purchaser, as the case may be, or any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that the delivery
of any notice pursuant to this Section 6.4 shall not limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
SECTION 6.5. Access to Information.
(a) From the date hereof to the Effective Time, the Company shall, and
shall cause its officers, directors, employees, auditors and agents to, afford
the officers, employees and agents of the Purchaser reasonable access at all
reasonable times to its officers, employees, agents, properties, offices and
other facilities and to all books and records, and shall furnish the Purchaser
with all financial, operating and other data and information as the Purchaser,
through its officers, employees or agents, may reasonably request.
(b) Unless otherwise required by law and until the Appointment Date, the
Purchaser agrees that it shall, and shall
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cause its affiliates and each of their respective officers, directors,
employees, financial advisors and agents (the "Purchaser Representatives"), to
hold in strict confidence all data and information obtained by them from the
Company (unless such information is or becomes publicly available without the
fault of any of the Purchaser Representatives or public disclosure of such
information is required by law in the opinion of counsel to the Purchaser) and
shall ensure that the Purchaser Representatives do not disclose such information
to others without the prior written consent of the Company. Notwithstanding
anything herein to the contrary, the terms of the Confidentiality Agreement,
dated December 1, 1998 (the "Confidentiality Agreement") executed by the
stockholders of Purchaser shall remain in full force and effect.
(c) In the event of the termination of this Agreement, the Purchaser shall,
and shall cause its affiliates to, return (without maintaining any electronic,
digital, magnetic or optical representation thereof) promptly every document
furnished to them by the Company or any of its representatives in connection
with the transactions contemplated hereby and any copies (without maintaining
any electronic, digital, magnetic or optical representation thereof) thereof
which may have been made, and shall cause the Purchaser Representatives to whom
such documents were furnished promptly to return such documents and any copies
thereof any of them may have made, other than documents filed with the SEC or
otherwise publicly available.
SECTION 6.6. Public Announcements. The Purchaser and the Company shall
consult with each other before issuing any press release or otherwise making any
public statements with respect to the Offer or the Merger and shall not issue
any such press release or make any such public statement before such
consultation, except as may be required by law.
SECTION 6.7. Best Efforts; Cooperation. Upon the terms and subject to the
conditions hereof, each of the parties hereto agrees to use its reasonable best
efforts to take or cause to be taken all actions and to do or cause to be done
all things necessary, proper or advisable to consummate the transactions
contemplated by this Agreement and shall use its reasonable best efforts to
obtain all necessary waivers, consents and approvals, and to effect all
necessary filings under the Exchange Act and the HSR Act. The parties hereto
shall cooperate in responding to inquiries from, and making presentations to,
regulatory authorities.
SECTION 6.8. Agreement to Defend and Indemnify.
(a) It is understood and agreed that the Company shall, to the fullest
extent permitted under Delaware Law and regardless of whether the Merger becomes
effective, indemnify, defend and hold harmless, and after the Effective Time,
the Purchaser and the Surviving Corporation shall jointly and
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severally, to the fullest extent permitted under Delaware Law, indemnify, defend
and hold harmless the present and former officers, directors, employees and
agents of the Company ("Indemnified Parties") against any costs or expenses
(including reasonable attorneys' fees), judgments, fines, losses, claims,
damages, liabilities and amounts paid in settlement in connection with any
claim, action, suit, proceeding or investigation, including without limitation
liabilities arising out of this transaction, under the Exchange Act in
connection with the Offer or the Merger, and in the event of any such claim,
action, suit, proceeding or investigation (whether arising before or after the
Effective Time), (i) the Company or the Surviving Corporation shall pay the
reasonable fees and expenses of counsel selected by the Indemnified Parties,
which counsel shall be reasonably satisfactory to the Company or the Surviving
Corporation, promptly as statements therefor are received, and (ii) the Company
and the Surviving Corporation will cooperate in the defense of any such matter;
provided, however, that neither the Company nor the Surviving Corporation shall
be liable for any settlement effected without its prior written consent (which
consent shall not be unreasonably withheld); and further, provided, that neither
the Company nor the Surviving Corporation shall be obliged pursuant to this
Section 6.8 to pay the fees and disbursements of more than one counsel for all
Indemnified Parties in any single action except to the extent that, in the
opinion of counsel for the Indemnified Parties, two or more of such Indemnified
Parties have conflicting interests in the outcome of such action. For three
years after the Effective Time, the Surviving Corporation shall be required to
maintain or obtain officers' and directors' liability insurance covering the
Indemnified Parties who are currently covered by the Company's officers and
directors liability insurance policy with respect to matters existing or
occurring at or prior to the Effective Time on terms not less favorable than
those in effect on the date hereof in terms of coverage and amounts; provided,
however, that if the aggregate annual premiums for such insurance at any time
during such period shall exceed 150% of the per annum rate of premium currently
paid by the Company for such insurance on the date of this Agreement, which
amount is disclosed on Schedule 6.8 of the Disclosure Schedule, then the
Purchaser shall cause the Company (or the Surviving Corporation if after the
Effective Time) to, and the Company (or the Surviving Corporation if after the
Effective Time) shall, provide the maximum coverage that shall then be available
at an annual premium equal to 150% of such rate. This Section 6.8 shall survive
the consummation of the Merger. The Purchaser shall cause the Surviving
Corporation to reimburse all expenses, including reasonable attorney's fees and
expenses, incurred by any Person to enforce the obligations of the Purchaser and
the Surviving Corporation under this Section 6.8. Notwithstanding Section 9.7
hereof, this Section 6.8 is intended to be for the benefit of and to grant third
party rights to Indemnified Parties whether or not parties to this Agreement,
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and each of the Indemnified Parties shall be entitled to enforce the covenants
contained herein.
(b) If the Surviving Corporation or any of its successors or assigns (i)
consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers all or substantially all of its properties and assets to any
Person, then and in each such case, proper provision shall be made so that the
successors and assigns of the Surviving Corporation assume the obligations set
forth in this Section 6.8.
SECTION 6.9. Debt Offer.
(a) The Company shall, within 10 days of receiving any request by the
Purchaser to do so, commence an offer to purchase (accompanied by a related
solicitation of consents regarding covenant amendments) all of the Company's
outstanding 9 1/2% Senior Discount Notes due 2005 (the "Senior Notes") on such
customary terms and conditions as are acceptable to the Purchaser and reasonably
satisfactory to the Board of Directors (the "Debt Offer"). The Company shall
waive any of the conditions to the Debt Offer and make any other changes in the
terms and conditions of the Debt Offer as may be requested by the Purchaser and
as are reasonably satisfactory to the Board of Directors, and the Company shall
not, without the Purchaser's prior written consent, waive any material condition
to the Debt Offer, make any changes to the terms and conditions of the Debt
Offer set forth in Schedule 6.9 hereto or make any other material changes in the
terms and conditions of the Debt Offer. The Company covenants and agrees that,
subject to the terms and conditions of this Agreement, including but not limited
to the conditions in the Debt Offer, it will accept for payment and pay for the
Senior Notes as soon as reasonably practicable after such conditions to the Debt
Offer are satisfied and it is permitted to do so under applicable law, provided
that the Company shall use reasonable best efforts to coordinate the timing of
any such purchase with the Purchaser in order to obtain the greatest
participation in the Debt Offer.
(b) Promptly following the date of this Agreement, the Company and the
Purchaser shall prepare an offer to purchase for the Senior Notes and forms of
the related letters of transmittal and summary advertisement, as well as all
other information and exhibits (collectively, the "Debt Documents"). All
mailings of the Debt Documents to the holders of the Senior Notes in connection
with the Debt Offer shall be subject to the prior review, comment and approval
of the Purchaser (which approval shall not be unreasonably withheld or delayed).
The Company will use its reasonable best efforts to cause the Debt Documents to
be mailed to the holders of the Senior Notes as promptly as practicable
following receipt of the request from the Purchaser under paragraph (a) above to
do so. The Company agrees promptly
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to correct any information in the Debt Documents that shall be or have become
false or misleading in any material respect.
(c) The Purchaser shall provide to the Company all funds necessary to
consummate the Debt Offer on terms reasonably satisfactory to the Board of
Directors. No term or condition of such funding shall prevent or restrict the
consummation of the Merger.
(d) In the event that the Debt Offer is commenced but is terminated without
consummation, and such failure to consummate is not the result of the Company's
breach, the Purchaser will reimburse the Company for any and all expenses and
fees incurred by the Company in connection with the Debt Offer.
SECTION 6.10. Qualified Electing Fund Documentation. The Company has
prepared, or caused to be prepared, and has submitted for review to the
Purchaser on or prior to the date hereof, Internal Revenue Service Form 8621 and
such amended United States Federal income Tax Returns (and other documentation),
as required for the Company to make a retroactive "Qualified Electing Fund"
election, pursuant to Treasury Regulations Section 1.1295-3T(f), effective for
the Company's entire holding period, with respect to the Company's interest in
Omnitel. Such documentation shall be prepared in such manner as would fully
satisfy the requirements of Treasury Regulations Section 1.1295-3T(g) and the
private letter ruling received by the Company dated November 18, 1998. Such
documentation shall not be filed with the Internal Revenue Service without the
Purchaser's prior written consent, which consent shall not be unreasonably
withheld or delayed. The Purchaser will take all actions necessary to file such
Forms 862i and such amended Tax Returns, and shall cooperate with the Company in
connection therewith.
