SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 23, 1997 (November 21, 1997)
AMERICAN RADIO SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-26102 04-3196245
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
116 Huntington Avenue
Boston, Massachusetts 02116
(Address of principal executive offices, including zip code)
(617) 375-7500
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
1. On December 12, 1997, American Tower Systems Corporation ("ATS"), a
wholly-owned subsidiary of American Radio Systems Corporation ("ARS"), entered
into an Agreement and Plan of Merger (the "ATC Merger Agreement") by and between
ATS and American Tower Corporation ("ATC"), an unaffiliated Delaware
corporation, pursuant to which ATC will merge with and into ATS, and ATS will be
the surviving corporation (the "ATC Merger"). Pursuant to the ATC Merger, ATS
will issue an aggregate of approximately 31.72 million shares of Class A Common
Stock, $.01 par value per share, of ATS (the "ATS Class A Common Stock")
(including shares issuable upon exercise of ATC options). Such number of shares
will represent approximately 35% of the number of shares of common stock, of ATS
(the "ATS Common Stock") which would be outstanding on a pro forma basis,
assuming the consummation of the CBS Merger (as defined below), including the
Tower Separation (as defined below), the Gearon Merger (as defined below), a
proposed private placement of approximately $80.0 million of ATS Common Stock,
the exercise of all options to acquire ATS Common Stock proposed to be
outstanding and the conversion of all shares of ARS 7% Convertible Exchangeable
Preferred Stock. Consummation of the ATC Merger is also conditioned on, among
other things, the expiration or earlier termination of the waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act") and
consummation of the Tower Separation. The ATC Merger also provides for a
termination fee of $15.0 million (together with the reimbursement of reasonable
out-of pocket expenses up to an aggregate of $1.0 million) payable to either
party under certain circumstances. Such fee is payable to ATC in the event that
the ATC Merger is terminated because of failure of the CBS Merger or the Tower
Separation to occur on or prior to May 31, 1998. The ATC Merger is expected to
be consummated in the second quarter of 1998, and ATS will be renamed American
Tower Corporation upon consummation.
For more information, see the ATC Merger Agreement, which is attached
herewith as Exhibit 2.1, and the ARS press release, dated December 15, 1997,
which is attached herewith as Exhibit 99.1.
2. On November 21, 1997, ATS and its wholly-owned subsidiary, American Tower
Systems (Delaware), Inc. ("ATSI"), entered into an Agreement and Plan of Merger
(the "Gearon Merger Agreement") by and among ATS, ATSI, Gearon & Co., Inc.
("Gearon"), a Georgia corporation, and J. Michael Gearon, Jr., the principal
stockholder of Gearon, pursuant to which Gearon will merge with and into ATSI
(the "Gearon Merger"). Pursuant to the Gearon Merger Agreement, ATS will issue
an aggregate of approximately 5.333 million shares of ATS Class A Common Stock
and approximately $32.0 million in cash for an aggregate agreed upon
consideration of approximately $80.0 million. Consummation of the transaction is
also conditioned on, among other things, the expiration or earlier termination
of the HSR Act waiting period and is expected to occur in January 1998.
For more information, see the Gearon Merger Agreement, which is
attached herewith as Exhibit 2.2, and the ARS press release, dated December 3,
1997, which is attached herewith as Exhibit 99.2.
<PAGE>
3. On September 19, 1997, ARS, CBS Corporation (formerly Westinghouse Electric
Corporation ("CBS")) and R Acquisition Corp. ("CBS Sub") entered into an
Agreement and Plan of Merger (the "Original Merger Agreement") pursuant to which
CBS Sub would be merged with and into ARS and ARS will become a subsidiary of
CBS (the "CBS Merger"). As a condition of the Original Merger Agreement, prior
to the effective time of the CBS Merger (the "Effective Time"), ATS, which owns
and operates ARS's communications sites business, would be separated from ARS
and distributed (the "Tower Separation") to the holders of Class A Common Stock,
$.01 par value per share, Class B Common Stock, $.01 par value per share, and
Class C Common Stock, $.01 par value per share, of ARS (collectively, the "ARS
Common Stock"). At the Effective Time, the holders of ARS Common Stock would,
pursuant to the terms of the Original Merger Agreement, be entitled to receive
$44.0 in cash per share of ARS Common Stock for, in effect, their interest in
ARS's radio business.
On December 18, 1997, ARS, CBS and CBS Sub entered into an Amended and
Restated Agreement and Plan of Merger (the "Amended Agreement") to provide that
the Tower Separation may be effectuated (i) through the CBS Merger or (ii) at
ARS' election, if the CBS Merger has not been consummated by May 31, 1998,
through the merger (the "Tower Merger") of ATS Merger Corporation, a newly
formed wholly-owned subsidiary of ARS ("ATS Merger"), with and into ARS,
pursuant to the Agreement and Plan of Merger by and between ARS and ATS Merger,
dated as of December 18, 1997, which is attached as Exhibit D to the Amended
Agreement. If the Tower Separation is effectuated through the CBS Merger, at the
Effective Time, each holder of ARS Common Stock shall be entitled to receive per
share (i) $44.0 in cash and (ii) one share of ATS Common Stock of the same class
as the class of ARS Common Stock surrendered. If the Tower Separation is
effectuated through the Tower Merger, ARS will redeem, at the effective time of
the Tower Merger (the "Tower Merger Effective Time"), a portion of ARS Common
Stock in exchange for all of the shares of ATS Common Stock which would
otherwise have been distributed to the holders of ARS Common Stock as part of
the CBS Merger. In such event, the amount of cash to be received per share of
ARS Common Stock pursuant to the CBS Merger would be proportionately increased
so that each holder of ARS Common Stock will receive pursuant to the CBS Merger
the same amount of cash he or she would have received if the Tower Merger had
not been consummated (assuming no disposition by such holder of shares of ARS
Common Stock between the Tower Merger Effective Time and the Effective Time).
The provisions with respect to the effectuation of the Tower Separation through
the CBS Merger or the Tower Merger were added for two reasons: (i) to facilitate
consummation of the ATC Merger (in the event the CBS Merger has not been
consummated by May 31, 1998, which is the termination date of the ATC Merger
Agreement) and (ii) to increase the likelihood that such separation would be
treated as capital gains for tax purposes. For more information, see Exhibit 2.3
hereto.
As a result of the request of one of the holders of ARS Common Stock,
which was aware of the tax benefit to holders of ARS Common Stock of the
provisions in the Amended Agreement, holders of shares of ARS Common Stock
representing a majority of the voting power of the shares of the ARS Common
Stock entitled to vote with respect to such matters executed and delivered on
December 19, 1997 written consents approving and adopting the Amended Agreement
and the Tower Merger Agreement and approving the CBS Merger and the Tower
Merger, each on the respective terms set forth therein and in accordance with
<PAGE>
Delaware General Corporation Law (the "DGCL"). Accordingly, no further
stockholder approval is required and, therefore, ARS will not hold a
stockholder's meeting and will not seek stockholder proxies with respect to the
Amended Agreement or the Tower Merger Agreement.
On December 19, 1997, ARS, CBS and CBS Sub executed an amendment (the
"First Amendment") to the Amended Agreement reflecting approval and adoption by
the holders of ARS Common Stock of the Amended Agreement and approval of the CBS
Merger, changing all references to the term "Proxy Statement" to "Information
Statement" and to the term "Tower Proxy Statement" to "Tower Information
Statement", deleting the requirements of meetings of ARS common stockholders to
approve and adopt the Amended Agreement and the Tower Merger Agreement and
approve the transactions contemplated by each of them, and acknowledging that
the Amended Agreement amended and restated the Original Merger Agreement. The
amendment also contained a representation and warranty of ARS to the effect that
the stockholder consents constituted the required vote under the DGCL.
For more information, see Exhibit 2.4.
The foregoing descriptions of the ATC Merger Agreement, the Gearon
Merger Agreement, the Amended Agreement, the First Amendment, and the Tower
Merger Agreement do not purport to be complete and are qualified in their
entirety by the copies of the foregoing agreements which are attached hereto as
Exhibits.
Item 7. Financial Statements and Exhibits
(c). Exhibits
Exhibit 2.1 - Agreement and Plan of Merger, dated as of
December 12, 1997, by and between American Tower
Systems Corporation, a Delaware corporation, and
American Tower Corporation, a Delaware corporation.
(Schedules and Exhibits omitted).
Exhibit 2.2 - Agreement and Plan of Merger, dated as of
November 21, 1997, by and among American Tower
Systems Corporation, a Delaware corporation, American
Tower Systems (Delaware), Inc., a Delaware
corporation, Gearon & Co., Inc., a Georgia
corporation, and J. Michael Gearon, Jr. (Schedules
and Exhibits omitted).
Exhibit 2.3 - Amended and Restated Agreement and Plan of
Merger, dated as of December 18, 1997, by and among
American Radio Systems Corporation, a Delaware
Corporation, CBS Corporation (formerly, Westinghouse
Electric Corporation), a Pennsylvania corporation,
and R Acquisition Corp., a Delaware corporation
(Schedule and Exhibits omitted, except for Exhibit
D).
Exhibit 2.4 - First Amendment, dated December 19, 1997, to
Amended and Restated Agreement, dated December 18,
1997 by and among American Radio Systems Corporation,
a Delaware Corporation, CBS
<PAGE>
Corporation (formerly, Westinghouse Electric
Corporation), a Pennsylvania corporation, and R
Acquisition Corp., a Delaware corporation. (Schedules
and Exhibits omitted).
Exhibit 99.1 - Press Release, dated as of December 15, 1997.
Exhibit 99.2 - Press Release, dated as of December 3, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN RADIO SYSTEMS
CORPORATION
(Registrant)
Date: December 23, 1997 By: /s/ Justin D. Benincasa
Name: Justin D. Benincasa
Title: Vice President and Corporate Controller
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
By and Between
AMERICAN TOWER SYSTEMS CORPORATION
and
AMERICAN TOWER CORPORATION
Dated as of
DECEMBER 12, 1997
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C>
ARTICLE 1
DEFINED TERMS............................................................................................1
ARTICLE 2
THE MERGER...............................................................................................2
2.1 The Merger.............................................................................2
2.2 Closing................................................................................2
2.3 Effective Time.........................................................................2
2.4 Effect of the Merger...................................................................2
2.5 Certificate of Incorporation...........................................................2
2.6 Bylaws.................................................................................2
2.7 Directors and Officers.................................................................2
ARTICLE 3
CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES...........................................................3
3.1 Conversion of Capital Stock............................................................3
3.2 Surrender of Certificates; Payment of Merger Consideration and
Preferred Stock Merger Consideration...................................................4
3.3 Stock Transfer Books...................................................................4
3.4 Dissenting Shares......................................................................5
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF ATC ...................................................................5
4.1 Organization and Business; Power and Authority; Effect of Transaction..................5
4.2 Financial and Other Information. .....................................................7
4.3 Material Statements and Omissions; Absence of Events...................................7
4.4 Title to Properties; Leases............................................................8
4.5 Compliance with Private Authorizations.................................................9
4.6 Compliance with Governmental Authorizations and Applicable Law.........................9
4.7 Intangible Assets......................................................................9
4.8 Related Transactions..................................................................10
4.9 Insurance.............................................................................10
4.10 Tax Matters. ........................................................................10
4.11 Employee Retirement Income Security Act of 1974.......................................10
4.12 Absence of Sensitive Payments.........................................................12
4.13 Bank Accounts, Etc....................................................................12
4.14 Employment Arrangements...............................................................13
4.15 Material Agreements...................................................................13
4.16 Ordinary Course of Business...........................................................13
4.17 Material and Adverse Restrictions.....................................................14
4.18 Broker or Finder......................................................................15
4.19 Solvency..............................................................................15
4.20 Environmental Matters.................................................................15
4.21 Capital Stock.........................................................................16
<PAGE>
4.22 State Takeover Statutes...............................................................16
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF ATS...................................................................16
5.1 Organization and Business; Power and Authority; Effect of Transaction.................16
5.2 Financial and Other Information. ....................................................18
5.3 Material Statements and Omissions; Absence of Events..................................18
5.4 Title to Properties; Leases...........................................................18
5.5 Compliance with Private Authorizations................................................19
5.6 Compliance with Governmental Authorizations and Applicable Law........................20
5.7 Intangible Assets.....................................................................20
5.8 Related Transactions..................................................................20
5.9 Insurance.............................................................................21
5.10 Tax Matters. ........................................................................21
5.11 Employee Retirement Income Security Act of 1974.......................................21
5.12 Absence of Sensitive Payments.........................................................23
5.13 Employment Arrangements...............................................................24
5.14 Material Agreements...................................................................24
5.15 Ordinary Course of Business...........................................................24
5.16 Material and Adverse Restrictions.....................................................25
5.17 Broker or Finder......................................................................26
5.18 Solvency..............................................................................26
5.19 Environmental Matters.................................................................26
5.20 Capital Stock.........................................................................27
5.21 State Takeover Statutes...............................................................27
5.22 ATS Private Placement.................................................................27
5.23 ARS Organization and Business; Power and Authority; Effect of Transaction.............27
ARTICLE 6
COVENANTS...............................................................................................29
6.1 Access to Information; Confidentiality................................................29
6.2 Agreement to Cooperate. .............................................................30
6.3 Public Announcements..................................................................31
6.4 Notification of Certain Matters.......................................................31
6.5 No Solicitation.......................................................................31
6.6 Conduct of Business by ATS Pending the Merger.........................................32
6.7 Conduct of Business by ATC Pending the Merger.........................................34
6.8 Directors', Officers' and Employees' Indemnification and Insurance....................36
6.9 ATC Employees and Benefit Plans.......................................................37
6.10 ATC Stock Options.....................................................................38
6.11 ATS Voting Agreement. ...............................................................39
6.13 Registration Statement and Proxy/Information Statement. .............................39
6.14 Listing of ATS Class A Common Stock...................................................40
6.15 Solicitation of Employees.............................................................40
6.16 Additional Tax Matters................................................................40
6.17 ATS Registration Rights Agreement.....................................................41
6.18 Charter Amendment.....................................................................41
ii
<PAGE>
6.19 Conversion of Class B Common Stock....................................................41
6.20 ATS Separation Agreement..............................................................41
6.21 CBS Merger or Tower Distribution Related Actions......................................41
6.22 Efforts Regarding Pending Transactions................................................41
6.23 Certain Closing Certificates..........................................................41
6.25 Issue of ATS Class B Common Stock.....................................................42
6.26 Election of ATS Directors.............................................................42
ARTICLE 7
CLOSING CONDITIONS......................................................................................42
7.1 Conditions to Obligations of Each Party...............................................42
7.2 Conditions to Obligations of ATS......................................................43
7.3 Conditions to Obligations of ATC. ...................................................44
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER.......................................................................45
8.1 Termination...........................................................................45
8.2 Effect of Termination.................................................................46
ARTICLE 9
GENERAL PROVISIONS......................................................................................47
9.1 Waivers; Amendments...................................................................47
9.2 Fees, Expenses and Other Payments.....................................................47
9.3 Notices...............................................................................47
9.4 Specific Performance; Other Rights and Remedies.......................................48
9.5 Severability..........................................................................48
9.6 Counterparts..........................................................................49
9.7 Section Headings......................................................................49
9.8 Governing Law.........................................................................49
9.9 Further Acts..........................................................................49
9.10 Entire Agreement......................................................................49
9.11 Assignment............................................................................50
9.12 Parties in Interest...................................................................50
9.13 Non-Survival of Representations, Warranties, Covenants and Agreements.................50
APPENDIX A: Definitions
EXHIBITS:
EXHIBIT A: Certificate of Merger (Section 2.3).
EXHIBIT B-1: Existing ATS Restated Certificate of Incorporation (Section 2.5).
EXHIBIT B-2 Principles on which to restate Existing ATS Restated Certificate of Incorporation
(Section 2.5).
EXHIBIT C: ATS Voting Agreement (Section 6.11).
EXHIBIT D: ATS Registration Rights Agreement (Section 6.17)
iii
<PAGE>
EXHIBIT E: ATC Affiliate Agreement (Section 6.24).
EXHIBIT F: Opinion of Vinson & Elkins LLP (Section 7.2(a)).
EXHIBIT G: Tax Certificate of ATC and the ATC stockholders (Section 7.2(d)).
EXHIBIT H: Opinion of Sullivan & Worcester LLP (Section 7.3(a)).
EXHIBIT I: Tax Certificate of ATS (Section 7.3(f)).
iv
</TABLE>
<PAGE>
AGREEMENT AND PLAN OF MERGER
Agreement and Plan of Merger, dated as of December 12, 1997, by and
among American Tower Systems Corporation, a Delaware corporation ("ATS"), and
American Tower Corporation, a Delaware corporation ("ATC").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of ATC and ATS have determined that
the merger (the "Merger") of ATC into ATS on the terms and conditions set forth
in this Agreement and Plan of Merger (this "Agreement") is consistent with and
in furtherance of the long-term business strategy of each, and is fair to, and
in the best interests of, ATS, ATC and the stockholders of each; and
WHEREAS, this Agreement provides that ATC shall be merged with and into
ATS, and ATS shall be the surviving corporation; and
WHEREAS, the Boards of Directors of ATC and ATS have approved and
adopted this Agreement and have directed that this Agreement be submitted to the
stockholders of ATC and ATS, respectively, for their adoption and approval; and
WHEREAS, the Board of Directors of American Radio Systems Corporation,
a Delaware corporation ("ARS"), has approved and adopted this Agreement and
approved the Merger on behalf of ARS as the sole stockholder of ATS;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained and other
valuable consideration, the receipt and adequacy whereof are hereby
acknowledged, the parties hereto hereby, intending to be legally bound,
represent, warrant, covenant and agree as follows:
ARTICLE 1
DEFINED TERMS
As used herein, unless the context otherwise requires, the terms
defined in Appendix A shall have the respective meanings set forth therein.
Terms defined in the singular shall have a comparable meaning when used in the
plural, and vice versa, and the reference to any gender shall be deemed to
include all genders. Unless otherwise defined or the context otherwise clearly
requires, terms for which meanings are provided in this Agreement shall have
such meanings when used in the ATC Disclosure Schedule, the ATS Disclosure
Schedule and each Collateral Document executed pursuant hereto or thereto or
otherwise delivered pursuant hereto or thereto. References to "hereof," "herein"
or similar terms are intended to refer to the Agreement as a whole and not a
particular section, and references to "this Section" or "this Article" are
intended to refer to the entire section or article and not a particular
subsection thereof.
<PAGE>
ARTICLE 2
THE MERGER
2.1 The Merger. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the Delaware General Corporation Law
(the "DCL"), ATC shall be merged with and into ATS. As a result of the Merger,
the separate corporate existence of ATC shall cease and ATS shall continue as
the surviving corporation in the Merger (sometimes referred to, as such, as the
"Surviving Corporation").
2.2 Closing. Unless this Agreement shall have been terminated pursuant
to Section 8.1 and subject to the satisfaction or, to the extent permitted by
Applicable Law, waiver of the conditions set forth in Article 7, the closing of
the Merger (the "Closing") will take place, at 10:00 a.m., on the Closing Date,
at the offices of Sullivan & Worcester LLP, One Post Office Square, Boston,
Massachusetts 02109, on the date on which the Tower Distribution occurs (whether
by reason of the CBS Merger or otherwise), unless another date, time or place is
agreed to in writing by the parties. The date on which the Closing occurs is
herein referred to as the "Closing Date."
2.3 Effective Time. Subject to the provisions of this Agreement, as
promptly as practicable after the Closing, the parties hereto shall cause the
Merger to be consummated by filing a Certificate of Merger in the form attached
hereto as Exhibit A and made a part hereof (the "Certificate of Merger") and any
related filings required under the DCL with the Secretary of State of the State
of Delaware. The Merger shall become effective at such time as such documents
are duly filed as aforesaid, or at such later time as is specified in such
documents (the "Effective Time").
2.4 Effect of the Merger. The Merger shall have the effects provided
for under the DCL.
2.5 Certificate of Incorporation. Subject to the consummation of the
Merger, ATS shall file with the Secretary of State of the State of Delaware an
Amended and Restated Certificate of Incorporation, in the form attached hereto
as Exhibit B-1 and made a part hereof (the "ATS Existing Restated Certificate"),
as amended to incorporate the principles set forth on Exhibit B-2 and made a
part hereof, which principles will be incorporated in an Amended and Restated
Certificate of Incorporation of ATS (the "ATS Restated Certificate") and which
principles will control over any provision in the Existing ATS Restated
Certificate, which shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter changed or amended as provided therein or by
Applicable Law.
2.6 Bylaws. The bylaws of ATS in the form included as part of Section
2.5 of the ATS Disclosure Schedule modified to reflect the change of ATS' name
to "American Tower Corporation" shall be the bylaws of the Surviving Corporation
until amended in accordance with Applicable Law and the Organic Documents of
ATS.
2.7 Directors and Officers. From and after the Effective Time, until
successors are duly elected or appointed and qualified, or upon their earlier
resignation or removal, in accordance with Applicable Law and the Organic
Documents of ATS, (a) the directors of ATS at the Effective Time shall be the
directors of the Surviving Corporation and Fred. R. Lummis and Randall Mays, and
(b) the officers of ATS at the Effective Time shall be the officers of the
Surviving Corporation.
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<PAGE>
ARTICLE 3
CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
3.1 Conversion of Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of ATS or ATC or their respective
stockholders:
(a) Each share of Common Stock, par value $.01 per share, of
ATS (the "ATS Common Stock") issued and outstanding immediately prior
to the Effective Time shall remain outstanding.
(b) Each share (each, an "ATC Share" and collectively the "ATC
Shares") of Class A Common Stock, par value $.01 per share, of ATC and
Class B Common Stock, par value $.01 per share, of ATC (collectively
for both such classes, the "ATC Common Stock") issued and outstanding
immediately prior to the Effective Time (other than Dissenting Shares)
shall, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into the right to receive the number
of shares (the "Merger Consideration") of Class A Common Stock, par
value $.01 per share, of ATS (the "ATS Class A Common Stock") obtained
by dividing the Aggregate Merger Shares by the number of shares of ATC
Common Stock determined on a Fully-Diluted Basis immediately prior to
the Effective Time (the "Exchange Ratio"). The parties acknowledge that
the Exchange Ratio has been determined to give the ATC stockholders
(assuming there are no Dissenting Shares) in the aggregate shares of
ATS Class A Common Stock representing 35% of the Surviving
Corporation's outstanding common stock determined on a Fully-Diluted
Basis.
(c) Each share of ATC Common Stock owned by ATS or any of its
Subsidiaries or ATC or any of its Subsidiaries immediately prior to the
Effective Time shall automatically be canceled and extinguished without
any conversion thereof and no payment shall be made with respect
thereto.
(d) Each share of Senior Preferred Stock, par value $.01 per
share, of ATC (the "ATC Preferred Stock"), issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Merger
and without any action on the part of the holder thereof, be converted
into the right to receive cash or other immediately available funds in
the amount of $200.00 (the "Preferred Stock Merger Consideration").
In the event either the Gearon Transaction or the ATS Private Placement
has not been consummated prior to the Effective Time, the parties hereto will
negotiate in good faith to determine the net effect, if any, of the failure to
so consummate either or both of the foregoing on the enterprise value of ATS. If
the parties agree that the net effect of the failure of either or both of the
Gearon Transaction and the ATS Private Placement to occur is a reduction in the
ATS enterprise value, the parties shall also determine an appropriate adjustment
of the number of Aggregate Merger Shares so that the Aggregate Merger Shares, as
adjusted, constitute a higher percentage to reflect the relative enterprise
values of ATS and ATC. The parties shall negotiate in good faith for fifteen
(15) days following the request by either party to do so. Any mater not resolved
within such fifteen (15)-day period shall be submitted to a nationally
recognized, independent investment banking firm selected by agreement of the
parties hereto. Within five (5) days after the selection of such firm, ATC and
ATS shall each submit to such firm and the other its calculation of its proposed
adjustment, together with its methodology. The parties shall instruct such to
render a final and binding decision by selecting one of the two submitted
adjustment proposals that more fairly represents, in the opinion of such firm,
the adjustment required by reason of the enterprise reductions solely
attributable to the items set forth above. The investment banking firm shall not
have any discretion to select an adjustment other than one
-3-
<PAGE>
of the two proposed. The parties shall instruct such firm to render its decision
within fifteen (15) days after submission of the adjust. Each party shall
cooperate in all reasonable respects with such firm in making its determination.
The Termination Date shall be extended to allow for the foregoing discussions
for the later of the fifteen (15)-day period the parties negotiate in good faith
or, if they fail to reach agreement, for the period required by the investment
banking firm to render its decision.
At the Effective Time, all ATC Shares shall no longer be outstanding
and shall automatically be canceled and retired and shall cease to exist, and
certificates previously evidencing any such ATC Shares (each, a "Certificate")
shall thereafter represent the right to receive, upon the surrender of such
Certificate in accordance with the provisions of Section 3.2, the Merger
Consideration multiplied by the number of ATC Shares represented by such
Certificate, and a holder of more than one Certificate shall have the right to
receive the Merger Consideration multiplied by the number of ATC Shares
represented by all such Certificates, or, in the case of a holder of Dissenting
Shares, the right to perfect the right to receive payment for Dissenting Shares
pursuant to Section 262 of the DCL. In lieu of any such fractional shares, each
holder of ATC Common Stock who would otherwise have been entitled to receive a
fraction of a share of ATS Class A Common Stock, upon surrender of Certificates
for exchange pursuant to this Article, shall be entitled to receive a cash
payment equal to such fraction multiplied by the closing price per share of ATS
Class A Common Stock on the Nasdaq National Market ("Nasdaq") or, if not then
traded on Nasdaq, on the principal stock exchange on which the ATS Class A
Common Stock is admitted to trading, as reported by the Wall Street Journal, for
the first trading day immediately following the Effective Time, and the Merger
Consideration to which a holder is entitled shall be deemed to be such number of
shares of ATS Class A Common Stock and such cash. The holders of such
Certificates previously evidencing ATC Shares outstanding immediately prior to
the Effective Time shall cease to have any rights with respect to such ATC
Shares, except as otherwise provided herein or by Applicable Law.
At the Effective Time, all shares of ATC Preferred Stock shall no
longer be outstanding and shall automatically be canceled and retired and shall
cease to exist, and certificates previously evidencing any such shares shall
thereafter represent the right to receive, upon the surrender of certificates
representing such shares in accordance with the provisions of Section 3.2, the
Preferred Stock Merger Consideration multiplied by the number of shares of ATC
Preferred Stock represented by such certificate, and a holder of more than one
certificate shall have the right to receive the Preferred Stock Merger
Consideration multiplied by the number of ATC Preferred Stock represented by all
such certificates. The holders of such certificates previously evidencing shares
of ATC Preferred Stock outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such shares, except as otherwise
provided herein or by Applicable Law.
3.2 Surrender of Certificates; Payment of Merger Consideration and
Preferred Stock Merger Consideration. At and after the Effective Time, the
Surviving Corporation shall issue to each holder of ATC Common Stock, upon
surrender of each of his or its Certificates, a certificate of ATS Class A
Common Stock representing the Merger Consideration with respect to the ATC
Shares represented by such Certificate in accordance with the provisions of
Section 3.1, plus cash in amount sufficient to make payment for fractional
shares. In addition, the Surviving Corporation shall pay to each holder of ATC
Preferred Stock, upon surrender of his or its stock certificate evidencing
ownership of ATC Preferred Stock, in cash or immediately available funds by wire
transfer to an account or accounts designated by ATC to ATS at least two (2)
Business Days prior to the Closing, the sum of $200.00 multiplied by the number
of shares of ATC Preferred Stock evidenced by such certificate. In the event any
ATC stockholder has not delivered the certificate referred to in Section 6.28,
the Surviving Corporation shall be entitled to withhold from delivery
certificates for the ATS Class A Common Stock to which such stockholder would
otherwise be entitled, a number of shares of ATS
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Class A Common Stock required to enable the Surviving Corporation to comply with
the applicable provisions of the Code.
3.3 Stock Transfer Books. At the Effective Time, the stock transfer
books of ATC shall be closed, and there shall be no further transfer of shares
of ATC Common Stock or ATC Preferred Stock thereafter on the records of ATC. Any
Certificates representing ATC Shares or certificates representing shares of ATC
Preferred Stock presented after the Effective Time for transfer shall be
canceled and exchanged for the amount to which the ATC Shares or shares of ATC
Preferred Stock represented thereby shall be entitled pursuant to Sections 3.1
and 3.2.
3.4 Dissenting Shares.
(a) Notwithstanding any other provision of this Agreement to
the contrary, shares of ATC Common Stock that are outstanding
immediately prior to the Effective Time and which are held by ATC
stockholders who shall have not voted in favor of the Merger or
consented thereto in writing and who shall be entitled to and shall
have demanded properly in writing appraisal rights for such shares of
ATC Common Stock in accordance with Section 262 of the DCL and who
shall not have withdrawn such demand or otherwise have forfeited
appraisal rights (collectively, the "Dissenting Shares"), shall not be
converted into or represent the right to receive the Merger
Consideration payable in respect of each share of ATC Common Stock
represented thereby. Such ATC stockholders shall be entitled to receive
payment of the appraised value of such shares of ATC Common Stock held
by them in accordance with the provisions of the DCL; provided,
however, that all Dissenting Shares held by ATC stockholders who shall
have failed to perfect or who effectively shall have withdrawn,
forfeited or lost their appraisal rights with respect to such shares of
ATC Common Stock under the DCL shall thereupon be deemed to have been
converted into and to have become exchangeable for, as of the Effective
Time, the right to receive, without any interest thereon, the Merger
Consideration upon surrender, in the manner provided in Section 3.2, of
the Certificates with respect to such shares.
(b) ATC shall give ATS prompt notice of any demands for
appraisal rights received by it, withdrawals of such demands, and any
other instruments served pursuant to the DCL and received by ATC and
relating thereto. ATC shall give ATS the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal
rights under the provisions of the DCL. ATC shall not, except with the
prior written consent of ATS, make any payment with respect to any
demands for appraisal rights, or offer to settle, or settle, any such
demands.
3.5 Option Securities and Convertible Securities; Payment Rights. At
the Effective Time, subject to the provisions of Section 6.10, each outstanding
Option Security and each Convertible Security of ATC, if any, whether or not
then exercisable for or convertible into ATC Shares or other ATC securities,
outstanding immediately prior to the Effective Time, shall be canceled and
retired and shall cease to exist, and the holder thereof shall not be entitled
to receive any consideration therefor.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF ATC
ATC hereby represents and warrants to ATS as follows (it being
understood and agreed by the parties that, except as the context otherwise
requires, the representations and warranties of ATC set forth in this Article
shall apply to each of its Subsidiaries with the same force and effect as though
each of them were named in each Section hereof):
4.1 Organization and Business; Power and Authority; Effect of
Transaction.
(a) ATC is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization,
has all requisite power and authority (corporate and other) to own or
hold under lease its properties and to conduct its business as now
conducted and is duly qualified and in good standing as a foreign
corporation in each other jurisdiction (as shown on Section 4.1(a) of
the ATC Disclosure Schedule) in which the character of the property
owned or leased by it or the nature of its business or operations
requires such qualification, except for such qualifications the failure
of which to obtain, individually or in the aggregate, would not have a
Material Adverse Effect on ATC.
(b) ATC has all requisite power and authority (corporate and
other) and has in full force and effect all Governmental Authorizations
and Private Authorizations necessary to enable it to execute and
deliver, and to perform its obligations under, this Agreement and each
Collateral Document executed or required to be executed by it pursuant
hereto or thereto and to consummate the Transactions to which ATC is a
party; and the execution, delivery and performance of this Agreement
and each Collateral Document executed or required to be executed by it
pursuant hereto or thereto have been duly authorized by all requisite
corporate or other action on the part of ATC, other than the approval
of the stockholders of ATC, and no other corporate proceedings on the
part of ATC are necessary to authorize this Agreement or the
transactions contemplated hereby or to consummate the Merger or the
other transactions so contemplated (other than, with respect to the
Merger, the ATC Required Vote). This Agreement has been duly executed
and delivered by ATC and constitutes, and each Collateral Document
executed or required to be executed by it pursuant hereto or thereto or
to consummate the Transactions when executed and delivered by ATC will
constitute, legal, valid and binding obligations of ATC, enforceable in
accordance with their respective terms, except as such enforceability
may be subject to bankruptcy, moratorium, insolvency, reorganization,
arrangement, voidable preference, fraudulent conveyance and other
similar laws relating to or affecting the rights of creditors and
except as the same may be subject to the effect of general principles
of equity. The provisions of Section 203 of the DCL will not apply to
ATC by reason of this Agreement or the Merger. As of the date hereof,
the Board of Directors of ATC, at a meeting duly called and held at
which a quorum was present throughout, has approved the Merger and this
Agreement, and has recommended that the ATC stockholders approve and
adopt this Agreement and the transactions contemplated hereby,
including without limitation the Merger and the ATC Voting Agreement
and the acquisition by ATS of the "beneficial" ownership contemplated
thereby.
(c) Except as set forth in Section 4.1(c) of the ATC
Disclosure Schedule, neither the execution and delivery by ATC of this
Agreement or any Collateral Document executed or required to be
executed by it pursuant hereto or thereto, nor the consummation of the
Transactions by ATC, nor compliance with the terms, conditions and
provisions hereof or thereof by ATC:
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(i) will conflict with, or result in a breach or
violation of, or constitute a default under, any Organic
Document of ATC or any Applicable Law, or will conflict with,
or result in a breach or violation of, or constitute a default
under, or permit the acceleration of any obligation or
liability in, or but for any requirement of giving of notice
or passage of time or both would constitute such a conflict
with, breach or violation of, or default under, or permit any
such acceleration in, any Material Agreement of ATC; or
(ii) will require ATC to make or obtain any
Governmental Authorization, Governmental Filing or Private
Authorization including without limitation under the FCA,
except as required by the Hart-Scott-Rodino Act and other than
any of the foregoing that have been obtained.
(d) Except as set forth in Section 4.1(d) of the ATC
Disclosure Schedule, ATC does not have any Subsidiaries, each of which
is (i) wholly-owned unless noted otherwise in Section 4.1(d) of the ATC
Disclosure Schedule, (ii) a corporation which is duly organized,
validly existing and in good standing under the laws of the respective
state of incorporation set forth opposite its name on Section 4.1(d) of
the ATC Disclosure Schedule, and (iii) duly qualified and in good
standing as a foreign corporation in each other jurisdiction (as shown
on Section 4.1(d) of the ATC Disclosure Schedule) in which the
character of the property owned or leased by it or the nature of its
business or operations requires such qualification, with full power and
authority (corporate and other) to carry on the business in which it is
engaged, except for such qualifications the failure of which to obtain,
individually or in the aggregate, would not have a Material Adverse
Effect on ATC. ATC owns, directly or indirectly, all of the outstanding
capital stock and equity interests (as shown in Section 4.1(d) of the
ATC Disclosure Schedule) of each Subsidiary, free and clear of all
Liens (except for Permitted Liens or except as described in the notes
to the ATC Financial Statements or set forth in Section 4.1(d) of the
ATC Disclosure Schedule), and all such stock or other equity interests
has been duly authorized and validly issued and is fully paid and
nonassessable. There are no outstanding Option Securities or
Convertible Securities, or agreements or understandings of any nature
whatsoever, relating to the authorized and unissued or outstanding
capital stock or equity interests of any Subsidiary of ATC.
4.2 Financial and Other Information. The financial statements of ATC,
furnished by ATC, and included in the ATS Information Statement (the "ATC
Financial Statements"), including in each case the notes thereto, have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby, except as otherwise noted therein or as set forth in
Section 4.2 of the ATC Disclosure Schedule, and fairly present in all material
respects the financial condition and the results of operations and cash flow of
ATC, on the bases therein stated, as of the respective dates thereof, and for
the respective periods covered thereby subject, in the case of unaudited
financial statements, to normal nonmaterial year-end audit adjustments and
accruals.
4.3 Material Statements and Omissions; Absence of Events. Neither any
representation or warranty made by ATC contained in this Agreement or any
certificate, document or other instrument or other information furnished or to
be furnished by ATC pursuant to the provisions hereof (including without
limitation information with respect to ATC furnished for inclusion in the ATS
Prospectus and the ATS Registration Statement) nor the ATC Disclosure Schedule
or the ATC Business Description contains or will contain any untrue statement of
a material fact or omits or will omit to state any material fact required to
make any statement contained herein or therein, in light of the circumstances
under which they were made, not
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misleading; provided, however, that to the extent that any such information
contains any financial projections, ATC represents and warrants only that such
projections have been prepared in good faith on the basis of the ATC Financial
Statements and other information and assumptions which ATC believes to be
reasonable. Since the date of the most recent financial statements constituting
a part of the ATC Financial Statements, except to the extent specifically
described in Section 4.3 of the ATC Disclosure Schedule, there has been no
change in ATC which has had a Material Adverse Effect on ATC. There is no Event
known to ATC which has had, or (so far as ATC can now reasonably foresee) is
likely to have, a Material Adverse Effect on ATC, except to the extent
specifically described in Section 4.3 of the ATC Disclosure Schedule and except
for matters affecting the tower rental, ownership and construction industry
generally, including without limitation competition, regulation and resources or
events arising out of the execution or public announcement of this Agreement.
4.4 Title to Properties; Leases.
(a) ATC has, to ATC's knowledge, good and indefeasible title
to all of its real property (other than leasehold real property) and
good title to all of its other assets (other than real property),
tangible and intangible (the "ATC Assets"); all of such real property
and other assets are so owned, in each case, free and clear of all
Liens, except (i) Permitted Liens, and (ii) Liens described in the
notes to the ATC Financial Statements or set forth on Section 4.4(a) of
the ATC Disclosure Schedule. Except for financing statements evidencing
Liens referred to in the preceding sentence, no financing statements
under the Uniform Commercial Code and no other filing which names ATC
as debtor or which covers or purports to cover any of the ATC Assets is
on file in any state or other jurisdiction, and ATC has not signed or
agreed to sign any such financing statement or filing or any agreement
authorizing any secured party thereunder to file any such financing
statement or filing. Except as disclosed in Section 4.4(a) of the ATC
Disclosure Schedule, all improvements on the real property owned or
leased by ATC are, to ATC's knowledge, in compliance with applicable
zoning, wetlands and land use laws, ordinances and regulations and
applicable title covenants, conditions, restrictions and reservations
in all respects necessary to conduct the operations as presently
conducted, except for any instances of non-compliance which do not and
will not in the aggregate have a Material Adverse Effect on ATC. Except
as described in the notes to the ATC Financial Statements or disclosed
in Section 4.4(a) of the ATC Disclosure Statement, all such
improvements comply with all Applicable Laws, ATC Governmental
Authorizations and ATC Private Authorizations, except where
noncompliance is not reasonably likely to have a Material Adverse
Effect on ATC. There is no pending or, to ATC's knowledge, threatened
or contemplated action to take by eminent domain or otherwise to
condemn any part of any real property constituting a material portion
of the real property owned by ATC or, to ATC's knowledge, any real
property leased by ATC. Except as described in the notes to the ATC
Financial Statements or set forth in Section 4.4(a) of the ATC
Disclosure Schedule, such real property (other than land), fixtures,
fixed assets and other material items of personal property, including
equipment, have, in ATC's reasonable business judgment, been maintained
in a manner consistent with customary industry practices and currently
permit the business of ATC (the "ATC Business") to be operated in all
material respects in accordance with the terms and conditions of all
Applicable Laws, ATC Governmental Authorizations and ATC Private
Authorizations.
(b) Each Lease or other occupancy or other agreement under
which ATC holds real or personal property constituting a part of the
ATC Assets has been duly authorized, executed and delivered by or
assigned to ATC and, to ATC's knowledge, each of the other parties
thereto, and is a legal, valid and binding obligation of ATC, and, to
ATC's knowledge, each of the other parties thereto, enforceable in
accordance with its terms, except as such enforceability may be limited
by
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bankruptcy, moratorium, insolvency and similar laws affecting the
rights and remedies of creditors and obligations of debtors generally
and by general principles of equity , and except for such exceptions to
the foregoing as, individually or in the aggregate, have not had and
will not have any Material Adverse Effect on ATC. ATC has a valid
leasehold interest in and enjoys peaceful and undisturbed possession
under all Leases pursuant to which it holds any such real property or
tangible personal property, subject to the terms of each such Lease and
Applicable Law and except for such exceptions to the foregoing as,
individually or in the aggregate, have not had and will not have any
Material Adverse Effect on ATC. All of such Leases are valid and
subsisting and in full force and effect, and neither ATC nor, to ATC's
knowledge, any other party thereto, is in material default in the
performance, observance or fulfillment of any obligation, covenant or
condition contained in any such Lease, except for such exceptions to
the foregoing as, individually or in the aggregate, have not had and
will not have any Material Adverse Effect on ATC.
4.5 Compliance with Private Authorizations. ATC has obtained all
Private Authorizations (collectively, the "ATC Private Authorizations") which
are necessary for the ownership or operation of the ATC Assets or the conduct of
the ATC Business which, if not obtained and maintained, could, individually or
in the aggregate, be reasonably likely to have a Material Adverse Effect on ATC.
All of the ATC Private Authorizations are valid and in good standing and are in
full force and effect, except for such exceptions as are not reasonably likely
to have a Material Adverse Effect on ATC. ATC is not in breach or violation of,
or in default in the performance, observance or fulfillment of, any ATC Private
Authorization, and no Event exists or has occurred, which constitutes, or but
for any requirement of giving of notice or passage of time or both would
constitute, such a breach, violation or default, under any ATC Private
Authorization, except for such defaults, breaches or violations as do not and
are not reasonably likely to have in the aggregate a Material Adverse Effect on
ATC. No ATC Private Authorization is the subject of any pending or, to ATC's
knowledge, threatened attack, revocation or termination, except for such
exceptions as are not reasonably likely to have a Material Adverse Effect on
ATC.
4.6 Compliance with Governmental Authorizations and Applicable Law.
(a) ATC has obtained all Governmental Authorizations
(collectively, the "ATC Governmental Authorizations") which are
necessary for the ownership or operation of the ATC Assets or the
conduct of the ATC Business as now conducted and which, if not obtained
and maintained, would, individually or in the aggregate, have any
Material Adverse Effect on ATC. None of the ATC Governmental
Authorizations is subject to any restriction or condition which would
limit in a material respect the ownership or operations of the ATC
Assets or the conduct of the ATC Business as currently conducted,
except for restrictions and conditions generally applicable to ATC
Governmental Authorizations of such type. The ATC Governmental
Authorizations are valid and in good standing, are in full force and
effect and are not impaired by any act or omission of ATC or its
officers, directors, employees or agents, and the ownership or
operation of the ATC Assets or the conduct of the ATC Business are in
accordance with the ATC Governmental Authorizations, except for such
exceptions to the foregoing as, individually or in the aggregate, have
not had and will not have any Material Adverse Effect on ATC. All
material reports, forms and statements required to be filed by ATC with
all Authorities with respect to the ATC Business have been filed and
are true, complete and accurate in all material respects. No ATC
Governmental Authorization is the subject of any pending or, to ATC's
knowledge, threatened challenge or proceeding to revoke or terminate
any ATC Governmental Authorization which, if revoked or terminated,
would have a Material Adverse Effect on ATC.
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(b) ATC is in compliance with all Applicable Laws, except
where such noncompliance, individually or in the aggregate, has not had
and is not reasonably like to have a Material Adverse Effect on ATC.
Except as set forth in Section 4.6(b) of the ATC Disclosure Schedule,
there are no Legal Actions of any kind pending or, to the knowledge of
ATC, threatened at law, in equity or before any Authority against ATC.
4.7 Intangible Assets. Except as set forth in Section 4.7 of the ATC
Disclosure Schedule, no Intangible Assets (except ATC Governmental
Authorizations and ATC Private Authorizations) are required for the ownership or
operation of the ATC Assets or the conduct of the ATC Business as currently
owned, operated and conducted, except for such exceptions to the foregoing as,
individually or in the aggregate, have not had and will not have any Material
Adverse Effect on ATC. ATC does not, to its knowledge, wrongfully infringe upon
or unlawfully use any Intangible Assets owned or claimed by another, and ATC has
not received any notice of any claim or infringement relating to any such
Intangible Asset, except from ATS and except for such exceptions to the
foregoing as, individually or in the aggregate, have not had and will not have
any Material Adverse Effect on ATC.
4.8 Related Transactions. ATC is not a party or subject to any
Contractual Obligation relating to the ownership or operation of the ATC Assets
or the conduct of the ATC Business between ATC and any of its officers,
directors or stockholders or, to the knowledge of ATC, any Affiliate of any
thereof, including without limitation any Contractual Obligation providing for
the furnishing of services to or by, providing for rental of property, real,
personal or mixed, to or from, or providing for the lending or borrowing of
money to or from or otherwise requiring payments to or from, any such Person,
other than (i) Employment Arrangements listed or described in Section 4.14 of
the ATC Disclosure Schedule, (ii) Contractual Obligations between ATC and any of
its directors, stockholders or officers or any Affiliate of any of the
foregoing, which will be terminated, at no cost or expense to ATC, prior to the
Closing, (iii) as specifically set forth in Section 4.8 of the ATC Disclosure
Schedule, or (iv) transactions related to payments that are a part of the $5.0
million allowance described in Section 6.0(a)(iv)(A).
4.9 Insurance. ATC maintains, with respect to the ATC Assets and the
ATC Business, policies of fire and extended coverage and casualty, liability and
other forms of insurance in such amounts and against such risks and losses as
are customary for companies engaged in similar businesses.
4.10 Tax Matters.
(a) ATC has in accordance with all Applicable Laws filed all
Tax Returns which are required to be filed, and has paid, or made
adequate provision for the payment of, all Taxes which have become due
and payable pursuant to said Tax Returns and all other governmental
charges and assessments received to date other than those Taxes being
contested in good faith for which adequate provision has been made on
the most recent balance sheet forming part of ATC Financial Statements.
The Tax Returns of ATC have been prepared in all material respects in
accordance with all Applicable Laws. All Taxes which ATC is required by
law to withhold and collect have been duly withheld and collected, and
have been paid over, in a timely manner, to the proper Authorities to
the extent due and payable. ATC has not executed any waiver to extend,
or otherwise taken or failed to take any action that would have the
effect of extending, the applicable statute of limitations in respect
of any Tax liabilities of ATC for the fiscal years prior to and
including the most recent fiscal year. ATC is not a "consenting
corporation" within the meaning of Section 341(f) of the Code. ATC has
at all times been taxable as a Subchapter C corporation under the Code,
and has never been a member of any
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consolidated group for Tax purposes, except as otherwise set forth in
Section 4.10(a) of the ATC Disclosure Schedule.
(b) Federal and state income Tax Returns of ATC have not been
examined by the IRS or applicable state Authority, and ATC has not been
notified of any proposed examination, except as shown in Section
4.10(b) of the ATC Disclosure Schedule.
(c) ATC is not a party to any tax sharing agreement or
arrangement with any other Person.
(d) All of the ATC stockholders are "U.S. persons" within the
meaning of Section 7701(a)(30) of the Code.
4.11 Employee Retirement Income Security Act of 1974.
(a) ATC (which for purposes of this Section shall include any
ERISA Affiliate of ATC) currently sponsors, maintains and contributes
only to the Plans and Benefit Arrangements set forth in Section 4.11(a)
of the ATC Disclosure Schedule. ATC has delivered or made available to
ATS true, complete and correct copies of (i) each Plan and Benefit
Arrangement (or, in the case of any unwritten Plans or Benefit
Arrangements, reasonable descriptions thereof), (ii) the two most
recent annual reports on Form 5500 (including all schedules and
attachments thereto) filed with the Internal Revenue Service with
respect to each Plan (if any such report was required by Applicable
Law), (iii) the most recent summary plan description (or similar
document) for each Plan for which such a summary plan description is
required by Applicable Law or was otherwise provided to plan
participants or beneficiaries, and (iv) each trust agreement and
insurance or annuity contract or other funding or financing arrangement
relating to any Plan. To the knowledge of ATC, each such Form 5500 and
each such summary plan description (or similar document) does not, as
of the date hereof, contain any material misstatements. ATC does not
contribute to or have an obligation to contribute to, and has not at
any time within six (6) years prior to the date of this Agreement
contributed to or had an obligation to contribute to, and no Plan
listed in Section 4.11(a) of the ATC Disclosure Schedule is, (i) an
employee pension benefit plan within the meaning of Section 3(2) of
ERISA, (ii) a Multiemployer Plan, or (iii) a Plan subject to Section
412 of the Code, Section 302 of ERISA or Title IV of ERISA. ATC has no
actual or potential liability under Title IV of ERISA. ATC does not
maintain any Plan that provides for post-retirement medical or life
insurance benefits, and ATC does not have any obligation or liability
with respect to any such Plan previously maintained by ATC, except as
the provisions of COBRA may apply to any former employees of ATC.
Except as set forth in Section 4.11(a) of the ATC Disclosure Schedule,
as to all Plans and Benefit Arrangements listed in Section 4.11(a) of
the ATC Disclosure Schedule:
(i) all such Plans and Benefit Arrangements comply
and have been administered in form and in operation in
accordance with their respective terms, and with all
Applicable Laws, in all material respects, and ATC has not
received any notice from any Authority disputing or
investigating such compliance;
(ii) none of the assets of any such Plan are invested
in employer securities or employer real property;
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(iii) there are no Claims (other than routine Claims
for benefits or actions seeking qualified domestic relations
orders) pending or, to ATC's knowledge, threatened involving
such Plans or the assets of such Plans, and, to ATC's
knowledge, no facts exist which are reasonably likely to give
rise to any such Claims (other than routine Claims for
benefits or actions seeking qualified domestic relations
orders);
(iv) all material contributions to, and material
payments from, the Plans and Benefit Arrangements that may
have been required to be made in accordance with the terms of
the Plans and Benefit Arrangements, and any applicable
collective bargaining agreement, have been made. All such
contributions to, and payments from, the Plans and Benefit
Arrangements, except those payments to be made from a trust
qualified under Section 401(a) of the Code, for any period
ending before the Closing Date that are not yet, but will be,
required to be made, will be properly accrued and reflected on
the financial books and records of ATC;
(v) No act, omission or transaction has occurred
which would result in imposition on ATC of (A) any breach of
fiduciary duty liability damages under Section 409 of ERISA,
(B) a civil penalty assessed pursuant to subsections (c), (i)
or (l) of Section 502 of ERISA or (C) a tax imposed pursuant
to Chapter 43 of Subtitle D of the Code;
(vi) ATC has not incurred any material liability to a
Plan (other than for contributions not yet due) which
liability has not been fully paid or accrued for payment as of
the date hereof;
(vii) except as otherwise contemplated by this
Agreement or the ATC Disclosure Schedule, no current or former
employee of ATC will be entitled to any additional benefits or
any acceleration of the time of payment or vesting of any
benefits under any Plan or Benefit Arrangement as a result of
the transactions contemplated by this Agreement;
(viii) no compensation payable by ATC to any of its
employees under any existing Plan, Benefit Arrangement
(including by reason of the transactions contemplated hereby)
will be subject to disallowance under Section 162(m) of the
Code;
(ix) any amount that could be received (whether in
cash or property or the vesting of property) as a result of
any of the transactions contemplated by this Agreement by any
employee, officer, director or independent contractor of ATC
who is a "disqualified individual" (as such term is defined in
proposed Treasury Regulation Section 1.280G-1) under any
employment arrangement would not be characterized as an
"excess parachute payment" (as such term is defined in Section
280G(b)(1) of the Code), except for any amount that is
approved by the stockholders of ATC on or before the Closing
Date in the manner provided in Section 280G(b)(5) of the Code;
and
(x) there are no outstanding options (or contractual
obligations to issue options) to acquire ATC Common Stock or
other ATC securities other than options held by employees or
directors of ATC and issued under Benefit Arrangements (the
aggregate number of which are as set forth in Section 4.11(a)
of the ATC Disclosure Schedule).
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(b) The execution, delivery and performance by ATC of this
Agreement and the Collateral Documents executed or required to be
executed by ATC pursuant hereto and thereto will not involve any
prohibited transaction within the meaning of ERISA or Section 4975 of
the Code with respect to any Plan listed in Section 4.11(a) of the ATC
Disclosure Schedule.
4.12 Absence of Sensitive Payments. Neither ATC nor, to ATC's
knowledge, any of its officers, directors, employees, agents or other
representatives, has with respect to the ATC Assets or the ATC Business (a) made
any contributions, payments or gifts to or for the private use of any
governmental official, employee or agent where either the payment or the purpose
of such contribution, payment or gift is illegal under the laws of the United
States or the jurisdiction in which made or (b) established or maintained any
unrecorded fund or asset for any illegal purpose or made any false or artificial
entries on its books.
4.13 Bank Accounts, Etc. Section 4.13 of the ATC Disclosure Schedule
contains a true, accurate and complete list as of the date hereof of all banks,
trust companies, savings and loan associations and brokerage firms in which ATC
has an account or a safe deposit box and the names of all Persons authorized to
draw thereon, to have access thereto, or to authorize transactions therein, the
names of all Persons, if any, holding valid and subsisting powers of attorney
from ATC and a summary statement as to the terms thereof.
4.14 Employment Arrangements. Section 4.14 of the ATC Disclosure
Schedule contains a true, accurate and complete list of all employees of ATC and
its Subsidiaries as of the date of this Agreement (the "ATC Employees"),
together with each such employee's title or the capacity in which he or she is
employed and each such employee's compensation. ATC has no obligation or
liability, contingent or other, under any Employment Arrangement with any ATC
Employee, other than (i) those listed or described in Section 4.11(a) or Section
4.14 of the ATC Disclosure Schedule, (ii) those incurred in the ordinary and
usual course of business, or (iii) such obligations or liabilities as do not and
will not have, in the aggregate, any Material Adverse Effect on ATC. Except as
described in Section 4.14 of the ATC Disclosure Schedule, (a) none of the ATC
Employees is now, or since January 1, 1995 has been, represented by any labor
union or other employee collective bargaining organization, and ATC is not, and
never has been, a party to any labor or other collective bargaining agreement
with respect to any of the ATC Employees, (b) there are no pending grievances,
disputes or controversies with any union or any other employee or collective
bargaining organization of such employees, or threats of strikes, work stoppages
or slowdowns or any pending demands for collective bargaining by any such union
or other organization, (c) neither ATC nor any of such employees is now, or
since January 1, 1995 has been, subject to or involved in or, to ATC's
knowledge, threatened with, any union elections, petitions therefor or other
organizational or recruiting activities, in each case with respect to the ATC
Employees, and (d) none of the ATC Employees has notified ATC that he or she
does not intend to continue employment with ATC until the Closing or with ATS
following the Closing. ATC has performed in all material respects all
obligations required to be performed under all Employment Arrangements of ATC
and is not in material breach or violation of or in material default or arrears
under any of the terms, provisions or conditions thereof.
4.15 Material Agreements. Listed on Section 4.15 of the ATC Disclosure
Schedule are all Material Agreements relating to the ownership or operation of
the ATC Assets or the conduct of the ATC Business or to which ATC is a party or
to which it is bound or which any of the ATC Assets is subject. True, accurate
and complete copies of each of such Material Agreements have been made available
by ATC to ATS. All of such Material Agreements are valid, binding and legally
enforceable obligations of ATC, except as such enforceability may be limited by
bankruptcy, moratorium, insolvency and similar laws affecting the rights and
remedies of creditors and obligations of debtors generally and by general
principles of equity. ATC has complied with all of the material terms and
conditions of each such Material Agreement and has not done or
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performed, or failed to do or perform (and there is no pending or, to the
knowledge of ATC, threatened in writing Claim with which ATC has not so
complied, done and performed or failed to do and perform) any act which would
invalidate or provide grounds for the other party thereto to terminate (with or
without notice, passage of time or both) such Material Agreement or impair the
rights or benefits, or increase the costs, of ATC under any of such Material
Agreements, except for such noncompliances, acts or omissions that, individually
or in the aggregate, have not had and will not have a Material Adverse Effect on
ATC. Without limiting the generality of the foregoing, Section 4.15 of the ATC
Disclosure Schedule sets forth a true, correct and complete description of all
material acquisitions pending or which are actively being negotiated and the
current status of all such acquisitions, except for those which ATC cannot
disclose due to its obligations to maintain the same in confidence, none of
which, if consummated on the terms and conditions currently being negotiated,
will have a Material Adverse Effect on ATC.
4.16 Ordinary Course of Business. Since September 30, 1997, except (i)
as may be described on Section 4.16 of the ATC Disclosure Schedule, or (ii) as
may be required or expressly permitted or contemplated by the terms of this
Agreement, ATC:
(a) has operated its business in all material respects in the
normal, usual and customary manner in the ordinary and regular course
of business, consistent with past practice, it being understood that
the acquisition and financing of communications sites and related
assets and other business involved in the communications sites industry
and the construction of communications towers and related assets is
part of the ordinary course of business of ATC;
(b) except in each case in the ordinary course of business,
consistent with past practice, it being understood that the acquisition
and financing of communications sites and related assets and other
business involved in the communications sites industry and the
construction of communications towers and related assets is part of the
ordinary course of business of ATC:
(i) has not incurred any obligation or liability
(fixed, contingent or other) individually having a value in
excess of $100,000;
(ii) has not sold or otherwise disposed of or
contracted to sell or otherwise dispose of any of its
properties or assets having a value in excess of $100,000;
(iii) has not entered into any individual commitment
having a value in excess of $100,000; and
(iv) has not canceled any debts or claims;
(c) has not created or permitted to be created any Lien on any
of its property, except for Permitted Liens;
(d) has not made or committed to make any additions to its
property or any purchases of equipment, except in the ordinary course
of business consistent with past practice or for normal maintenance and
replacements;
(e) except in the ordinary course of business consistent with
past practice, has not increased the compensation payable or to become
payable to any of the ATC Employees or otherwise materially altered,
modified or changed the terms of their employment;
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(f) has not suffered any damage, destruction or loss (whether
or not covered by insurance) or any acquisition or taking of property
by any Authority that has had or is reasonably likely to have a
Material Adverse Effect on ATC;
(g) has not waived any rights of material value without fair
and adequate consideration;
(h) has not experienced any work stoppage;
(i) except in the ordinary course of business, has not entered
into, amended or terminated any Lease, Governmental Authorization,
Private Authorization, Material Agreement or Employment Arrangement, or
any transaction, agreement or arrangement with any Affiliate of ATC;
and
(j) has not made, paid or declared any Distribution.
4.17 Material and Adverse Restrictions. ATC is not a party to or
subject to, nor is any of the ATC Assets subject to, any Applicable Law,
Governmental Authorization, Contractual Obligation, Employment Arrangement,
Material Agreement or Private Authorization, or any other obligation or
restriction of any kind or character, which now has or, as far as ATC can now
reasonably foresee, at any time in the future, individually or in the aggregate,
is likely to have, any Material Adverse Effect on ATC, except as set forth in
Section 4.17 of the ATC Disclosure Schedule and except for matters affecting the
tower rental and construction industry generally.
4.18 Broker or Finder. No Person assisted in or brought about the
negotiation of this Agreement or the Merger in the capacity of broker, agent or
finder or in any similar capacity on behalf of ATC or, to the knowledge of ATC,
any of the ATC stockholders which, in any case, will result in liability to the
Surviving Corporation which was not reflected in the financial information
heretofore furnished by ATC to ATS.
4.19 Solvency. As of the execution and delivery of this Agreement, ATC
is, and immediately prior to the consummation of the Merger will be, Solvent.
4.20 Environmental Matters. Except as set forth in Section 4.20 of the
ATC Disclosure Schedule, with respect to the ATC Assets and the ATC Business,
ATC:
(a) has not been notified that it is potentially liable under,
has not received any request for information or other correspondence
concerning its potential liability with respect to any site or facility
under, and, to ATC's knowledge, is not a "potentially responsible
party" under, the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, the Resource Conservation
Recovery Act, as amended, or any similar state law;
(b) has not entered into or received any consent decree,
compliance order or administrative order issued pursuant to any
Environmental Law;
(c) is not a party in interest or in default under any
judgment, order, writ, injunction or decree of any Final Order issued
pursuant to any Environmental Law;
(d) has obtained all Environmental Permits required under
Environmental Laws, and has filed all applications, notices and other
documents required to be filed prior to the date of this
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Agreement to effect the timely renewal or issuance of all Environmental
Permits for the continued conduct of its business in the manner now
conducted;
(e) is in compliance in all material respects with all
Environmental Laws, and is not the subject of or, to ATC's knowledge,
threatened with any Legal Action involving a demand for damages or
other potential liability, including any Lien, with respect to
violations or breaches of any Environmental Law;
(f) has provided ATS with copies of all environmental site
assessments, audits or other investigatory reports in its possession
that pertain to any property currently owned, leased, operated or
occupied by ATC;
(g) has not installed or used any above ground or underground
storage tanks, friable asbestos, polychlorinated biphenyls or urea
formaldehyde foam insulation on any property currently owned, leased or
operated by ATC and, to ATC's knowledge, there are no above ground or
underground storage tanks, friable asbestos, polychlorinated biphenyls
or urea formaldehyde foam insulation or any property currently owned,
leased or operated by ATC;
(h) has not disposed of, released, spilled or buried any
Hazardous Materials (nor has any Person acting on its behalf done so)
in violation of Environmental Laws on any property or facility owned,
leased, operated or occupied by ATC or to ATC's knowledge at any
facility or site to which Hazardous Materials from or generated by ATC
may have been taken at any time in the past;
(i) has no knowledge of any disposal, release, spill or burial
of any Hazardous Materials by ATC (or any Person acting on its behalf)
on any property which could reasonably be expected to result or has
resulted in contamination which requires investigation, remediation or
other response activity on or beneath any properties or facilities
currently owned, leased, operated or occupied by ATC; and
(j) has no knowledge of any past or present Event related to
ATC's properties, operations or business, which Event, individually or
in the aggregate, could reasonably be expected to interfere with or
prevent continued material compliance with all Environmental Laws
applicable to the conduct of ATC's business in the manner now
conducted, or which, individually or in the aggregate, could reasonably
be expected to form the basis of any material Claim against ATC in
connection with the release or threatened release into the environment
of any Hazardous Material.
4.21 Capital Stock. The authorized and outstanding capital stock of ATC
is as set forth in Section 4.21 of the ATC Disclosure Schedule. All of such
outstanding capital stock has been duly authorized and validly issued, is fully
paid and nonassessable and is owned of record and, to ATC's knowledge,
beneficially as shown in Section 4.21 of the ATC Disclosure Schedule. Except as
described in Section 4.21 of the ATC Disclosure Schedule, ATC has not granted or
issued, nor has ATC agreed to grant or issue, any shares of its capital stock or
any Option Security or Convertible Security, and ATC is not a party to or bound
by any agreement, put or commitment pursuant to which it is obligated to
purchase, redeem or otherwise acquire any shares of capital stock or any Option
Security or Convertible Security. The affirmative vote of the holders of a
majority of the shares of ATC Common Stock (the "ATC Required Vote") is the only
unobtained vote necessary to approve and adopt this Agreement and the
transactions contemplated by this Agreement. As of the date of this Agreement,
[e] votes constituted a majority of the outstanding voting power of the ATC
Common Stock.
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4.22 State Takeover Statutes. To ATC's knowledge, no state takeover
Law, statute or similar statute or regulation applies or purports to apply to
the Merger, this Agreement or any of the transactions contemplated by this
Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF ATS
ATS hereby represents and warrants to ATC as follows (it being
understood and agreed by the parties that, except as the context otherwise
requires, the representations and warranties of ATS set forth in this Article
shall apply to each of its Subsidiaries with the same force and effect as though
each of them were named in each Section hereof):
5.1 Organization and Business; Power and Authority; Effect of
Transaction.
(a) ATS is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization,
has all requisite power and authority (corporate and other) to own or
hold under lease its properties and to conduct its business as now
conducted and is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which the character of the
property owned or leased by it or the nature of its business or
operations requires such qualification, except for such qualifications
the failure of which to obtain, individually or in the aggregate, would
not have a Material Adverse Effect on ATS.
(b) ATS has all requisite power and authority (corporate and
other) and has in full force and effect all Governmental Authorizations
and Private Authorizations necessary to enable it to execute and
deliver, and to perform its obligations under, this Agreement and each
Collateral Document executed or required to be executed by it pursuant
hereto or thereto and to consummate the Transactions to which ATS is a
party; and the execution, delivery and performance of this Agreement
and each Collateral Document executed or required to be executed by it
pursuant hereto or thereto have been duly authorized by all requisite
corporate or other action on the part of ATS, including without
limitation by the requisite approval of ARS, as the sole stockholder of
ATS, and no other corporate proceedings on the part of ATS are
necessary to authorize this Agreement or the transactions contemplated
hereby or to consummate the Merger or the other transactions so
contemplated. This Agreement has been duly executed and delivered by
ATS and constitutes, and each Collateral Document executed or required
to be executed by it pursuant hereto or thereto or to consummate the
Transactions when executed and delivered by ATS will constitute, legal,
valid and binding obligations of ATS, enforceable in accordance with
their respective terms, except as such enforceability may be subject to
bankruptcy, moratorium, insolvency, reorganization, arrangement,
voidable preference, fraudulent conveyance and other similar laws
relating to or affecting the rights of creditors and except as the same
may be subject to the effect of general principles of equity.
(c) Except as set forth in Section 5.1(c) of the ATS
Disclosure Schedule, neither the execution and delivery by ATS of this
Agreement or any Collateral Document executed or required to be
executed by it pursuant hereto or thereto, nor the consummation of the
Transactions by ATS, nor compliance with the terms, conditions and
provisions hereof or thereof by ATS:
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(i) will conflict with, or result in a breach or
violation of, or constitute a default under, any Organic
Document of ATS or any Applicable Law, or will conflict with,
or result in a breach or violation of, or constitute a default
under, or permit the acceleration of any obligation or
liability in, or but for any requirement of giving of notice
or passage of time or both would constitute such a conflict
with, breach or violation of, or default under, or permit any
such acceleration in, any Material Agreement of ATS; or
(ii) will require ATS to make or obtain any
Governmental Authorization, Governmental Filing or Private
Authorization including without limitation under the FCA,
except as required by the Hart-Scott-Rodino Act and other than
any of the foregoing that have been obtained.
(d) Except as set forth in Section 5.1(d) of the ATS
Disclosure Schedule, ATS does not have any Subsidiaries, each of which
is (i) wholly-owned unless noted otherwise in Section 5.1(d) of the ATS
Disclosure Schedule, (ii) an Entity which is duly organized, validly
existing and in good standing under the laws of the respective state of
organization, and (iii) duly qualified and in good standing as a
foreign corporation or other Entity in each other jurisdiction in which
the character of the property owned or leased by it or the nature of
its business or operations requires such qualification, with full power
and authority (corporate and other) to carry on the business in which
it is engaged, except for such qualifications the failure of which to
obtain, individually or in the aggregate, would not have a Material
Adverse Effect on ATS. ATS owns, directly or indirectly, all of the
outstanding capital stock and equity interests of each Subsidiary, free
and clear of all Liens (except for Permitted Liens or except as set
forth on Section 5.1(d) of the ATS Disclosure Schedule), and all such
stock or other equity interests has been duly authorized and validly
issued and is fully paid and nonassessable. There are no outstanding
Option Securities or Convertible Securities, or agreements or
understandings of any nature whatsoever, relating to the authorized and
unissued or outstanding capital stock or equity interests of any
Subsidiary of ATS, except as set forth in Section 5.1(d) of the ATS
Disclosure Schedule with respect to the noncorporate Subsidiaries of
ATS.
5.2 Financial and Other Information. The financial statements of ATS,
furnished by ATS, and included in the ATS Information Statement (the "ATS
Financial Statements"), including in each case the notes thereto, have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby, except as otherwise noted therein or as set forth in
Section 5.2 of the ATS Disclosure Schedule, and fairly present in all material
respects the financial condition and the results of operations and cash flow of
ATS, on the bases therein stated, as of the respective dates thereof, and for
the respective periods covered thereby subject, in the case of unaudited
financial statements, to normal nonmaterial year-end audit adjustments and
accruals.
5.3 Material Statements and Omissions; Absence of Events. Neither any
representation or warranty made by ATS contained in this Agreement or any
certificate, document or other instrument or other information furnished or to
be furnished by ATS pursuant to the provisions hereof (including without
limitation information with respect to ATS included in the ATS Prospectus and
the ATS Registration Statement) nor the ATS Disclosure Schedule or the ATS
Information Statement contains or will contain any untrue statement of a
material fact or omits or will omit to state any material fact required to make
any statement contained herein or therein, in light of the circumstances under
which they were made, not misleading; provided, however, that to the extent that
any such information contains any financial projections, ATS represents and
warrants only that such projections have been prepared in good faith on the
basis of the
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ATS Financial Statements and other information and assumptions which ATS
believes to be reasonable. Since the date of the most recent financial
statements constituting a part of the ATS Financial Statements, except to the
extent specifically described in Section 5.3 of the ATS Disclosure Schedule,
there has been no change in ATS which has had a Material Adverse Effect on ATS.