SECTION 6.11. Omnitel Agreement. Notwithstanding anything herein to the
contrary, (i) it shall not constitute a failure of any condition to the Merger
set forth in Article VII of this Agreement nor to the Offer set forth in Annex I
of this Agreement, which conditions are for the benefit of the Purchaser, if,
and (ii) the Purchaser agrees that it will not terminate or seek to terminate or
otherwise impair its performance of this Agreement in any manner as a result of,
in either case, any claim, action, suit, proceeding (including, without
limitation, arbitration proceeding) or other alternative dispute resolution
proceeding or investigation is commenced or threatened against the Company, the
Purchaser, Mannesmann, Olivetti or Oliman Holding B.V. arising out of, or
relating to, the Joint Venture Agreement, dated as of May 3, 1990, among Ing. C.
Olivetti & C., S.p.A., Bell Atlantic International, Inc., CCI Partnership, Inc.,
Shearson Lehman Hutton Eurocell Italy, Inc. and Swedish Telecomm International
AB, as amended November 24, 1993 and February 23, 1994, and in connection with
the execution and delivery of this Agreement and the consummation of the
transactions contemplated
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hereby, other than any of the foregoing brought by or on behalf of the Company.
ARTICLE VII.
CONDITIONS OF MERGER
The respective obligations of each party to effect the Merger shall be
subject to the following conditions, provided that the obligation of each party
shall not be relieved by the failure of any such conditions if such failure of
any such conditions is the proximate result of any breach by such party of any
of its material obligations under this Agreement.
SECTION 7.1. Offer. The Purchaser shall have made, or caused to be made,
the Offer and shall have purchased, or caused to be purchased, the Shares
pursuant to the Offer; provided, however, that this condition shall be deemed to
have been satisfied with respect to the obligation of the Purchaser to effect
the Merger if the Purchaser fails to accept for payment or pay for Shares
pursuant to the Offer in violation of the terms of the Offer or of this
Agreement.
SECTION 7.2. Stockholder Approval. The Merger and this Agreement shall have
been approved and adopted by the requisite vote of the stockholders of the
Company, if required by Delaware Law.
SECTION 7.3. No Challenge. No statute, rule, regulation, judgment, writ,
decree, order or injunction shall have been promulgated, enacted, entered or
enforced, and no other action shall have been taken, by any government or
governmental, administrative or regulatory authority or by any court of
competent jurisdiction, that in any of the foregoing cases has the effect of
making illegal or directly or indirectly restraining, prohibiting or restricting
the consummation of the Merger.
ARTICLE VIII.
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1. Termination. This Agreement may be terminated and the
transactions contemplated herein may be abandoned at any time before the
Effective Time, whether before or after stockholder approval:
(a) By mutual written consent of the Boards of Directors of the Purchaser
and the Company; or
(b) By the Purchaser if the Offer shall have expired or been terminated
without any Shares being purchased thereunder
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by the Purchaser as a result of the occurrence of any of the events set forth in
Annex I; or
(c) By either the Purchaser or the Company if a court of competent
jurisdiction or governmental, regulatory or administrative agency or commission
shall have issued an order, decree or ruling or taken any other action (which
order, decree or ruling the parties hereto shall use their best efforts to
lift), in each case permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement; or
(d) By the Purchaser if, without any material breach by the Purchaser of
its obligations under this Agreement, the purchase of Shares pursuant to the
Offer shall not have occurred on or before May 15, 1999; or
(e) By the Company if, without any material breach by the Company of its
obligations under this Agreement, the purchase of Shares pursuant to the Offer
shall not have occurred on or before May 15, 1999; or
(f) By the Company (i) if there shall be a material breach of any of the
Purchaser's representations, warranties or covenants hereunder, which breach
cannot be or has not been cured within ten days of the receipt of written notice
thereof, or (ii) to allow the Company to enter into an agreement in accordance
with Section 5.3(b) with respect to a Superior Proposal which the Board of
Directors has determined is more favorable to the stockholders of the Company
than the transactions contemplated hereby; provided that it has complied with
all provisions thereof, including the notice provision therein, and that it
makes simultaneous payment of the Termination Fee, plus any amounts then due as
a reimbursement of expenses; or
(g) By the Purchaser if, prior to the purchase of Shares pursuant to the
Offer the Company shall have breached any representation, warranty or covenant
or other agreement contained in this Agreement, which breach (i) would give rise
to the failure of a condition set forth in paragraph (e) or (f) of Annex I
hereto and (ii) cannot be or has not been cured within ten days of the receipt
of written notice thereof; or
(h) By the Purchaser, at any time prior to the purchase of the Shares
pursuant to the Offer, if (i) the Board of Directors shall withdraw, modify, or
change its recommendation or approval in respect of this Agreement or the Offer
in a manner adverse to the Purchaser, (ii) the Board of Directors shall have
recommended any proposal other than by the Purchaser in respect of a Takeover
Proposal, (iii) the Company shall have exercised a right with respect to a
Takeover Proposal referenced in Section 5.3(b) and shall, directly or through
its representatives, continue discussions with any third party concerning a
Takeover Proposal for more than ten business days after the date of
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receipt of such Takeover Proposal, (iv) a Takeover Proposal that is publicly
disclosed shall have been commenced or communicated to the Company which
contains a proposal as to price (without regard to whether such proposal
specifies a specific price or a range of potential prices) and the Company shall
not have rejected such proposal within twenty (20) business days of its receipt
or, if sooner, the date its existence first becomes publicly disclosed, or (v)
any Person or group (as defined in Section 13(d)(3) of the Exchange Act) other
than the Purchaser or any of its Subsidiaries or affiliates shall have become
the beneficial owner of more than 15% of the outstanding Company Common Stock
(either on a primary or a fully diluted basis); provided, however, that this
provision shall not apply to any Person that owns more than 15% of the
outstanding Shares on the date hereof; or
(i) by the Purchaser, if the Company or its representatives shall have
materially breached the provisions of Section 5.1 or Section 5.3 hereof.
SECTION 8.2. Effect of Termination.
(a) In the event of termination of this Agreement as provided in Section
8.1 hereof, written notice thereof shall forthwith be given to the other party
specifying the provision hereof pursuant to which such termination is made, and
this Agreement shall forthwith become null and void and there shall be no
liability on the part of the Purchaser or the Company, except (i) as set forth
in Sections 6.5 and 9.3 hereof and (ii) nothing herein shall relieve any party
from liability for any breach of this Agreement.
(b) If (i) the Purchaser shall have terminated this Agreement pursuant to
Section 8.1(h) or Section 8.1(i), (ii) the Purchaser shall have terminated this
Agreement pursuant to Section 8.1(g), following the date hereof but prior to
such termination there shall have been a Takeover Proposal Interest, and within
two years of any such termination the Company shall have entered into a
definitive agreement with respect to a Takeover Proposal or a Takeover Proposal
with respect to the Company shall have been consummated or (iii) the Company
shall have terminated this Agreement pursuant to Section 8.1(f)(ii), then in any
such case the Company shall pay simultaneously with such termination if pursuant
to Section 8.1(f)(ii) and promptly, but in no event later than two business days
after the date of such termination or event if pursuant to Section 8.1(h),
8.1(i) or 8.1(g), to the Purchaser a termination fee (the "Termination Fee") of
$43 million, which amount shall be payable by wire transfer to such account as
the Purchaser may designate in writing to the Company.
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ARTICLE IX.
GENERAL PROVISIONS
SECTION 9.1. Non-Survival of Representations, Warranties and Agreements.
The representations, warranties and agreements in this Agreement or in any
schedule, instrument or other document delivered pursuant to this Agreement
shall terminate at the Effective Time or the termination of this Agreement
pursuant to Section 8.1, as the case may be, except that the agreements set
forth in Article II and Section 6.8 shall survive the Effective Time
indefinitely and those set forth in Sections 6.5(b), 6.5(c), 8.2 and 9.3 shall
survive termination indefinitely.
SECTION 9.2. Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made (i) as of the date delivered or sent by facsimile if delivered
personally or by facsimile, (ii) on the first business day following dispatch by
an internationally recognized overnight courier service to a domestic addressee,
(iii) on the third business day following dispatch by an internationally
recognized overnight courier service to a international addressee and (iv) on
the tenth business day after deposit with a national mail service, if mailed by
registered or certified mail (postage prepaid, return receipt requested), in
each case to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice, except that notices of changes
of address shall be effective upon receipt):
(a) if to the Purchaser
Mannesmann AG
Am Wallgraben 125
D-70565 Stuttgart
Germany
Attention: Dr. Kurt J. Kinzius
Facsimile: 49-711-990-2201
and
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Olivetti S.p.A.
Via Lorenteggio 257
20152 Milan
Italy
Attention: Marco De Benedetti
Facsimile: 39-2-4836-6700
With a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6009
Attention: Neil Novikoff, Esq.
Facsimile: (212) 728-8111
(b) if to the Company:
Cellular Communications International, Inc.
110 East 59th Street
New York, New York 10022
Attention: Richard J. Lubasch, Esq.
Facsimile: (212) 906-8497
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attention: Thomas H. Kennedy, Esq.
Facsimile: (212) 735-2000
SECTION 9.3. Expenses. Except as expressly set forth in Section 8.2(b), all
fees, costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such fees,
costs and expenses.
SECTION 9.4. Certain Definitions. For purposes of this Agreement, the term:
(a) "affiliate" of a Person means a Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first mentioned Person. For avoidance of doubt, NTL,
CCPR and Corecomm shall not be considered affiliates of the Company;
(b) "control" (including the terms "controlled by" and "under common
control with") means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of stock, as trustee or executor, by contract or credit
arrangement or otherwise; and
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(c) "Lien" means any mortgage, pledge, hypothecation, assignment for
security purposes, deposit arrangement, encumbrance, lien (statutory or other),
charge or other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including without limitation any conditional sale or other title retention
agreement and any financing lease having substantially the same economic effect
as any of the foregoing); provided, however, that liens for Taxes not yet due
and payable but for which adequate reserves have been established and other
statutory liens shall not be Liens for the purposes of this Agreement.
(d) "Person" means an individual, corporation, partnership, limited
liability company, association, trust or any unincorporated organization.
SECTION 9.5. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.6. Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. 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 to the end that the transactions contemplated hereby are fulfilled to the
maximum extent possible.
SECTION 9.7. Entire Agreement; No Third-Party Beneficiaries. This
Agreement, the Option Agreement and the Stockholders Agreement constitute the
entire agreement and supersede any and all other prior agreements and
undertakings, both written and oral, between the parties with respect to the
subject matter hereof and, except as otherwise expressly provided herein, this
Agreement is not intended to confer upon any other Person any rights or remedies
hereunder.
SECTION 9.8. Assignment. This Agreement shall not be assigned by operation
of law or otherwise, except that the Purchaser may assign all or any of its
rights hereunder to any affiliate of the Purchaser provided that no such
assignment shall relieve the Purchaser of its obligations hereunder.
SECTION 9.9. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed entirely within that State.
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SECTION 9.10. Amendment. This Agreement may be amended by the parties
hereto by action taken by the Purchaser and by action taken by or on behalf of
the Board of Directors at any time before the Effective Time; provided, however,
that, after approval, if any, of the Merger by the stockholders of the Company,
no amendment may be made which would reduce the amount or change the type of
consideration into which each Share will be converted upon consummation of the
Merger. This Agreement may not be amended except by an instrument in writing
signed by the parties hereto.
SECTION 9.11. Waiver. At any time before the Effective Time, either party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other party hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (c) 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 as against such party and only if
set forth in an instrument in writing signed by such party.
SECTION 9.12. Counterparts. This Agreement may be executed in two or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which shall
constitute one and the same agreement.
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IN WITNESS WHEREOF, the Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
By: /s/ William B. Ginsberg
-------------------------------------------
Name: William B. Ginsberg
Title: Chairman of the Board of Directors,
President, Chief Executive Officer
KENSINGTON ACQUISITION SUB, INC.
By: /s/ Marco De Benedetti
-------------------------------------------
Name: Marco De Benedetti
Title: Co-President and Co-Secretary
By: /s/ Dr. Kurt Kinzius
-------------------------------------------
Name: Dr. Kurt Kinzius
Title: Co-President and Co-Secretary
<PAGE>
ANNEX I
Conditions to the Offer. Notwithstanding any other provision of the Offer,
the Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) promulgated
under the Exchange Act (relating to the Purchaser's obligation to pay for or
return tendered Shares promptly after termination or withdrawal of the Offer),
pay for, and (subject to any such rules or regulations) may delay the acceptance
for payment of any tendered Shares and (except as provided in this Agreement)
amend or terminate the Offer as to any Shares not then paid for if (i) the
condition that there shall be validly tendered and not withdrawn prior to the
expiration of the Offer a number of Shares which represents at least a majority
of the total number of shares of Company Common Stock then outstanding on a
fully diluted basis (after giving effect to the conversion or exercise of all
outstanding options, warrants and other rights and securities exercisable or
convertible into shares of Company Common Stock) shall not have been satisfied
(the "Minimum Condition"); (ii) any applicable waiting period under the HSR Act
shall not have expired or been terminated prior to the expiration of the Offer;
or (iii) at any time after the date of this Agreement and before the time of
acceptance of payment for any such Shares (whether or not any Shares have
theretofore been accepted for payment or paid for pursuant to the Offer), any of
the following conditions exists:
(a) there shall be threatened or pending in effect an injunction or
other order, decree, judgment or ruling by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission of competent jurisdiction or a statute, rule, regulation,
executive order or other action shall have been promulgated, enacted, taken
or threatened by a Governmental Authority or a governmental, regulatory or
administrative agency or commission of competent jurisdiction which in any
such case (i) restrains or prohibits the making or consummation of the
Offer or the consummation of the Merger, (ii) prohibits or restricts the
ownership or operation by the Purchaser (or any of its affiliates or
subsidiaries) of any portion of its or the Company's business or assets
which is material to the business of all such entities taken as a whole, or
compels the Purchaser (or any of its affiliates or subsidiaries) to dispose
of or hold separate any portion of its or the Company's business or assets
which is material to the business of all such entities taken as a whole,
(iii) imposes material limitations on the ability of the Purchaser
effectively to acquire or to hold or to exercise full rights of ownership
of the Shares, including, without limitation, the right to vote the Shares
purchased by the Purchaser on all matters properly presented to the
stockholders of the Company, (iv) imposes any material limitations on the
ability of the Purchaser or any of its affiliates or
<PAGE>
subsidiaries effectively to control in any material respect the business
and operations of the Company; or
(b) this Agreement shall have been terminated by the Company or the
Purchaser in accordance with its terms; or
(c) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on any national securities
exchange or the over-the-counter market for a period in excess of 24 hours
(excluding suspensions or limitations resulting solely from physical damage
or interference with such exchanges not related to market conditions), (ii)
a declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States (whether or not mandatory), (iii) a
commencement of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States (with the
exception of any such occurrence involving Iraq), (iv) any limitation
(whether or not mandatory) by any United States Governmental Authority on
the extension of credit generally by banks, (v) a change in general
financial, bank or capital market conditions which materially and adversely
affects the ability of financial institutions in the United States to
extend credit or syndicate loans to investment grade securities or (vi) in
the case of any of the foregoing existing at the time of the execution of
this Agreement, a material acceleration or worsening thereof; or
(d) (i) the Board of Directors or any committee thereof shall have
withdrawn or modified in a manner adverse to the Purchaser its approval or
recommendation of the Offer, the Merger or this Agreement, or approved or
recommended any Takeover Proposal, or (ii) the Company shall have entered
into any agreement with respect to any Superior Proposal in accordance with
Section 5.3(b) of this Agreement; or
(e) the representations and warranties of the Company set forth in
this Agreement shall not be true and correct in all material respects, in
each case (i) as of the date referred to in any representation or warranty
which addresses matters as of a particular date, or (ii) as to all other
representations and warranties as of the date of this Agreement and as of
the scheduled expiration of the Offer; or
(f) the Company shall have failed to perform in all material respects
any obligation or to comply with any agreement or covenant to be performed
or complied with by it under this Agreement; or
(g) the Purchaser shall have failed to receive a certificate executed
by the President or a Vice President of
<PAGE>
the Company, dated as of the scheduled expiration of the Offer, to the
effect that the conditions set forth in paragraphs (e) and (f) of this
Annex I have not occurred; or
(h) there shall have occurred any change (or any development that,
insofar as reasonably can be foreseen, is reasonably likely to result in
any change) that constitutes a Material Adverse Effect; or
(i) any Person acquires beneficial ownership (as defined in Rule 13d-3
promulgated under the Exchange Act), of at least 15% of the outstanding
Company Common Stock.
The foregoing conditions (other than the Minimum Condition) are for the
sole benefit of the Purchaser and may be asserted by the Purchaser regardless of
the circumstances (including any action or inaction by the Purchaser) giving
rise to any such conditions and may be waived by the Purchaser in whole or in
part at any time and from time to time, in each case, in the exercise of the
good faith judgment of the Purchaser and subject to the terms of this Agreement.
The failure by the Purchaser at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of December 11, 1998 (this "Agreement"),
between Kensington Acquisition Sub, Inc., a Delaware corporation ("Purchaser"),
and Cellular Communications International, Inc., a Delaware corporation (the
"Company").
WHEREAS, Purchaser and the Company, concurrently with the execution and
delivery of this Agreement, have entered into an Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"), providing for, among other
things, the merger of Purchaser with and into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Purchaser to enter into the
Merger Agreement, Purchaser has required that the Company agree, and in order to
induce Purchaser to enter into the Merger Agreement the Company has agreed, to
grant Purchaser the Option (as defined below) upon the terms and subject to the
conditions of this Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual promises,
representations, warranties, covenants and agreements contained herein and in
the Merger Agreement, the parties hereto, intending to be legally bound hereby,
agree as follows:
ARTICLE I
THE OPTION
SECTION 1.1 Grant of Option. The Company hereby grants to Purchaser an
irrevocable option (the "Option") to purchase up to 4,338,133 newly-issued
shares ("Shares") of the Common Stock, par value $.01 per share ("Company Common
Stock"), of the Company at a purchase price per share of $65.75 (the "Exercise
Price"), in the manner set forth in Sections 1.2 and 1.3 of this Agreement;
provided, however, that in no event shall the number of Shares for which the
Option is exercisable exceed 19.9% of the Company's issued and outstanding
shares of Company Common Stock. The number of Shares that may be received upon
the exercise of the Option and the Exercise Price are subject to adjustment as
herein set forth. This Agreement shall terminate, and the Option hereby granted
shall expire, on the earliest of (i) the Effective Time (as defined in the
Merger Agreement) and (ii) to the extent that no Option Notice (as defined
below) has theretofore been given by Purchaser, six (6) months after any
termination of the Merger Agreement pursuant to Section 8.1(b), (f)(ii), (g),
(h) or (i) thereof and at the time of termination
<PAGE>
of the Merger Agreement pursuant to Section 8.1(a), (c), (d), (e) or (f)(i).