There is no Event known to ATS which has had, or (so far as ATS can now
reasonably foresee) is likely to have, a Material Adverse Effect on ATS, except
to the extent specifically described in Section 5.3 of the ATS Disclosure
Schedule and except for matters affecting the tower rental, ownership and
construction industry generally, including without limitation competition,
regulation and resources or events arising out of the execution or public
announcement of this Agreement.
5.4 Title to Properties; Leases.
(a) ATS has, to ATS' knowledge, good and indefeasible title to
all of its real property (other than leasehold real property) and good
title to all of its other assets (other than real property), tangible
and intangible (the "ATS Assets"); all of such real property and other
assets are so owned, in each case, free and clear of all Liens, except
(i) Permitted Liens, and (ii) Liens set forth on Section 5.4(a) of the
ATS Disclosure Schedule. Except for financing statements evidencing
Liens referred to in the preceding sentence, no financing statements
under the Uniform Commercial Code and no other filing which names ATS
as debtor or which covers or purports to cover any of the ATS Assets is
on file in any state or other jurisdiction, and ATS has not signed or
agreed to sign any such financing statement or filing or any agreement
authorizing any secured party thereunder to file any such financing
statement or filing. Except as disclosed in Section 5.4(a) of the ATS
Disclosure Schedule, all improvements on the real property owned or
leased by ATS are, to ATS' knowledge, in compliance with applicable
zoning, wetlands and land use laws, ordinances and regulations and
applicable title covenants, conditions, restrictions and reservations
in all respects necessary to conduct the operations as presently
conducted, except for any instances of non-compliance which do not and
will not in the aggregate have a Material Adverse Effect on ATS. Except
as disclosed in Section 5.4(a) of the ATS Disclosure Statement, all
such improvements comply with all Applicable Laws, ATS Governmental
Authorizations and ATS Private Authorizations, except where
noncompliance is not reasonably likely to have a Material Adverse
Effect on ATS. There is no pending or, to ATS' knowledge, threatened or
contemplated action to take by eminent domain or otherwise to condemn
any part of any real property constituting a material portion of the
real property owned by ATS or, to ATS' knowledge, any real property
leased by ATS. Except as set forth in Section 5.4(a) of the ATS
Disclosure Schedule, such real property (other than land), fixtures,
fixed assets and other material items of personal property, including
equipment, have, in ATS' reasonable business judgment, been maintained
in a manner consistent with customary industry practices and currently
permit the business of ATS (the "ATS Business") to be operated in all
material respects in accordance with the terms and conditions of all
Applicable Laws, ATS Governmental Authorizations and ATS Private
Authorizations.
(b) Each Lease or other occupancy or other agreement under
which ATS holds real or personal property constituting a part of the
ATS Assets has been duly authorized, executed and delivered by or
assigned to ATS and, to ATS' knowledge, each of the other parties
thereto, and is a legal, valid and binding obligation of ATS, and, to
ATS' knowledge, each of the other parties thereto, enforceable in
accordance with its terms, except as such enforceability may be limited
by bankruptcy, moratorium, insolvency and similar laws affecting the
rights and remedies of creditors and obligations of debtors generally
and by general principles of equity , and except for such exceptions to
the foregoing as, individually or in the aggregate, have not had and
will not have any Material Adverse
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Effect on ATS. ATS has a valid leasehold interest in and enjoys
peaceful and undisturbed possession under all Leases pursuant to which
it holds any such real property or tangible personal property, subject
to the terms of each such Lease and Applicable Law and except for such
exceptions to the foregoing as, individually or in the aggregate, have
not had and will not have any Material Adverse Effect on ATS. All of
such Leases are valid and subsisting and in full force and effect, and
neither ATS nor, to ATS' knowledge, any other party thereto, is in
material default in the performance, observance or fulfillment of any
obligation, covenant or condition contained in any such Lease, except
for such exceptions to the foregoing as, individually or in the
aggregate, have not had and will not have any Material Adverse Effect
on ATS.
5.5 Compliance with Private Authorizations. ATS has obtained all
Private Authorizations (collectively, the "ATS Private Authorizations") which
are necessary for the ownership or operation of the ATS Assets or the conduct of
the ATS Business which, if not obtained and maintained, could, individually or
in the aggregate, be reasonably likely to have a Material Adverse Effect on ATS.
All of the ATS Private Authorizations are valid and in good standing and are in
full force and effect, except for such exceptions as are not reasonably likely
to have a Material Adverse Effect on ATS. ATS is not in breach or violation of,
or in default in the performance, observance or fulfillment of, any ATS Private
Authorization, and no Event exists or has occurred, which constitutes, or but
for any requirement of giving of notice or passage of time or both would
constitute, such a breach, violation or default, under any ATS Private
Authorization, except for such defaults, breaches or violations as do not and
are not reasonably likely to have in the aggregate a Material Adverse Effect on
ATS. No ATS Private Authorization is the subject of any pending or, to ATS'
knowledge, threatened attack, revocation or termination, except for such
exceptions as are not reasonably likely to have a Material Adverse Effect on
ATS.
5.6 Compliance with Governmental Authorizations and Applicable Law.
(a) ATS has obtained all Governmental Authorizations
(collectively, the "ATS Governmental Authorizations") which are
necessary for the ownership or operation of the ATS Assets or the
conduct of the ATS Business as now conducted and which, if not obtained
and maintained, would, individually or in the aggregate, have any
Material Adverse Effect on ATS. None of the ATS Governmental
Authorizations is subject to any restriction or condition which would
limit in a material respect the ownership or operations of the ATS
Assets or the conduct of the ATS Business as currently conducted,
except for restrictions and conditions generally applicable to ATS
Governmental Authorizations of such type. The ATS Governmental
Authorizations are valid and in good standing, are in full force and
effect and are not impaired by any act or omission of ATS or its
officers, directors, employees or agents, and the ownership or
operation of the ATS Assets or the conduct of the ATS Business are in
accordance with the ATS Governmental Authorizations, except for such
exceptions to the foregoing as, individually or in the aggregate, have
not had and will not have any Material Adverse Effect on ATS. All
material reports, forms and statements required to be filed by ATS with
all Authorities with respect to the ATS Business have been filed and
are true, complete and accurate in all material respects. No ATS
Governmental Authorization is the subject of any pending or, to ATS'
knowledge, threatened challenge or proceeding to revoke or terminate
any ATS Governmental Authorization which, if revoked or terminated,
would have a Material Adverse Effect on ATS.
(b) ATS is in compliance with all Applicable Laws, except
where such noncompliance, individually or in the aggregate, has not had
and is not reasonably like to have a Material Adverse Effect on ATS.
Except as set forth in Section 5.6(b) of the ATS Disclosure Schedule,
there are no
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5.7 Intangible Assets. Except as set forth in Section 5.7 of the ATS
Disclosure Schedule, no Intangible Assets (except ATS Governmental
Authorizations and ATS Private Authorizations) are required for the ownership or
operation of the ATS Assets or the conduct of the ATS Business as currently
owned, operated and conducted, except for such exceptions to the foregoing as,
individually or in the aggregate, have not had and will not have any Material
Adverse Effect on ATS. ATS does not, to its knowledge, wrongfully infringe upon
or unlawfully use any Intangible Assets owned or claimed by another, and ATS has
not received any notice of any claim or infringement relating to any such
Intangible Asset, except for such exceptions to the foregoing as, individually
or in the aggregate, have not had and will not have any Material Adverse Effect
on ATS.
5.8 Related Transactions. ATS is not a party or subject to any material
Contractual Obligation relating to the ownership or operation of the ATS Assets
or the conduct of the ATS Business between ATS and any of its officers,
directors or stockholders or, to the knowledge of ATS, any Affiliate of any
thereof, including without limitation any Contractual Obligation providing for
the furnishing of services to or by, providing for rental of property, real,
personal or mixed, to or from, or providing for the lending or borrowing of
money to or from or otherwise requiring payments to or from, any such Person,
other than (i) Employment Arrangements listed or described in Section 5.13 of
the ATS Disclosure Schedule, (ii) Contractual Obligations between ATS and any of
its directors, stockholders or officers or any Affiliate of any of the
foregoing, which are on arms' length terms and conditions, (iii) as specifically
set forth in Section 5.8 of the ATS Disclosure Schedule; provided, however, that
the foregoing representation and warranty shall not apply to the fact that prior
to the consummation of the CBS Merger, all administrative, accounting,
corporate, data processing and other informational, financial, human resources
services, legal and other support services will have been provided by ARS to ATS
and without which services ATS could not operate in the ordinary course of
business. Following consummation of the Merger, a sufficient number of the
individuals presently providing such services to ATS on behalf of ARS will
continue to be available to provide services consistent with past practice to
ATS so that ATS will be able to operate in the ordinary course of business.
5.9 Insurance. ATS maintains, with respect to the ATS Assets and the
ATS Business, policies of fire and extended coverage and casualty, liability and
other forms of insurance in such amounts and against such risks and losses as
are customary for companies engaged in similar businesses.
5.10 Tax Matters.
(a) ATS has in accordance with all Applicable Laws filed all
Tax Returns which are required to be filed, and has paid, or made
adequate provision for the payment of, all Taxes which have become due
and payable pursuant to said Tax Returns and all other governmental
charges and assessments received to date other than those Taxes being
contested in good faith for which adequate provision has been made on
the most recent balance sheet forming part of ATS Financial Statements.
The Tax Returns of ATS have been prepared in all material respects in
accordance with all Applicable Laws. All Taxes which ATS is required by
law to withhold and collect have been duly withheld and collected, and
have been paid over, in a timely manner, to the proper Authorities to
the extent due and payable. ATS has not executed any waiver to extend,
or otherwise taken or failed to take any action that would have the
effect of extending, the applicable statute of limitations in respect
of any Tax liabilities of ATS for the fiscal years prior to and
including the most recent fiscal year. ATS is not a "consenting
corporation" within the meaning of Section 341(f) of the Code.
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ATS has at all times been taxable as a Subchapter C corporation under
the Code, and has never been a member of any consolidated group for Tax
purposes, except as a member of the consolidated group with ARS and all
of its Subsidiaries which can be consolidated for Federal income tax
purposes.
(b) Federal and state income Tax Returns of ATS have not been
examined by the IRS or applicable state Authority, and ATS has not been
notified of any proposed examination, except as shown in Section
5.10(b) of the ATS Disclosure Schedule.
(c) ATS is not a party to any tax sharing agreement or
arrangement with any other Person, except as set forth in Section
5.10(c) of the ATS Disclosure Schedule.
5.11 Employee Retirement Income Security Act of 1974.
(a) ATS (which for purposes of this Section shall include any
ERISA Affiliate of ATS) currently sponsors, maintains and contributes
only to the Plans and Benefit Arrangements set forth in Section 5.11(a)
of the ATS Disclosure Schedule. ATS has delivered or made available to
ATC true, complete and correct copies of (i) each Plan and Benefit
Arrangement (or, in the case of any unwritten Plans or Benefit
Arrangements, reasonable descriptions thereof), (ii) the two most
recent annual reports on Form 5500 (including all schedules and
attachments thereto) filed with the Internal Revenue Service with
respect to each Plan (if any such report was required by Applicable
Law), (iii) the most recent summary plan description (or similar
document) for each Plan for which such a summary plan description is
required by Applicable Law or was otherwise provided to plan
participants or beneficiaries, and (iv) each trust agreement and
insurance or annuity contract or other funding or financing arrangement
relating to any Plan. To the knowledge of ATS, each such Form 5500 and
each such summary plan description (or similar document) does not, as
of the date hereof, contain any material misstatements. ATS does not
contribute to or have an obligation to contribute to, and has not at
any time within six (6) years prior to the date of this Agreement
contributed to or had an obligation to contribute to, and no Plan
listed in Section 5.11(a) of the ATS Disclosure Schedule is, (i) a
Multiemployer Plan, or (ii) a Plan subject to Section 412 of the Code,
Section 302 of ERISA or Title IV of ERISA. ATS has no actual or
potential liability under Title IV of ERISA. ATS does not maintain any
Plan that provides for post-retirement medical or life insurance
benefits, and ATS does not have any obligation or liability with
respect to any such Plan previously maintained by ATS, except as the
provisions of COBRA may apply to any former employees of ATS. Except as
set forth in Section 5.11(a) of the ATS Disclosure Schedule, as to all
Plans and Benefit Arrangements listed in Section 5.11(a) of the ATS
Disclosure Schedule:
(i) all such Plans and Benefit Arrangements comply
and have been administered in form and in operation in
accordance with their respective terms, and with all
Applicable Laws, in all material respects, and ATS has not
received any notice from any Authority disputing or
investigating such compliance;
(ii) none of the assets of any such Plan are invested
in employer securities or employer real property;
(iii) there are no Claims (other than routine Claims
for benefits or actions seeking qualified domestic relations
orders) pending or, to ATS' knowledge, threatened involving
such Plans or the assets of such Plans, and, to ATS'
knowledge, no facts exist which are
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reasonably likely to give rise to any such Claims (other than
routine Claims for benefits or actions seeking qualified
domestic relations orders);
(iv) all material contributions to, and material
payments from, the Plans and Benefit Arrangements that may
have been required to be made in accordance with the terms of
the Plans and Benefit Arrangements, and any applicable
collective bargaining agreement, have been made. All such
contributions to, and payments from, the Plans and Benefit
Arrangements, except those payments to be made from a trust
qualified under Section 401(a) of the Code, for any period
ending before the Closing Date that are not yet, but will be,
required to be made, will be properly accrued and reflected on
the financial books and records of ATS;
(v) No act, omission or transaction has occurred
which would result in imposition on ATS of (A) any breach of
fiduciary duty liability damages under Section 409 of ERISA,
(B) a civil penalty assessed pursuant to subsections (c), (i)
or (l) of Section 502 of ERISA or (C) a tax imposed pursuant
to Chapter 43 of Subtitle D of the Code;
(vi) ATS has not incurred any material liability to a
Plan (other than for contributions not yet due) which
liability has not been fully paid or accrued for payment as of
the date hereof;
(vii) except as otherwise contemplated by this
Agreement or the ATS Disclosure Schedule, no current or former
employee of ATS will be entitled to any additional benefits or
any acceleration of the time of payment or vesting of any
benefits under any Plan or Benefit Arrangement as a result of
the transactions contemplated by this Agreement;
(viii) no compensation payable by ATS to any of its
employees under any existing Plan, Benefit Arrangement
(including by reason of the transactions contemplated hereby)
will be subject to disallowance under Section 162(m) of the
Code;
(ix) any amount that could be received (whether in
cash or property or the vesting of property) as a result of
any of the transactions contemplated by this Agreement by any
employee, officer, director or independent contractor of ATS
who is a "disqualified individual" (as such term is defined in
proposed Treasury Regulation Section 1.280G-1) under any
employment arrangement would not be characterized as an
"excess parachute payment" (as such term is defined in Section
280G(b)(1) of the Code),;
(x) all such Plans maintained by ATS that are
intended to comply with Sections 401 and 501 of the Code
comply in all material respects with all applicable
requirements of such sections, and no Event has occurred which
is known to ATS which will give rise to disqualification of
any such Plan under such sections or to a tax under Section
511 of the Code and each such Plan has been the subject of a
determination letter from the Internal Revenue Service to the
effect that such Plan and related trust is qualified and
exempt from Federal income Taxes under Sections 401(a) and
501(a), respectively, of the Code; no such determination
letter has been revoked, and, to the knowledge of ATS,
revocation has not been threatened. ATS has delivered or made
available to ATC a copy of the most recent determination
letter received with respect to each Plan for which such a
letter has been issued, as well as a copy of any pending
application for a determination letter. ATS has also
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provided or made available to ATC a list of all Plan
amendments as to which a favorable determination letter has
not yet been received;
(xi) no Plan which is an employee stock ownership
plan (an "ESOP") constitutes a leveraged employee stock
ownership plan within the meaning of Section 4975(e)(7) of the
Code and there are no unallocated shares of stock of ATS
currently held under any such ESOP in a suspense account; and
(xii) there are no outstanding options (or
contractual obligations to issue options) to acquire ATS
Common Stock or other ATS securities other than options held
by employees or directors of ATS and issued under Benefit
Arrangements (the aggregate number of which are as set forth
in Section 5.11(a) of the ATS Disclosure Schedule).
(b) The execution, delivery and performance by ATS of this
Agreement and the Collateral Documents executed or required to be
executed by ATS pursuant hereto and thereto will not involve any
prohibited transaction within the meaning of ERISA or Section 4975 of
the Code with respect to any Plan listed in Section 5.11(a) of the ATS
Disclosure Schedule.
5.12 Absence of Sensitive Payments. Neither ATS nor, to ATS' knowledge,
any of its officers, directors, employees, agents or other representatives, has
with respect to the ATS Assets or the ATS Business (a) made any contributions,
payments or gifts to or for the private use of any governmental official,
employee or agent where either the payment or the purpose of such contribution,
payment or gift is illegal under the laws of the United States or the
jurisdiction in which made or (b) established or maintained any unrecorded fund
or asset for any illegal purpose or made any false or artificial entries on its
books.
5.13 Employment Arrangements. ATS has no obligation or liability,
contingent or other, under any Employment Arrangement with any employee of ATS
or any of its Subsidiaries (the "ATS Employees"), other than (i) those listed or
described in Section 5.11(a) or Section 5.13 of the ATS Disclosure Schedule,
(ii) those incurred in the ordinary and usual course of business, or (iii) such
obligations or liabilities as do not and will not have, in the aggregate, any
Material Adverse Effect on ATS. Except as described in Section 5.13 of the ATS
Disclosure Schedule, (a) none of the ATS Employees is now, or since its
organization has been, represented by any labor union or other employee
collective bargaining organization, and ATS is not, and never has been, a party
to any labor or other collective bargaining agreement with respect to any of the
ATS Employees, (b) there are no pending grievances, disputes or controversies
with any union or any other employee or collective bargaining organization of
such employees, or threat of strikes, work stoppages or slowdowns or any pending
demands for collective bargaining by any such union or other organization, (c)
neither ATS nor any of such employees is now, or since its organization has
been, subject to or involved in or, to ATS' knowledge, threatened with, any
union elections, petitions therefor or other organizational or recruiting
activities, in each case with respect to the ATS Employees, and (d) none of the
ATS Employees has notified ATS that he or she does not intend to continue
employment with ATS until the Closing or with ATS following the Closing. ATS has
performed in all material respects all obligations required to be performed
under all Employment Arrangements of ATS and is not in material breach or
violation of or in material default or arrears under any of the terms,
provisions or conditions thereof.
5.14 Material Agreements. Listed on Section 5.14 of the ATS Disclosure
Schedule are all Material Agreements relating to the ownership or operation of
the ATS Assets or the conduct of the ATS Business or to which ATS is a party or
to which it is bound or which any of the ATS Assets is subject. True, accurate
and complete copies of each of such Material Agreements have been made available
by ATS to ATC. All of such
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Material Agreements are valid, binding and legally enforceable obligations of
ATS, except as such enforceability may be limited by bankruptcy, moratorium,
insolvency and similar laws affecting the rights and remedies of creditors and
obligations of debtors generally and by general principles of equity. ATS has
complied with all of the material terms and conditions of each such Material
Agreement and has not done or performed, or failed to do or perform (and there
is no pending or, to the knowledge of ATS, threatened in writing Claim with
which ATS has not so complied, done and performed or failed to do and perform)
any act which would invalidate or provide grounds for the other party thereto to
terminate (with or without notice, passage of time or both) such Material
Agreement or impair the rights or benefits, or increase the costs, of ATS under
any of such Material Agreements, except for such noncompliances, acts or
omissions that, individually or in the aggregate, have not had and will not have
a Material Adverse Effect on ATS. Without limiting the generality of the
foregoing, Section 5.14 of the ATS Disclosure Schedule sets forth a true,
correct and complete description of all material acquisitions pending or which
are actively being negotiated and the current status of all such acquisitions,
except for those which ATS cannot disclose due to its obligations to maintain
the same in confidence, none of which, if consummated on the terms and
conditions currently being negotiated, will have a Material Adverse Effect on
ATS.
5.15 Ordinary Course of Business. Since September 30, 1997, except (i)
as may be described on Section 5.15 of the ATS Disclosure Schedule, or (ii) as
may be required or expressly permitted or contemplated by the terms of this
Agreement, ATS:
(a) has operated its business in all material respects in the
normal, usual and customary manner in the ordinary and regular course
of business, consistent with past practice, it being understood that
the acquisition and financing of communications sites and related
assets and other business involved in the communications sites industry
and the construction of communications towers and related assets is
part of the ordinary course of business of ATS;
(b) except in each case in the ordinary course of business,
consistent with past practice, it being understood that the acquisition
and financing of communications sites and related assets and other
business involved in the communications sites industry and the
construction of communications towers and related assets is part of the
ordinary course of business of ATS:
(i) has not incurred any obligation or liability
(fixed, contingent or other) individually having a value in
excess of $100,000;
(ii) has not sold or otherwise disposed of or
contracted to sell or otherwise dispose of any of its
properties or assets having a value in excess of $100,000;
(iii) has not entered into any individual commitment
having a value in excess of $100,000; and
(iv) has not canceled any debts or claims;
(c) has not created or permitted to be created any Lien on any
of its property, except for Permitted Liens;
(d) has not made or committed to make any additions to its
property or any purchases of equipment, except in the ordinary course
of business consistent with past practice or for normal maintenance and
replacements;
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(e) except in the ordinary course of business consistent with
past practice, has not increased the compensation payable or to become
payable to any of the ATS Employees or otherwise materially altered,
modified or changed the terms of their employment;
(f) has not suffered any damage, destruction or loss (whether
or not covered by insurance) or any acquisition or taking of property
by any Authority that has had or is reasonably likely to have a
Material Adverse Effect on ATS;
(g) has not waived any rights of material value without fair
and adequate consideration;
(h) has not experienced any work stoppage;
(i) except in the ordinary course of business, has not entered
into, amended or terminated any Lease, Governmental Authorization,
Private Authorization, Material Agreement or Employment Arrangement, or
any transaction, agreement or arrangement with any Affiliate of ATS;
and
(j) has not made, paid or declared any Distribution.
5.16 Material and Adverse Restrictions. ATS is not a party to or
subject to, nor is any of the ATS Assets subject to, any Applicable Law,
Governmental Authorization, Contractual Obligation, Employment Arrangement,
Material Agreement or Private Authorization, or any other obligation or
restriction of any kind or character, which now has or, as far as ATS can now
reasonably foresee, at any time in the future, individually or in the aggregate,
is likely to have, any Material Adverse Effect on ATS, except as set forth in
Section 5.16 of the ATS Disclosure Schedule and except for matters affecting the
tower rental and construction industry generally.
5.17 Broker or Finder. No Person assisted in or brought about the
negotiation of this Agreement or the Merger in the capacity of broker, agent or
finder or in any similar capacity on behalf of ATS or, to the knowledge of ATS,
ARS which, in each case, will result in liability to the Surviving Corporation
which was not reflected in the financial information heretofore furnished by ATS
to ATC.
5.18 Solvency. As of the execution and delivery of this Agreement, ATS
is, and immediately prior to the consummation of the Merger will be, Solvent.
5.19 Environmental Matters. Except as set forth in Section 5.19 of the
ATS Disclosure Schedule, with respect to the ATS Assets and the ATS Business,
ATS:
(a) has not been notified that it is potentially liable under,
has not received any request for information or other correspondence
concerning its potential liability with respect to any site or facility
under, and, to ATS' knowledge, is not a "potentially responsible party"
under, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Resource Conservation Recovery
Act, as amended, or any similar state law;
(b) has not entered into or received any consent decree,
compliance order or administrative order issued pursuant to any
Environmental Law;
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(c) is not a party in interest or in default under any
judgment, order, writ, injunction or decree of any Final Order issued
pursuant to any Environmental Law;
(d) has obtained all Environmental Permits required under
Environmental Laws, and has filed all applications, notices and other
documents required to be filed prior to the date of this Agreement to
effect the timely renewal or issuance of all Environmental Permits for
the continued conduct of its business in the manner now conducted;
(e) is in compliance in all material respects with all
Environmental Laws, and is not the subject of or, to ATS' knowledge,
threatened with any Legal Action involving a demand for damages or
other potential liability, including any Lien, with respect to
violations or breaches of any Environmental Law;
(f) has provided ATC with copies of all environmental site
assessments, audits or other investigatory reports in its possession
that pertain to any property currently owned, leased, operated or
occupied by ATS;
(g) has not installed or used any above ground or underground
storage tanks, friable asbestos, polychlorinated biphenyls or urea
formaldehyde foam insulation on any property currently owned, leased or
operated by ATS and, to ATS' knowledge, there are no above ground or
underground storage tanks, friable asbestos, polychlorinated biphenyls
or urea formaldehyde foam insulation or any property currently owned,
leased or operated by ATS;
(h) has not disposed of, released, spilled or buried any
Hazardous Materials (nor has any Person acting on its behalf done so)
in violation of Environmental Laws on any property or facility owned,
leased, operated or occupied by ATS or to ATS' knowledge at any
facility or site to which Hazardous Materials from or generated by ATS
may have been taken at any time in the past;
(i) has no knowledge of any disposal, release, spill or burial
of any Hazardous Materials by ATS (or any Person acting on its behalf)
on any property which could reasonably be expected to result or has
resulted in contamination which requires investigation, remediation or
other response activity on or beneath any properties or facilities
currently owned, leased, operated or occupied by ATS; and
(j) has no knowledge of any past or present Event related to
ATS' properties, operations or business, which Event, individually or
in the aggregate, could reasonably be expected to interfere with or
prevent continued material compliance with all Environmental Laws
applicable to the conduct of ATS' business in the manner now conducted,
or which, individually or in the aggregate, could reasonably be
expected to form the basis of any material Claim against ATS in
connection with the release or threatened release into the environment
of any Hazardous Material.
5.20 Capital Stock. The authorized and outstanding capital stock of ATS
is as set forth in Section 5.20 of the ATS Disclosure Schedule. All of such
outstanding capital stock has been duly authorized and validly issued, is fully
paid and nonassessable and is owned of record and, to ATS' knowledge,
beneficially by ARS. Except as described in Section 5.20 of the ATS Disclosure
Schedule, ATS has not granted or issued, nor has ATS agreed to grant or issue,
any shares of its capital stock or any Option Security or Convertible Security,
and ATS is not a party to or bound by any agreement, put or commitment pursuant
to which it is obligated to purchase, redeem or otherwise acquire any shares of
capital stock or any Option Security or
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Convertible Security. The shares of ATS Class A Common Stock to be issued
pursuant to consummation of the Merger or upon exercise of the ATS Options have
been duly authorized and, when so issued, will be validly issued, fully paid and
nonassumable, and all such shares have been duly reserved for issuance pursuant
to such consummation or exercise.
5.21 State Takeover Statutes. To ATS' knowledge, no state takeover Law,
statute or similar statute or regulation applies or purports to apply to the
Merger, this Agreement or any of the transactions contemplated by this
Agreement.
5.22 ATS Private Placement. ATS and the Persons named in the ATS
Information Statement (and possible other Persons) intend to enter into binding
and definitive documentation substantially on the terms and conditions described
in the ATS Information Statement with respect to the ATS Private Placement.
Pursuant to such documentation, ATS and such Persons will have agreed to
purchase shares of ATS Class B Common Stock for a per share purchase price of
not less than $9.00 per share and for an aggregate purchase price equal to not
less than $80.0 million on such other terms and conditions not materially less
favorable, in the aggregate, to ATS than those described in the ATS Information
Statement.
5.23 ARS Organization and Business; Power and Authority; Effect of
Transaction.
(a) ARS is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization,
has all requisite power and authority (corporate and other) to own or
hold under lease its properties and to conduct its business as now
conducted and is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which the character of the
property owned or leased by it or the nature of its business or
operations requires such qualification, except for such qualifications
the failure of which to obtain, individually or in the aggregate, would
not have a Material Adverse Effect on ARS.
(b) ARS has all requisite power and authority (corporate and
other) and has in full force and effect all Governmental Authorizations
and Private Authorizations necessary to enable it to execute and
deliver, and to perform its obligations under, the CBS Merger Agreement
and each agreement or other document executed or required to be
executed by it pursuant thereto, including without limitation the ATS
Separation Agreement, and to consummate the CBS Merger and the Tower
Distribution; and the execution, delivery and performance of the CBS
Merger Agreement and each agreement or other document executed or
required to be executed by ARS pursuant thereto, including without
limitation the ATS Separation Agreement, have been duly authorized by
all requisite corporate or other action on the part of ARS, and no
other corporate proceedings on the part of ARS, including without
limitation that of the ARS common stockholders, are necessary to
authorize the CBS Merger Agreement or the transactions contemplated
thereby, including without limitation the ATS Separation Agreement, or
to consummate the CBS Merger and the Tower Distribution. The CBS Merger
Agreement has been duly executed and delivered by ARS and constitutes,
and each agreement or other document executed or required to be
executed by it pursuant thereto or to consummate the CBS Merger and the
Tower Distribution, when executed and delivered by ARS will constitute,
legal, valid and binding obligations of ARS, enforceable in accordance
with their respective terms, except as such enforceability may be
subject to bankruptcy, moratorium, insolvency, reorganization,
arrangement, voidable preference, fraudulent conveyance and other
similar laws relating to or affecting the rights of creditors and
except as the same may be subject to the effect of general principles
of equity. No consent or approval from the stockholders of ARS is
required to consummate the Merger (including the issuance of the Merger
Consideration) or the Tower Distribution, except
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that a waiver of the restricted payments covenant of the Certificate of
Designation with respect to the ARS Cumulative Preferred Stock (the
"ARS Preferred Certificate") will be required from the holders thereof
in order to effect the Tower Distribution, whether pursuant to the CBS
Merger Agreement or otherwise.
(c) Except as set forth in Section 5.23(c) of the ATS
Disclosure Schedule or in Section 5.23(b), neither the execution and
delivery by ARS of the CBS Merger Agreement or any agreement or other
document executed or required to be executed by it pursuant thereto,
nor the consummation of the CBS Merger or the Tower Distribution by
ARS, nor compliance with the terms, conditions and provisions hereof or
thereof by ARS:
(i) will conflict with, or result in a breach or
violation of, or constitute a default under, any Organic
Document of ARS or any Applicable Law, or will conflict with,
or result in a breach or violation of, or constitute a default
under, or permit the acceleration of any obligation or
liability in, or but for any requirement of giving of notice
or passage of time or both would constitute such a conflict
with, breach or violation of, or default under, or permit any
such acceleration in, any Material Agreement of ARS; or
(ii) will require ARS to make or obtain any
Governmental Authorization, Governmental Filing or Private
Authorization including without limitation under the FCA,
except as required by the Hart-Scott-Rodino Act and other than
any of the foregoing that have been obtained.
ARTICLE 6
COVENANTS
6.1 Access to Information; Confidentiality.
(a) Each party shall afford to the other party and its
accountants, counsel, financial advisors and other representatives (the
"Representatives") full access during normal business hours throughout
the period prior to the Closing Date to all of its (and its
Subsidiaries') properties, books, contracts, commitments and records
(including without limitation Tax Returns), but excluding any of the
foregoing that are or may become the subject of, and not disclosable
under, the terms of any confidential agreement (the "Restricted
Information") and, during such period, shall furnish promptly upon
request (i) a copy of each report, schedule and other document filed or
received by either party pursuant to the requirements of any Applicable
Law (including without limitation the FCA) or filed by it with any
Authority in connection with the Merger or any other report, schedule
or documents which may have a material effect on the businesses,
operations, properties, prospects, personnel, condition, (financial or
other), or results of operations of their respective businesses, (ii)
to the extent not provided for pursuant to the preceding clause, all
financial records, ledgers, work papers and other sources of financial
information possessed or controlled by it or its accountants deemed by
each party or its Representatives necessary or useful for the purpose
of performing an audit of the business and assets of ATC and ATS, as
applicable, and, in the case of ATS, certifying financial statements
and financial information pursuant to the provisions of Section 7.2(d),
and (iii) such other information concerning any of the foregoing as ATS
or ATC shall reasonably request, other than any Restricted Information.
All Confidential Information furnished pursuant to the provisions of
this Agreement, including without limitation this Section, will be kept
confidential and shall not, without the prior
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written consent of the party disclosing such Confidential Information,
which consent shall not be unreasonably withheld, delayed or
conditioned, be disclosed by the other party in any manner whatsoever,
in whole or in part, and, except as required by Applicable Law, shall
not be used for any purposes, other than in connection with the Merger
(including without limitation in connection with any registration,
proxy or information statement or similar document filed pursuant to
any federal or state securities Law) . Except as otherwise herein
provided, each party agrees to reveal such Confidential Information
only to those of its Representatives or other Persons who need to know
such Confidential Information for the purpose of evaluating and
consummating the Merger who are informed of its confidential nature.
For purposes of this Agreement, "Confidential Information" shall mean
any and all information (excluding information that (i) has been or is
obtained from a source independent of the disclosing party, (ii) is or
becomes generally available to the public other than as a result of
unauthorized disclosure by the receiving party, or (iii) is
independently developed by the receiving party without reliance in any
way on information provided by the disclosing party) related to the
business or businesses of ATS and its Affiliates, on the one hand, or
ATC and its Affiliates, on the other hand, including any of their
respective successors and assigns.
(b) In the event that this Agreement is terminated in
accordance with its terms, each party shall promptly redeliver all
written Confidential Information provided pursuant to this Section or
any other provision of this Agreement or otherwise in connection with
the Merger and shall not retain any copies, extracts or other
reproductions in whole or in part of such written material, other than,
in the event any Legal Action or Claim is then pending, threatened or
reasonably likely to be asserted, one copy thereof which shall be
delivered to independent counsel for such party.
(c) No investigation pursuant to this Section or otherwise
shall affect any representation or warranty in this Agreement of either
party or any condition to the obligations of the parties hereto.
(d) The provisions of this Section shall apply to all
Subsidiaries of ATC and ATS.