SECTION 1.2 Exercise Of Option. At any time or from time to time prior to
the termination of the Option granted hereunder in accordance with the terms of
this Agreement (other than such time as Purchaser is in material breach of its
obligations under the Merger Agreement), Purchaser (or its designee) may
exercise the Option, in whole or in part, if on or after the date hereof:
(a) any corporation, partnership, individual, trust, unincorporated
association, or other entity or "person" (as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),) other than
Purchaser or any of its "affiliates" (as defined in the Exchange Act) (a "Third
Party"), shall have:
(i) commenced or announced an intention to commence a tender offer or
exchange offer for any shares of Company Common Stock, the consummation of
which would result in "beneficial ownership" (as defined under the Exchange
Act) by such Third Party (together with all such Third Party's affiliates
and "associates" (as such term is defined in the Exchange Act)) of 15% or
more of the then outstanding voting equity of the Company (either on a
primary or a fully diluted basis); or
(ii) acquired beneficial ownership of shares of Company Common Stock
which, when aggregated with any shares of Company Common Stock already
owned by such Third Party, its affiliates and associates, would result in
the aggregate beneficial ownership by such Third Party, its affiliates and
associates of 15% or more of the then outstanding voting equity of the
Company (either on a primary or a fully diluted basis); provided, however,
that "Third Party" for purposes of this clause (ii) shall not include any
corporation, partnership, person, other entity or group which beneficially
owns more than 15% of the outstanding voting equity of the Company (either
on a primary or a fully diluted basis) as of the date hereof and that does
not, after the date hereof, increase such ownership percentage by more than
an additional 1% of the outstanding voting equity of the Company (either on
a primary or a fully diluted basis); or
(b) any of the events described in Section 8.1(g) (so long as following the
date hereof but prior to any termination there shall have been a Takeover
Proposal Interest (as defined in the Merger Agreement)), 8.1(h) or 8.1(i) of the
Merger Agreement that would allow Purchaser to terminate the Merger Agreement
has occurred (but without the necessity of Purchaser having terminated the
Merger Agreement).
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In the event that Purchaser wishes to exercise all or any part of the
Option, Purchaser shall give written notice (the "Option Notice," with the date
of the Option Notice being hereinafter called the "Notice Date") to the Company
specifying the number of Shares it will purchase and a place and date (not
earlier than three (3) nor later than twenty (20) business days from the Notice
Date) for closing such purchase (a "Closing"). Purchaser's obligation to
purchase Shares upon any exercise of the Option is subject (at its election) to
the conditions that (i) no preliminary or permanent injunction or other order
against the purchase, issuance or delivery of the Shares issued by any federal,
state or foreign court of competent jurisdiction shall be in effect (and no
action or proceeding shall have been commenced or threatened for purposes of
obtaining such an injunction or order), (ii) any applicable waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act") shall have expired and (iii) there shall have been no material breach of
the representations, warranties, covenants or agreements of the Company
contained in this Agreement or the Merger Agreement; provided, however, that any
failure by Purchaser to purchase Shares upon exercise of the Option at any
Closing as a result of the nonsatisfaction of any of such conditions shall not
affect or prejudice Purchaser's right to purchase such Shares upon the
subsequent satisfaction of such conditions. Upon request by Purchaser, the
Company will promptly take all action required to effect all necessary filings
by the Company under the HSR Act.
SECTION 1.3 Purchase of Shares. At any Closing, (i) the Company will
deliver to Purchaser the certificate or certificates representing the number of
Shares being purchased in proper form for transfer upon exercise of the Option
in the denominations designated by Purchaser in the Option Notice, and, if the
Option has been exercised in part, a new Option evidencing the rights of
Purchaser to purchase the balance of the Shares subject thereto, and (ii)
Purchaser shall pay the aggregate purchase price for the Shares to be purchased
by delivery to the Company of a certified or bank cashier's check payable in New
York Clearing House funds to the order of the Company in the amount of the
Exercise Price times the number of Shares to be purchased.
SECTION 1.4 Adjustments Upon Share Issuances, Changes in Capitalization,
etc. (a) In the event of any change in Company Common Stock or in the number of
outstanding shares of Company Common Stock by reason of a stock dividend,
split-up, recapitalization, combination, exchange of shares or similar
transaction or any other change in the corporate or capital structure of the
Company (including, without limitation, the declaration or payment of an
extraordinary dividend of cash, securities or other property), the type and
number of the Shares to be issued by the Company upon exercise of the Option
shall be adjusted appropriately, and proper provision shall be made in the
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<PAGE>
agreements governing such transaction, so that Purchaser shall receive upon
exercise of the Option the number and class of shares or other securities or
property that Purchaser would have received in respect to the Company Common
Stock if the Option had been exercised immediately prior to such event, or the
record date therefor, as applicable, and the holder of such Company Common Stock
had elected to the fullest extent it would have been permitted to elect, to
receive such securities, cash or other property.
(b) In the event that the Company shall enter into an agreement (i) to
consolidate with or merge into any person, other than Purchaser or one of its
subsidiaries, and shall not be the continuing or surviving corporation of such
consolidation or merger, (ii) to permit any person, other than Purchaser or one
of its subsidiaries, to merge into the Company and the Company shall be the
continuing or surviving corporation, but, in connection with such merger, the
then outstanding shares of Company Common Stock shall be changed into or
exchanged for stock or other securities of the Company or any other person or
cash or any other property, or then outstanding shares of Company Common Stock
shall after such merger represent less than 50% of the outstanding shares and
share equivalents of the surviving corporation or (iii) to sell or otherwise
transfer all or substantially all of its assets to any person, other than
Purchaser or one of its subsidiaries, then, and in each such case, proper
provision shall be made in the agreements governing such transaction so that
Purchaser shall receive upon exercise of the Option the number and class of
shares or other securities or property that Purchaser would have received in
respect of Company Common Stock if the Option had been exercised immediately
prior to such transaction, or the record date therefor, as applicable, and the
holder of such Company Common Stock had elected to the fullest extent it would
have been permitted to elect, to receive such securities, cash or other
property.
(c) The rights of Purchaser under this Section 1.4 shall be in addition to,
and shall in no way limit, its rights against the Company for any breach of the
Merger Agreement.
(d) The provisions of this Agreement shall apply with appropriate
adjustments to any securities for which the Option becomes exercisable pursuant
to this Section 1.4.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchaser as follows:
SECTION 2.1 Authority Relative to this Agreement. The Company is a
corporation duly organized and validly existing under the laws of the State of
Delaware. The Company has all necessary power and authority (corporate and
otherwise) to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation by the Company of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of the Company, and no other corporate proceeding on the part
of the Company is necessary to authorize this Agreement or for the Company to
consummate such transactions. This Agreement has been duly and validly executed
and delivered by the Company.
SECTION 2.2 No Conflict; Required Filings and Consents. The execution and
delivery of this Agreement by the Company do not, and the performance of this
Agreement by the Company will not, (i) conflict with or violate the Restated
Certificate of Incorporation or Bylaws of the Company, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to the
Company or by which the Company is bound or affected, (iii) result in any breach
of or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance of any kind on any of the Shares pursuant to, any agreement,
contract, indenture, notice or instrument to which the Company is a party or by
which the Company is bound or affected, or (iv) except for applicable
requirements, if any, of the HSR Act, the Exchange Act and the Securities Act of
1933, as amended (the "Securities Act"), require any filing by the Company with,
or any permit, authorization, consent or approval of, any governmental or
regulatory authority, domestic or foreign.
SECTION 2.3 Option Shares. The Company has taken all necessary corporate
action to authorize and reserve for issuance upon exercise of the Option a total
of 4,338,133 Shares, and the Shares, when issued and delivered by the Company to
Purchaser (or its designee) upon exercise of the Option will be duly authorized,
validly issued, fully paid and nonassessable shares of Company Common Stock, and
will be free and clear of any security interests, liens, claims, pledges,
charges or encumbrances of any kind.
5
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company as follows:
SECTION 3.1 Authority Relative to this Agreement. Purchaser is a
corporation duly organized and validly existing under the laws of the State of
Delaware. Purchaser has all necessary power and authority (corporate and
otherwise) to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation by Purchaser of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of Purchaser, and no other corporate proceeding on the part of
Purchaser is necessary to authorize this Agreement or for Purchaser to
consummate such transactions. This Agreement has been duly executed and
delivered by Purchaser and, assuming its due authorization, execution and
delivery by the Company, constitutes a legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms.
SECTION 3.2 No Conflict, Required Filing and Consents. The execution and
delivery of this Agreement by Purchaser do not, and the performance of this
Agreement by Purchaser will not, (i) conflict with or violate the organizational
documents of Purchaser, (ii) conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to Purchaser or by which Purchaser is bound
or affected, (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or cancellation of,
any agreement, contract, indenture, note or instrument to which Purchaser is a
party or by which it is bound or affected or (iv) except for applicable
requirements, if any, of the HSR Act, the Exchange Act and the Securities Act,
require any filing by Purchaser with, or any permit, authorization, consent or
approval of, any governmental or regulatory authority, domestic or foreign,
except in the case of each of the foregoing clauses (i) through (iv) for any
such conflicts, violations, breaches, defaults, failures to file or obtain the
consent or approval of, or other occurrences that would not cause or create a
material risk of non-performance or delayed performance by Purchaser of its
obligations under this Agreement.
SECTION 3.3 Investment Intent. The purchase of Shares pursuant to this
Agreement is for the account of Purchaser for the purpose of investment and not
with a view to or for sale in connection with any distribution thereof within
the meaning of
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the Securities Act and the rules and regulations promulgated thereunder.
ARTICLE IV
ADDITIONAL AGREEMENTS
SECTION 4.1 Registration Rights; Listing of Shares. (a) Upon the written
request of Purchaser, the Company agrees to effect up to two registrations under
the Securities Act and any applicable state securities laws covering any part or
all of the Option (provided that only Shares will be distributed to the public)
and any part or all of the Shares purchased under this Agreement, which
registration shall be continued in effect for 90 days, unless, in the written
opinion of counsel to the Company, addressed to Purchaser and reasonably
satisfactory in form and substance to counsel for Purchaser, such registration
is not required for the sale and distribution of such Shares in the manner
contemplated by Purchaser. The registration effected under this paragraph shall
be effected at the Company's expense except for any underwriting commissions. If
Shares are offered in a firm commitment underwriting, the Company will provide
reasonable and customary indemnification to the underwriters. In the event of
any demand for registration pursuant to this paragraph, the Company may delay
the filing of the registration statement for a period of up to 90 days if, in
the good faith judgment of the Board of Directors of the Company, such delay is
necessary in order to avoid interference with a planned material transaction
involving the Company. In the event the Company effects a registration of
Company Common Stock for its own account or for any other stockholder of the
Company (other than on Form S-4 or Form S-8 or any successor or similar form),
it shall allow Purchaser to participate in such registration; provided, however,
that if the managing underwriters in such offering advise the Company in writing
that in their opinion the number of shares of Company Common Stock requested to
be included in such registration exceeds the number which can be sold in such
offering, the Company will include the securities requested to be included
therein pro rata among the holders requesting to be included.
(b) The Company shall, at its expense, use its best efforts to cause the
Shares to be approved for listing on the Nasdaq National Market (the "NNM")
subject to notice of issuance, as promptly as practicable following the date of
this Agreement, and will provide prompt notice to the NNM of the issuance of
each Share pursuant to any exercise of the Option.
SECTION 4.2 Right to Sell Option. At any time that Purchaser is entitled to
exercise the Option pursuant to Section 1.2 hereof, Purchaser may elect, in its
sole discretion, to sell the Option to the Company in lieu of exercising the
Option. The
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<PAGE>
Company shall be required to purchase the Option from Purchaser on the third
business day after the Purchaser gives the Company written notice of such
election for a cash price (payable by certified or official bank check in same
day funds to Purchaser or its designee) equal to the product of the number of
Shares then covered by the Option multiplied by the excess over the Exercise
Price of the greater of (x) the closing price of a share of Company Common Stock
on the NNM on the last trading day prior to the date of such notice and (y) the
highest price per share of Company Common Stock paid or proposed to be paid to
any holder thereof by any person in any Takeover Proposal (as defined in the
Merger Agreement). The Company shall give Purchaser prompt written notice of the
occurrence of any event set forth in Section 1.2 hereof and of any agreements or
proposals relating to such an event, but the failure to give any such notice
shall not limit Purchaser's right to require the Company to purchase the Option
pursuant to this Section 4.2.
SECTION 4.3 Limitation on Profit. (a) Notwithstanding any other provision
of this Agreement, in no event shall Purchaser's Total Profit (as defined below)
exceed $14 million and, if it otherwise would exceed such amount, Purchaser, at
its sole election, shall either (a) reduce the number of shares of Company
Common Stock subject to the Option, (b) deliver to the Company for cancellation
Shares previously purchased by Purchaser, (c) pay cash to the Company, or
(d) any combination thereof, so that Purchaser's actually realized Total Profit
shall not exceed $14 million after taking into account the foregoing actions.
(b) As used herein, the term "Total Profit" shall mean the aggregate amount
(before taxes) of the following: (i) (x) the net cash amounts received by
Purchaser pursuant to the sale of Shares (or any other securities into which
such Shares are converted or exchanged) to any unaffiliated party, less (y)
Purchaser's purchase price of such Shares, and (ii) any Notional Total Profit
(as defined below).
(c) As used herein, the term "Notional Total Profit" with respect to the
total number of Shares as to which Purchaser could propose to exercise the
Option shall be the Total Profit determined as of the date of such proposal
assuming that the Option were fully exercised on such date for such number of
Shares and assuming that such Shares, together with all other Shares held by
Purchaser and its affiliates as of such date, were sold for cash at the closing
market price for the Company Common Stock as of the close of business on the
preceding trading day (less customary brokerage commissions).
SECTION 4.4 Transfer of Shares; Restrictive Legend. Purchaser agrees not to
transfer or otherwise dispose of the Shares, or any interest therein, without
first providing to the Company an opinion of counsel for Purchaser, reasonably
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<PAGE>
satisfactory in form and substance to counsel for the Company, to the effect
that such transfer or disposition will not violate the Securities Act or any
applicable state law governing the offer and sale of securities, and the rules
and regulations thereunder. Purchaser further agrees to the placement on the
certificate(s) representing the Shares of the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE
REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE."
provided that upon provision to the Company of any opinion of counsel for
Purchaser, reasonably satisfactory in form and substance to counsel for the
Company, to the effect that such legend is no longer required under the
provisions of the Securities Act or applicable state securities laws, the
Company shall promptly cause new unlegended certificates representing such
Shares to be issued to Purchaser against surrender of such legended
certificates.
SECTION 4.5 Best Efforts. Subject to the terms and conditions of this
Agreement, Purchaser and the Company shall each use its best efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
Each party shall promptly consult with the other and provide any necessary
information and material with respect to all filings made by such party with any
governmental or regulatory authority in connection with this Agreement or the
transactions contemplated hereby.
SECTION 4.6 Further Assurances. The Company shall perform such further acts
and execute such further documents and instruments as may reasonably be required
to vest in Purchaser the power to carry out the provisions of this Agreement. If
Purchaser shall exercise the Option, or any portion thereof, in accordance with
the terms of this Agreement, the Company shall, without additional
consideration, execute and deliver all such further documents and instruments
and take all such further action as Purchaser may reasonably request for the
purpose of effectively carrying out the transactions contemplated by this
Agreement.
SECTION 4.7 Survival. All of the representations, warranties and covenants
contained herein shall survive a Closing and shall be deemed to have been made
as of the date hereof and as of the date of each Closing.
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ARTICLE V
MISCELLANEOUS
SECTION 5.1 Specific Performance. The parties hereto agree that if any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached, irreparable damage would occur, no
adequate remedy at law would exist and damages would be difficult to determine,
and that the parties shall be entitled to specific performance of the terms
hereof, without any requirement for securing or posting any bond, in addition to
any other remedy at law or equity.
SECTION 5.2 Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
SECTION 5.3 Amendment; Assignment. This Agreement may not be amended except
by an instrument in writing signed by the parties hereto and specifically
referencing this Agreement. No party to this Agreement may assign any of its
rights or obligations under this Agreement without the prior written consent of
the other party hereto, except that the rights and obligations of Purchaser
hereunder may, upon written notice to the Company prior to or promptly following
such action, be assigned by Purchaser to any of its corporate affiliates, but no
such transfer shall relieve Purchaser of its obligations hereunder if such
transferee does not perform such obligations.
SECTION 5.4 Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provisions hereof or
thereof shall not affect the validity and enforceability of the other provisions
hereof. If any provision of this Agreement, or the application thereof, to any
person or entity or any circumstances is invalid or unenforceable, (i) a
suitable and equitable provision shall be substituted therefor in order to carry
out, so far as may be valid and enforceable, the intent and purpose of such
invalid and unenforceable provision and (ii) the remainder of this Agreement and
the application of such provision to other persons, entities or circumstances
shall not be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction.
SECTION 5.5 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware without giving
effect to the provisions thereof relating to conflicts of law.
SECTION 5.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be
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deemed to be an original, but each of which together shall constitute one and
the same document.
SECTION 5.7 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made (i) as of the date delivered or sent by facsimile if delivered
personally or by facsimile, (ii) on the first business day following dispatch by
an internationally recognized overnight courier service to a domestic addressee,
(iii) on the third business day following dispatch by an internationally
recognized overnight courier service to a international addressee and (iv) on
the tenth business day after deposit with a national mail service, if mailed by
registered or certified mail (postage prepaid, return receipt requested), in
each case to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice, except that notices of changes
of address shall be effective upon receipt):
(a) if to the Company, to
Cellular Communications International, Inc.
110 East 59th Street
New York, New York 10022
Attn: Richard Lubasch, Esq.
Fax: (212) 906-8497
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attn: Thomas H. Kennedy, Esq.
Fax: (212) 735-2000
(b) if to Purchaser, to
Mannesmann AG
Am Wallgraben 125
D-70565 Stuttgart
Germany
Attn: Dr. Kurt J. Kinzius
Fax: 49-711-990-2201
and
Olivetti S.p.A.
Via Lorenteggio 257
20152 Milan
Italy
Attn: Marco De Benedetti
Fax: 39-2-4836-6700
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with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
Attn: Neil Novikoff, Esq.
Fax: (212) 728-8111
SECTION 5.8 Binding Effect. The terms of this Agreement shall inure to the
benefit of and be binding upon by the successors and assigns of the parties
hereto. Nothing expressed or referred to in this Agreement is intended or shall
be construed to give any person other than the parties to this Agreement, or
their respective successors or assigns, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
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IN WITNESS WHEREOF, each of the Company and Purchaser have caused this
Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the date first above written.
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
By: /s/ William B. Ginsberg
-----------------------------------------
Name: William B. Ginsberg
Title: Chairman of the Board of Directors,
President, Chief Executive Officer
KENSINGTON ACQUISITION SUB, INC.