6.2 Agreement to Cooperate.
(a) Each of the parties hereto shall use reasonable business
efforts (x) to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable under
Applicable Law to consummate the Merger according to the terms and
subject to the conditions hereof, and (y) to refrain from taking, or
cause to be taken, any action and to refrain from doing or causing to
be done, anything which could impede or impair the consummation of the
Merger according to the terms and subject to the conditions hereof or
the consummation of the other Transactions according to the terms and
subject to the conditions hereof, including, in all cases, without
limitation using its reasonable business efforts (i) to prepare and
file with the applicable Authorities as promptly as practicable after
the execution of this Agreement all requisite applications and
amendments thereto, together with related information, data and
exhibits, necessary to request issuance of orders approving the Merger
by all such applicable Authorities, (ii) to obtain all necessary or
appropriate waivers, consents and approvals, (iii) to effect all
necessary registrations, filings and submissions (including without
limitation, if required, filings within ten (10) business days of the
date of this Agreement under the Hart-Scott-Rodino Act and all filings
necessary for ATS to own and operate the ATC Assets and the ATC
Business), (iv) to lift any injunction or other legal bar to the Merger
(and, in such case, to proceed with the Merger as expeditiously as
possible), and (v) to obtain the satisfaction of the conditions
specified in Article 7, including without limitation the truth and
correctness as of the Closing Date as if made on and as of the Closing
Date (other than those that
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speak as of a specific date which need only be true and correct as of
such date) of the representations and warranties of such party and the
performance and satisfaction as of the Closing Date of all agreements
and conditions to be performed or satisfied by such party.
(b) ATC shall cooperate and use its reasonable business
efforts to cause its independent accountants to reasonably cooperate
with ATS, and at ATS' expense, in order to enable ATS to have ATC's or
ATS' independent accountants prepare audited financial statements for
ATC described in Section 7.2(d). ATC will use its reasonable business
efforts to ensure that such financial statements will have been
prepared in accordance with GAAP applied on a basis consistent with the
ATC Financial Statements and will present fairly in all material
respects the financial condition, results of operation and cash flow of
ATC. Without limiting the generality of the foregoing, ATC agrees that
it will (i) consent to the use of such audited financial statements in
any registration, proxy or information statement or other document
filed by ATS or any of its Affiliates under the Securities Act or the
Exchange Act and (ii) execute and deliver, and cause its officers to
execute and deliver, such "representation" letters as are customarily
delivered in connection with audits and as ATS' or ATC's independent
accountants may reasonably request under the circumstances.
(c) Without limiting the generality of the foregoing, as
promptly as practicable after the execution of this Agreement, ATS and
ATC shall, at the written request of the other made from time to time
within thirty (30) days of the date of this Agreement, deliver or cause
to be delivered to ATC or ATS, as the case may be, copies of (i) all
title report and title insurance and (ii) Phase I environmental site
assessment reports or other environmental reports or studies in their
possession with respect to real property owned or leased by such party.
Each of ATS and ATC (an "investigating party") may at its own cost and
expense obtain, and deliver to the other party (the "owning party")
full and complete copies of, preliminary title reports and/or Phase I
environmental site assessment reports (or other environmental reports
or studies) with respect to any real property owned or leased by the
owning party (i) which is not covered by a title or environmental
report delivered to the investigating party or (ii) with respect to
which the title or environment report so furnished, in the reasonable
business judgment of the investigating party, raises questions of (x)
defects in title, in the case of title reports, or (y) potential
liability, in the case of Phase I environmental site assessment reports
(or other environmental reports or studies) which, in the case of title
defects or potential liability has had or could reasonably be expected
to have a Material Adverse Effect on the owning or leasing party. Site
assessments shall be conducted by such consultants and professionals as
ATS and ATC shall mutually agree and shall be arranged at times
mutually convenient to the parties. Each of ATC and ATS shall be
entitled to have representatives present at the time such site
assessments are conducted, and to have copies of all correspondence
with any environmental company conducting the site assessment pursuant
to the provisions of this Section.
(d) ATC agrees that prior to the Closing Date it will not make
or permit to be made any change affecting any bank, trust company,
savings and loan association, brokerage firm or safe deposit box or in
the names of the Persons authorized to draw thereon, to have access
thereto or to authorize transactions therein or in such powers of
attorney, or open any additional accounts or boxes or grant any
additional powers of attorney, without in each case notifying ATS in
writing on or prior to the Closing Date.
6.3 Public Announcements. Until the Closing or the termination of this
Agreement, each party shall consult with the other before issuing any press
release or otherwise making any public statements with
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respect to this Agreement or the Merger and shall not issue any such press
release or make any such public statement without the prior consent of the
other. Notwithstanding the foregoing, the parties acknowledge and agree that
they may, without each other's prior consent, issue such press releases or make
such public statements as may be required by Applicable Law, in which case the
disclosing party shall use its reasonable business efforts to consult with the
other party and agree upon the nature, content and form of such disclosure,
press release or other statement.
6.4 Notification of Certain Matters. Each party shall give prompt
notice to the other, of the occurrence or non-occurrence of any Event of which
such party becomes aware the occurrence or non-occurrence of which would be
reasonably likely to cause (a) any representation or warranty made by it
contained in this Agreement to be untrue or inaccurate in any material respect
or (b) any failure made by it to comply with or satisfy, or be able to comply
with or satisfy, in any material respect, any covenant, condition or agreement
to be complied with or satisfied by it under this Agreement in any material
respect, such that, in any such case, one or more of the conditions of Closing
would not be satisfied; provided, however, that the delivery of any notice
pursuant to this Section shall not limit or otherwise affect the rights and
remedies available hereunder to the party receiving such notice or the
obligations of the party delivering such notice and shall not, in any event,
affect the representations, warranties, covenants and agreements of the parties
or the conditions to their respective obligations under this Agreement.
6.5 No Solicitation. Neither ATC nor ATS shall, nor shall either of
them knowingly permit any of its or any of their Representatives or, with
respect to ATS, permit ARS (including, without limitation, any officer,
director, stockholder or any investment banker, broker, finder, attorney or
accountant retained by it) to, initiate, solicit or facilitate, directly or
indirectly, any inquiries or the making of any proposal with respect to any
Alternative Transaction applicable to it, engage in any discussions or
negotiations concerning, or provide to any other Person any information or data
relating to, it for the purposes of, or otherwise cooperate in any way with or
assist or participate in, or facilitate any inquiries or the making of any
proposal which constitutes, or may reasonably be expected to lead to, a proposal
to seek or effect any Alternative Transaction applicable to it, or agree to or
endorse any Alternative Transaction applicable to it. If ATC or ATS or any of
its Representatives receives any inquiry with respect to an Alternative
Transaction applicable to it while this Agreement is in effect, ATC or ATS, as
the case may be, shall inform the inquiring party that it is not entitled to
enter into discussions or negotiations relating to such an Alternative
Transaction. The provisions of this Section shall apply to all Subsidiaries of
ATC and ATS.
6.6 Conduct of Business by ATS Pending the Merger. Without limiting any
other covenant or agreement of ATS set forth in this Agreement, except as
otherwise permitted or contemplated by this Agreement, including without
limitation pursuant to the ATS Separate Agreement and, in the case of paragraphs
(a) and (b)(ii) and (iii), the Tower Distribution, after the date hereof and
prior to the Closing Date or earlier termination of this Agreement unless ATC
shall otherwise agree in writing, ATS shall, and shall cause its Subsidiaries,
to:
(a) conduct its business in the ordinary and usual course of
business and consistent with past practice, it being understood that
the acquisition of communications sites and related assets and other
business involved in the communications sites industry and the
construction and maintenance of communications towers and related
assets is part of the ordinary course of business of ATS; provided,
however, that any such acquisition or construction activity shall be
subject to the other paragraphs of this Section, including without
limitation paragraphs (d) and (l);
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(b) not (i) amend or propose to amend their respective Organic
Documents, (ii) split, combine or reclassify (whether by stock dividend
or otherwise) its outstanding capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of, or in
substitution for shares of its capital stock, or (iii) declare, set
aside or pay any dividend or distribution payable in cash, stock,
property or otherwise;
(c) not issue, sell, transfer, assign, convey, pledge or
dispose of, or agree to issue, sell, transfer, assign, convey, pledge
or dispose of, any shares of ATS Common Stock, Convertible Securities,
Option Securities or other equity securities;
(d) not (i) incur or become contingently liable with respect
to any Indebtedness for Money Borrowed other than (x) borrowings, in
addition to those permitted or consented to pursuant to the provisions
of clause (y) immediately following, not to exceed the sum of (I) the
principal amount of borrowings presently outstanding and (II) $5.0
million in the aggregate outstanding at any one time, and (y)
borrowings necessary to finance acquisitions and construction projects
permitted or consented pursuant to the provisions of paragraph (l)
below, (ii) redeem, purchase, acquire or offer to purchase or acquire
any shares of its capital stock, Convertible Securities or Option
Securities (iii) sell, lease, license, pledge, dispose of or encumber
any properties or assets or sell any businesses other than (A) pursuant
to agreements which are described in Section 6.6(d) of the ATS
Disclosure Schedule, (B) Liens arising in accordance with the
provisions of indebtedness in effect on the date hereof and in
accordance with their present terms, and (C) leases of towers and
shelter space to third-party customers, or (iv) make any loans,
advances or capital contributions to, or investments in, any other
Person, except to officers and employees of ATS for travel, business or
relocation expenses in the ordinary course of business consistent with
past practices;
(e) use reasonable business efforts to preserve intact its
business organization and goodwill, keep available the services of its
present officers and key employees, and preserve the goodwill and
business relationships with customers and others having business
relationships with them and not engage in any action, directly or
indirectly, with the intent to adversely impact the transactions
contemplated by this Agreement;
(f) at ATC's reasonable request, confer on a regular basis
with one or more representatives of ATC to report material operational
matters and the general status of ongoing operations, including without
limitation the status of pending and prospective acquisitions and of
the CBS Merger, including the satisfaction of the conditions to
consummation thereof, to the extent permitted or not restricted by
confidentiality provisions;
(g) not adopt, enter into, amend or terminate any employment,
severance, special pay arrangement with respect to employment or
termination of employment or other similar arrangements or agreements
with any directors, officers or key employees;
(h) maintain with financially responsible insurance companies
insurance on the ATS Assets and the ATS Business in such amounts and
against such risks and losses as are consistent with past practice;
(i) not make any Tax election that could reasonably be likely
to have a Material Adverse Effect on ATS or settle or compromise any
material income Tax liability;
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(j) except in the ordinary course of business, not modify or
amend in any material adverse manner or terminate any Material
Agreement to which ATS is a party or by which any of the ATS Assets may
be bound or to which any of them may be subject or waive, release or
assign any material rights or claims thereunder;
(k) not make any material change to its accounting methods,
principles or practices, except as may be required by GAAP;
(l) not enter into or agree to enter into any Restricted
Transaction (or group of related Restricted Transactions), whether for
its own account or for any other Person, if (i) the aggregate amount
reasonably expected to be expended by ATS or any of its Subsidiaries in
connection with such individual Restricted Transaction (together with
any group of related Restricted Transactions) exceeds $5.0 million, or
(ii) the aggregate amount to be expended in connection with all
Restricted Transactions (together with any group of related Restricted
Transactions) exceeds $20.0 million; provided, however, that the
foregoing restriction shall not apply to any Restricted Transaction
pursuant to agreements which are described in Section 6.6(l) of the ATS
Disclosure Schedule. (ATC agrees not to unreasonably withhold, delay or
condition a consent to any Restricted Transaction as to which ATS has
requested its consent pursuant to the provisions of this Section, it
being understood that any such consent shall not, however, relieve ATS
from the obligation to comply with the provisions of this Agreement
(other than, to the extent so consented to, paragraph (d) hereof) and
shall not be deemed to be a waiver of any condition of ATC's
obligations to consummate the Merger set forth in Section 7.3);
(m) except as set forth in Section 5.13 of the ATS Disclosure
Schedule, (i) not grant to any executive officer or other key employee
of ATS any increase in compensation, except for normal increases in the
ordinary course of business consistent with past practice, (ii) not
grant to any such executive officer any increase in severance or
termination pay, (iii) not adopt or amend any Plan or Benefit
Arrangement (including change any actuarial or other assumption used to
calculate funding obligations with respect to any Plan, or change the
manner in which contributions to any Plan are made or the basis on
which such contributions are determined) and (iv) except in the
ordinary course, not enter into, amend in any material respect or
terminate any Governmental Authorization, material Private
Authorization or Contract, except, for purposes of this clause (iv)
only, as would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect on ATS;
(n) not voluntarily take or permit to be taken any action
which if taken between the end of its most recent fiscal quarter and
prior to the date of this Agreement would have been required to be
noted as an exception on Section 5.15 of the ATS Disclosure Schedule,
other than as permitted or not restricted by the preceding provisions
of this Section 6.6; and
(o) not authorize or enter into any agreement that would
violate any of the foregoing.
6.7 Conduct of Business by ATC Pending the Merger. Without limiting any
other covenant or agreement of ATC set forth in this Agreement, except as
otherwise permitted or contemplated by this Agreement, or as set forth or
described in the ATC Disclosure Schedule, after the date hereof and prior to the
Closing Date or earlier termination of this Agreement, unless ATS shall
otherwise consent in writing, ATC shall, and shall cause its Subsidiaries to:
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(a) conduct its business in the ordinary and usual course of
business and consistent with past practice, it being understood that
the acquisition of communications sites and related assets and other
business involved in the communications sites industry and the
construction and maintenance of communications towers and related
assets is part of the ordinary course of business of ATC; provided,
however, that any such acquisition or construction activity shall be
subject to the other paragraphs of this Section, including without
limitation paragraphs (d) and (l);
(b) not (i) amend or propose to amend their respective Organic
Documents, (ii) split, combine or reclassify (whether by stock dividend
or otherwise) its outstanding capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of, or in
substitution for shares of its capital stock, or (iii) declare, set
aside or pay any dividend or distribution payable in cash, stock,
property or otherwise;
(c) not issue, sell, transfer, assign, convey, pledge or
dispose of, or agree to issue, sell, transfer, assign, convey, pledge
or dispose of, any shares of ATC Common Stock, Convertible Securities,
Option Securities or other equity securities;
(d) not (i) incur or become contingently liable with respect
to any Indebtedness for Money Borrowed other than (x) borrowings, in
addition to those permitted or consented to pursuant to the provisions
of clause (y) immediately following, not to exceed $2.5 million in the
aggregate outstanding at any one time, (y) borrowings necessary to fund
finance acquisitions or construction projects permitted pursuant to the
provisions of paragraph (l) below or to fund bonus payments and
transaction fees permitted by the provisions of this Agreement, and (z)
up to $4.5 million of subordinated borrowings to exercise redemption
rights with respect to ATC's preferred stock, (ii) redeem, purchase,
acquire or offer to purchase or acquire any shares of its capital
stock, Convertible Securities or Option Securities (iii) sell, lease,
license, pledge, dispose of or encumber any properties or assets
(except for nonstrategic assets that in the aggregate have a fair
market value of less than $1.0 million) or sell any businesses other
than (A) pursuant to agreements which are described in Section 6.7(d)
of the ATC Disclosure Schedule, (B) Liens arising in accordance with
the provisions of indebtedness in effect on the date hereof and in
accordance with their present terms, and (C) leases of towers and
shelter space to third-party customers or (iv) make any loans, advances
or capital contributions to, or investments in, any other Person,
except to officers and employees of ATC for travel, business or
relocation expenses in the ordinary course of business consistent with
past practices;
(e) use reasonable business efforts to preserve intact its
business organization and goodwill, keep available the services of its
present officers and key employees (other than individuals identified
to ATS prior to date hereof with specific reference to this provision),
and preserve the goodwill and business relationships with customers and
others having business relationships with them and not engage in any
action, directly or indirectly, with the intent to adversely impact the
transactions contemplated by this Agreement;
(f) at ATS' reasonable request, confer on a regular basis with
one or more representatives of ATS to report material operational
matters and the general status of ongoing operations, including without
limitation the status of pending and prospective acquisitions to the
extent permitted or not restricted by confidentiality provisions;
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(g) not adopt, enter into, amend or terminate any employment,
severance, special pay arrangement with respect to employment or
termination of employment or other similar arrangements or agreements
with any directors, officers or key employees;
(h) maintain with financially responsible insurance companies
insurance on the ATC Assets and the ATC Business in such amounts and
against such risks and losses as are consistent with past practice;
(i) not make any Tax election that could reasonably be likely
to have a Material Adverse Effect on ATC or settle or compromise any
material income Tax liability;
(j) except in the ordinary course of business, not modify or
amend in a manner materially adverse to ATC or terminate any Material
Agreement to which ATC is a party or by which any of the ATC Assets may
be bound or to which any of them may be subject or waive, release or
assign any material rights or claims thereunder;
(k) not make any material change to its accounting methods,
principles or practices, except as may be required by GAAP;
(l) not enter into or agree to enter into any Restricted
Transactions (or group of related Restricted Transactions), whether for
its own account or for any other Person, if (i) the aggregate amount
reasonably expected to be expended by ATC or any of its Subsidiaries in
connection with such individual Restricted Transaction (together with
any group of related Restricted Transactions) exceeds $5.0 million, or
(ii) the aggregate amount to be expended in connection with all
Restricted Transactions (together with any group of related Restricted
Transactions) exceeds $20.0 million; provided, however, that the
foregoing restriction shall not apply to any Restricted Transaction
pursuant to agreements which are described in Section 6.7(l) of the ATC
Disclosure Schedule. (ATS agrees not to unreasonably withhold, delay or
condition a consent to any Restricted Transaction as to which ATC has
requested its consent pursuant to the provisions of this Section, it
being understood that any such consent shall not, however, relieve ATC
from the obligation to comply with the provisions of this Agreement
(other than, to the extent so consented to, paragraph (d) hereof) and
shall not be deemed to be a waiver of any condition of ATS' obligations
to consummate the Merger set forth in Section 7.2);
(m) except as set forth in Section 4.14 of the ATC Disclosure
Schedule, (i) not grant to any executive officer or other key employee
of ATC any increase in compensation, except for normal increases in the
ordinary course of business consistent with past practice or as
required under Benefit Arrangements in effect as of September 30, 1997,
(ii) not grant to any such executive officer any increase in severance
or termination pay, except as was required under any Benefit
Arrangements in effect as of September 30, 1997, (iii) not adopt or
amend any Plan or Benefit Arrangement (including change any actuarial
or other assumption used to calculate funding obligations with respect
to any Plan, or change the manner in which contributions to any Plan
are made or the basis on which such contributions are determined) and
(iv) except in the ordinary course, not enter into, amend in any
material respect or terminate any Governmental Authorization, material
Private Authorization or Contract, except, for purposes of this clause
(iv) only, as would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect on ATC;
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(n) not voluntarily take or permit to be taken any action
which if taken between the end of its most recent fiscal quarter and
prior to the date of this Agreement would have been required to be
noted as an exception on Section 4.16 of the ATC Disclosure Schedule,
other than as permitted or not restricted pursuant to the provisions of
this Section 6.7; and
(o) not authorize or enter into any agreement that would
violate any of the foregoing.
6.8 Directors', Officers' and Employees' Indemnification and Insurance.
(a) The Organic Documents of ATS shall contain provisions no
less favorable with respect to indemnification than are set forth in
the Organic Documents of ATS, as in effect on the date hereof, which
provisions shall not be amended, repealed or otherwise modified for a
period of six (6) years from the Effective Time in any manner that
would affect adversely the rights thereunder of individuals who at any
time prior to the Effective Time were directors, officers or employees
of ATC or any of its Subsidiaries, unless such modification shall be
required by Applicable Law.
(b) From and after the Effective Time, ATS shall indemnify,
defend and hold harmless the present and former officers, directors and
employees of ATC or any of its Subsidiaries (collectively, the
"Indemnified Parties") against all losses, expenses, claims, damages,
liabilities or amounts that are paid in settlement of, or otherwise in
connection with any claim, action, suit, proceeding or investigation
(as used in this Section, a "claim"), based in whole or in part on the
fact that the Indemnified Party (or the Person controlled by the
Indemnified Party) is or was a director, officer or employee of ATC or
any of its Subsidiaries and arising out of actions or omissions
occurring at or prior to the Effective Time (including, without
limitation, in connection with this Agreement, the Merger and the
transactions contemplated hereby), whether asserted or claimed prior
to, at or after the Effective Time, in each case to the fullest extent
permitted under the DCL (and shall pay any expenses, as incurred, in
advance of the final disposition of any such action or proceeding to
each Indemnified Party to the fullest extent permitted under the DCL).
Without limiting the foregoing, in the event any such claim is brought
against any of the Indemnified Parties, (i) such Indemnified Parties
may retain counsel (including local counsel) satisfactory to them and
which shall be reasonably satisfactory to ATS and ATS shall pay all
reasonable fees and expenses of such counsel for such Indemnified
Parties; and (ii) ATS shall use its best efforts to assist in the
defense of any such claim; provided, however, that ATS shall not be
liable for any settlement effected without its written consent, which
consent shall not be unreasonably withheld, delayed or conditioned.
(c) ATS will use its best efforts to cause to be maintained
for a period of not less than six (6) years from the Effective Time a
directors' and officers' insurance and indemnification policy that
provides coverage for events occurring on or prior to the Effective
Time ("D&O Insurance") for all Persons who are directors and officers
of ATC or any of its Subsidiaries on the date of this Agreement, so
long as the annual premium therefor would not be in excess of $500,000.
If any then existing D&O Insurance expires, is terminated or canceled
during such six-year period, ATS will use its best efforts to cause to
be obtained as much D&O Insurance as can be obtained for the remainder
of such period for an annualized premium not in excess of $500,000, on
terms and conditions no less advantageous to the covered Persons than
the then existing D&O Insurance.
(d) In the event ATS or any of their respective successors or
assigns (i) consolidates with or merges into any other person and shall
not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers all or substantially all of
its properties and assets to any
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person, then and in each such case, proper provisions shall be made so
that the successors and assigns of ATS shall assume the obligations set
forth in this Section.
(e) This Section is intended to be for the benefit of, and
shall be enforceable by, the Indemnified Parties, their heirs and
personal representatives and shall be binding on ATS and its successors
and assigns. ATS shall furnish ATC with a copy of the D&O insurance
complying with the provisions of this Section 6.8 at or prior to the
Closing.
6.9 ATC Employees and Benefit Plans.
(a) Notwithstanding any provision in this Agreement to the
contrary, on or prior to the Closing Date, ATC may (i) take any action
permitted under Paragraph VIII(c) of ATC's 1995 Stock Option Plan with
respect to any or all Option Securities issued and outstanding under
such plan, (ii) accelerate the vesting and exercisability of any or all
of such Option Securities, (iii) amend any or all such Option
Securities to provide that such Option Security shall continue to be
exercisable for its entire stated term without regard to the employment
status or death of the holder of such Option Security, and (iv) pay
bonuses to the employees of ATC and its Subsidiaries in such amounts as
ATC shall determine in its sole discretion; provided, however, that (A)
the aggregate amount of the bonuses paid pursuant to clause (iv) of
this sentence, when added to any fees or expense reimbursements paid or
payable to any financial advisers in connection with the Merger or
related financial advice, shall not exceed $5.0 million (which amount
shall not include nor be reduced by any performance bonuses paid to
employees of ATC and its Subsidiaries with respect to calendar year
1997 on a basis consistent with past practices), and (B) ATC shall have
any action or payment described in this sentence approved by the
stockholders of ATC in accordance with the provisions of Section
280G(b)(5) of the Code to the extent necessary to ensure that no
actions taken with respect to the employees of ATC and its Subsidiaries
or payments made to such employees would result in imposition of the
sanctions imposed under Sections 280G and 4999 of the Code. Any bonus
paid pursuant to clause (iv) of the preceding sentence may be paid in
cash, by reducing the purchase price of shares of ATC Common Stock that
may be acquired under an Option Security issued under ATC's 1995 Stock
Option Plan, or any combination of the foregoing. Any actions taken or
payments made by ATC pursuant to the provisions of this Section 6.9(a)
may vary among the individual employees of ATC and its Subsidiaries and
may vary among the Option Securities held by any individual employee,
all as determined by ATC in its sole discretion.
(b) ATS shall take such action as may be necessary so that at
the Effective Time and for twelve (12) months thereafter the
individuals employed by ATC and its Subsidiaries immediately prior to
the Effective Time (the "Continued Employees") shall receive base
compensation (i.e., salary and wages) at a rate that is not less than
that received by such Continued Employees immediately prior to the
Closing Date; provided, however, that the foregoing provisions shall
not impair ATS' ability to terminate any such Continued Employee for
cause. If, within the twelve-month period beginning at the Effective
Time, the employment of any Continued Employee is terminated by ATS or
any of its Subsidiaries other than for cause, or any Continued Employee
is required to accept a material reduction in his or her title or
responsibilities or to transfer to a job location that is more than
thirty-five (35) miles from his or her job location immediately prior
to the Effective Time, but refuses such reduction or transfer within
fifteen (15) days of notice of such reduction or transfer, then ATS
shall continue to pay such Continued Employee his or her base rate of
pay for the balance of such twelve-month period (without mitigation for
any subsequent employment by such continued
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employee). The provisions of this Section 6.9(b) shall not be
applicable with respect to Fred R. Lummis.
(c) ATS shall take such action as may be necessary so that on
and after the Effective Time and for twelve (12) months thereafter,
officers and employees of ATC and its Subsidiaries shall be provided
employee benefits, plans and programs (excluding equity incentive
arrangements) which are no less favorable in the aggregate than those
generally available pursuant to those employee benefit plans and
programs in effect for such officers and employees immediately prior to
the Effective Time; it being understood that ATS shall determine the
types and levels of specific benefits to be so provided. For purposes
of eligibility to participate, vesting and benefit determinations
(other than benefit accruals under any defined benefit plan) in all
benefits provided to officers and employees of ATC and its
Subsidiaries, such officers and employees of ATC and its Subsidiaries
will be credited with their service with ATC and its Subsidiaries and
their respective predecessors. Upon termination of any health plan of
ATC or any of its Subsidiaries, individuals who were officers or
employees of ATC or its Subsidiaries at the Effective Time shall if
employed by ATS or its Subsidiaries become eligible to participate in
such health plans as may be established or maintained by ATS or its
Subsidiaries to the extent that such individuals and their eligible
dependents were eligible to participate in the applicable health plan
of ATC or its Subsidiaries immediately prior to the Effective Time.
Amounts paid during the calendar year in which such change of coverage
occurs by officers and employees of ATC and its Subsidiaries under any
health plans of ATC shall after such change be taken into account in
applying deductible and out-of-pocket limits applicable under the
health plans of ATS or its Subsidiaries provided during such calendar
year to the same extent as if such amounts had been paid under such
health plans of ATS or its Subsidiaries and ATS shall cause to be
waived under its health plans any pre-existing conditions as of the
date of termination of the ATC health plan and eligibility to
participate in such health plan to the extent such conditions would be
waived under the applicable plans of ATC and its Subsidiaries as in
effect on the date hereof. Nothing in this Agreement shall be construed
as granting to any employee of ATC or its Subsidiaries any rights of
continuing employment.
6.10 ATC Stock Options. Prior to the Effective Time, ATS and ATC shall
take such action as may be necessary to cause each unexpired and unexercised
option to purchase ATC Common Stock that is outstanding immediately prior to the
Merger (each, an "ATC Option" and collectively, the "ATC Options") to be
automatically converted at the Effective Time into an option (each, an "ATS
Option" and collectively, the "ATS Options") to purchase a number of shares of
ATS Class A Common Stock equal to the product of the number of shares of ATC
Common Stock which the holder is entitled to purchase under the ATC Option
multiplied by the Exchange Ratio, at a price per share equal to the quotient
obtained by dividing (a) the per share option exercise price determined pursuant
to the ATC Option by (b) the Exchange Ratio. Each ATS Option will otherwise have
the same terms and conditions as the ATC Option exchanged therefor, including
acceleration and period of exercise. At the Effective Time, ATS will execute and
deliver to each holder of an ATS Option a document evidencing ATS' assumptions
of ATC's obligations under the ATC Option and all references in the stock option
agreements to ATC shall be deemed to refer to ATS. As of the Effective Time, ATS
shall assume all of ATC's obligations with respect to the ATC Options as so
amended and shall, from and after the Effective Time, have reserved for issuance
upon exercise of the ATS Options all shares of ATS Class A Common Stock covered
thereby and shall file a Registration Statement on Form S-8 to register the
shares of ATS Class A Common Stock subject to the ATS Options granted in
replacement of ATC Options. ATS shall take all actions reasonably necessary to
maintain the effectiveness of such Registration Statement (and maintain the
current status of the prospectus or prospectuses contained therein) for so long
as such ATS Options remain outstanding. No fractional shares of ATS Class A
Common Stock will be issued upon the
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exercise of any ATS Option, and instead the exercising holder of such ATS Option
shall receive cash for any fractional share amounts, based on the fair market
value of the ATS Class A Common Stock at the time of exercise.
6.11 ATS Voting Agreement. ATS shall use its best efforts to cause each
of the Persons named therein to execute and deliver to ATC an agreement
substantially in the form of Exhibit C attached hereto and made a part hereof
(collectively, the "ATS Voting Agreement").
6.12 Stockholder Approval. ATC will, as soon as practicable following
the date thereof, establish a record date (which will be as soon as practicable
following the date hereof) for, and, after the Registration Statement has become
effective, duly call, give notice of, convene and hold a meeting of its
stockholders (the "ATC Stockholders Meeting") for the purpose of obtaining the
approval and adoption of this Agreement and the approval of the Merger by the
ATC stockholders (the "ATC Stockholder Approval"). ATC will, through its Board
of Directors, recommend to its stockholders approval and adoption of this
Agreement and approval of the Merger.
6.13 Registration Statement and Proxy/Information Statement.
(a) ATS shall prepare and file with the Commission as soon as
is reasonably practicable after the date hereof a Registration
Statement under the Securities Act (the "ATS Registration Statement")
on Form S-4 in connection with the Merger for the purpose of
registering all of the shares of ATS Class A Common Stock to be issued
in the Merger. ATS shall also take any action required under Applicable
Law in connection with causing the ATS Registration Statement declared
effective by the Commission as promptly as practicable, including
without limitation making all filings under applicable state blue sky
or securities laws in connection with the issuance of ATS Class A
Common Stock in the Merger. ATS shall promptly furnish to each other
all information, and take such other actions, as may reasonably be
requested in connection with any action by either of them in connection
with the provisions of this Section.
(b) ATC shall, as soon as is reasonably practicable after the
effectiveness of the ATS Registration Statement, mail notice to the ATC
common stockholders of the ATC Stockholders Meeting. Such notice shall
comply with the provisions of Applicable Law. ATS and ATC shall
promptly furnish to the other all information, and take such other
actions, as may reasonably be requested in connection with any action
taken to comply with the provisions of this Section, including, in the
case of ATS, the final prospectus (the "ATS Prospectus" and,
collectively with the notice furnished to the ATC stockholders in
connection with the ATC Stockholders Meeting, the "ATC Stockholder
Information") contained in the ATS Registration Statement.
(c) Each of ATC and ATS shall correct promptly any information
provided by it to be used specifically in the ATS Registration
Statement and the ATC Stockholder Information that shall have become
false or misleading in any material respect and ATS shall take all
steps necessary to file with the Commission and have cleared by the
Commission any amendment or supplement to the ATS Registration
Statement so as to correct such information and ATS shall cause it to
be disseminated to the ATC stockholders, to the extent required by
Applicable Law. Without limiting the generality of the foregoing, ATS
shall notify ATC promptly of the receipt of the comments of the
Commission and of any request by the Commission for amendments or
supplements to the ATS Registration Statement or the ATS Prospectus, or
for additional information, and shall supply ATC with copies of all
correspondence between it or its representatives, on the one hand, and
the Commission or members
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of its staff, on the other hand, with respect to the ATS Registration
Statement or the ATS Prospectus. Whenever any event occurs which should
be described in an amendment or a supplement to the ATS Registration
Statement or the ATS Prospectus, ATS shall, upon learning of such
event, promptly prepare, file and clear with the Commission and ATS
shall mail to the ATC stockholders such amendment or supplement;
provided, however, that, prior to such mailing, (i) ATS shall consult
with ATC with respect to such amendment or supplement, (ii) shall
afford ATC reasonable opportunity to comment thereon, and (iii) each
such amendment or supplement shall be reasonably satisfactory to ATC.
(d) ATC shall use its reasonable business efforts to cause to
be delivered to ATS and its directors a letter of independent auditors,
dated (i) the date of the ATS Prospectus Statement, and (ii) the
Closing Date, and addressed to ATS and its directors, in form, scope
and substance customary for letters delivered by independent public
accountants in connection with registrations statements similar to the
ATS Registration Statement.
6.14 Listing of ATS Class A Common Stock. ATS shall use its reasonable
business efforts to effect, at or before the Effective Time, authorization for
listing on Nasdaq (or such stock exchange as ATS shall have reasonably selected)
upon official notice of issuance, of the additional shares of the ATS Class A
Common Stock to be issued pursuant to the Merger; provided, however, that such
efforts shall not require the elimination of the different voting rights of the
classes of ATS Common Stock.
6.15 Solicitation of Employees. If this Agreement is terminated, each
of ATS and ATC agrees that neither it nor any of its Affiliates will, for a
period of eighteen (18) months from the date of such termination, solicit or
actively seek to hire any person who during such period is employed by ATC or
any of its Affiliates or ATS or any of its Affiliates, as the case may be,
whether or not such individual would commit breach of such individual's
employment agreement or contact in leaving such employment; provided, however,
that the foregoing shall not prevent ATS or ATC (or any of its respective
Affiliates) from soliciting or actively seeking to hire any such key employee
who (i) initiates employment discussions with it, (ii) is not employed by ATS or
ATC, as the case may be, on the date ATC or ATS, as the case may be, first
solicits such key employee, or (iii) soliciting through general advertisement.
6.16 Additional Tax Matters.
(a) Except for transactions in the ordinary and usual course
of business, following the date on which, for purposes of Section 1504
of the Code, ATS ceases to be a member of the "affiliated group" of
corporations of which ARS is the "common parent", ATS shall not engage
in any transaction and shall not permit an of its Subsidiaries to
engage in any transaction that would be treated as an "intercompany
transaction" as defined in Treas. Reg. ss. 1.1502-13.
(b) Each party hereto shall use all reasonable business
efforts to cause the Merger to qualify, and shall not take, and shall
use all reasonable business efforts to prevent any Affiliate of such
party from taking, any action which could prevent the Merger from
qualifying, as a reorganization under the provisions of Section 368(a)
of the Code.