By: /s/ Marco De Benedetti
-----------------------------------------
Name: Marco De Benedetti
Title: Co-President and Co-Secretary
By: /s/ Dr. Kurt Kinzius
-----------------------------------------
Name: Dr. Kurt Kinzius
Title: Co-President and Co-Secretary
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of December 11, 1998,
by and among Cellular Communications International, Inc., a Delaware corporation
(the "Company"), Kensington Acquisition Sub, Inc., a Delaware corporation
("Purchaser"), and the persons listed on Schedule 1 hereto (the "Stockholders").
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of this Agreement,
the Company and Purchaser have entered into an Agreement and Plan of Merger,
dated as of the date hereof (as such agreement may hereafter be amended from
time to time, the "Merger Agreement"), pursuant to which, among other things,
Purchaser will make a tender offer (the "Offer") for all outstanding shares of
common stock, par value $.01 per share ("Shares"), of the Company at a price of
$65.75 per Share (the "Offer Price"), net to the seller in cash, to be followed
by a merger of Purchaser with and into the Company, and each issued and
outstanding Share, except as set forth in the Merger Agreement, will be
converted into the right to receive the Offer Price;
WHEREAS, the Stockholders are the Beneficial Owners (as defined below) and
owners of record, and have the sole right to vote and dispose of, Shares as
indicated on Schedule 1 hereto (with respect to such Stockholder, together with
any other Shares acquired by such Stockholder after the date hereof and during
the term of the Agreement, collectively the "Owned Shares"); and
WHEREAS, as an inducement and a condition to its entering into the Merger
Agreement and incurring the obligations set forth therein, Purchaser has
required that the Stockholders enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
representations, warranties, covenants and agreements contained herein and in
the Merger Agreement, the parties hereto, intending to be legally bound hereby,
agree as follows:
<PAGE>
1. Certain Definitions. Capitalized terms not defined herein have the
respective meanings ascribed to them in the Merger Agreement. In addition, for
purposes of this Agreement:
"Affiliate" means, with respect to any specified Person, any Person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Person specified.
"Beneficially Own", "Beneficial Owner" or "Beneficial Ownership" with
respect to any securities means having "beneficial ownership" of such securities
(as determined pursuant to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by the same holder,
securities Beneficially Owned by a Person shall include securities Beneficially
Owned by all Affiliates of such Person and all other Persons with whom such
Person would constitute a "group" within the meaning of Section 13(d) of the
Exchange Act and the rules promulgated thereunder.
"Person" means an individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization or other
entity.
"Representative" means, with respect to any Person, as applicable, such
Person's officers, directors, employees, agents and representatives (including
any investment banker, financial advisor, agent, representative or expert
retained by or acting on behalf of such Person or its Subsidiaries).
"Transfer" means, with respect to a security, the sale, transfer, pledge,
hypothecation, encumbrance, assignment or disposition of such security or the
Beneficial Ownership thereof, the offer to make such a sale, transfer or other
disposition, and each option, agreement, arrangement or understanding, whether
or not in writing, to effect any of the foregoing. As a verb, "Transfer" shall
have a correlative meaning.
2. Agreement to Tender; Voting of Owned Shares; Proxy. (a) If requested by
the Purchaser, the Company shall take all actions necessary to provide that,
prior to the Expiration Date, all Options granted to Stockholders under the
Option Plans are vested and exercisable. Each Stockholder hereby agrees, if
requested by the Purchaser, to exercise (on the Expiration Date but not earlier
than 5 p.m. on such date) all Options granted to such Stockholder under the
Option Plans, which exercise may be conditional upon the satisfaction of the
following: the receipt of a notice from the Purchaser that, as of 5 p.m. on such
day, it expects satisfaction of all conditions in the Offer; the delivery of an
irrevocable notice by the Purchaser to the Depositary of its acceptance for
payment of the tenders of the Shares pursuant to the Offer and a calculation
showing that such exercise and
2
<PAGE>
tender will, giving effect to all Shares tendered as of 5 p.m. on such day,
result in a tender of over 90% of the outstanding Shares in the Offer. In
connection with such exercise, the Purchaser will indemnify the Stockholder
against any and all costs, expenses and taxes incurred by such Stockholder which
would not be incurred by such Stockholder if the Options were treated pursuant
to Section 2.12(a) of the Merger Agreement. During the period commencing on the
date hereof and continuing until the earlier to occur of (i) the Effective Time
and (ii) the termination of the Merger Agreement in accordance with its terms
(such period being referred to as the "Voting Period"), each Stockholder (x)
hereby agrees to validly tender (or cause the record owner of such Shares to
validly tender) and sell (and not withdraw) pursuant to the Offer not later than
the tenth business day after commencement of the Offer all of the Owned Shares;
and (y) at any meeting (whether annual or special, and whether or not an
adjourned or postponed meeting) of the Company's stockholders, however called,
or in connection with any written consent of the Company's stockholders, subject
to the absence of a preliminary or permanent injunction or other final order by
any United States federal, state or foreign court barring such action, shall
vote (or cause to be voted) all of its Owned Shares:
a. in favor of the Merger, the execution and delivery by the Company
of the Merger Agreement and the approval and adoption of the Merger and the
terms thereof and each of the other actions contemplated by the Merger
Agreement and this Agreement and any actions required in furtherance
thereof and hereof;
b. against any action or agreement that would (A) result in a breach
of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or of such Stockholder
under this Agreement or (B) impede, interfere with, delay, postpone, or
adversely affect the Merger or the transactions contemplated thereby or
hereby; and
c. except as otherwise agreed to in writing in advance by Purchaser,
against the following actions (other than the Merger and the transactions
contemplated by the Merger Agreement and this Agreement): (A) any
extraordinary corporate transaction, such as a merger, consolidation or
other business combination, involving the Company or any of its
Subsidiaries; (B) any sale, lease or transfer of a material amount of the
assets or business of the Company or its Subsidiaries, or any
reorganization, restructuring, recapitalization, special dividend,
dissolution, liquidation or winding up of the Company or its Subsidiaries;
(C) any change in the present capitalization of the Company, including any
proposal to sell any equity interest in the Company or any of its
Subsidiaries or any amendment of the Restated Certificate of Incorporation
or Bylaws of the Company; (D) any change in the majority of the Board of
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<PAGE>
Directors; (E) any other change in the Company's corporate structure or
business; and (F) any other action which is intended or could reasonably be
expected to impede, interfere with, delay, postpone, discourage or affect
the Merger, the transactions contemplated by the Merger Agreement or this
Agreement or the contemplated economic benefits of any of the foregoing. No
Stockholder shall enter into any agreement, arrangement or understanding
with any Person the effect of which would be inconsistent with or violative
of the provisions and agreement contained in this Section 2(a).
(b) IRREVOCABLE PROXY. EACH STOCKHOLDER HEREBY GRANTS TO, AND APPOINTS
PURCHASER, DR. KURT J. KINZIUS AND MARCO DE BENEDETTI, IN THEIR RESPECTIVE
CAPACITIES AS OFFICERS OF PURCHASER, AND ANY INDIVIDUAL WHO SHALL HEREAFTER
SUCCEED TO ANY SUCH OFFICE OF THE PURCHASER, AND ANY OTHER DESIGNEE OF
PURCHASER, EACH OF THEM INDIVIDUALLY, SUCH STOCKHOLDER'S IRREVOCABLE (UNTIL THE
END OF THE VOTING PERIOD) PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER OF
SUBSTITUTION) TO VOTE THE OWNED SHARES OF THE STOCKHOLDER AS INDICATED IN
SECTION 2(a) ABOVE. THE STOCKHOLDER INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL
THE END OF THE VOTING PERIOD) AND COUPLED WITH AN INTEREST AND SHALL TAKE SUCH
FURTHER ACTIONS AND EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO
EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY
GRANTED BY THE STOCKHOLDER WITH RESPECT TO THE OWNED SHARES.
3. (a) Restrictions on Transfer, Other Proxies. No Stockholder shall, until
the expiration of the Voting Period, directly or indirectly: (i) Transfer to any
Person any or all Owned Shares; (ii) except as provided in Section 2(b), grant
any proxies or powers of attorney, deposit any Owned Shares into a voting trust
or enter into a voting agreement, understanding or arrangement with respect to
such Owned Shares; or (iii) take any action that would make any representation
or warranty of such Stockholder contained herein untrue or incorrect or would
result in a breach by such Stockholder of its obligations under this Agreement
or a breach by the Company of its obligations under the Merger Agreement.
Notwithstanding the foregoing, the Stockholder may transfer Shares to (x) an
Affiliate of the Stockholder, (y) any member of the immediate family of the
Stockholder or trusts for the benefit of family members of the Stockholder or
(z) any organizations qualifying under Section 501(c)(3) of the Internal Revenue
Code of 1986, as amended, in each case under clauses (x), (y) and (z), that
agrees to be bound by this Agreement.
(b) Notwithstanding anything herein to the contrary, the Stockholder may
exercise Options pursuant to a "cashless exercise" or similar provision, such
that the number of Shares actually received may be less than the number of
Shares set forth on Schedule 1.