6.17 ATS Registration Rights Agreement. Subject to the satisfaction (or
waiver) of the conditions to closing set forth in (a) Sections 7.1 and 7.2 (the
"ATS Conditions"), at or prior to the Closing, ATS shall execute and deliver a
registration rights agreement substantially in the form attached hereto as
Exhibit D and made a part hereof (the "ATS Registration Rights Agreement") and
permit the ATS Registration Statement
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to be executed by such of the ATC stockholders as elect to be so included, and
(b) Sections 7.1 and 7.3 (the "ATC Conditions"), ATC shall use its reasonable
business efforts to cause ATC's two largest stockholders and Fred R. Lummis to
the extent any of them may be an "affiliate", as that term is used in paragraphs
(c) and (d) of Rule 145 under the Securities Act, of ATS, to execute and deliver
the ATS Registration Rights Agreement.
6.18 Charter Amendment. Subject to the satisfaction (or waiver) of the
ATS Conditions, at or prior to the Closing, ATS shall cause the ATS Restated
Certificate to be approved by the Board of Directors and stockholders of ATS and
to be filed with the Secretary of State of the State of Delaware.
6.19 Conversion of Class B Common Stock. Subject to the satisfaction
(or waiver) of the ATS Conditions, at or prior to the Closing, ATS shall cause
the ATS Class B Common Stock issued to Steven B. Dodge in the ATS Private
Placement to be converted into a like number of shares of ATS Class A Common
Stock to the extent that, after giving effect to the consummation of the Merger,
Steven B. Dodge, Chairman of the Board and Chief Executive Officer of ATS, would
own more than 49.99% of the voting power of the ATS Common Stock within the
meaning of the ATS Restated Certificate. ATS shall ensure that no ATS Class B
Common Stock is issued in the ATS Private Placement to any Person other than
Steven B. Dodge and Thomas H. Stoner, in each case, to the extent permitted by
the provisions of this Section and Section 6.25.
6.20 ATS Separation Agreement. Unless previously entered into and
subject to the satisfaction (or waiver) of the ATS Conditions, at or prior to
the Closing, ATS shall, and shall ARS to, execute and deliver the ATS Separation
Agreement.
6.21 CBS Merger or Tower Distribution Related Actions. Subject to the
satisfaction (or waiver) of the ATS Conditions, at or prior to the Closing, ATS
shall, and shall cause ARS to, use its reasonable business efforts to cause (a)
the CBS Merger to occur, or, if the Tower Distribution is required in order to
satisfy the ATC Conditions, and (b) the Tower Distribution to occur, in each
case, in a manner that does not result in a default in, or with the passage of
time or giving of notice would not result in a default in or violation of any
Material Agreement to which ATS or ARS is a party or by which it is bound or the
Organic Documents of ATS or ARS, including without limitation the ATS Credit
Agreement, the ARS Credit Agreement and the ARS Cumulative Preferred Stock.
6.22 Efforts Regarding Pending Transactions. ATS shall use reasonable
business efforts to cause to be satisfied on or before the Termination Date all
conditions to closing applicable to the Gearon Transaction and the ATS Private
Placement and, upon satisfaction thereof, to consummate such transactions.
6.23 Certain Closing Certificates. ATC shall cause its chief financial
officer to deliver to ATS and its counsel at the Closing a certificate showing
his calculation, in reasonable detail, of the number of shares of ATC Common
Stock determined on a Fully-Diluted Basis immediately prior to the Effective
Time. ATS shall cause its chief financial officer to deliver to ATC and its
counsel at the Closing a certificate showing his calculation, in reasonable
detail, of the number of shares of ATS Common Stock determined on a
Fully-Diluted Basis immediately prior to the Effective Time.
6.24 ATC Affiliates Agreements. ATC shall use its reasonable business
efforts to cause each executive officer, director and other Person who may be an
"affiliate," as that term is used in paragraphs (c) and (d) of Rule 145 under
the Securities Act, of ATC, to have executed and delivered to ATS an agreement
substantially in the form of Exhibit E attached hereto and made a part hereof
(collectively, the "ATC Affiliate Agreements").
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6.25 Issue of ATS Class B Common Stock. Subject to the satisfaction of
the ATS Conditions, ATS shall not issue any shares of Class B Common Stock or
any Convertible Securities convertible or exchangeable into, or Option
Securities to purchase, any shares of ATS Class B Common Stock, except (a) to
Steven B. Dodge and, in the event Class B Common Stock shall not have been
distributed pursuant to the Tower Distribution, Thomas H. Stoner (but, with
respect to Mr. Stoner, in a number not more than he holds on the date hereof)
pursuant to the provisions of the ATS Private Placement, (b) Option Securities
issued to the holders of options to purchase Class B Common Stock of ARS, and
(c) upon consummation of the CBS Merger or the Tower Distribution to holders of
Class B Common Stock of ARS. ATS will furnish to ATC, if it has not already done
so, within five (5) business days of this Agreement, a list of the holders of
Class B Common Stock of ARS or of options to purchase Class B Common Stock of
ARS.
6.26 Election of ATS Directors. Subject to the satisfaction of the ATS
Conditions, ATS shall cause Fred R. Lummis and Randall Mays to be elected as
members of the Board of Directors of ATS.
6.27 Employee List. Within ten (10) days after the date hereof, ATS
shall furnish ATS with a list of all employees of ARS, ATS or their respective
Subsidiaries that are expected to be employed by the Surviving Company after the
Merger, the office or title of each and the compensation of each.
6.28 Certificates of Non-Foreign Status. Prior to the Closing Date, ATC
shall in respect of the conversion of ATC Common Stock pursuant to the Merger
use its reasonable to obtain on behalf of itself and ATS, from each person who
is a stockholder of ATC immediately prior to the Effective Time, a certificate
of non-foreign status of such stockholder that meets the requirements of Section
1445 of the Code and Section 1.1445-2(b) of the Treasury Regulations thereunder,
it being understood that the failure to obtain any such certificate shall not be
deemed to be a breach of this Section. ATC shall furnish to ATS on the Closing
Date a copy of such certificates of non-foreign status.
ARTICLE 7
CLOSING CONDITIONS
7.1 Conditions to Obligations of Each Party. The respective obligations
of each party to effect the Merger shall be subject to the satisfaction at or
prior to the Closing Date of the following conditions, any or all of which may
be waived, in whole or in part, to the extent permitted by Applicable Law by
each party benefitting therefrom:
(a) As of the Closing Date, no temporary restraining order,
preliminary or permanent injunction or other order issued by any court
of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in effect;
(b) The waiting period applicable to the consummation of the
Merger and the receipt by each ATC common stockholder of the Merger
Consideration due pursuant thereto, as the case may be, under the
Hart-Scott-Rodino Act, to the extent applicable, shall have expired or
been terminated;
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(c) The ATS Registration Statement shall have become effective
in accordance with the provisions of the Securities Act and in
accordance with the provisions of Section 6.13, and no stop order
suspending such effectiveness shall have been issued and remain in
effect and no proceeding for that purpose shall have been instituted by
the Commission or any state regulatory authorities and all shares of
ATS Common Stock to be issued to the ATC stockholders pursuant to the
Merger shall be covered by the ATS Registration Statement;
(d) The shares of ATS Class A Common Stock to be issued in the
Merger shall have been approved for listing on Nasdaq (or such other
national stock exchange on which such stock is then approved for
listing), upon official notice of issuance; and
(e) The ATC Stockholder Approval shall have been obtained.
7.2 Conditions to Obligations of ATS. The obligation of ATS to effect
the Merger shall be subject to the satisfaction of the following conditions, any
or all of which may be waived, in whole or in part, by ATS to the extent
permitted by Applicable Law:
(a) ATC shall have furnished ATS and, at ATS' request, any
bank or other financial institution providing credit to ATS, with a
favorable opinion, dated the Closing Date, of Vinson & Elkins L.L.P.,
counsel for ATC, substantially in the form attached hereto as Exhibit F
and made a part hereof;
(b) (i) The representations and warranties of ATC set forth in
this Agreement (other than in Section 4.21) shall be true and correct
as of the date hereof and as of the Closing Date as though made on and
as of the Closing Date except (x) to the extent such representations
and warranties expressly speak as of an earlier date (in which case
such representations and warranties shall be true and correct as of
such earlier date) and (y) to the extent that the failure of such
representations and warranties to be true and correct, individually or
in the aggregate, would not have a Material Adverse Effect on ATC;
provided, however, that for the purpose of this clause (y),
representations and warranties that are qualified as to materiality
(including by reference to "Material Adverse Effect") shall not be
deemed to be so qualified; (ii) the representations and warranties of
ATC set forth in Section 4.21 of this Agreement shall be true and
correct; provided, however, such untruth shall be disregarded for
purposes of this Section 7.2(b) if, by adjusting the Exchange Ratio at
Closing, the untruth is rendered harmless and such adjustment either
does not require the approval of the ATC stockholders, or such approval
has been obtained, in accordance with the DCL; (iii) each and all of
the agreements and covenants to be performed or satisfied by ATC or any
of the ATC stockholders hereunder at or prior to the Closing Date shall
have been duly performed or satisfied in all material respects; and
(iv) an executive officer of ATC shall have furnished ATS with his
certificate, confirming, to his knowledge, the truth of such
representations and warranties and the performance of such covenants
and agreements;
(c) There has not occurred any Event (including without
limitation the failure to secure all authorizations, consents, waivers,
orders or approvals required to be obtained by ATC from all Authorities
and other Person, and all filings, submissions, registrations, notices
or declarations required to be made by any of the parties with any
Authority, or the imposition of any condition or requirement in
connection therewith) that has had, or is reasonably likely to have, a
Material Adverse Effect on ATC, other than an Event affecting the
economy or the tower communications business
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generally or an Event that would not have occurred but for the
execution of this Agreement and the announcement of the Merger; and
(d) ATS shall have received from its counsel, Sullivan &
Worcester LLP, a favorable opinion (dated as of the Closing Date) to
the effect that the Merger constitutes a reorganization within the
meaning of Section 368 of the Code and that, as a consequence, ATS will
not recognize any gain or loss for federal income tax purposes as a
result of consummation of the Merger, and, in connection with such
opinion, ATC and such of its stockholders as such counsel shall have
reasonably requested shall have executed and delivered to ATS and such
counsel a certificate substantially in the form attached hereto as
Exhibit G and made a part hereof.
7.3 Conditions to Obligations of ATC. The obligation of ATC to effect
the Merger shall be subject to the satisfaction of the following conditions, any
or all of which may be waived, in whole or in part, by ATC to the extent
permitted by Applicable Law:
(a) ATS shall have furnished ATC, with favorable opinions,
dated the Closing Date, of Sullivan & Worcester LLP, counsel for ATS,
substantially in the form attached hereto as Exhibit H and made a part
hereof, and with respect to such other matters arising after the date
of this Agreement and incident to the Merger, as ATC or its counsel may
reasonably request;
(b) (i) The representations and warranties of ATS set forth in
this Agreement (other than in Section 5.20) shall be true and correct
as of the date hereof and as of the Closing Date as though made on and
as of the Closing Date except (x) to the extent such representations
and warranties expressly speak as of an earlier date (in which case
such representations and warranties shall be true and correct as of
such earlier date) and (y) to the extent that the failure of such
representations and warranties to be true and correct, individually or
in the aggregate, would not have a Material Adverse Effect on ATS;
provided, however, that for the purpose of this clause (y),
representations and warranties that are qualified as to materiality
(including by reference to "Material Adverse Effect") shall not be
deemed to be so qualified; (ii) the representations and warranties of
ATS set forth in Section 5.20 of this Agreement shall be true and
correct; provided, however, such untruth shall be disregarded for
purposes of this Section 7.3(b) if, by adjusting the Exchange Ratio at
Closing, the untruth is rendered harmless and such adjustment either
does not require the approval of the ATS or ARS stockholders, or such
approval has been obtained, in accordance with the DCL; (iii) each and
all of the agreements and conditions to be performed or satisfied by
ATS or any of the ATS common stockholders hereunder at or prior to the
Closing Date (including without limitation the execution and delivery
of all collateral documents to be executed and delivered by it or any
of them) shall have been duly performed or satisfied in all material
respects; and (iv) an executive officer of ATS shall have furnished ATC
with his certificate confirming, to his knowledge, the truth of such
representations and warranties and the performance of such covenants
and agreements;
(c) There has not occurred any Event (including without
limitation the failure to secure all authorizations, consents, waivers,
orders or approvals required to be obtained by ATS from all Authorities
and other Person, and all filings, submissions, registrations, notices
or declarations required to be made by any of the parties with any
Authority, or the imposition of any condition or requirement in
connection therewith) that has had, or is reasonably likely to have, a
Material Adverse Effect on ATS, other than an Event affecting the
economy or the tower communications business generally or an Event that
would not have occurred but for the execution of this Agreement and the
announcement of the Merger;
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(d) ATC shall have received evidence of the consummation of
the Gearon Transaction and the ATS Private Placement, all on the terms
and conditions set forth, in the case of the Gearon Transaction, in the
Gearon Merger Agreement, and, in the case of the ATS Private Placement,
on the terms and conditions described in the ATS Information Statement,
or, in either case, on such other terms and conditions not materially
adverse to ATS, including without limitation, but, in any event, in
both cases, the issuance of shares of ATS Class A Common Stock shall be
at a price per share of not less than $9.00 and, with respect to the
ATS Private Placement for a total purchase price of not less than $80.0
million;
(e) Fred R. Lummis, one of the stockholders of ATC, and
Randall Mays, the Chief Financial Officer of another of the
stockholders of ATC, shall have been elected as directors of ATS;
(f) ATC shall have received from its counsel, Vinson & Elkins
L.L.P., a favorable opinion (dated as of the Closing Date) to the
effect that the Merger constitutes a reorganization within the meaning
of Section 368 of the Code and that, as a consequence, ATC and its
stockholders will not recognize any gain or loss for federal income tax
purposes as a result of consummation of the Merger, and, in connection
with such opinion, ATS shall have executed and delivered to ATC and its
counsel a certificate substantially in the form of Exhibit I hereto and
made a part hereof; and
(g) Either the CBS Merger shall be consummated on the terms
set forth in the CBS Merger Agreement, including execution and delivery
of the ATS Separation Agreement or the Tower Distribution shall have
occurred.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date:
(a) by mutual consent of ATC and ATS; or
(b) by either ATS or ATC if any permanent injunction, decree
or judgment by any Authority preventing the consummation of the Merger
shall have become final and nonappealable; or
(c) by ATC in the event (i) ATC is not in breach of this
Agreement and none of its representations or warranties shall have
become and continue to be untrue in a manner that would cause the
condition set forth in Section 7.2(b) not to be satisfied, and (ii)
either (A) the Merger has not been consummated prior to the Termination
Date, or (B) ATS is in breach of this Agreement or any of its
representations or warranties shall have become and continue to be
untrue in a manner that would be reasonably likely to cause the
conditions set forth in Section 7.3(b) not to be satisfied, and such a
breach or untruth exists and is not capable of being cured, by and will
prevent or delay consummation of the Merger by or beyond, the
Termination Date; or
(d) by ATS in the event (i) ATS is not in breach of this
Agreement and none of its representations or warranties shall have
become and continue to be untrue in a manner that would
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cause the condition set forth in Section 7.3(b) not to be satisfied,
and (ii) either (A) the Merger has not been consummated prior to the
Termination Date, or (B) ATC is in breach of this Agreement or any of
ATC's representations or warranties shall have become and continue to
be untrue in a manner that would be reasonably likely to cause the
conditions set forth in Section 7.2(b) not to be satisfied, and such a
breach or untruth exists and is not capable of being cured by, and will
prevent or delay consummation of the Merger by or beyond, the
Termination Date; or
(e) by ATS or ATC in the event (i) the ATC Stockholder
Approval has not been obtained prior to the Termination Date, (ii)
neither the CBS Merger nor the Tower Distribution has occurred prior to
the Termination Date in the manner described in Section 6.21, or (iii)
prior to the Termination Date, any consent or approval from the ARS
stockholders required to satisfy any of the conditions in Article 7 or
otherwise to consummate the Merger has not been obtained.
The right of ATS or ATC to terminate this Agreement pursuant to this
Section shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of either party, any Person controlling
either party or any of their respective Representatives whether prior to or
after the execution of this Agreement.
8.2 Effect of Termination.
(a) Except as provided in Sections 6.1 (solely with respect to
confidentiality), 6.3 and 6.15 and this Section and except as provided
in Section 8.2(b), in the event of the termination of this Agreement
pursuant to Section 8.1, or in the event the Merger shall not have been
consummated prior to the end of business on the Termination Date,
except as otherwise provided in this Section, this Agreement shall
forthwith become void, there shall be no liability on the part of
either party, or any of its respective shareholders, officers or
directors, to the other and all rights and obligations of either party
shall cease; provided, however, that such termination shall not relieve
either party from liability for any willful misrepresentation or
willful breach of any of its warranties, covenants or agreements set
forth in this Agreement.
(b) Notwithstanding anything in this Agreement to the
contrary, including without limitation the provisions of Section 9.4,
in the event this Agreement is terminated (a) pursuant to the
provisions of Section 8.1(e)(i), then ATC acknowledges and agrees that
ATS shall be entitled to a termination fee in an amount equal to
$15,000,000, together with the reasonable out of pocket fees and
expenses (including without limitation the reasonable out of pocket
fees and expenses of accountants, attorneys, financial advisors and
printers and all registration and other filing fees), not to exceed
$1,000,000, incurred by ATS in connection with this Agreement and the
Merger, unless ATS has notified Fred R. Lummis (or the then acting
Chairman of ATC, if not Mr. Lummis) or ATC is otherwise actually aware,
at least five (5) business days in advance of the Termination Date,
that the ATS Registration Statement has been declared effective, in
which case ATS shall not be entitled to any termination fee, expense
reimbursement or other payment from ATC, or (b) pursuant to the
provisions of Section 8.1(e)(ii) or (iii), then ATS acknowledges and
agrees that ATC shall be entitled to a termination fee in an amount
equal to $15,000,000, together with the reasonable out of pocket fees
and expenses (including without limitation the reasonable out of pocket
fees and expenses of accountants, attorneys, financial advisors and
printers and all registration and other filing fees), not to exceed
$1,000,000, incurred by ATC in connection with this Agreement and the
Merger. The parties agree that, anything in Section 8.2(a), Section 9.4
or elsewhere in this Agreement to the contrary notwithstanding, such
amount shall be a sole and exclusive remedy and constitute full
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payment for any and all damages suffered by ATS or ATC, as the case may
be, by reason of the events referred to in the preceding sentence. ATS
and ATC agree in advance that actual damages would be difficult to
ascertain and that such termination fee is a fair and equitable amount
to be paid by ATC or by ATS in order to reimburse the other for damages
sustained due to the failure of the Merger to be consummated for the
above-stated reasons.
ARTICLE 9
GENERAL PROVISIONS
9.1 Waivers; Amendments. Changes in or additions to this Agreement may
be made, or compli ance with any term, covenant, agreement, condition or
provision set forth herein may be omitted or waived (either generally or in a
particular instance and either retroactively or prospectively) with, but only
with, the consent in writing of the parties hereto. No delay on the part of
either party at any time or times in the exercise of any right or remedy shall
operate as a waiver thereof. Any consent may be given subject to satisfaction of
conditions stated therein. The failure to insist upon the strict provisions of
any covenant, term, condition or other provision of this Agreement or to
exercise any right or remedy thereunder shall not constitute a waiver of any
such covenant, term, condition or other provision thereof or default in
connection therewith. The waiver of any covenant, term, condition or other
provision thereof or default thereunder shall not affect or alter this Agreement
in any other respect, and each and every covenant, term, condition or other
provision of this Agreement shall, in such event, continue in full force and
effect, except as so waived, and shall be operative with respect to any other
then existing or subsequent default in connection therewith.
9.2 Fees, Expenses and Other Payments. All costs and expenses incurred
in connection with this Agreement and the consummation of the Merger, including
without limitation fees and disbursements of counsel, financial advisors and
accountants incurred by the parties hereto, shall be borne solely and entirely
by the party which has incurred such costs and expenses or which is responsible
therefor under Applicable Law.
9.3 Notices. All notices and other communications which by any
provision of this Agreement are required or permitted to be given shall be given
in writing and shall be deemed to have been delivered (a) three (3) days after
being mailed by first-class or express mail, postage prepaid, (b) the next
business day when sent overnight by recognized courier service, (c) upon
confirmation when sent by telex, telegram, telecopy or other form of rapid
transmission, confirmed by mailing (by first class or express mail, postage
prepaid, or by recognized courier service) written confirmation at substantially
the same time as such rapid transmission, or (d) upon delivery when personally
delivered to the receiving party (which if other than an individual shall be an
officer or other responsible party of the receiving party). All such notices and
communications shall be mailed, sent or delivered as follows:
(a) If to ATS:
116 Huntington Avenue
Boston, Massachusetts 02116
Attention: Joseph L. Winn, Chief Financial Officer
Telecopier No.: (617) 375-7575
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with a copy to:
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
Attention: Norman A. Bikales, Esq.
Telecopier No.: (617) 338-2880
(b) If to ATC:
3411 Richmond Avenue,
Suite 400
Houston, Texas 77046
Attention: Marty L. Jimmerson, Chief Financial Officer
Telecopier No.: (713) 629-1189
with a copy to:
Vinson & Elkins L.L.P.
1001 Fannin
Suite 2300
Houston, Texas 70002-6170
Attention: Bruce C. Herzog, Esq.
Telecopier No.: (713) 615-5946
or to such other person(s), telex or facsimile number(s) or address(es) as the
party to receive any such communication or notice may have designated by written
notice to the other party given in accordance with this Section.
9.4 Specific Performance; Other Rights and Remedies. Each party
recognizes and agrees that in the event the other party should refuse to perform
any of its obligations under this Agreement or any Collateral Document, the
remedy at law would be inadequate and agrees that for breach of such provisions,
each party shall, in addition to such other remedies as may be available to it
at law or in equity, except as otherwise provided in Section 8.2(b), be entitled
to injunctive relief and to enforce its rights by an action for specific
performance to the extent permitted by Applicable Law. Each party hereby waives
any requirement for security or the posting of any bond or other surety in
connection with any temporary or permanent award of injunctive, mandatory or
other equitable relief. Except as otherwise provided in Section 8.2, nothing
herein contained shall be construed as prohibiting either party from pursuing
any other remedies available to it pursuant to the provisions of this Agreement
or Applicable Law for a breach by the other party, including without limitation
the recovery of damages, including, to the extent awarded in any Legal Action,
punitive, incidental and consequential damages (including without limitation
damages for diminution in value and loss of anticipated profits) or any other
measure of damages permitted by Applicable Law.
9.5 Severability. If any term or provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative, illegal or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the
conflicting of any provision with any constitution or statute or rule of public
policy or for any other reason, such circumstance shall not have the effect of
rendering the provision or provisions in question invalid, inoperative, illegal
or
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unenforceable in any other jurisdiction or in any other case or circumstance or
of rendering any other provision or provisions herein contained invalid,
inoperative, illegal or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative, illegal or unenforceable
provision had never been contained herein and such provision reformed so that it
would be valid, operative and enforceable to the maximum extent permitted in
such jurisdiction or in such case. Notwithstanding the foregoing, in the event
of any such determination the effect of which is to affect materially and
adversely either party, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by Applicable Law in an acceptable
manner to the end that the Transactions are fulfilled and consummated to the
maximum extent possible.
9.6 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, binding upon all of the
parties. In pleading or proving any provision of this Agreement, it shall not be
necessary to produce more than one of such counterparts.
9.7 Section Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
9.8 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by, and construed in accordance
with, the applicable laws of the United States of America and the laws of the
State of New York applicable to contracts made and performed in such State and,
in any event, without giving effect to any choice or conflict of laws provision
or rule that would cause the application of domestic substantive laws of any
other jurisdiction, except to the extent that the DCL or other laws of the State
of Delaware shall be applicable.
9.9 Further Acts. Each party agrees that at any time, and from time to
time, before and after the consummation of the transactions contemplated by this
Agreement, it will do all such things and execute and deliver all such
Collateral Documents and other assurances, as the other party reasonably deems
necessary or desirable in order to carry out the terms and conditions of this
Agreement and the transactions contemplated hereby or to facilitate the
enjoyment of any of the rights created hereby or to be created hereunder.
9.10 Entire Agreement. This Agreement (together with the ATC Disclosure
Schedule, the ATS Disclosure Schedule, the Exhibits and the other Collateral
Documents delivered or to be delivered in connection herewith) constitutes the
entire agreement of the parties with respect to the subject matter hereof and
supersedes all prior agreements, arrangements, covenants, promises, conditions,
undertakings, inducements, representations, warranties and negotiations,
expressed or implied, oral or written, between the parties, with respect to the
subject matter hereof. Each of the parties is a sophisticated legal entity that
was advised by experienced counsel and, to the extent it deemed necessary, other
advisors in connection with this Agreement. Each of the parties hereby
acknowledges that (a) neither of the parties has relied or will rely in respect
of this Agreement or the transactions contemplated hereby upon any document or
written or oral information previously furnished to or discovered by it or its
representatives, other than this Agreement (or such of the foregoing as are
delivered at the Closing, (b) there are no covenants or agreements by or on
behalf of either party or any of its respective Affiliates or representatives
other than those expressly set forth in this Agreement and the Collateral
Documents, and (c) the parties' respective rights and obligations with respect
to this Agreement and the events giving rise thereto will be solely as set forth
in this Agreement and the Collateral Documents. WITHOUT LIMITING THE GENERALITY
OF THE FOREGOING, EACH PARTY
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HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN
THIS AGREEMENT, NEITHER OF THE PARTIES MAKES ON BEHALF OF ITSELF AND ITS
DIRECTORS, OFFICERS, STOCKHOLDERS AND OTHER AFFILIATES ANY OTHER REPRESENTATIONS
OR WARRANTIES, AND EACH HEREBY DISCLAIMS ON BEHALF OF ITSELF AND ITS OFFICERS,
DIRECTORS, STOCKHOLDERS AND OTHER AFFILIATES ANY OTHER REPRESENTATIONS OR
WARRANTIES MADE BY ITSELF OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
FINANCIAL AND LEGAL ADVISORS OR OTHER REPRESENTATIVES, WITH RESPECT TO THE
EXECUTION AND DELIVERY OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR THE OTHER'S
REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY
ONE OR MORE OF THE FOREGOING.
9.11 Assignment. This Agreement shall not be assignable by either party
and any such assignment shall be null and void, except that it shall inure to
the benefit of and by binding upon any successor to either party by operation of
law, including by way of merger, consolidation or sale of all or substantially
all of its assets.
9.12 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any Person any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement,
except as otherwise provided in Sections 6.8, 6.9(b), 6.9(c), 6.10 and 8.11.
9.13 Non-Survival of Representations, Warranties, Covenants and
Agreements. Except for damages or other remedies attributable to or based upon
fraud, willful or intentional misrepresentation or willful or intentional breach
of warranty, covenant or agreement, none of the representations, warranties,
covenants and agreements in this Agreement shall survive the Merger, and after
effectiveness of the Merger neither party nor any of its respective officers,
directors or stockholders shall have any further obligation with respect
thereto. This Section shall not limit any covenant or agreement of the parties
which by its terms contemplates performance after the Effective Time.
9.14 Mutual Drafting. This Agreement is the result of the joint efforts
of the parties, and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of the parties and there shall be no
construction against either party based on any presumption of that party's
involvement in the drafting thereof.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have executed or caused this Agreement
to be executed by their respective officers thereunto duly authorized as of the
date first written above.
American Tower Systems Corporation
By: /s/ Joseph L. Winn
Name: Joseph L. Winn
Title: Chief Financial Officer
American Tower Corporation
By: /s/ Fred R. Lummis
Name: Fred R. Lummis
Title: President
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APPENDIX A
DEFINITIONS
Affiliate, Affiliated shall mean, with respect to any Person, (a) any
other Person at the time directly or indirectly controlling, controlled by or
under direct or indirect common control with such Person, (b) any other Person
of which such Person at the time owns, or has the right to acquire, directly or
indirectly, ten percent (10%) or more of any class of the capital stock or
beneficial interest, (c) any other Person which at the time owns, or has the
right to acquire, directly or indirectly, ten percent (10%) or more of any class
of the capital stock or beneficial interest of such Person, (d) any executive
officer or director of such Person, (e) with respect to any partnership, joint
venture or similar Entity, any general partner thereof, and (f) when used with
respect to an individual, shall include any member of such individual's
immediate family or a family trust.
Agreement shall mean this Agreement as originally in effect, including,
unless the context otherwise specifically requires, this Appendix A, the ATC
Disclosure Schedule, the ATS Disclosure Schedule and all exhibits hereto, and as
any of the same may from time to time be supplemented, amended, modified or
restated in the manner herein or therein provided.
Aggregate Merger Shares shall mean the number obtained by solving the
following equation for "x":
x = (.5384615) multiplied by y, where "y" is the number of
shares of ATS Common Stock determined on a Fully-Diluted Basis
immediately prior to the Effective Time. Thus, in the event
there were no Dissenting Shares, the number of Aggregate
Merger Shares would equal 35% of the sum of the Aggregate
Merger Shares and the number of shares of ATS Common Stock
determined on a Fully-Diluted Basis.
Alternative Transaction shall mean, with respect to any Person, a
transaction or series of related transactions (other than the Transactions)
resulting in or reasonably likely to result in (i) any change of control of such
Person, (ii) any merger, consolidation or other business combination of such
Person, regardless of whether such Person is the surviving Entity unless the
surviving Entity remains obligated under this Agreement to the same extent as
such Person was, (iii) any tender offer or exchange offer for, or any
acquisitions of, any securities of such Person, (iv) any sale or other
disposition of all or any substantial part of the assets or business of such
Person, (v) any issue or sale, or any agreement to issue or sell, any capital
stock, Convertible Securities, Option Securities or other equity securities by
such Person, or (vi) any issue, sale, transfer, pledge, assignment or other
conveyance or any agreement to issue, sell, transfer, pledge, assign or
otherwise convey, any capital stock, such Convertible Securities, Option
Securities or other equity securities of such Person.
Applicable Law shall mean any Law of any Authority, whether domestic or
foreign, including without limitation the FCA and all federal and state
securities and Environmental Laws, to which a Person is subject or by which it
or any of its business or operations is subject or any of its property or assets
is bound.
ARS shall have the meaning given to it in the fourth Whereas paragraph.
ARS Credit Agreements shall mean the two credit agreements of ARS with
its lending banks and other financial institutions.
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ARS Cumulative Preferred Stock shall mean the 11 3/8% Cumulative
Exchangeable Preferred Stock, par value $.01 per share, of ARS.
ARS Preferred Certificate shall have the meaning given to it in Section
5.23(b).
ATC shall have the meaning given to it in the Preamble.
ATC Affiliate Agreements shall have the meaning given to it in Section
6.24.
ATC Assets shall have the meaning given to it in Section 4.4(a).
ATC Business shall have the meaning given to it in Section 4.4(a).
ATC Business Description shall mean the business description of ATC set
forth in the ATS Prospectus.
ATC Common Stock shall have the meaning given to it in Section 3.1(b).
ATC Conditions shall have the meaning given to it in Section 6.17.
ATC Disclosure Schedule shall mean the ATC Disclosure Schedule dated as
of the date of this Agreement delivered by ATC to ATS.
ATC Employees shall have the meaning given it in Section 4.14.
ATC Financial Statements shall have the meaning given to it in Section
4.2.
ATC Governmental Authorizations shall have the meaning given to it in
Section 4.6(a).
ATC Option(s) shall have the meanings given to those terms in Section
6.10.
ATC Preferred Stock shall have the meaning given to it in Section
3.1(d).
ATC Private Authorization(s) shall have the meaning given to it in
Section 4.5.
ATC Required Vote shall have the meaning given to it in Section 4.21.
ATC Share(s) shall have the meanings given to them in Section 3.1(b).
ATC Stockholder Approval shall have the meaning given to it in Section
6.12.
ATC Stockholder Information shall have the meaning given to it in
Section 6.13(b)
ATC Stockholders Meeting shall have the meaning given to it in Section
6.12.
ATC's knowledge (or words of similar import) shall mean the actual
knowledge of ATC or any ATC director or officer, as such knowledge exists on the
date of this Agreement, after reasonable review of appropriate ATC records and
after reasonable inquiry of appropriate ATC employees.
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ATS shall have the meaning given to it in the Preamble.
ATS Assets shall have the meaning given to it in Section 5.4(a).
ATS Business shall have the meaning given to it in Section 5.4(a).
ATS Existing Restated Certificate shall have the meaning given to it in
Section 2.5.
ATS Class A Common Stock shall have the meaning given to it in Section
3.1(b).
ATS Class B Common Stock shall mean the Class B Common Stock, par value
$.01 per share, of ATS.
ATS Common Stock shall have the meaning given to it in Section 3.1(b).
ATS Conditions shall have the meaning given to it in Section 6.17.
ATS Disclosure Schedule shall mean the ATS Disclosure Schedule dated as
of the date of this Agreement delivered by ATS to ATC.
ATS Employees shall have the meaning given it in Section 5.13.
ATS Financial Statements shall have the meaning given to it in Section
5.2
ATS Governmental Authorizations shall have the meaning given to it in
Section 5.6(a)
ATS Information Statement shall mean the Information Statement draft,
dated December 12, 1997, describing the business of ATS and certain other
matters heretofore delivered by ATS to ATC.
ATS' knowledge (or words of similar import) shall mean the actual
knowledge of any director or executive officer of ATS, as such knowledge exists
on the date of this Agreement, after reasonable review of appropriate ATS
records and after reasonable inquiry of appropriate ATS employees.
ATS Noncompetition Agreements shall have the meaning given to it in
Section 7.2(i).
ATS Option(s) shall have the meanings given to those terms in Section
6.10.
ATS Private Authorizations shall have the meaning given to it in
Section 5.5.
ATS Private Placement shall mean the issue and sale by ATS of shares of
ATS Class A Common Stock to certain officers and directors of ATS (or their
Affiliates) for an aggregate consideration of not more than $80.0 million, at a
per share price of not less than $9.00, all as described in the ATS Information
Statement.
ATS Prospectus shall have the meaning given to it in Section 6.13(b).
ATS Registration Rights Agreement shall have the meaning given to it in
Section 6.17.
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ATS Registration Statement shall have the meaning given to it in
Section 6.13(a).
ATS Restated Certificate shall have the meaning given to it in Section
2.5.
ATS Separation Agreement shall mean the agreement referred to in
Section 6.17 of the CBS Merger Agreement and which shall incorporate the
provisions of Section 6.17, 6.18 and 6.19 of the CBS Merger Agreement as they
exist on the date hereof or as they may be amended in a manner that does not
increase materially the obligations and liabilities of ATS.