4
<PAGE>
(c) Each Stockholder hereby agrees, during the Voting Period, to place the
following legend on any and all certificates representing any Owned Shares:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER PURSUANT TO THAT CERTAIN STOCKHOLDERS
AGREEMENT, DATED AS OF DECEMBER 11, 1998, BY AND AMONG THE
STOCKHOLDERS OF CELLULAR COMMUNICATIONS INTERNATIONAL, INC. PARTY
THERETO, CELLULAR COMMUNICATIONS INTERNATIONAL, INC. AND KENSINGTON
ACQUISITION SUB, INC. AND ANY TRANSFER OF SUCH SHARES IN VIOLATION OF
THE TERMS OF SUCH AGREEMENT SHALL BE NULL AND VOID AND OF NO EFFECT
WHATSOEVER.
4. No Solicitation. (a) Other than as required in his capacity as director
of the Company (or as an officer of the Company acting at the direction of the
Board of Directors of the Company) under applicable law and fiduciary duties, in
which case his actions shall be restricted solely by the terms of the Merger
Agreement, each Stockholder and its Affiliates shall not, and shall instruct
their respective officers, directors, employees, agents or other Representatives
not to,
(i) directly or indirectly solicit, initiate, or encourage (including
by way of furnishing nonpublic information or assistance), or take any
other action to facilitate, any inquiries or proposals from any Person that
constitute, or may reasonably be expected to lead to, a Takeover Proposal,
(ii) enter into, maintain, or continue discussions or negotiations
with any party (other than Purchaser) in furtherance of such inquiries or
to obtain a Takeover Proposal, and shall use their best efforts to cause
any such party in possession of confidential information about the Company
that was furnished by or on behalf of the Stockholder to return or destroy
all such information in the possession of any such party (other than the
Company) or in the possession of any Representative of any such party,
(iii) agree to or endorse any Takeover Proposal, or
(iv) authorize or permit the Stockholder's or any of its Affiliates'
Representatives to take any such action.
(b) During the Voting Period, other than as required in his capacity as
director of the Company (or as an officer of the Company acting at the direction
of the Board of Directors of the Company) under applicable law and fiduciary
duties, in which case his actions shall be restricted solely by the terms of the
Merger Agreement, each Stockholder shall not, and shall cause its Affiliates not
to, directly or indirectly, make any public
5
<PAGE>
comment, statement or communication, or take any action that would otherwise
require any public disclosure by such Stockholder, the Company, Purchaser or any
other Person, concerning the Merger and the other transactions contemplated by
the Merger Agreement and this Agreement except for any disclosure (i) concerning
the status of the Stockholder as a party to this Agreement, the terms hereof,
and its Beneficial Ownership of Shares required pursuant to Section 13(d) of the
Exchange Act or (ii) required in the Proxy Statement (as defined in the Merger
Agreement).
5. Proprietary Information. Except as required by law, no Stockholder and
no Representative of any Stockholder shall, at any time, directly or indirectly,
make use of or divulge or otherwise disclose to any Person other than Purchaser,
any trade secret, confidential information or other proprietary information or
data (including any financial data, mailing lists, customer lists or employee
data or records) concerning the business or policies of the Company or its
Subsidiaries that such Stockholder or any of its Representatives may have
learned as a stockholder, employee, officer or director of the Company or any of
its Subsidiaries.
6. Representations and Warranties of the Stockholder. Each Stockholder
hereby severally represents, warrants and covenants to Purchaser as follows:
(a) Due Authorization, Etc. Such Stockholder has all necessary power and
authority to enter into and perform this Agreement and its obligations
hereunder, and no other proceedings or actions on the part of such Stockholder
are necessary to authorize the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby. Such
Stockholder currently has good, valid and marketable title to the Owned Shares,
free and clear of all security interests, liens, claims, charges, encumbrances,
equities and options of any nature whatsoever, and with no restriction on the
voting rights pertaining thereto. The Stockholder further warrants that there
are no outstanding options, warrants or rights to purchase or acquire, or
agreements relating to, any of the Owned Shares.
(b) Enforceability. This Agreement constitutes a valid and binding
agreement of such Stockholder, enforceable against such Stockholder in
accordance with its terms. Neither the execution and delivery of this Agreement
by such Stockholder nor the consummation by such Stockholder of the transactions
contemplated hereby shall conflict with or constitute a violation of or default
under any contract, commitment, agreement, arrangement or restriction of any
kind to which such Stockholder is a party or by which such Stockholder is bound.
(c) Voting Rights. Except as provided in Section 2(b) hereof, such
Stockholder has sole power to vote and to dispose of
6
<PAGE>
the Owned Shares, and sole power to issue instructions with respect to the Owned
Shares to the extent appropriate in respect of the matters set forth in this
Agreement, sole power to demand appraisal rights and sole power to agree to all
of the matters set forth in this Agreement, in each case with respect to all of
the Owned Shares, with no limitations, qualifications, or restrictions on such
rights, subject to applicable securities laws and the terms of this Agreement.
(d) No Filings. Except for filings, authorizations, consents and approvals
as may be required under, and other applicable requirements of, the HSR Act and
the Exchange Act, (i) no filing with, and no permit, authorization, consent or
approval of, any state or federal governmental body or authority is necessary
for the execution of this Agreement by such Stockholder and the consummation by
such Stockholder of the transactions contemplated hereby and (ii) none of the
execution and delivery of this Agreement by such Stockholder, the consummation
by such Stockholder of the transactions contemplated hereby or compliance by
such Stockholder with any of the provisions hereof shall (A) result in a
violation or breach of, or constitute (with or without notice or lapse of time
or both) a default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of the terms,
conditions or provisions of any note, loan agreement, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding, agreement or other
instrument or obligation of any kind to which such Stockholder is a party or by
which such Stockholder or any of its properties or assets (including the Owned
Shares) may be bound, or (B) violate any order, writ, injunction, decree,
judgment, statute, rule or regulation applicable to such Stockholder or any of
its properties or assets.
(e) Such Stockholder understands and acknowledges that Purchaser is
entering into the Merger Agreement, and is incurring the obligations set forth
therein, in reliance upon the Stockholder's execution and delivery of this
Agreement.
7. Representations and Warranties of Purchaser. Purchaser hereby
represents, warrants and covenants to each Stockholder as follows:
(a) Due Authorization, Etc. Purchaser has all necessary corporate power and
authority to enter into and perform this Agreement and its obligations
hereunder, and no other proceedings or actions on the part of Purchaser are
necessary to authorize the execution, delivery or performance of this Agreement
or the consummation of the transactions contemplated hereby.
(b) Enforceability. This Agreement constitutes a valid and binding
agreement of Purchaser, enforceable against Purchaser in accordance with its
terms. Neither the execution
7
<PAGE>
and delivery of this Agreement by Purchaser nor the consummation by Purchaser of
the transactions contemplated hereby shall conflict with or constitute a
violation of or default under any contract, commitment, agreement, arrangement
or restriction of any kind to which Purchaser is a party or by which Purchaser
is bound.
(c) No Filings. Except for filings, authorizations, consents and approvals
as may be required under, and other applicable requirements of, the HSR Act and
the Exchange Act, (i) no filing with, and no permit, authorization, consent or
approval of, any state or federal public body or authority is necessary for the
execution of this Agreement by Purchaser and the consummation by Purchaser of
the transactions contemplated hereby and (ii) none of the execution and delivery
of this Agreement by Purchaser, the consummation by Purchaser of the
transactions contemplated hereby or compliance by Purchaser with any of the
provisions hereof shall (A) conflict with or result in any breach of the
organizational documents of Purchaser, or (B) result in a violation or breach
of, or constitute (with or without notice or lapse of time or both) a default
(or give rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which Purchaser is a party or by which Purchaser or
any of its properties or assets may be bound, or violate any order, writ,
injunction, decree, judgment, statute, rule or regulation applicable to
Purchaser or any of its properties or assets.
8. Certain Covenants.
(a) No Sale. No Stockholder shall sell, transfer, assign, pledge,
hypothecate or otherwise dispose of or limit its right to vote in any manner any
of the Owned Shares which are the subject matter of this Agreement except
pursuant to the terms hereof.
(b) 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 lawful action as may be necessary
or desirable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement.
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 or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any
8
<PAGE>
court of the United States located in the State of New York or in any New York
State court located in the Borough of Manhattan, this being in addition to any
other remedy to which they are entitled at law or in equity. In addition, each
of the parties hereto (a) consents to submit itself (without making such
submission exclusive) to the personal jurisdiction of any federal court located
in the State of New York or any New York State court in the event any dispute
arises out of this Agreement or any of the transactions contemplated by this
Agreement and (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court.
10. Miscellaneous.
(a) Assignment. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned or delegated, in whole or in
part, by operation of law or otherwise, by any of the parties hereto without the
prior written consent of the other parties, except that Purchaser may assign its
rights and obligations, in whole or in part, to any of its Affiliates, but no
such assignment shall relieve Purchaser of its obligations hereunder if such
assignee does not perform such obligations. 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.
(b) Amendments. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
(c) Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
(i) as of the date delivered or sent by facsimile if delivered personally or by
facsimile, (ii) on the first business day following dispatch by an
internationally recognized overnight courier service to a domestic addressee,
(iii) on the third business day following dispatch by an internationally
recognized overnight courier service to a international addressee and (iv) on
the tenth business day after deposit with a national mail service, if mailed by
registered or certified mail (postage prepaid, return receipt requested), in
each case to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice, except that notices of changes
of address shall be effective upon receipt):
(i) if to the Company, to
Cellular Communications International, Inc.
110 East 59th Street
New York, New York 10022
Attn: Richard Lubasch, Esq.
Fax: (212) 906-8497
9
<PAGE>
with a copy to:
Skadden, Arps, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attn: Thomas H. Kennedy, Esq.