ATS Voting Agreement shall have the meaning give to it in Section 6.11.
ATSI shall mean American Tower Systems, Inc., a Delaware corporation
which is wholly-owned by ATS and which conducts directly or through Subsidiaries
substantially all of the ATS Business and owns directly or through Subsidiaries
substantially all of the ATS Assets.
Authority shall mean any governmental or quasi-governmental authority,
whether administrative, executive, judicial, legislative or other, or any
combination thereof, including without limitation any federal, state,
territorial, county, municipal or other government or governmental or
quasi-governmental agency, arbitrator, authority, board, body, branch, bureau,
or comparable Person, whether domestic or foreign, including without limitation
the FCC.
Benefit Arrangement shall mean, with respect to any Person, any
material benefit arrangement that is not a Plan, including (a) any employment or
consulting agreement, (b) any arrangement providing for insurance coverage or
workers' compensation benefits, (c) any incentive bonus or deferred bonus
arrangement, (d) any arrangement providing termination allowance, severance or
similar benefits, (e) any equity compensation plan, (f) any deferred
compensation plan, and (g) any compensation policy and practice, but only to the
extent that it covers or relates to any officer, employee, individual or Entity
involved in the ownership and operation of the assets of such Person or the
conduct of the business of such Person.
CBS Merger shall mean the merger of R Acquisition Corp. ("CBS Sub"), a
Delaware subsidiary wholly-owned by CBS Corporation (formerly Westinghouse
Electric Corporation), a Pennsylvania corporation ("CBS"), with and into ARS, on
the terms set forth in an Agreement and Plan of Merger, dated as of September
19, 1997, by and among ARS, CBS and CBS Sub, as the same has heretofore been
amended or as it may from time to time be hereafter amended, modified,
supplemented and restated in a manner that does not increase materially the
obligations and liabilities of ATS (as so amended, modified, supplemented and
restated, the "CBS Merger Agreement").
Certificate shall have the meaning given to it in Section 3.1(i).
Certificate of Merger shall have the meaning given to it in Section
2.3.
Claims shall mean any and all debts, liabilities, obligations, losses,
damages, deficiencies, assessments and penalties, together with all Legal
Actions, pending or threatened, claims and judgments of whatever kind and nature
relating thereto, and all fees, costs, expenses and disbursements (including
without limitation reasonable attorneys' and other legal fees, costs and
expenses) relating to any of the foregoing.
Closing shall have the meaning given to it in Section 2.2.
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Closing Date shall have the meaning given to it in Section 2.2.
COBRA shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, as set forth in Section 4980B of the Code and Part 6 of
Subtitle B of Title I of ERISA.
Code shall mean the Internal Revenue Code of 1986, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
Collateral Documents shall mean the ATC Affiliate Agreements, the ATS
Information Statement, the ATS Prospectus, the ATS Registration Rights
Agreement, the ATS Registration Statement, the ATS Restated Certificate, the ATS
Voting Agreement, the Certificate of Merger and any other agreement,
certificate, contract, instrument, notice, opinion or other document delivered
pursuant to the provisions of this Agreement.
Commission shall mean the Securities and Exchange Commission and shall
include any successor Authority.
Confidential Information shall have the meaning given to it in Section
6.1(a).
Continued Employees shall have the meaning given to it in Section
6.9(b).
Contract, Contractual Obligation shall mean, with respect to any
Person, any agreement, arrangement, commitment, contract, covenant, indemnity,
undertaking or other obligation or liability which involves the ownership or
operation of the assets of such Person or the conduct of the business of such
Person.
Control (including the terms "controlled," "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management or
policies of a Person, or the disposition of such Person's assets or properties,
whether through the ownership of stock, equity or other ownership, by contract,
arrangement or understanding, or as trustee or executor, by contract or credit
arrangement or otherwise.
Convertible Securities shall mean any evidences of indebtedness, shares
of capital stock (other than common stock) or other securities directly or
indirectly convertible into or exchangeable for shares of common stock, whether
or not the right to convert or exchange thereunder is immediately exercisable or
is conditioned upon the passage of time, the occurrence or non-occurrence or
existence or non-existence of some other Event, or both.
DCL shall have the meaning given to it in Section 2.1.
Distribution shall mean, with respect to any Person, (a) the
declaration or payment of any dividend (except dividends payable in common stock
of such Person) on or in respect of any shares of any class of capital stock of
such Person or any shares of capital stock of any Subsidiary owned by a Person
other than such Person or a Subsidiary, (b) the purchase, redemption or other
retirement of any shares of any class of capital stock of such Person or any
shares of capital stock of any Subsidiary of such Person owned by a Person other
than such Person or a Subsidiary of such Person, and (c) any other distribution
on or in respect of any shares of any class of capital stock of such Person or
any shares of capital stock of any Subsidiary of such Person owned by a Person
other than such Person or a Subsidiary of such Person.
D&O Questionnaire shall have the meaning given to it in Section 6.8(c).
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Effective Time shall have the meaning given to it in Section 2.3.
Employment Arrangement shall mean, with respect to any Person, any
employment, consulting, retainer, severance or similar contract, agreement,
plan, arrangement or policy (exclusive of any which is terminable within thirty
(30) days without liability, penalty or payment of any kind by such Person or
any Affiliate), or providing for severance, termination payments, insurance
coverage (including any self-insured arrangements), workers compensation,
disability benefits, life, health, medical, dental or hospitalization benefits,
supplemental unemployment benefits, vacation or sick leave benefits, pension or
retirement benefits or for deferred compensation, profit-sharing, bonuses, stock
options, stock purchase or appreciation rights or other forms of incentive
compensation or post-retirement insurance, compensation or post-retirement
insurance, compensation or benefits, or any collective bargaining or other labor
agreement, whether or not any of the foregoing is subject to the provisions of
ERISA, but only to the extent that it covers or relates to any officer, employee
or other Person involved in the ownership or operation of the assets or the
conduct of the business of such Person.
Encumber shall mean to suffer, accept, agree to or permit the
imposition of a Lien.
Entity shall mean any corporation, firm, unincorporated organization,
association, partnership, limited liability company, trust (inter vivos or
testamentary), estate of a deceased, insane or incompetent individual, business
trust, joint stock company, joint venture or other organization, entity or
business, whether acting in an individual, fiduciary or other capacity, or any
Authority.
Environmental Law shall mean any Law relating to or otherwise imposing
liability or standards of conduct concerning pollution or protection of the
environment, including without limitation Laws relating to emissions,
discharges, releases or threatened releases of Hazardous Materials or other
chemicals or industrial pollutants, substances, materials or wastes into the
environment (including, without limitation, ambient air, surface water, ground
water, mining or reclamation or mined land, land surface or subsurface strata)
or otherwise relating to the manufacture, processing, generation, distribution,
use, treatment, storage, disposal, cleanup, transport or handling of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances, materials
or wastes. Environmental Laws shall include without limitation the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 6901
et seq.), the Hazardous Material Transportation Act (49 U.S.C. Section 1801 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.),
the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control
Act (15 U.S.C. Section 2601 et seq.), the Occupational Safety and Health Act (29
U.S.C. Section 651 et seq.), the Federal Insecticide Fungicide and Rodenticide
Act (7 U.S.C. Section 136 et seq.), and the Surface Mining Control and
Reclamation Act of 1977 (30 U.S.C. Section 1201 et seq.), and any analogous
federal, state, local or foreign, Laws, and the rules and regulations
promulgated thereunder as in effect on the date hereof or on the Closing Date,
as applicable, and any reference to any statutory or regulatory provision shall
be deemed to be a reference to any successor statutory or regulatory provision.
Environmental Permit shall mean any Governmental Authorization required
by or pursuant to any Environmental Law.
ERISA shall mean the Employee Retirement Income Security Act of 1974,
and the rules and regulations thereunder, all as from time to time in effect, or
any successor law, rules or regulations, and any reference to any statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
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ERISA Affiliate shall mean, with respect to any Person, any individual
or Entity that is treated as a single employer with such Person under Sections
414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA.
Event shall mean the existence or occurrence of any act, action,
activity, circumstance, condition, event, fact, failure to act, omission,
incident or practice, or any set or combination of any of the foregoing.
Exchange Act shall mean the Securities Exchange Act of 1934, and the
rules and regulations thereunder, all as from time to time in effect, or any
successor law, rules or regulations, and any reference to any statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
Exchange Ratio shall have the meaning given to it in Section 3.1(b).
FCA shall mean the Communications Act of 1934, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
FCC shall mean the Federal Communications Commission and shall include
any successor Authority.
Final Order shall mean, with respect to any Authority, including
without limitation the FCC, one with respect to which no appeal, no stay, no
petition or application for rehearing, reconsideration, review or stay, whether
on motion of the applicable Authority or other Person or otherwise, and no other
Legal Action contesting such consent or approval, is in effect or pending and as
to which the time or deadline for filing any such appeal, petition or
application or other Legal Action has expired or, if filed, has been denied,
dismissed or withdrawn, and the time or deadline for instituting any further
Legal Action has expired.
Fully-Diluted Basis shall mean, when applied to the ATC Common Stock or
the ATS Common Stock, the total number of shares of the issuer of such stock
that are outstanding as of the date of determination plus, without duplication,
the total number of all shares issuable in respect of securities convertible
into or exchangeable for ATC Common Stock or ATS Common Stock (excluding the ATS
Common Stock that may be issued upon exchange of membership interests issued in
Communications System Development, LLC, but including in both Convertible
Securities), as the case may be, or issuable upon exercise of stock appreciation
rights or options, warrants and other irrevocable rights to purchase or
subscribe for ATC Common Stock or ATS Common Stock, as the case may be,
including Option Securities. Without limiting the foregoing, the parties agree
that, if the Tower Distribution occurs before the CBS Merger, the term
"Fully-Diluted Basis" would take into account any Convertible Securities or
Option Securities that ATS or the Surviving Corporation may be required to issue
upon consummation of the Merger.
GAAP shall mean generally accepted accounting principles applied on a
consistent basis, (i) as set forth in Opinions of the Accounting Principles
Board of the American Institute of Certified Public Accountants ("AICPA") and/or
in statements of the Financial Accounting Standards Board that are applicable in
the circumstances as of the date in question, and (ii) when not inconsistent
with such opinions and statements, as set forth in other AICPA publications and
guidelines that otherwise arise by custom for the particular industry, all as
the same shall exist on the date of this Agreement.
Gearon Transaction shall mean the merger of Gearon & Co., Inc., a
Georgia corporation ("Gearon"), with and into ATSI, pursuant to an Agreement and
Plan of Merger (the "Gearon Merger Agreement"), dated
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as of November 21, 1997, by and among ATS, ATSI, Gearon and J. Michael Gearon
Jr., as the same has may from time to time be hereafter amended, modified,
supplemented and restated in a manner which would not have any significant
adverse effect on ATS (as so amended, modified, supplemented and restated, the
"Gearon Merger Agreement").
Governmental Authorizations shall mean, with respect to any Person, all
approvals, concessions, consents, franchises, licenses, permits, plans,
registrations and other authorizations of all Authorities, including without
limitation the United States Forest Service and the Federal Aviation
Administration, in connection with the ownership or operation of the assets or
the conduct of the business of such Person.
Governmental Filings shall mean all filings, including franchise and
similar Tax filings, and the payment of all fees, assessments, interest and
penalties associated with such filings, with all Authorities.
Hart-Scott-Rodino Act shall mean the Hart-Scott-Rodino Improvement Act
of 1976, as from time to time in effect, or any successor law, and any reference
to any statutory provision shall be deemed to be a reference to any successor
statutory provision.
Hazardous Materials shall mean and include any substance, material,
waste, constituent, compound, chemical, natural or man-made element (in whatever
state of matter): (a) the presence of which requires investigation or
remediation under any Environmental Law, (b) that is defined as a "hazardous
waste" or "hazardous substance" under any Environmental Law; (c) that is toxic,
explosive, corrosive, etiologic, flam mable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is regulated by any ap
plicable Authority pursuant to any Environmental Law; (d) the presence of which
on the real property owned or leased by such Person causes or threatens to cause
a nuisance upon any such real property or to adjacent properties or poses or
threatens to pose a hazard to the health or safety of persons on or about any
such real property; or (e) that contains gasoline, diesel fuel or other
petroleum hydrocarbons, or any by-products or fractions thereof, natural gas,
polychlorinated biphenyls ("PCBs") and PCB-containing equipment, radioactive
material, lead, asbestos or asbestos-containing materials, or urea formaldehyde
foam insulation.
Indebtedness shall mean, with respect to any Person, (a) all items,
except items of capital stock or of surplus or of general contingency or
deferred tax reserves or any minority interest in any Subsidiary of such Person
to the extent such interest is treated as a liability with indeterminate term on
the consolidated balance sheet of such Person, which in accordance with GAAP
would be included in determining total liabilities as shown on the liability
side of a balance sheet of such Person, (b) all obligations secured by any Lien
to which any property or asset owned or held by such Person is subject, whether
or not the obligation secured thereby shall have been assumed, and (c) to the
extent not otherwise included, all Contractual Obligations of such Person
constituting capitalized leases and all obligations of such Person with respect
to Leases constituting part of a sale and leaseback arrangement.
Indebtedness for Money Borrowed shall mean, with respect to any Person,
money borrowed and Indebtedness represented by notes payable and drafts accepted
representing extensions of credit, all obligations evidenced by bonds,
debentures, notes or other similar instruments, the maximum amount currently or
at any time thereafter available to be drawn under all outstanding letters of
credit issued for the account of such Person, all Indebtedness upon which
interest charges are customarily paid by such Person, and all Indebtedness
(including capitalized lease obligations and purchase money Indebtedness) issued
or assumed as full or partial payment for property or services, whether or not
any such notes, drafts, obligations or Indebtedness represent Indebtedness for
Money Borrowed, but shall not include (a) trade payables, (b) expenses accrued
in the ordinary course of business, (c) customer advance payments and customer
deposits
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<PAGE>
received in the ordinary course of business, or (d) conditional sales agreements
not prohibited by the terms of this Agreement.
Indemnified Party shall have the meaning given to it in Section 6.8(b).
Intangible Assets shall mean all assets and property lacking physical
properties the evidence of ownership of which must customarily be maintained by
independent registration, documentation, certification, recordation or other
means, and shall include, without limitation, concessions, copyrights,
franchises, license, patents, permits, service marks, trademarks, trade names,
and applications with respect to any of the foregoing, technology and know-how.
Law shall mean any (a) administrative, judicial, legislative or other
action, code, consent decree, constitution, decree, directive, enactment,
finding, law, injunction, interpretation, judgment, order, ordinance, policy
statement, proclamation, promulgation, regulation, requirement, rule, rule of
law, rule of public policy, settlement agreement, statute, or writ of any
Authority, domestic or foreign; (b) the common law, or other legal precedent; or
(c) arbitrator's, mediator's or referee's award, decision, finding or
recommendation.
Lease shall mean any lease of property, whether real, personal or
mixed, and all amendments thereto.
Legal Action shall mean, with respect to any Person, any and all
litigation or legal or other actions, arbitrations, counterclaims,
investigations, proceedings, requests for material information by or pursuant to
the order of any Authority or suits, at law or in arbitration, equity or
admiralty, whether or not purported to be brought on behalf of such Person,
affecting such Person or any of such Person's business, property or assets.
Lien shall mean any of the following: mortgage; lien (statutory or
other); or other security agreement, arrangement or interest; hypothecation,
pledge or other deposit arrangement; assignment; charge; levy; executory
seizure; attachment; garnishment; encumbrance (including any easement,
exception, reservation or limitation, right of way, and the like); conditional
sale, title retention or other similar agreement, arrangement, device or
restriction; preemptive or similar right; any financing lease involving
substantially the same economic effect as any of the foregoing; the filing of
any financing statement under the Uniform Commercial Code or comparable law of
any jurisdiction; restriction on sale, transfer, assignment, disposition or
other alienation; or any option, equity, claim or right of or obligation to, any
other Person, of whatever kind and character.
Material Adverse Effect shall mean, with respect to ATC or ATS, any
Event which is reasonably likely, in the reasonable business judgment of the
relevant party, to be expected to (a) materially and adversely affect the
validity or enforceability of this Agreement or the likelihood of consummation
of the Merger, or (b) materially and adversely affect the business, operations,
management, properties or prospects, or the condition, financial or other, or
results of operation of ATC and its Subsidiaries taken as a whole or ATS and its
Subsidiaries taken as a whole, as applicable, or (c) materially impair ATC's or
ATS' ability to fulfill its obligations under the terms of this Agreement, or
(d) materially and adversely affect the aggregate rights and remedies of the
other party (other under this Agreement. Notwithstanding the foregoing, and
anything in this Agreement to the contrary notwithstanding, any Event generally
affecting the economy or the tower communications business shall not be deemed
to have a Material Adverse Effect.
Material Agreement shall mean, with respect to any Person, any
Contractual Obligation (other than Contractual Obligations under Contracts
governing the lease or rental of tower spaces to third-party
A-9
<PAGE>
customers) which (a) involves the purchase, sale or lease of goods or materials,
or purchase of services, whether in or outside of the ordinary course of
business (including, without limitation, acquisitions of communications towers
or tower businesses), that individually involves a purchase price in excess of
$2,000,000, (b) involves a capitalized lease obligation or Indebtedness for
Money Borrowed in excess of $1,000,000, (c) involves a written agency, broker,
dealer, license, distributorship, sales representative or similar written
agreement pursuant to which such Person or its Subsidiaries made payments in
excess of $1,000,000 during the preceding twelve-month period, (d) accounted for
more than 3% of the revenues of the business of such Person in any of the three
fiscal years or is likely to account for more than 3% of the revenues of the
business of such Person during the current fiscal year, (e) involves the
management by such Person of more than ten (10) communication towers for any
other Person, (f) is a partnership, limited liability company or other joint
venture, (g) grants any Person the exclusive right to represent ATS and its
Subsidiaries of ATC and its Subsidiaries, as the case may be, with respect to
brokering tower transactions, or marketing tower space or administering tower or
(h) limits the freedom to compete in any line of business or to conduct business
in any geographic location.
Merger shall have the meaning given to it in the first Whereas
paragraph.
Merger Consideration shall have the meaning given to it in Section
3.1(b).
Multiemployer Plan shall mean a Plan which is a "multiemployer plan"
within the meaning of Section 3(37) or 4001(a)(3) of ERISA.
Nasdaq shall have the meaning given to it in Section 3.1.
Option Securities shall mean all rights, options and warrants, and
calls or commitments evidencing the right, to subscribe for, purchase or
otherwise acquire shares of capital stock or Convertible Securities, whether or
not the right to subscribe for, purchase or otherwise acquire is immediately
exercisable or is conditioned upon the passage of time, the occurrence or
non-occurrence or the existence or non-existence of some other Event.
Organic Document shall mean, with respect to a Person which is a
corporation, its charter, its by-laws and all shareholder agreements, voting
trusts and similar arrangements applicable to any of its capital stock and, with
respect to a Person which is a partnership, its agreement and certificate of
partnership, any agreements among partners, and any management and similar
agreements between the partnership and any general partners (or any Affiliate
thereof).
Permitted Liens shall mean (a) Liens for current taxes not yet due and
payable, (b) such imperfections of title, easements, encumbrances and mortgages
or other Liens, if any, as, individually or in the aggregate, do not materially
detract from the value, or materially interfere with the present use, of the ATC
Assets or the ATS Assets, as the case may be, or otherwise materially impair the
conduct of the ATC Business or the ATS Business, as the case may be, and (c)
such other Liens as are permitted by the provisions of this Agreement to be in
place on the Closing Date.
Person shall mean any natural individual or any Entity.
Plan shall mean, with respect to any Person and at a particular time,
any employee benefit plan which is covered by ERISA and in respect of which such
Person or an ERISA Affiliate is (or, if such plan were
A-10
<PAGE>
terminated at such time, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA, but only to the extent that it
covers or relates to any officer, employee, individual or Entity involved in the
ownership and operation of the assets of such Person or the conduct of the
business of such Person.
Preferred Stock Merger consideration shall have the meaning given to it
in Section 3.1(d).
Private Authorizations shall mean all approvals, concessions, consents,
franchises, licenses, permits, and other authorizations of all Persons (other
than Authorities) including without limitation those with respect to Intangible
Assets.
Regulations shall mean the federal income tax regulations promulgated
under the Code, as such Regulations may be amended from time to time. All
references herein to specific sections of the Regulations shall be deemed also
to refer to any corresponding provisions of succeeding Regulations, and all
references to temporary Regulations shall be deemed also to refer to any
corresponding provisions of final Regulations.
Representatives shall have the meaning given to it in Section 6.1(a).
Restricted Information shall have the meaning given to it in Section
6.1.
Restricted Transaction shall mean any (i) acquisition or agreement to
acquire (x) by merging or consolidating with, or by purchasing a substantial
portion of the assets of, or by any other manner, any business or any Person or
other business organization or division thereof or (y) any assets (other than in
the ordinary course of business which for purposes of this definition does not
include the acquisition of communications sites and related assets and other
business involved in the communications sites industry or the construction of
communications towers and related assets), or (ii) any undertaking or agreement
to undertake the construction of one or more communications towers.
Securities Act shall mean the Securities Act of 1933, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
Solvent shall mean, with respect to any Person on a particular date,
that on such date (i) the fair value of the assets of such Person (both at fair
valuation and at present fair saleable value) is, on the date of determination,
greater than the total amount of liabilities, including, without limitation,
contingent and unliquidated liabilities, of such Person, (ii) such Person is
able to pay all liabilities of such Person as they mature, and (iii) such Person
does not have unreasonably small capital with which to carry on its business. In
computing the amount of contingent or unliquidated liabilities at any time, such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability. For purposes of this
definition, "indebtedness" shall mean any liability on a claim, and "claim"
shall mean (a) right to payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal equitable, secured or unsecured, or (b) right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
Subsidiary shall mean, with respect to a Person, any Entity a majority
of the capital stock ordinarily entitled to vote for the election of directors
of which, or if no such voting stock is outstanding, a majority of
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<PAGE>
the equity interests of which, is owned directly or indirectly, legally or
beneficially, by such Person or any other Person controlled by such Person.
Surviving Corporation shall have the meaning given to it in Section
2.1.
Tax (and "Taxable", which shall mean subject to Tax), shall mean, with
respect to any Person, (a) all taxes (domestic or foreign), including without
limitation any income (net, gross or other including recapture of any tax items
such as investment tax credits), alternative or add-on minimum tax, gross
income, gross receipts, gains, sales, use, leasing, lease, user, ad valorem,
transfer, recording, franchise, profits, property (real or personal, tangible or
intangible), fuel, license, withholding on amounts paid to or by such Person,
payroll, employment, unemployment, social security, excise, severance, stamp,
occupation, premium, environmental or windfall profit tax, custom, duty or other
tax, or other like assessment or charge of any kind whatsoever, together with
any interest, levies, assessments, charges, penalties, addition to tax or
additional amount imposed by any Taxing Authority, (b) any joint or several
liability of such Person with any other Person for the payment of any amounts of
the type described in (a) and (c) any liability of such Person for the payment
of any amounts of the type described in (a) as a result of any express or
implied obligation to indemnify any other Person.
Tax Return or Returns shall mean all returns, consolidated or otherwise
(including without limitation information returns), required to be filed with
any Authority with respect to Taxes.
Taxing Authority shall mean any Authority responsible for the
imposition of any Tax.
Termination Date shall mean May 31, 1998 or such other date as the
parties may, from time to time, mutually agree.
Transactions shall mean the transactions contemplated by this Agreement
to be consummated on or prior to the Closing Date, including without limitation
the Merger and the execution, delivery and performance of the Collateral
Documents.
Tower Distribution shall mean the pro rata distribution by ARS to each
ARS common stockholder of a umber of shares of ATS Common Stock such that, after
giving to such distribution, (i) immediately prior to the Merger, such ARS
common stockholder will own the same percentage of ATS as it owned of ARS
determined as if all Convertible Securities of ARS had been so converted and all
Option Securities of ARS had ben exercised, (ii) neither ARS nor any of its
Subsidiaries owns any capital stock in ATS or its Subsidiaries, other than
shares of ATS Common Stock (a) required to satisfy ARS Convertible Securities
and ARS Option Securities in the manner contemplated by the CBS Merger Agreement
or (b) owned with respect to (x) shares of ARS Common Stock as to which
appraisal rights have been asserted as a consequence of the Tower Distribution
or (y) ARS Option Securities which have been converted to ATS Option Securities,
and (iii) the Tower Distribution will have been made in all material respects in
accordance with Applicable Law including Federal securities laws.
A-12
EXHIBIT 2.2
AGREEMENT AND PLAN OF MERGER
By and Among
AMERICAN TOWER SYSTEMS CORPORATION,
AMERICAN TOWER SYSTEMS, INC.
GEARON & CO., INC.
and
J. MICHAEL GEARON, JR.
Dated as of
NOVEMBER 21, 1997
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C>
ARTICLE 1 DEFINED TERMS...................................................................................1
ARTICLE 2 THE MERGER......................................................................................2
2.1 The Merger.............................................................................2
2.2 Closing................................................................................2
2.3 Effective Time.........................................................................2
2.4 Effect of the Merger...................................................................2
2.5 Certificate of Incorporation...........................................................2
2.6 Bylaws.................................................................................2
2.7 Directors and Officers.................................................................2
ARTICLE 3 CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES..................................................3
3.1 Conversion of Capital Stock............................................................3
3.2 Exchange of Certificates...............................................................4
3.3 Stock Transfer Books...................................................................4
3.4 Option Securities and Convertible Securities; Payment Rights...........................4
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF GEARON .......................................................4
4.1 Organization and Business; Power and Authority; Effect of Transaction..................4
4.2 Financial and Other Information. .....................................................5
4.3 Material Statements and Omissions; Absence of Events...................................5
4.4 Title to Properties; Leases............................................................6
4.5 Compliance with Private Authorizations.................................................7
4.6 Compliance with Governmental Authorizations and Applicable Law.........................7
4.7 Intangible Assets......................................................................8
4.8 Related Transactions...................................................................9
4.9 Insurance..............................................................................9
4.10 Tax Matters. .........................................................................9
4.11 Employee Retirement Income Security Act of 1974.......................................10
4.12 Absence of Sensitive Payments.........................................................10
4.13 Bank Accounts, Etc....................................................................10
4.14 Employment Arrangements...............................................................10
4.15 Material Agreements...................................................................11
4.16 Ordinary Course of Business...........................................................11
4.17 Material and Adverse Restrictions.....................................................12
4.18 Broker or Finder......................................................................12
4.19 Solvency..............................................................................12
4.20 Environmental Matters.................................................................12
4.21 Capital Stock.........................................................................14
4.22 Materiality...........................................................................14
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF ATS AND ATSI.................................................14
5.1 Organization and Business; Power and Authority; Effect of Transaction.................14
5.2 Financial and Other Information. ....................................................15
5.3 Material Statements and Omissions; Absence of Events..................................15
5.5 Title to Properties; Leases...........................................................16
5.6 Compliance with Private Authorizations................................................16
5.7 Compliance with Governmental Authorizations and Applicable Law........................16
<PAGE>
5.8 Related Transactions..................................................................17
5.9 Tax Matters...........................................................................17
5.10 Ordinary Course of Business...........................................................17
5.11 Environmental Matters.................................................................18
5.12 Materiality...........................................................................19
5.13 Material and Adverse Restrictions.....................................................19
5.14 Broker or Finder......................................................................19
5.15 Solvency..............................................................................19
5.16 Capital Stock.........................................................................19
5.17 Employment Arrangements...............................................................20
5.18 Investment Representation.............................................................20
5.19 Covenant Regarding Transfer...........................................................20
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE GEARON STOCKHOLDER
RELATING TO THE SUBJECT STOCK..................................................................20
6.1 Enforceability........................................................................20
6.2 Title to Shares.......................................................................21
6.3 No Conflict; Required Filings and Consents............................................21
ARTICLE 7 COVENANTS......................................................................................21
7.1 Access to Information; Confidentiality. .............................................21
7.2 Agreement to Cooperate. .............................................................22
7.3 Public Announcements..................................................................23
7.4 Notification of Certain Matters.......................................................23
7.5 No Solicitation.......................................................................24
7.6 Conduct of Business by ATSI Pending the Merger........................................24
7.7 Conduct of Business by Gearon Pending the Merger......................................24
7.8 Preliminary Title Reports.............................................................26
7.9 Environmental Site Assessments........................................................26
7.10 Interim Financing for Gearon..........................................................27
ARTICLE 8 CLOSING CONDITIONS.............................................................................27
8.1 Conditions to Obligations of Each Party...............................................27
8.2 Conditions to Obligations of ATS and ATSI.............................................27
8.3 Conditions to Obligations of Gearon. ................................................30
ARTICLE 9 TERMINATION, AMENDMENT AND WAIVER..............................................................31
9.1 Termination...........................................................................31
9.2 Effect of Termination.................................................................32
ARTICLE 10 INDEMNIFICATION................................................................................32
10.1 Survival..............................................................................32
10.2 Indemnification.......................................................................33
10.3 Limitation of Liability...............................................................33
10.4 Notice of Claims......................................................................34
10.5 Defense of Third Party Claims.........................................................34
10.6 Exclusive Remedy......................................................................34
ARTICLE 11 GENERAL PROVISIONS.............................................................................35
-ii-
<PAGE>
11.1 Waivers; Amendments...................................................................35
11.2 Fees, Expenses and Other Payments.....................................................35
11.3 Notices...............................................................................35
11.4 Specific Performance; Other Rights and Remedies.......................................36
11.5 Severability..........................................................................36
11.6 Counterparts..........................................................................37
11.7 Section Headings......................................................................37
11.8 Governing Law.........................................................................37
11.9 Further Acts..........................................................................37
11.10 Entire Agreement......................................................................37
11.11 Assignment............................................................................38
11.12 Parties in Interest...................................................................38
11.14 Due Diligence.........................................................................38
</TABLE>
APPENDIX A: Definitions
EXHIBITS:
EXHIBIT A: Gearon Notes (Section 7.10).
EXHIBIT B: Security Agreement (Section 7.10).
EXHIBIT C: ATS Noncompetition Agreement (Section 8.2(i)).
EXHIBIT D: Gearon Employment Agreement (Section 8.2(n)).
EXHIBIT E: Indemnity Escrow Agreement (Section 8.2(o)).
EXHIBIT F: Registration Rights Agreement (Section 8.2(p)).
EXHIBIT G: Investment Letter (Section 8.2(r)).
-iii-
<PAGE>
AGREEMENT AND PLAN OF MERGER
Agreement and Plan of Merger, dated as of November 21, 1997, by and
among American Tower Systems Corporation, a Delaware corporation ("ATS"),
American Tower Systems, Inc. a Delaware corporation ("ATSI"), Gearon & Co.,
Inc., a Georgia corporation ("Gearon"), and J. Michael Gearon, Jr. (the "Gearon
Stockholder").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of ATS, ATSI and Gearon
have approved the merger (the "Merger") of Gearon with and into ATSI on the
terms and conditions set forth in this Agreement and Plan of Merger (this
"Agreement") and have approved this Agreement; and
WHEREAS, the Board of Directors of ATS has approved and adopted this
Agreement as the sole stockholder of ATSI, and the sole voting shareholder of
Gearon has approved and adopted this Agreement; and
WHEREAS, this Agreement provides that Gearon shall be merged into ATSI,
and ATSI shall be the surviving corporation; and
WHEREAS, as a condition of the willingness of ATS and ATSI to enter
into this Agreement, and as an inducement thereto, the Gearon Stockholder is
delivering his written consent approving and adopting the Merger and this
Agreement;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained and other
valuable consideration, the receipt and adequacy whereof are hereby
acknowledged, the parties hereto hereby, intending to be legally bound,
represent, warrant, covenant and agree as follows:
ARTICLE 1
DEFINED TERMS
As used herein, unless the context otherwise requires, the terms
defined in Appendix A shall have the respective meanings set forth therein.
Terms defined in the singular shall have a comparable meaning when used in the
plural, and vice versa, and the reference to any gender shall be deemed to
include all genders. Unless otherwise defined or the context otherwise clearly
requires, terms for which meanings are provided in this Agreement shall have
such meanings when used in the Gearon Disclosure Schedule, and each Collateral
Document executed or required to be executed pursuant hereto or thereto or
otherwise delivered, from time to time, pursuant hereto or thereto. References
to "hereof," "herein" or similar terms are intended to refer to the Agreement as
a whole and not a particular section, and references to "this Section" or "this
Article" are intended to refer to the entire section or article and not a
particular subsection thereof. The term "either party" shall, unless the context
otherwise requires, refer to ATS and ATSI, on the one hand, and Gearon and the
Gearon Stockholder, on the other hand.
<PAGE>
ARTICLE 2
THE MERGER
2.1 The Merger. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the Delaware General Corporation Law
(the "DCL") and the Georgia Business Corporation Code (the "GBCC"), at the
Effective Time, Gearon shall be merged with and into ATSI. As a result of the
Merger, the separate corporate existence of Gearon shall cease and ATSI shall
continue as the surviving corporation in the Merger (sometimes referred to, as
such, as the "Surviving Corporation"). ATS and Gearon acknowledge and agree that
it is the intention of the parties that the business of Gearon conducted prior
to the Effective Time continue to be operated and expanded either as a distinct
operating division of ATSI or as a wholly owned subsidiary of ATSI.
2.2 Closing. Unless this Agreement shall have been terminated pursuant
to Section 9.1 and subject to the satisfaction or, to the extent permitted by
Applicable Law, waiver of the conditions set forth in Article 8, the closing of
the Merger (the "Closing") will take place, at 10:00 a.m., on the Closing Date,
at the offices of Sullivan & Worcester LLP, One Post Office Square, Boston,
Massachusetts 02109, on the date that is the second (2nd) day after the date on
which all of the conditions set forth in Article 8 (other than those which
require delivery of opinions or documents at the Closing) shall have been
satisfied or waived, unless another date, time or place is agreed to in writing
by the parties. The date on which the Closing occurs is herein referred to as
the "Closing Date."
2.3 Effective Time. Subject to the provisions of this Agreement, as
promptly as practicable after the Closing, the parties hereto shall cause the
Merger to be consummated by filing a Certificate of Merger and any related
filings required under the DCL with the Secretary of State of the State of
Delaware and Articles of Merger and any related filings required under the GBCC
with the Secretary of State of the State of Georgia. The Merger shall become
effective at such time as such documents are duly filed as aforesaid, or at such
later time as is specified in such documents (the "Effective Time").
2.4 Effect of the Merger. The Merger shall have the effects provided
for under the DCL and the GBCC.
2.5 Certificate of Incorporation. The Certificate of Incorporation of
ATSI, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by Applicable Law.
2.6 Bylaws. The bylaws of ATSI in effect at the Effective Time shall be
the bylaws of the Surviving Corporation until amended in accordance with
Applicable Law and the Organic Documents of ATSI.
2.7 Directors and Officers. From and after the Effective Time, until
successors are duly elected or appointed and qualified, or upon their earlier
resignation or removal, in accordance with Applicable Law and the Organic
Documents of ATSI, and subject to satisfaction of the condition set forth in
Sections 8.3(g) and 8.3(j), (a) the directors of ATSI at the Effective Time
shall be the directors of the Surviving Corporation, and (b) the officers of
ATSI at the Effective Time shall be the officers of the Surviving Corporation.
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<PAGE>
ARTICLE 3
CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
3.1 Conversion of Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of ATS, ATSI or Gearon or their
respective stockholders:
(a) Each share of Common Stock, par value $.01 per share, of
ATSI issued and outstanding immediately prior to the Effective Time
shall remain outstanding.
(b) Each share of Common Stock, no par value, of Gearon (the
"Gearon Common Stock") issued and outstanding immediately prior to the
Effective Time (other than shares held in the treasury of Gearon)
shall, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into the right to receive its pro-rata
share of the following:
(i) with respect to Dan King Brainard, Jeff Ebihara
and Doug Wiest, 555,555, 16,666 and 33,333 shares,
respectively, of Class A Common Stock, par value $.01 per
share, of ATS (the "ATS Class A Common Stock") (being a number
of shares of ATS Class A Common Stock with an agreed upon fair
market value of $5,000,000, $150,000 and $300,000,
respectively, based on an agreed upon per share value of the
ATS Class A Common Stock of $9.00, which ATS represents is not
more than the price per share at which shares are to be sold
pursuant to the ATS Private Placement) to be issued to each
such Gearon stockholder in proportion to the number of shares
of Gearon Common Stock held by such stockholder to the number
of shares of Gearon Common Stock held by all such stockholders
(the "Gearon Employees Consideration" which term shall include
any adjustment pursuant to the provisions of this Section);
and
(ii) with respect to the Gearon Stockholder and the
Gearon Family Partnership, (A) 4,727,778 shares of ATS Class A
Common Stock (being a number of shares of ATS Class A Common
Stock with an agreed upon fair market value of $42,550,000
based on an agreed upon per share value of the ATS Class A
Common Stock of $9.00, which ATS represents is not more than
the price per share at which shares are to be sold pursuant to
the ATS Private Placement) (the "Gearon Common Stock
Consideration"), and (B) $32.0 million in immediately
available funds (the "Cash Consideration" and collectively,
with the Gearon Common Stock Consideration, the "Merger
Consideration" which term shall include any adjustment
pursuant to the provisions of this Section).
Notwithstanding the foregoing, the Cash Consideration shall be (i)
increased by an amount equal to the Net Working Capital of Gearon (if
positive) on and as of the Closing Date, and (ii) decreased by an
amount equal to the Net Working Capital of Gearon (if negative) on and
as of the Closing Date. The term "Exchange Merger Consideration" shall
mean an amount equal to the Gearon Employees Consideration or the
Merger Consideration, as the case may be, divided by the aggregate
number of shares of Gearon Common Stock (the "Gearon Shares") issued
and outstanding at the Effective Time and held of record at the
Effective Time by the Persons (x) named in paragraph (i), in the case
of the Gearon Employees Consideration, and (y) named in paragraph (ii),
in the case of the Gearon Common Stock Consideration and the Cash
Consideration.
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At the Effective Time, all Gearon Shares shall no longer be outstanding
and shall automatically be canceled and retired and shall cease to exist, and
certificates previously evidencing any such Gearon Shares (each, a
"Certificate") shall thereafter represent the right to receive, upon the
surrender of such Certificate in accordance with the provisions of Section 3.2,
the Exchange Merger Consideration multiplied by the number of Gearon Shares
represented by such Certificate, and a holder of more than one Certificate shall
have the right to receive the Exchange Merger Consideration multiplied by the
number of Gearon Shares represented by all such Certificates. In lieu of issuing
fractional shares, ATS shall convert the holder's right to receive ATS Class A
Common Stock pursuant to the provisions of this Section into a right to receive
the highest whole number of shares of ATS Class A Common Stock constituting the
Exchange Merger Consideration plus cash equal to the fraction of a share of ATS
Class A Common Stock to which the holder would otherwise be entitled multiplied
by $[i], and the Exchange Merger Consideration to which a holder is entitled
shall be deemed to be such number of shares of ATS Class A Common Stock, the
Cash Consideration and such cash. The holders of such Certificates previously
evidencing Gearon Shares outstanding immediately prior to the Effective Time
shall cease to have any rights with respect to such Gearon Shares, except as
otherwise provided herein or by Applicable Law.
3.2 Exchange of Certificates. At and after the Effective Time, each
stockholder of Gearon, upon surrender of each of his Certificates, shall be
issued a certificate of ATS Class A Common Stock and cash representing the
Exchange Merger Consideration with respect to the Gearon Shares represented by
such Certificate in accordance with the provisions of Section 3.1, plus cash in
amount sufficient to make payment for fractional shares, subject, however, to
the provisions of the Indemnity Escrow Agreement.
3.3 Stock Transfer Books. At the Effective Time, the stock transfer
books of Gearon shall be closed, and there shall be no further transfer of
shares of Gearon Common Stock thereafter on the records of Gearon. Any
Certificates presented after the Effective Time for transfer shall be canceled
and exchanged for the amount to which the Gearon Shares represented thereby
shall be entitled pursuant to Sections 3.1 and 3.2.
3.4 Option Securities and Convertible Securities; Payment Rights. At
the Effective Time, each outstanding Option Security and each Convertible
Security of Gearon, if any, whether or not then exercisable for or convertible
into Gearon Shares or other Gearon securities, outstanding immediately prior to
the Effective Time, shall be canceled and retired and shall cease to exist, and
the holder thereof shall not be entitled to receive any consideration therefor.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF GEARON
Gearon and the Gearon Stockholder, jointly and severally, hereby
represent and warrant to ATS and ATSI as follows:
4.1 Organization and Business; Power and Authority; Effect of
Transaction.
(a) Gearon is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization, has all
requisite power and authority (corporate and other) to own or hold under lease
its properties and to conduct its business as now conducted.
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(b) Gearon has all requisite power and authority (corporate and other)
and has in full force and effect all Governmental Authorizations and Private
Authorizations necessary to enable it to execute and deliver, and to perform its
obligations under, this Agreement and each Collateral Document executed or
required to be executed by it pursuant hereto or thereto or to consummate the
Transactions; and the execution, delivery and performance of this Agreement and
each Collateral Document executed or required to be executed by it pursuant
hereto or thereto have been duly authorized by all requisite corporate or other
action on the part of Gearon, including without limitation by the requisite
approval of the stockholders of Gearon. This Agreement has been duly executed
and delivered by Gearon and constitutes, and each Collateral Document executed
or required to be executed by it pursuant hereto or thereto or to consummate the
Transactions when executed and delivered by Gearon will constitute, legal, valid
and binding obligations of Gearon, enforceable in accordance with their
respective terms, except as such enforceability may be subject to bankruptcy,
moratorium, insolvency, reorganization, arrangement, voidable preference,
fraudulent conveyance and other similar laws relating to or affecting the rights
of creditors and except as the same may be subject to the effect of general
principles of equity.
(c) Except as set forth in Section 4.1(c) of the Gearon Disclosure
Schedule, neither the execution and delivery by Gearon of this Agreement or any
Collateral Document executed or required to be executed by it pursuant hereto or
thereto, nor the consummation of the Transactions, nor compliance with the
terms, conditions and provisions hereof or thereof by Gearon:
(i) will conflict with, or result in a breach or violation of,
or constitute a default under, any Organic Document of Gearon or any
Applicable Law, or will conflict with, or result in a breach or
violation of, or constitute a default under, or permit the acceleration
of any obligation or liability in, or but for any requirement of giving
of notice or passage of time or both would constitute such a conflict
with, breach or violation of, or default under, or permit any such
acceleration in, any Contractual Obligation of Gearon; or
(ii) will require Gearon to make or obtain any Governmental
Authorization, Governmental Filing or Private Authorization including
without limitation under the FCA, except as required by the
Hart-Scott-Rodino Act.
(d) Except as set forth in Section 4.1(d) of the Gearon Disclosure
Schedule, Gearon does not have any Subsidiaries.
4.2 Financial and Other Information. Gearon has heretofore furnished to
ATS copies of the financial statements of Gearon listed in Section 4.2 of the
Gearon Disclosure Schedule (the "Gearon Financial Statements"). The Gearon
Financial Statements, including in each case the notes thereto, have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby, except as otherwise noted therein or as set forth in
Section 4.2 of the Gearon Disclosure Schedule, are true, accurate and complete
in all material respects, do not contain any untrue statement of a material fact
or omit to state a material fact required by GAAP to be stated therein or
necessary in order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading, and fairly present the
financial condition and the results of operations and cash flow of Gearon, on
the bases therein stated, as of the respective dates thereof, and for the
respective periods covered thereby subject, in the case of unaudited financial
statements, to normal nonmaterial year-end audit adjustments and accruals.
4.3 Material Statements and Omissions; Absence of Events. Neither any
representation or warranty made by Gearon contained in this Agreement or any
certificate, document or other instrument
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furnished or to be furnished by Gearon pursuant to the provisions hereof nor the
Gearon Disclosure Schedule contains or will contain any untrue statement of a
material fact or omits or will omit to state any material fact required to make
any statement contained herein or therein, in light of the circumstances under
which they were made, not misleading. Since the date of the most recent
financial statements constituting a part of the Gearon Financial Statements,
except to the extent specifically described in Section 4.3 of the Gearon
Disclosure Schedule, there has been no material adverse change in Gearon. There
is no Event known to Gearon which materially adversely affects, or (so far as
Gearon can now reasonably foresee) is likely to materially adversely affect,
Gearon, except to the extent specifically described in Section 4.3 of the Gearon
Disclosure Schedule. Gearon is not aware of any impending or contemplated Event
that would cause any of the representations and warranties made by it in this
Article not to be true, correct and complete on the date of such Event as if
made on that date.
4.4 Title to Properties; Leases.
(a) Section 4.4(a) of the Gearon Disclosure Schedule contains a true,
accurate and complete description of all real property owned by Gearon that is
part of the property and assets of Gearon (the "Gearon Assets"). Gearon has, to
Gearon's knowledge, good indefeasible, marketable and insurable title to all
real property (other than leasehold real property) and good indefeasible and
marketable title to all other assets (other than real property), tangible and
intangible, constituting a part of the Gearon Assets; all of such real property
and other assets are so owned, in each case, free and clear of all Liens, except
(i) Permitted Liens, and (ii) Liens set forth on Section 4.4(a) of the Gearon
Disclosure Schedule. Except for financing statements evidencing Liens referred
to in the preceding sentence (a true, accurate and complete list and description
of which is set forth in Section 4.4(a) of the Gearon Disclosure Schedule), no
financing statements under the Uniform Commercial Code and no other filing which
names Gearon as debtor or which covers or purports to cover any of the Gearon
Assets is on file in any state or other jurisdiction, and Gearon has not signed
or agreed to sign any such financing statement or filing or any agreement
authorizing any secured party thereunder to file any such financing statement or
filing. Except as disclosed in Section 4.4(a) of the Gearon Disclosure Schedule,
all improvements on the real property owned or leased by Gearon are, to Gearon's
knowledge, in compliance with applicable zoning, wetlands and land use laws,
ordinances and regulations and applicable title covenants, conditions,
restrictions and reservations in all respects necessary to conduct the
operations as presently conducted, except for any instances of non-compliance
which do not and will not in the aggregate have a material adverse effect on the
owner or lessee, as the case may be, of such real property. Except as disclosed
in Section 4.4(a) of the Gearon Disclosure Statement, all such improvements
comply in all material aspects with all Applicable Laws, Governmental
Authorizations and Private Authorizations. Except as disclosed in Section 4.4(a)
of the Gearon Disclosure Statement, all of the transmitting towers, ground
radials, guy anchors, transmitting buildings and related improvements, if any,
located on the real property owned or leased by Gearon are located entirely on
such real property. There is no pending or, to Gearon's knowledge, threatened or
contemplated action to take by eminent domain or otherwise to condemn any part
of any real property owned by Gearon or, to Gearon's knowledge, any real
property leased by Gearon. Except as set forth in Section 4.4(a) of the Gearon
Disclosure Schedule, such real property (other than land), fixtures, fixed
assets and other material items of personal property, including equipment, have,
in Gearon's reasonable business judgment, been maintained in a manner consistent
with generally accepted standards of sound engineering practice and currently
permit the Gearon Business to be operated in all material respects in accordance
with the terms and conditions of all Applicable Laws, Governmental
Authorizations and Private Authorizations.
(b) Section 4.4(b) of the Gearon Disclosure Schedule contains a true,
accurate and complete description of all Leases under which any real property
used in the business of Gearon (the "Gearon Business") is leased. Except as
otherwise set forth in Section 4.4(b) of the Gearon Disclosure Schedule, each
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Lease or other occupancy or other agreement under which Gearon holds real or
personal property constituting a part of the Gearon Assets has been duly
authorized, executed and delivered by Gearon and, to Gearon's knowledge, each of
the other parties thereto, and is a legal, valid and binding obligation of
Gearon, and, to Gearon's knowledge, each of the other parties thereto,
enforceable in accordance with its terms, except as such enforceability may be
limited by bankruptcy, moratorium, insolvency and similar laws affecting the
rights and remedies of creditors and obligations of debtors generally and by
general principles of equity. Gearon has a valid leasehold interest in and
enjoys peaceful and undisturbed possession under all Leases pursuant to which it
holds any such real property or tangible personal property. All of such Leases
are valid and subsisting and in full force and effect; neither Gearon nor, to
Gearon's knowledge, any other party thereto, is in material default in the
performance, observance or fulfillment of any obligation, covenant or condition
contained in any such Lease. None of the fixed assets or equipment comprising a
part of the Gearon Assets is subject to contracts of sale, and none is held by
Gearon as lessee or as conditional sales vendee under any Lease or conditional
sales contract and none is subject to any title retention agreement, except as
set forth in Section 4.4(b) of the Gearon Disclosure Schedule.
(c) Section 4.4(c) of the Gearon Disclosure Schedule contains a true,
accurate and complete description of all material items of Personal Property of
Gearon. Gearon owns and has good and marketable title to all of its Personal
Property, in each case, free and clear of all Liens, except (i) Permitted Liens
and (ii) Liens set forth on Section 4.4(c) of the Gearon Disclosure Schedule
(which Liens shall be released prior to Closing). Except as set forth in Section
4.4(c) of the Gearon Disclosure Schedule, and except for any defects or damage
that would not, in the aggregate, have a material adverse effect on Gearon, all
of the Personal Property of Gearon is in a state of good repair and maintenance
and is in good operating condition, normal wear and tear excepted, has been
maintained in a manner consistent with generally accepted standards of good
engineering practice and currently permits the Gearon Business to be operated in
accordance with the terms and conditions of all Applicable Laws.
4.5 Compliance with Private Authorizations. Section 4.5 of the Gearon
Disclosure Schedule sets forth a true, accurate and complete list and
description of each Private Authorization which individually is material to the
Gearon Assets or the Gearon Business. Gearon has obtained all Private
Authorizations which are necessary for the ownership or operation of the Gearon
Assets or the conduct of the Gearon Business which, if not obtained and
maintained, could, individually or in the aggregate, materially adversely affect
Gearon. All of such Private Authorizations are valid and in good standing and
are in full force and effect. Gearon is not in breach or violation of, or in
default in the performance, observance or fulfillment of, any such Private
Authorization, and no Event exists or has occurred, which constitutes, or but
for any requirement of giving of notice or passage of time or both would
constitute, such a breach, violation or default, under any such Private
Authorization, except for such defaults, breaches or violations as do not and
will not have in the aggregate any material adverse effect on Gearon. No such
Private Authorization is the subject of any pending or, to Gearon's knowledge,
threatened attack, revocation or termination.
4.6 Compliance with Governmental Authorizations and Applicable Law.
(a) Section 4.6(a) of the Gearon Disclosure Schedule contains a true,
complete and accurate description of each Governmental Authorization required
under Applicable Law (i) to own and operate the Gearon Assets and conduct the
Gearon Business, as currently conducted or proposed to be conducted on or prior
to the Closing Date, all of which are in full force and effect or (ii) that is
necessary to permit Gearon to execute and deliver this Agreement and to perform
its obligations hereunder. Gearon has obtained all Governmental Authorizations
which are necessary for the ownership or operation of the Gearon Assets or the
conduct of the Gearon Business as now conducted and which, if not obtained and
maintained, would,
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individually or in the aggregate, have any material adverse effect on Gearon.
None of the Governmental Authorizations listed in Section 4.6(a) of the Gearon
Disclosure Schedule is subject to any restriction or condition which would limit
in any material respect the ownership or operations of the Gearon Assets or the
conduct of the Gearon Business as currently conducted, except for restrictions
and conditions generally applicable to Governmental Authorizations of such type.
The Governmental Authorizations listed in Section 4.6(a) of the Gearon
Disclosure Schedule are valid and in good standing, are in full force and effect
and are not impaired in any material respect by any act or omission of Gearon or
its officers, directors, employees or agents, and the ownership or operation of
the Gearon Assets or the conduct of the Gearon Business are in accordance in all
material respects with the Governmental Authorizations. All material reports,
forms and statements required to be filed by Gearon with all Authorities with
respect to the Gearon Business have been filed and are true, complete and
accurate in all material respects. No such Governmental Authorization is the
subject of any pending or, to Gearon's knowledge, threatened challenge or
proceeding to revoke or terminate any such Governmental Authorization. Gearon
has no reason to believe that any such Governmental Authorization would not be
renewed in the name of Gearon by the granting Authority in the ordinary course.
(b) Except as otherwise specifically described in Section 4.6(b) of the
Gearon Disclosure Schedule, neither Gearon nor any director or officer thereof
(in connection with the ownership or operation of the Gearon Assets or the
conduct of the Gearon Business) is in or is charged by any Authority with or, to
Gearon's knowledge, at any time since January 1, 1995 has been in or has been
charged by any Authority with, or, to Gearon's knowledge, is threatened or under
investigation by any Authority with respect to, breach or violation of, or
default in the performance, observance or fulfillment of, any Governmental
Authorization or any Applicable Law relating to the ownership and operation of
the Gearon Assets or the conduct of the Gearon Business. In particular, but
without limiting the generality of the foregoing, there are no applications,
Claims or Legal Actions pending or, to Gearon's knowledge, threatened before or
by any Authority (x) relating to the ownership or operation of the Gearon Assets
or the conduct of the Gearon Business which, individually or in the aggregate,
are reasonably likely to result in the revocation or termination of any
Governmental Authorization or the imposition of any restriction of such a nature
as would adversely affect the ownership or operation of the Gearon Assets or the
conduct of the Gearon Business; (y) involving charges of illegal discrimination
by Gearon under any federal or state employment Laws, or (z) involving
Environmental Laws or zoning laws, except as otherwise specifically described in
Section 4.6(b) of the Gearon Disclosure Schedule except, in each case, such
applications, Claims or Legal Actions as do not and will not have, individually
or in the aggregate, any material adverse effect on Gearon.
(c) Except as otherwise specifically described in Section 4.6(c) of the
Gearon Disclosure Schedule, no Event exists or has occurred, which, to Gearon's
knowledge, constitutes, or but for any requirement of giving of notice or
passage of time or both would constitute, such a breach, violation or default,
under (i) any Governmental Authorization or any Applicable Law, except for such
breaches, violations or defaults as do not and will not have, individually or in
the aggregate, any material adverse effect on Gearon or (ii) any material
requirement of any insurance carrier, applicable to the ownership or operations
of the Gearon Assets or the conduct of the Gearon Business, except for such
breaches, violations or defaults as do not and will not have, individually or in
the aggregate, any material adverse effect on Gearon.
(d) With respect to matters, if any, of a nature referred to in Section
4.6(a), 4.6(b) or 4.6(c) of the Gearon Disclosure Schedule, except as otherwise
specifically described in Section 4.6(d) of the Gearon Disclosure Schedule, all
such information and matters set forth in the Gearon Disclosure Schedule, if
adversely determined against Gearon, will not, individually or in the aggregate,
have a materially adversely effect on Gearon.
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4.7 Intangible Assets. Section 4.7 of the Gearon Disclosure Schedule
sets forth a true, accurate and complete description of all Intangible Assets
(other than Governmental Authorizations and Private Authorizations) relating to
the ownership and operation of the Gearon Assets or the conduct of the Gearon
Business held or used by Gearon, including without limitation the nature of
Gearon's interest in each and the extent to which the same have been duly
registered in the offices as indicated therein. Except as set forth in Section
4.7 of the Gearon Disclosure Schedule, no Intangible Assets (except Governmental
Authorizations, Private Authorizations, and the Intangible Assets so set forth)
are required for the ownership or operation of the Gearon Assets or the conduct
of the Gearon Business as currently owned, operated and conducted or proposed to
be owned, operated and conducted on or prior to the Closing Date. Gearon does
not, to its knowledge, wrongfully infringe upon or unlawfully use any Intangible
Assets owned or claimed by another, and Gearon has not received any notice of
any claim or infringement relating to any such Intangible Asset.
4.8 Related Transactions. Gearon is not a party or subject to any
Contractual Obligation relating to the ownership or operation of the Gearon
Assets or the conduct of the Gearon Business between Gearon and any of its
officers, directors, stockholders, employees or, to the knowledge of Gearon, any
Affiliate of any thereof, including without limitation any Contractual
Obligation providing for the furnishing of services to or by, providing for
rental of property, real, personal or mixed, to or from, or providing for the
lending or borrowing of money to or from or otherwise requiring payments to or
from, any such Person, other than (a) Employment Arrangements listed or
described in Section 4.14 of the Gearon Disclosure Schedule, (b) Contractual
Obligations between Gearon and any of its directors, stockholders, officers,
employees or Affiliates of Gearon or any of the foregoing, which will be
terminated, at no cost or expense to Gearon, prior to the Closing, or (c) as
specifically set forth in Section 4.8 of the Gearon Disclosure Schedule.
4.9 Insurance. Gearon maintains, with respect to the Gearon Assets and
the Gearon Business, policies of fire and extended coverage and casualty,
liability and other forms of insurance in such amounts and against such risks
and losses as are set forth in Section 4.9 of the Gearon Disclosure Schedule.
4.10 Tax Matters.
(a) Gearon has in accordance with all Applicable Laws filed all Tax
Returns which are required to be filed, and has paid, or made adequate provision
for the payment of, all Taxes which have or may become due and payable pursuant
to said Tax Returns and all other governmental charges and assessments received
to date other than those Taxes being contested in good faith for which adequate
provision has been made on the most recent balance sheet forming part of Gearon
Financial Statements. The Tax Returns of Gearon have been prepared in all
material respects in accordance with all Applicable Laws and generally accepted
principles applicable to taxation consistently applied. All Taxes which Gearon
is required by law to withhold and collect have been duly withheld and
collected, and have been paid over, in a timely manner, to the proper
Authorities to the extent due and payable. Gearon has not executed any waiver to
extend, or otherwise taken or failed to take any action that would have the
effect of extending, the applicable statute of limitations in respect of any Tax
liabilities of Gearon for the fiscal years prior to and including the most
recent fiscal year. Adequate provision has been made on the most recent balance
sheet forming part of Gearon Financial Statements for all Taxes accrued through
the date of such balance sheet of any kind, including interest and penalties in
respect thereof, whether disputed or not, and whether past, current or deferred,
accrued or unaccrued, fixed, contingent, absolute or other, and there are, to
Gearon's knowledge, no past transactions or matters which could result in
additional Taxes of a material nature to Gearon for which an adequate reserve
has not been provided on such balance sheet. Gearon is not a "consenting
corporation" within the meaning of Section 341(f) of the Code. Gearon has at all
times been taxable as a Subchapter S corporation under the
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Code, and has never been a member of any consolidated group for Tax purposes,
except as otherwise set forth in Section 4.10(a) of the Gearon Disclosure
Schedule.
(b) The information shown on the federal income Tax Returns of Gearon
for each of the most recent two tax years (true and complete copies of which
have, to the extent requested by ATS, been furnished by Gearon to ATS) is true,
accurate and complete in all material respects and fairly and accurately
reflects the information purported to be shown. Federal and state income Tax
Returns of Gearon have not been exam ined by the IRS or applicable state
Authority, and Gearon has not been notified of any proposed examination, except
as shown in Section 4.10(b) of the Gearon Disclosure Schedule.
(c) Gearon is not a party to any tax sharing agreement or arrangement.
4.11 Employee Retirement Income Security Act of 1974. Except as
described in Section 4.11 of the Gearon Disclosure Schedule:
(a) Gearon (which for purposes of this Section shall include any ERISA
Affiliate) is not making any contribution to or sponsoring, and has not at any
time since its organization made any contribution to or sponsored, any Plan or
Benefit Arrangement which is subject to ERISA.
(b) Gearon is not and never has been a party to any Multiemployer Plan
or made contributions to any such Plan.
(c) Gearon does not maintain any Plan that provides benefits described
in Section 3(1) of ERISA, except as the provisions of COBRA may apply, to any
former employees or retirees of Gearon.
(d) The execution, delivery and performance by Gearon of this Agreement
and the Collateral Documents executed or required to be executed pursuant hereto
and thereto will not involve any prohibited transaction within the meaning of
ERISA or Section 4975 of the Code.
4.12 Absence of Sensitive Payments. Neither Gearon nor, to Gearon's
knowledge, any of its officers, directors, employees, agents or other
representatives, has with respect to the Gearon Assets or the Gearon Business
(a) made any contributions, payments or gifts to or for the private use of any
governmental official, employee or agent where either the payment or the purpose
of such contribution, payment or gift is illegal under the laws of the United
States or the jurisdiction in which made or (b) established or maintained any
unrecorded fund or asset for any illegal purpose or made any false or artificial
entries on its books.
4.13 Bank Accounts, Etc. Section 4.13 of the Gearon Disclosure Schedule
contains a true, accurate and complete list as of the date hereof of all banks,
trust companies, savings and loan associations and brokerage firms in which
Gearon has an account or a safe deposit box and the names of all Persons
authorized to draw thereon, to have access thereto, or to authorize transactions
therein, the names of all Persons, if any, holding valid and subsisting powers
of attorney from Gearon and a summary statement as to the terms thereof. Gearon
agrees that prior to the Closing Date it will not make or permit to be made any
change affecting any bank, trust company, savings and loan association,
brokerage firm or safe deposit box or in the names of the Persons authorized to
draw thereon, to have access thereto or to authorize transactions therein or in
such powers of attorney, or open any additional accounts or boxes or grant any
additional powers of attorney, without in each case first notifying ATS in
writing.
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4.14 Employment Arrangements. Section 4.14 of the Gearon Disclosure
Schedule contains a true, accurate and complete list of all Gearon employees
(the "Gearon Employees"), together with each such employee's title or the
capacity in which he or she is employed and each such employee's compensation.
Gearon has no obligation or liability, contingent or other, under any Employment
Arrangement with any Gearon Employee, other than (i) those listed or described
in Section 4.14 of the Gearon Disclosure Schedule, (ii) those incurred in the
ordinary and usual course of business, or (iii) such obligations or liabilities
as do not and will not have, in the aggregate, any material adverse effect on
Gearon. Except as described in Section 4.14 of the Gearon Disclosure Schedule,
(a) none of the Gearon Employees is now, or since January 1, 1995 has been,
represented by any labor union or other employee collective bargaining
organization, and Gearon is not, and never has been, a party to any labor or
other collective bargaining agreement with respect to any of the Gearon
Employees, (b) there are no pending grievances, disputes or controversies with
any union or any other employee or collective bargaining organization of such
employees, or threats of strikes, work stoppages or slowdowns or any pending
demands for collective bargaining by any such union or other organization, (c)
neither Gearon nor any of such employees is now, or has since January 1, 1995
been, subject to or involved in or, to Gearon's knowledge, threatened with, any
union elections, petitions therefor or other organizational or recruiting
activities, in each case with respect to the Gearon Employees, and (d) none of
the Gearon Employees has notified Gearon that he or she does not intend to
continue employment with Gearon until the Closing or with ATS following the
Closing. Gearon has performed in all material respects all obligations required
to be performed under all Employment Arrangements and is not in material breach
or violation of or in material default or arrears under any of the terms,
provisions or conditions thereof.
4.15 Material Agreements. Listed on Section 4.15 of the Gearon
Disclosure Schedule are all Material Agreements relating to the ownership or
operation of the Gearon Assets or the conduct of the Gearon Business or to which
Gearon is a party or to which it is bound or which any of the Gearon Assets is
subject. True, accurate and complete copies of each of such Material Agreements
have been made available by Gearon to ATS and Gearon has provided ATS with
photocopies of all such Material Agreements requested by ATS (or true, accurate
and complete descriptions thereof have been set forth in Section 4.15 of the
Gearon Disclosure Schedule, with respect to Material Agreements comprised of
site leases and site licenses granted by Gearon to third parties and with
respect to Material Agreements that are oral). All of such Material Agreements
are valid, binding and legally enforceable obligations of Gearon and, to
Gearon's knowledge, all other parties thereto, except as such enforceability may
be limited by bankruptcy, moratorium, insolvency and similar laws affecting the
rights and remedies of creditors and obligations of debtors generally and by
general principles of equity. Gearon has duly complied with all of the material
terms and conditions of each such Material Agreement and has not done or
performed, or failed to do or perform (and there is no pending or, to the
knowledge of Gearon, Claim threatened in writing with which Gearon has not so
complied, done and performed or failed to do and perform) any act which would
invalidate or provide grounds for the other party thereto to terminate (with or
without notice, passage of time or both) such Material Agreement or impair the
rights or benefits, or increase the costs, of Gearon under any of such Material
Agreements in any material respect.
4.16 Ordinary Course of Business. Gearon, from the end of its most
recent fiscal quarter to the date hereof, except (i) as may be described on
Section 4.16 of the Gearon Disclosure Schedule, (ii) as may be required or
expressly contemplated by the terms of this Agreement, or (iii) as may be
described in the Gearon Financial Statements, including the notes thereto, with
respect to the Gearon Assets and the Gearon Business:
(a) has operated its business in all material respects in the
normal, usual and customary manner in the ordinary and regular course
of business, consistent with prior practice;
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(b) except in each case in the ordinary course of business,
consistent with prior practice it being understood that the acquisition
of communications sites and assets involved in the communications sites
industry is part of the ordinary course of business of Gearon:
(i) has not incurred any obligation or liability
(fixed, contingent or other) individually having a value in
excess of $50,000;
(ii) has not sold or otherwise disposed of or
contracted to sell or otherwise dispose of any of its
properties or assets having a value in excess of $50,000;
(iii) has not entered into any individual commitment
having a value in excess of $50,000; and
(iv) has not canceled any debts or claims;
(c) has not created or permitted to be created any Lien on any
of its property, except for Permitted Liens;
(d) has not made or committed to make any additions to its
property or any purchases of equipment, except in the ordinary course
of business consistent with past practice or for normal maintenance and
replacements;
(e) has not increased the compensation payable or to become
payable to any of the Gearon Employees other than nonmaterial increases
in the ordinary course of business, or otherwise materially altered,
modified or changed the terms of their employment;
(f) has not suffered any material damage, destruction or loss
(whether or not covered by insurance) or any acquisition or taking of
property by any Authority;
(g) has not waived any rights of material value without fair
and adequate consideration;
(h) has not experienced any work stoppage;
(i) except in the ordinary course of business, has not entered
into, amended or terminated any Lease, Governmental Authorization,
Private Authorization, Material Agreement or Employment Arrangement, or
any transaction, agreement or arrangement with any Affiliate of Gearon;
(j) has not made, paid or declared any Distribution; and
(k) has not entered into any other transaction or series of
related transactions which individually or in the aggregate is material
to the Gearon Assets or the Gearon Business.
4.17 Material and Adverse Restrictions. Gearon is not a party to or
subject to, nor is any of the Gearon Assets subject to, any Applicable Law,
Governmental Authorization, Contractual Obligation, Employment Arrangement,
Material Agreement or Private Authorization, or any other obligation or
restriction of any kind or character, which now has or, as far as Gearon can now
reasonably foresee, at any time in the future, individually or in the aggregate,
is likely to have, any material adverse effect on Gearon, except as set forth in
Section 4.17 of the Gearon Disclosure Schedule.
4.18 Broker or Finder. No Person assisted in or brought about the
negotiation of this Agreement or the Merger in the capacity of broker, agent or
finder or in any similar capacity on behalf of Gearon or the Gearon Stockholder
which would entitle such Person to any compensation.
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4.19 Solvency. As of the execution and delivery of this Agreement,
Gearon is, and immediately prior to and immediately after giving effect to the
consummation of the Merger will be, solvent.
4.20 Environmental Matters. With respect to the Gearon Assets and the
Gearon Business, except as set forth in Gearon Disclosure Schedule 4.20 (it
being understood that such Schedule 4.20 shall include the information set forth
in the Phase I and Phase II Environmental Assessments which Gearon shall provide
to ATSI and which it shall have a reasonable period to review pursuant to the
provisions of Section 11.14) and except as the following representations may
relate to the operations or conduct of (i) the owners of any property which is
leased by Gearon or (ii) the clients or customers of Gearon on any property
which is owned or leased by Gearon, in which such representations shall be
limited to Gearon's knowledge, Gearon:
(a) has not been notified that it is potentially liable under,
has not received any request for information or other correspondence
concerning its potential liability with respect to any site or facility
under, and, to Gearon's knowledge, is not a "potentially responsible
party" under, the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, the Resource Conservation
Recovery Act, as amended, or any similar state law;
(b) has not entered into or received any consent decree,
compliance order or administrative order issued pursuant to any
Environmental Law, except such Environmental Permits, applications,
notices or other permits as do not and will not have, in the aggregate,
any material adverse effect on Gearon;
(c) is not a party in interest or in default under any
judgment, order, writ, injunction or decree of any Final Order issued
pursuant to any Environmental Law;
(d) has obtained all Environmental Permits required under
Environmental Laws, and has filed all applications, notices and other
documents required to be filed prior to the date of this Agreement to
effect the timely renewal or issuance of all Environmental Permits for
the continued conduct of its business in the manner now conducted;
(e) is in compliance in all material respects with all
Environmental Laws, and is not the subject of or, to Gearon's
knowledge, threatened with any Legal Action involving a demand for
damages or other potential liability, including any Lien, with respect
to violations or breaches of any Environmental Law;
(f) has not conducted or received any site assessment, audit
or other investigation as to material environmental matters at any
property currently owned, leased, operated or occupied by Gearon;
(g) has not installed or used any above ground or underground
storage tanks, friable asbestos, polychlorinated biphenyls or urea
formaldehyde foam insulation on any property currently owned, leased or
operated by Gearon and, to Gearon's knowledge, there are no above
ground or underground storage tanks, friable asbestos, polychlorinated
biphenyls or urea formaldehyde foam insulation or any property
currently owned, leased or operated by Gearon;
(h) has no knowledge of any past or present Event related to
Gearon's properties, operations or business, which Event, individually
or in the aggregate, may interfere with or prevent continued material
compliance with all Environmental Laws, or which, individually or in
the aggregate, may form the basis of any material Claim for or arising
out of the release or threatened release into the environment of any
Hazardous Material.