Fax: (212) 735-2000
(ii) if to Purchaser, to
Mannesmann AG
Am Wallgraben 125
D-70565 Stuttgart
Germany
Attn: Dr. Kurt J. Kinzius
Fax: 49-711-990-2201
and
Olivetti S.p.A.
Via Lorenteggio 257
20152 Milan
Italy
Attn: Marco De Benedetti
Fax: 39-2-4836-6700
with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
Attn: Neil Novikoff, Esq.
Fax: (212) 728-8111
(iii) if to a Stockholder, as set forth on Schedule 1 hereto.
(d) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, REGARDLESS OF THE LAWS THAT
MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
(e) 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 parties.
(f) Interpretation. When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement unless otherwise
indicated. The 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
10
<PAGE>
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."
(g) Entire Agreement; No Third-Party Beneficiaries. This Agreement, the
Option Agreement and the Merger Agreement (together with the other documents and
instruments referred to in the Option Agreement, the Merger Agreement and the
exhibits and disclosure schedules thereto) (a) constitute the entire agreement
and supersede all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter of this Agreement, and
(b) are not intended to confer upon any person other than the parties hereto any
rights or remedies.
11
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the parties hereto on the date first above written.
KENSINGTON ACQUISITION SUB, INC.
By: /s/ Marco De Benedetti
-----------------------------------------
Name: Marco De Benedetti
Title: Co-President and Co-Secretary
By: /s/ Dr. Kurt Kinzius
-----------------------------------------
Name: Dr. Kurt Kinzius
Title: Co-President and Co-Secretary
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
By: /s/ William B. Ginsberg
-----------------------------------------
Name: William B. Ginsberg
Title: Chairman of the Board of Directors,
President, Chief Executive Officer
<PAGE>
/s/ William B. Ginsberg
--------------------------------------------
Name: William B. Ginsberg
/s/ Richard J. Lubasch
--------------------------------------------
Name: Richard J. Lubasch
/s/ Stanton N. Williams
--------------------------------------------
Name: Stanton N. Williams
/s/ Gregg Gorelick
--------------------------------------------
Name: Gregg Gorelick
/s/ Del Mintz
--------------------------------------------
Name: Del Mintz
/s/ Sidney R. Knafel
--------------------------------------------
Name: Sidney R. Knafel
/s/ Alan J. Patricof
--------------------------------------------
Name: Alan J. Patricof
/s/ Warren Potash
--------------------------------------------
Name: Warren Potash
GUARANTEE
GUARANTEE, dated as of December 11, 1998, by and among Cellular
Communications International, Inc., a Delaware corporation (the "Company"), and
Olivetti S.p.A., a limited liability company organized under the laws of Italy
("Olivetti"), and Mannesmann AG, a limited liability company organized under the
laws of Germany ("Mannesmann", and together with Olivetti, the ("Guarantors").
WHEREAS, Kensington Acquisition Sub, Inc., a Delaware corporation (the
"Purchaser), is wholly-owned jointly by the Guarantors; and
WHEREAS, the Company and the Purchaser have entered into an Agreement and
Plan of Merger (the "Merger Agreement") of even date herewith; and
WHEREAS, upon the terms and subject to the conditions set forth in the
Merger Agreement, the Purchaser will make a cash tender offer (the "Offer") to
acquire all shares of the issued and outstanding common stock, $.01 par value,
of the Company (the "Company Common Stock"), including the associated Preferred
Stock Purchase Rights issued pursuant to the Rights Agreement, dated as of
December 19, 1990, between the Company and Continental Stock Transfer Trust
Company, for $65.75 per share or such higher price as may be paid in the Offer,
in each case net to the seller in cash; and
WHEREAS, as an inducement to the Company to enter into the Merger
Agreement, the Guarantors have agreed to enter into this agreement;
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, the
Company and the Guarantors hereby agree as follows:
1. The Guarantors hereby unconditionally and irrevocably jointly and
severally guarantee, as primary obligors and not merely as sureties, for the
benefit of the Company the performance of the following obligations of the
Purchaser pursuant to the Merger Agreement: (i) Section 1.1(e), (ii) the last
sentence of Section 2.12(b), (iii) Section 6.9 and (iv) any liability relating
to the representations set forth in Section 3.4.
2. The Guarantors covenant that this Guarantee will not be discharged
except by complete performance of the obligations contained in this Guarantee.
This Guarantee shall not be affected by, and shall remain in full force and
effect, notwithstanding any bankruptcy, insolvency, liquidation, or
reorganization of the Purchaser or either Guarantor. This
<PAGE>
Guarantee shall not be affected by any claim, action, suit, proceeding
(including, without limitation, arbitration proceedings) or other alternative
dispute resolution proceeding or investigation that is commenced or threatened
against the Company, the Purchaser, Mannesmann, Olivetti or OliMan Holding B.V.
arising out of, or relating to, the Omnitel Agreement (as defined below) and in
connection with the execution and delivery of the Merger Agreement and the
consummation of the transactions contemplated thereby, other than any of the
foregoing brought by or on behalf of the Company.
3. The Guarantors agree to pay, on demand, and to save the Company harmless
against liability for, any and all costs and expenses (including reasonable fees
and disbursements of counsel) incurred or expended by the Company in connection
with the enforcement of or preservation of any rights under this Guarantee.
4. Olivetti hereby represents, warrants and covenants to the Company as
follows:
a. Olivetti is a limited liability company duly organized and validly
existing under the laws of Italy. Olivetti has the necessary power and authority
to own and operate its properties and assets and to carry on its business as
currently conducted.
b. Olivetti has all requisite legal power and authority to enter into this
Guarantee. Olivetti has all requisite legal power and authority to carry out and
perform its obligations under the terms of this Guarantee. This Guarantee
constitutes the valid and binding obligation of Olivetti, enforceable against it
in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, moratorium, reorganization or other laws or equitable
principles relating to or affecting creditors' rights generally.
c. All corporate action on the part of Olivetti necessary to authorize the
execution, delivery and performance of this Guarantee has been taken.
5. Mannesmann hereby represents, warrants and covenants to the Company as
follows:
a. Mannesmann is a limited liability company duly organized and validly
existing under the laws of Germany. Mannesmann has the necessary power and
authority to own and operate its properties and assets and to carry on its
business as currently conducted.
b. Mannesmann has all requisite legal power and authority to enter into
this Guarantee. Mannesmann has all requisite legal power and authority to carry
out and perform its obligations under the terms of this Guarantee. This
Guarantee
-2-
<PAGE>
constitutes the valid and binding obligation of Mannesmann, enforceable against
it in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, moratorium, reorganization or other laws or equitable
principles relating to or affecting creditors' rights generally.
c. All corporate action on the part of Mannesmann necessary to authorize
the execution, delivery and performance of this Guarantee has been taken.
6. Each Guarantor hereby represents and warrants to the Company that to
such Guarantor's knowledge, the execution and delivery of this Guarantee by such
Guarantor do not, and the performance of this Guarantee by such Guarantor and
the consummation of the transactions contemplated by the Merger Agreement will
not result in a breach of or constitute a default under (with or without due
notice of lapse of time or both) any contract or instrument to which the
Guarantor or OliMan Holding, B.V. is a party (including the Joint Venture
Agreement (the "Omnitel Agreement"), dated as of May 3, 1990, among Ing. C.
Olivetti & C., S.p.A., Bell Atlantic International, Inc., CCI Partnership, Inc.,
Shearson Lehman Hutton Eurocell Italy, Inc., and Swedish Telecom International
AB, as amended November 24, 1993 and February 23, 1994) as is or could
reasonably be expected to be materially adverse to the ability of such Guarantor
to perform its obligations under this Guarantee or to the consummation of the
transactions contemplated by the Merger Agreement. For purposes of this
Guarantee, "to such Guarantor's knowledge" shall be limited to the knowledge of
a current director or officer of such Guarantor.
7. Each Guarantor agrees that any legal suit, action or proceeding brought
by the Company with respect to the transactions contemplated by the Merger
Agreement may be instituted in any state or federal court in The City of New
York, State of New York, waives to the fullest extent permitted by law any
objection which it may now or hereafter have to the laying of venue of any such
suit, action or proceeding and irrevocably submits to the non-exclusive
jurisdiction of any such court in any such suit, action or proceeding. Nothing
in this paragraph shall affect the right of a Guarantor, the Purchaser or any of
their respective affiliates to serve process in any manner permitted by law or
limit the right of a Guarantor, the Purchaser or any of their respective
affiliates to bring proceedings against the Company in the courts of any
jurisdiction or jurisdictions.
8. This Guarantee shall be deemed to be a contract under the laws of the
State of New York and shall for all purposes be governed by and construed in
accordance with the laws of such State.
9. This Guarantee shall terminate and be of no further force or effect upon
the consummation of the purchase by the Purchaser or any of its affiliates of
any Shares pursuant to the Offer.
-3-
<PAGE>
IN WITNESS WHEREOF, each of the Company and each Guarantor have caused this
Guarantee to be executed on its behalf by its officers thereunto duly
authorized, all as on the date first above written.
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
By: /s/ William B. Ginsberg
-----------------------------------------
Name: William B. Ginsberg
Title: Chairman of the Board of Directors,
President, Chief Executive Officer
MANNESMANN AG
By: /s/ Dr. Kurt Kinzius
-----------------------------------------
Name: Dr. Kurt Kinzius
Title:
OLIVETTI S.p.A.
By: /s/ Roberto Colaninno
-----------------------------------------
Name: Roberto Colaninno
Title: Chief Executive Officer
By: /s/ Marco De Benedetti
-----------------------------------------
Name: Marco De Benedetti
Title: Chairman