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4.21 Capital Stock. The authorized and outstanding capital stock of
Gearon is as set forth in Section 4.21 of the Gearon Disclosure Schedule. All of
such outstanding capital stock has been duly authorized and validly issued, is
fully paid and nonassessable and is not subject to any preemptive or similar
rights and is owned of record and, to Gearon's knowledge, beneficially as shown
in Section 4.21 of the Gearon Disclosure Schedule. Except as described in
Section 4.21 of the Gearon Disclosure Schedule, Gearon has not granted or
issued, nor has Gearon agreed to grant or issue, any shares of its capital stock
or any Option Security or Convertible Security, and Gearon is not a party to or
bound by any agreement, put or commitment pursuant to which it is obligated to
purchase, redeem or otherwise acquire any shares of capital stock or any Option
Security or Convertible Security.
4.22 Materiality. The representations and warranties set forth in this
Article would in the aggregate be true and correct even without the materiality
exceptions or qualifications contained therein or set forth in the Gearon
Disclosure Schedule, except for such exceptions and qualifications including
without limitation those set forth in the Gearon Disclosure Schedule which, in
the aggregate for all such representations and warranties, are not and could not
reasonably be expected to be materially adverse to Gearon.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF ATS AND ATSI
Each of ATS and ATSI, jointly and severally, hereby represents and
warrants to Gearon and the Gearon Stockholder as follows:
5.1 Organization and Business; Power and Authority; Effect of
Transaction.
(a) Each of ATS and ATSI is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, has all requisite power and authority (corporate and other) to own
or hold under lease its properties and to conduct its business as now conducted.
(b) Each of ATS and ATSI has all requisite power and authority
(corporate and other) and has in full force and effect all Governmental
Authorizations and Private Authorizations necessary to enable it to execute and
deliver, and to perform its obligations under, this Agreement and each
Collateral Document executed or required to be executed by it pursuant hereto or
thereto or to consummate the Transactions; and the execution, delivery and
performance of this Agreement and each Collateral Document executed or required
to be executed by it pursuant hereto or thereto have been duly authorized by all
requisite corporate or other action on the part of ATS and ATSI. This Agreement
has been duly executed and delivered by ATS and ATSI and constitutes, and each
Collateral Document executed or required to be executed by each of them pursuant
hereto or thereto or to consummate the Transactions when executed and delivered
by ATS and ATSI will constitute, legal, valid and binding obligations of each of
ATS and ATSI, enforceable in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, moratorium, insolvency and
similar laws affecting the rights and remedies of creditors and obligations of
debtors generally and by general principles of equity.
(c) Except to the extent specifically described in the ATS Information
Statement, neither the execution and delivery by ATS and ATSI of this Agreement
or any Collateral Document executed or required to be executed by each of them
pursuant hereto or thereto, nor the consummation of the Transactions, nor
compliance with the terms, conditions and provisions hereof or thereof by ATS
and ATSI:
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(i) will conflict with, or result in a breach or violation of,
or constitute a default under, any Organic Document of ATS or ATSI or
any Applicable Law, or will conflict with, or result in a breach or
violation of, or constitute a default under, or permit the acceleration
of any obligation or liability in, or but for any requirement of giving
of notice or passage of time or both would constitute such a conflict
with, breach or violation of, or default under, or permit any such
acceleration in, any Contractual Obligation of ATS or ATSI; or
(ii) will require ATS or ATSI to make or obtain any
Governmental Authorization, Governmental Filing or Private
Authorization including without limitation under the FCA, except as
required by the Hart-Scott-Rodino Act or as contemplated by the
Registration Rights Agreement.
5.2 Financial and Other Information. ATS has heretofore furnished to
Gearon copies of the ATS Information Statement. The consolidated financial
statements of ATS included in the ATS Information Statement (the "ATS Financial
Statements"), including in each case the notes thereto, have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, except as otherwise noted therein, are true, accurate and
complete in all material respects, do not contain any untrue statement of a
material fact or omit to state a material fact required by GAAP to be stated
therein or necessary in order to make the statements contained therein not
misleading, and fairly present the consolidated financial condition and the
consolidated results of operations and cash flow of ATS, on the bases therein
stated, as of the respective dates thereof, and for the respective periods
covered thereby subject, in the case of unaudited financial statements, to
normal nonmaterial year-end audit adjustments and accruals.
5.3 Material Statements and Omissions; Absence of Events. Neither any
representation or warranty made by ATS or ATSI contained in this Agreement or
any certificate, document or other instrument furnished or to be furnished by
ATS or ATSI pursuant to the provisions hereof nor the ATS Information Statement
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact required to make any statement contained
herein or therein not misleading. Since the date of the most recent financial
statements constituting a part of the ATS Financial Statements, except to the
extent specifically described in the ATS Information Statement, there has been
no material adverse change in ATS. There is no Event known to ATS which
materially adversely affects, or (so far as ATS can now reasonably foresee) is
likely to materially adversely affect, ATS, except to the extent specifically
described in the ATS Information Statement. ATS is not aware of any impending or
contemplated Event that would cause any of the representations and warranties
made by it in this Article not to be true, correct and complete on the date of
such Event as if made on that date.
5.4 Absence of Sensitive Payments. Neither ATS, ATSI nor, to ATS' and
ATSI's knowledge, any of their officers, directors, employees, agents or other
representatives, has with respect to the assets and business of ATS and ATSI (a)
made any contributions, payments or gifts to or for the private use of any
governmental official, employee or agent where either the payment or the purpose
of such contribution, payment or gift is illegal under the laws of the United
States or the jurisdiction in which made or (b) established or maintained any
unrecorded fund or asset for any illegal purpose or made any false or artificial
entries on its books.
5.5 Title to Properties; Leases. ATSI has, to ATS' knowledge, good
indefeasible, marketable and insurable title to all real property (other than
leasehold real property) and good indefeasible and merchantable title to all
other assets (other than real property), tangible and intangible, constituting a
part of the ATSI Assets; all of such real property and other assets is so owned,
in each case, free and clear of all Liens, except
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(i) Permitted Liens, (ii) Liens set forth or described in the ATS Information
Statement, and (iii) Liens that would not, individually or in the aggregate,
have a material adverse effect on ATS.
5.6 Compliance with Private Authorizations. ATSI has obtained all
Private Authorizations which are necessary for the ownership or operation of its
assets or the conduct of its business which, if not obtained and maintained,
could, individually or in the aggregate, materially adversely affect ATS. All of
such Private Authorizations are valid and in good standing and are in full force
and effect. ATSI is not in breach or violation of, or in default in the
performance, observance or fulfillment of, any such Private Authorization, and
no Event exists or has occurred, which constitutes, or but for any requirement
of giving of notice or passage of time or both would constitute, such a breach,
violation or default, under any such Private Authorization, except for such
defaults, breaches or violations as do not and will not have in the aggregate
any material adverse effect on ATS. No such Private Authorization which is
material to the ownership and operation of ATSI's assets or the conduct of
ATSI's business is the subject of any pending or, to ATSI's knowledge,
threatened attack, revocation or termination.
5.7 Compliance with Governmental Authorizations and Applicable Law.
(a) ATSI has obtained all Governmental Authorizations which are
necessary for the ownership or operation of its assets or the conduct of its
business as now conducted and which, if not obtained and maintained, would,
individually or in the aggregate, have any material adverse effect on ATS. None
of ATSI's Governmental Authorizations which is material to the ownership and
operation of ATSI's assets or the conduct of ATSI's business is subject to any
restriction or condition which would limit in any respect the ownership or
operations of ATSI's assets or the conduct of ATSI 's business as currently
conducted, except for restrictions and conditions (i) generally applicable to
Governmental Authorizations of such type, and (ii) that would not, individually
or in the aggregate, have a material adverse effect on ATS. ATSI's Governmental
Authorizations which are material to the ownership and operation of ATSI's
assets or the conduct of ATSI's business are valid and in good standing, are in
full force and effect and are not impaired in any material respect by any act or
omission of ATSI or its officers, directors, employees or agents, and the
ownership or operation of ATSI's assets or the conduct of ATSI's business are in
accordance in all material respects with the Governmental Authorizations. All
material reports, forms and statements required to be filed by ATSI with all
Authorities with respect to ATSI's business have been filed and are true,
complete and accurate in all material respects. No Governmental Authorization
which is material to the ownership and operation of ATSI's assets or the conduct
of ATSI's business is the subject of any pending or, to ATSI's knowledge,
threatened challenge or proceeding to revoke or terminate any such Governmental
Authorization. ATSI has no reason to believe that any such Governmental
Authorization would not be renewed in the name of ATSI by the granting Authority
in the ordinary course.
(b) Except as otherwise specifically described in the ATS Information
Statement, neither ATS or ATSI nor any director or officer thereof (in
connection with the ownership or operation of ATSI's assets or the conduct of
ATSI's business) is in or is charged by any Authority with or is threatened or
under investigation by any Authority with respect to, breach or violation of, or
default in the performance, observance or fulfillment of, any Governmental
Authorization or any Applicable Law relating to the ownership and operation of
ATSI's assets or the conduct of ATSI's business which, if determined adversely,
individually or in the aggregate, would have a material adverse effect on ATSI.
In particular, but without limiting the generality of the foregoing, there are
no applications, Claims or Legal Actions pending or, to ATS' knowledge,
threatened before or by any Authority (x) relating to the ownership or operation
of the ATS assets or the conduct of the ATS business which, individually or in
the aggregate, are reasonably likely to result in the revocation or termination
of any Governmental Authorization or the imposition of any restriction of such
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a nature as would adversely affect the ownership or operation of the ATS assets
or the conduct of the ATS business; (y) involving charges of illegal
discrimination by ATS under any federal or state employment Laws, or (z)
involving Environmental Laws or zoning laws, except, in each case, such
applications, Claims or Legal Actions as do not and will not have, individually
or in the aggregate, any material adverse effect on ATS.
(c) Except as otherwise specifically described in the ATS Information
Statement, no Event exists or has occurred, which, to ATS' knowledge,
constitutes, or but for any requirement of giving of notice or passage of time
or both would constitute, such a breach, violation or default, under (i) any
Governmental Authorization or any Applicable Law, or (ii) any material
requirement of any insurance carrier, applicable to the ownership or operations
of the ATS assets or the conduct of the ATS business, except, in each case, for
such breaches, violations or defaults as do not and will not have, individually
or in the aggregate, any material adverse effect on ATS.
5.8 Related Transactions. Neither ATS nor ATSI is a party or subject to
any Contractual Obligation relating to the ownership or operation of ATSI's
assets or the conduct of ATSI's business between either of them and any of its
officers, directors, stockholders, employees or, to the knowledge of ATS, any
Affiliate of any thereof, including without limitation any Contractual
Obligation providing for the furnishing of services to or by, providing for
rental of property, real, personal or mixed, to or from, or providing for the
lending or borrowing of money to or from or otherwise requiring payments to or
from, any such Person, other than those described or referred to in the ATS
Information Statement or that are not, individually or in the aggregate,
material to the business of ATS or ATSI.
5.9 Tax Matters. Each of ATS and ATSI has in accordance with all
Applicable Laws filed all Tax Returns which are required to be filed, and has
paid, or made adequate provision for the payment of, all Taxes which have or may
become due and payable pursuant to said Tax Returns and all other governmental
charges and assessments received to date other than those Taxes being contested
in good faith for which adequate provision has been made on the most recent
balance sheet forming part of ATS Financial Statements. The Tax Returns of ATS
and ATSI have been prepared in all material respects in accordance with all
Applicable Laws and generally accepted principles applicable to taxation
consistently applied. All Taxes which ATS and ATSI is required by law to
withhold and collect have been duly withheld and collected, and have been paid
over, in a timely manner, to the proper Authorities to the extent due and
payable. Adequate provision has been made on the most recent balance sheet
forming part of ATS Financial Statements for all Taxes accrued through the date
of such balance sheet of any kind, including interest and penalties in respect
thereof, whether disputed or not, and whether past, current or deferred, accrued
or unaccrued, fixed, contingent, absolute or other, and there are, to ATSI's
knowledge, no past transactions or matters which could result in additional
Taxes of a material nature to ATSI for which an adequate reserve has not been
provided on such balance sheet.
5.10 Ordinary Course of Business. Each of ATS and ATSI, from the end of
its most recent fiscal quarter to the date hereof, except (i) as may be
described in the ATS Information Statement, or (ii) as may be required or
expressly contemplated by the terms of this Agreement, has operated its business
in all material respects in the normal, usual and customary manner in the
ordinary and regular course of business, consistent with prior practice, it
being understood that the acquisition of communications sites and other
companies and assets involved in the communications sites industry is part of
the ordinary course of business of each of ATS and ATSI.
5.11 Environmental Matters. Except for such matters as would not,
individually or in the aggregate, have a material adverse effect on ATS, ATSI
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(a) has not been notified that it is potentially liable under,
has not received any request for information or other correspondence
concerning its potential liability with respect to any site or facility
under, and, to ATSI's knowledge, is not a "potentially responsible
party" under, the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, the Resource Conservation
Recovery Act, as amended, or any similar state law;
(b) has not entered into or received any consent decree,
compliance order or administrative order issued pursuant to any
Environmental Law;
(c) is not a party in interest or in default under any
judgment, order, writ, injunction or decree of any Final Order issued
pursuant to any Environmental Law;
(d) has obtained all Environmental Permits required under
Environmental Laws, and has filed all applications, notices and other
documents required to be filed prior to the date of this Agreement to
effect the timely renewal or issuance of all Environmental Permits for
the continued conduct of its business in the manner now conducted;
(e) is in compliance in all material respects with all
Environmental Laws, and is not the subject of or, to ATSI's knowledge,
threatened with any Legal Action involving a demand for damages or
other potential liability, including any Lien, with respect to
violations or breaches of any Environmental Law;
(f) has not conducted or received any site assessment, audit
or other investigation as to material environmental matters at any
property currently owned, leased, operated or occupied by ATSI;
(g) has not installed or used any above ground or underground
storage tanks, friable asbestos, polychlorinated biphenyls or urea
formaldehyde foam insulation on any property currently owned, leased or
operated by ATSI and, to ATSI's knowledge, there are no above ground or
underground storage tanks, friable asbestos, polychlorinated biphenyls
or urea formaldehyde foam insulation or any property currently owned,
leased or operated by ATSI;
(h) there has been no disposal, release, spill or burial of
any Hazardous Materials by ATSI (or any Person acting on its behalf) in
violation of Environmental Laws on any property or facility owned,
leased, operated or occupied by ATSI or to ATSI's knowledge at any
facility or site to which Hazardous Materials from or generated by ATSI
may have been taken at any time in the past;
(i) to ATSI's knowledge, there has been no disposal, release,
spill or burial of any Hazardous Materials by ATSI (or any Person
acting on its behalf) on any property which could reasonably be
expected to result or has resulted in contamination which requires
investigation, remediation or other response activity on or beneath any
properties or facilities currently owned, leased, operated or occupied
by ATSI; and
(j) has no knowledge of any past or present Event related to
ATSI's properties, operations or business, which Event, individually or
in the aggregate, may interfere with or prevent continued material
compliance with all Environmental Laws, or which, individually or in
the aggregate, may form the basis of any material Claim for or arising
out of the release or threatened release into the environment of any
Hazardous Material.
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5.12 Materiality. The representations and warranties set forth in this
Article would in the aggregate be true and correct even without the materiality
exceptions or qualifications contained therein, or set forth in the ATS
Information Statement, except for such exceptions and qualifications including
without limitation those set forth in the ATS Information Statement which, in
the aggregate for all such representations and warranties, are not and could not
reasonably be expected to be materially adverse to ATS.
5.13 Material and Adverse Restrictions. Neither ATS nor ATSI is a party
to or subject to, nor is any of the assets of ATS or ATSI subject to, any
Applicable Law, governmental authorization, contractual obligation, employment
arrangement, material agreement or private authorization, or any other
obligation or restriction of any kind or character, which now has or, as far as
ATS or ATSI can now reasonably foresee, at any time in the future, individually
or in the aggregate, is likely to have, any material adverse effect on ATS or
ATSI, except as set forth in the ATS Information Statement.
5.14 Broker or Finder. No Person assisted in or brought about the
negotiation of this Agreement or the Transactions in the capacity of broker,
agent or finder or in any similar capacity on behalf of ATS or ATSI.
5.15 Solvency. As of the execution and delivery of this Agreement, each
of ATS and ATSI is, and immediately prior to and immediately after giving effect
to the consummation of the Transactions will be, solvent.
5.16 Capital Stock.
(a) The authorized and outstanding capital stock of ATS is as set forth
in the ATS Information Statement. All of such outstanding capital stock has
been, and, when issued in accordance with the terms of this Agreement, the
Common Stock Consideration will be, duly authorized and validly issued, fully
paid and nonassessable and is not subject to any preemptive or similar rights.
Except as described in the ATS Information Statement, ATS has not granted or
issued, nor has ATS agreed to grant or issue, any shares of its capital stock or
any Option Security or Convertible Security, and ATS is not a party to or bound
by any agreement, put or commitment pursuant to which it is obligated to
purchase, redeem or otherwise acquire any shares of capital stock or any Option
Security or Convertible Security.
(b) All of the issued and outstanding capital stock of ATSI is owned by
ATS. ATS has no plan or intention (i) to cause ATSI to issue additional shares
of its capital stock that would result in ATS' losing "control" of ATSI within
the meaning of Section 368(c) of the Code; (ii) to liquidate ATSI; (iii) to
merge ATSI with and into another corporation other than as contemplated by this
Agreement (and certain other potential transaction which would not, however,
involve the issuance by ATSI of any securities to parties other than ATS); (iv)
to sell or otherwise dispose of any capital stock of ATSI; or (v) to cause ATSI
to sell or otherwise dispose of any of the assets of Gearon to be acquired
pursuant to the Merger, except for dispositions made in the ordinary course of
business or transfers described in Section 368(a)(2)(C) of the Code. Following
the Merger, ATSI will continue the historical business of Gearon or use a
significant portion of the Gearon Assets in its business.
5.17 Employment Arrangements. Neither ATS nor ATSI has any obligation
or liability, contingent or other, under any employment arrangement with any
employee of ATS or ATSI, other than (i) those incurred in the ordinary and usual
course of business, or (ii) such obligations or liabilities as do not and will
not have, in the aggregate, any material adverse effect on ATS or ATSI. Except
as described in the ATS Information Statement, (a) none of the employees of ATS
or ATSI is now, or since January 1, 1995 has been,
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represented by any labor union or other employee collective bargaining
organization, and neither ATS nor ATSI is, nor have they ever been, a party to
any labor or other collective bargaining agreement with respect to any of the
employees of ATS or ATSI, (b) there are no pending grievances, disputes or
controversies with any union or any other employee or collective bargaining
organization of such employees, or threats of strikes, work stoppages or
slowdowns or any pending demands for collective bargaining by any such union or
other organization, and (c) neither ATS, ATSI nor any of such employees is now,
or has since January 1, 1995 been, subject to or involved in or, to ATS' or
ATSI's knowledge, threatened with, any union elections, petitions therefor or
other organizational or recruiting activities, in each case with respect to such
employees. Each of ATS and ATSI has performed in all material respects all
obligations required to be performed under all Employment Arrangements and is
not in material breach or violation of or in material default or arrears under
any of the terms, provisions or conditions thereof.
5.18 Investment Representation.
(a) ATSI is an "accredited investor" within the meaning of Rule 501
promulgated under the Securities Act and has been furnished with and had access
to all information, financial and other, and has the opportunity to ask
questions of the management of Gearon with respect to Gearon and ATSI's proposed
investment therein.
(b) ATSI is acquiring the Gearon Notes to be purchased by it for its
own account for investment with no present intention of distributing or
reselling the same, subject, nevertheless, to its right to dispose of the Gearon
Notes or any part thereof in its sole discretion; provided, however, that
notwithstanding the foregoing, ATSI may pledge any or all of the Gearon Notes to
any bona fide lender to ATSI. ATSI understands that Gearon is not and will not
be required to file a registration statement under the Securities Act in
connection with any sale, transfer or other disposition of the Gearon Notes.
5.19 Covenant Regarding Transfer. ATSI covenants and agrees that it
will not sell, assign, transfer or otherwise dispose of any of the Gearon Notes
in violation of the Securities Act.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE GEARON STOCKHOLDER
RELATING TO THE SUBJECT STOCK
The Gearon Stockholder represents and warrants to ATS and ATSI as
follows:
6.1 Enforceability. This Agreement has been duly executed and delivered
by the Gearon Stockholder and constitutes, and each Collateral Document executed
or required to be executed by such Stockholder pursuant hereto or thereto when
executed and delivered by the Gearon Stockholder will constitute, legal, valid
and binding obligations of the Gearon Stockholder, enforceable in accordance
with their respective terms, except as such enforceability may be subject to
bankruptcy, moratorium, insolvency, reorganization, arrangement, voidable
preference, fraudulent conveyance and other similar laws relating to or
affecting the rights of creditors and except as the same may be subject to the
effect of general principles of equity.
6.2 Title to Shares. The Gearon Stockholder owns the Gearon Shares set
forth opposite his name in Section 4.21 of the Gearon Disclosure Schedule.
Except as set forth in Section 4.21 of the Gearon
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Disclosure Schedule, the Gearon Stockholder owns and has good and marketable
title to such Gearon Shares as so set forth, free and clear of all Liens.
6.3 No Conflict; Required Filings and Consents. Except for consents as
set forth in Section 4.1(c) of the Gearon Disclosure Schedule, neither the
execution and delivery by the Gearon Stockholder of this Agreement or any
Collateral Document executed or required to be executed by the Gearon
Stockholder pursuant hereto or thereto, nor the consummation of the
Transactions, nor compliance with the terms, conditions and provisions hereof or
thereof by the Gearon Stockholder:
(i) will conflict with, or result in a breach or violation of,
or constitute a default under, any Applicable Law, or will conflict
with, or result in a breach or violation of, or constitute a default
under, or permit the acceleration of any obligation or liability in, or
but for any requirement of the giving of notice or passage of time or
both would constitute such a conflict with, breach or violation of, or
default under, or permit any acceleration in, any Contractual
Obligation of the Gearon Stockholder;
(ii) will result in or permit the creation or imposition of
any Lien upon any property or asset of the Gearon Stockholder, except
for such Liens as do not and will not have, in the aggregate, a
material adverse effect on the Gearon Stockholder; or
(iii) will require any Governmental Authorization or
Governmental Filing or Private Authorization of the Gearon Stockholder,
except as required by the Hart-Scott-Rodino Act.
ARTICLE 7
COVENANTS
7.1 Access to Information; Confidentiality.
(a) Each party shall afford to the other party and its accountants,
counsel, financial advisors and other representatives (the "Representatives")
full access during normal business hours throughout the period prior to the
Closing Date to all of its (and its Subsidiaries') properties, books, contracts,
commitments and records (including without limitation Tax Returns) and, during
such period, shall furnish promptly upon request (i) a copy of each report,
schedule and other document filed or received by any party pursuant to the
requirements of any Applicable Law (including without limitation the FCA) or
filed by it with any Authority in connection with the Merger or any other
report, schedule or documents which may have a material effect on the
businesses, operations, properties, prospects, personnel, condition, (financial
or other), or results of operations of their respective businesses, (ii) to the
extent not provided for pursuant to the preceding clause, all financial records,
ledgers, work papers and other sources of financial information possessed or
controlled by it or its accountants deemed by each party or its Representatives
necessary or useful for the purpose of performing an audit of the business and
assets of Gearon and ATS, as applicable, and, in the case of ATS, certifying
financial statements and financial information pursuant to the provisions of
Section 8.2(g), and (iii) such other information concerning any of the foregoing
as ATS or Gearon shall reasonably request. All Confidential Information
furnished pursuant to the provisions of this Agreement, including without
limitation this Section, will be kept confidential and shall not, without the
prior written consent of the party disclosing such Confidential Information, be
disclosed by the other party in any manner whatsoever, in whole or in part, and,
except as required by Applicable Law (including without limitation in connection
with any registration,
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proxy or information statement or similar document filed pursuant to any federal
or state securities Law) shall not be used for any purposes, other than in
connection with the Merger. Except as otherwise herein provided, each party
agrees to reveal such Confidential Information only to those of its
Representatives or other Persons who need to know such Confidential Information
for the purpose of evaluating and consummating the Merger who are informed of
its confidential nature. For purposes of this Agreement, "Confidential
Information" shall mean any and all information (excluding information that (i)
has been or is obtained from a source independent of the disclosing party, (ii)
is or becomes generally available to the public other than as a result of
unauthorized disclosure by the receiving party, or (iii) is independently
developed by the receiving party without reliance in any way on information
provided by the disclosing party) related to the business or businesses of ATS,
ATSI and their respective Affiliates, on the one hand, or Gearon and its
Affiliates, on the other hand, including any of their respective successors and
assigns. For the period beginning on the date of this Agreement and ending on
the earlier to occur of (A) the Closing Date and (B) the date that is eighteen
(18) months from the date this Agreement is terminated, ATS and ATSI, on the one
hand, and Gearon and the Gearon Stockholder, on the other hand, agree that
neither it nor any of its Affiliates will solicit or actively seek to hire any
person who during such period is employed by the other party (or any of them),
whether or not such individual would commit a breach of such individual's
employment agreement or contract in leaving such employment; provided, however,
that the foregoing shall not prevent any party (or its Affiliates) from (i)
taking any such action with respect to any person who is not employed by the
other party on the date the first such action is taken, or (ii) placing general
advertisements in the media.
(b) Notwithstanding the provisions of Section 7.1(a), each party may
disclose such information as it may reasonably determine to be necessary in
connection with seeking all Governmental and Private Authorizations or that is
required by Applicable Law to be disclosed, including without limitation in any
registration, proxy or information statement or other document required to be
filed under any federal or state securities Law. In the event that this
Agreement is terminated in accordance with its terms, each party shall promptly
redeliver all written Confidential Information provided pursuant to this Section
or any other provision of this Agreement or otherwise in connection with the
Merger and shall not retain any copies, extracts or other reproductions in whole
or in part of such written material, other than one copy thereof which shall be
delivered to independent counsel for such party.
(c) No investigation pursuant to this Section or otherwise shall affect
any representation or warranty in this Agreement of any party or any condition
to the obligations of the parties hereto.
7.2 Agreement to Cooperate.
(a) Each of the parties hereto shall use reasonable business efforts
(x) to take, or cause to be taken, all actions and to do, or cause to be done,
all things necessary, proper or advisable under Applicable Law to consummate the
Merger, and (y) to refrain from taking, or cause to be taken, any action and to
refrain from doing or causing to be done, anything which could impede or impair
the consummation of the Merger or the consummation of the other Transactions,
including, in all cases, without limitation using its reasonable business
efforts (i) to prepare and file with the applicable Authorities as promptly as
practicable after the execution of this Agreement all requisite applications and
amendments thereto, together with related information, data and exhibits,
necessary to request issuance of orders approving the Merger by all such
applicable Authorities, (ii) to obtain all necessary or appropriate waivers,
consents and approvals, (iii) to effect all necessary registrations, filings and
submissions (including without limitation, if required, filings within five (5)
business days of the date of this Agreement under the Hart-Scott-Rodino Act and
all filings necessary for ATSI to own and operate the Gearon Assets and the
Gearon Business), (iv) to lift any injunction or other legal bar to the Merger
(and, in such case, to proceed with the Merger as expeditiously as possible),
and (v)
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to obtain the satisfaction of the conditions specified in Article 8, including
without limitation the truth and correctness as of the Closing Date as if made
on and as of the Closing Date of the representations and warranties of such
party and the performance and satisfaction as of the Closing Date of all
agreements and conditions to be performed or satisfied by such party.
(b) The parties shall cooperate with one another in the preparation of
all Tax Returns, questionnaires, applications or other documents regarding any
Taxes or transfer, recording, registration or other fees which become payable in
connection with the Merger that are required to be filed on or before the
Closing Date.
(c) Gearon shall cooperate and use its reasonable business efforts to
cause its independent accountants to reasonably cooperate with ATS, and at ATS'
expense, in order to enable ATS to have Gearon or ATS' independent accountants
prepare audited financial statements for Gearon described in Section 8.2(g).
Gearon and the Gearon Stockholder, jointly and severally, represent and warrant
that such financial statements will have been prepared in accordance with GAAP
applied on a basis consistent with the Gearon Financial Statements and will
present fairly the financial condition, results of operation and cash flow of
Gearon. Without limiting the generality of the foregoing, Gearon agrees that it
will (i) consent to the use of such audited financial statements in any
registration, proxy or information statement or other document filed by ATS or
any of its Affiliates under the Securities Act or the Exchange Act and (ii)
execute and deliver, and cause its officers to execute and deliver, such
"representation" letters as are customarily delivered in connection with audits
and as ATS' or Gearon's independent accountants may reasonably request under the
circumstances.
7.3 Public Announcements. Until the Closing or the termination of this
Agreement, each party shall consult with the other before issuing any press
release or otherwise making any public statements with respect to this Agreement
or the Merger and shall not issue any such press release or make any such public
statement without the prior consent of the other. Notwithstanding the foregoing,
the parties acknowledge and agree that they may, without each other's prior
consent, issue such press releases or make such public statements as may be
required by Applicable Law, in which case, to the extent practicable, they will
consult with the other regarding the nature, content and form of such press
release or public statement.
7.4 Notification of Certain Matters. Each party shall give prompt
notice to the other, of the occurrence or non-occurrence of any Event the
occurrence or non-occurrence of which would be reasonably likely to cause (a)
any representation or warranty made by it contained in this Agreement to be
untrue or inaccurate in any material respect or (b) any failure made by it to
comply with or satisfy, or be able to comply with or satisfy, in any material
respect, any covenant, condition or agreement to be complied with or satisfied
by it under this Agreement in any material respect, such that, in any such case,
one or more of the conditions of Closing would not be satisfied; provided,
however, that the delivery of any notice pursuant to this Section shall not
limit or otherwise affect the rights and remedies available hereunder to the
party receiving such notice or the obligations of the party delivering such
notice and shall not, in any event, affect the representations, warranties,
covenants and agreements of the parties or the conditions to their respective
obligations under this Agreement.
7.5 No Solicitation. Neither Gearon nor the Gearon Stockholder shall,
nor shall it or any of them knowingly permit any of its or any of their
Representatives (including, without limitation, any investment banker, broker,
finder, attorney or accountant retained by it or any of them) to, initiate,
solicit or facilitate, directly or indirectly, any inquiries or the making of
any proposal with respect to any Alternative Transaction, engage in any
discussions or negotiations concerning, or provide to any other Person any
information or data
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relating to, it for the purposes of, or otherwise cooperate in any way with or
assist or participate in, or facilitate any inquiries or the making of any
proposal which constitutes, or may reasonably be expected to lead to, a proposal
to seek or effect any Alternative Transaction, or agree to or endorse any
Alternative Transaction. "Alternative Transaction" means a transaction or series
of related transactions (other than the Transactions) resulting in or likely to
result in (i) any change of control of Gearon, (ii) any merger, consolidation or
other business combination of Gearon, regardless of whether Gearon is the
surviving Entity unless the surviving Entity remains obligated under this
Agreement to the same extent as Gearon was, (iii) any tender offer or exchange
offer for, or any acquisitions of, any securities of Gearon, (iv) any sale or
other disposition of all or any substantial part of the assets or business of
Gearon, (v) any issue or sale, or any agreement to issue or sell, any capital
stock, Convertible Securities or Option Securities by Gearon, or (vi) any sale,
transfer, pledge, assignment or other conveyance or any agreement to sell,
transfer, pledge, assign or otherwise convey, any Gearon Shares, Convertible
Securities or Option Securities of Gearon. If Gearon, the Gearon Stockholder or
its or any of their Representatives receives any inquiry with respect to an
Alternative Transaction while this Agreement is in effect, Gearon or the Gearon
Stockholder shall inform the inquiring party that it is not entitled to enter
into discussions or negotiations relating to an Alternative Transaction.
7.6 Conduct of Business by ATSI Pending the Merger. Except as otherwise
contemplated by this Agreement, or as has been publicly disclosed prior to the
date hereof or is described in the ATS Information Statement, after the date
hereof and prior to the Closing Date or earlier termination of this Agreement
unless Gearon shall otherwise agree in writing, ATS shall, and shall cause its
Subsidiaries, to:
(a) conduct their respective businesses in the ordinary and
usual course of business and consistent with past practice, which
includes the acquisition of other businesses or assets in the
communications site industry;
(b) not amend or propose to amend its Organic Documents,
except that ATS may amend its Restated Certificate of Incorporation to
change the authorized number of shares of capital stock and otherwise
in a manner not adverse to the holders of the ATS Class A Common Stock;
(c) use reasonable business efforts to preserve intact their
respective business organizations and goodwill, keep available the
services of their respective present officers and key employees, and
preserve the goodwill and business relationships with customers and
others having business relationships with them and not engage in any
action, directly or indirectly, with the intent to adversely affect the
transactions contemplated by this Agreement;
(d) confer on a regular and frequent basis with one or more
representatives of Gearon to report material operational matters; and
(e) not authorize or enter into any agreement that would
violate any of the foregoing.
7.7 Conduct of Business by Gearon Pending the Merger. Except as set
forth in Section 7.7 of the Gearon Disclosure Schedule or as otherwise
contemplated by this Agreement, after the date hereof and prior to the Closing
Date or earlier termination of this Agreement, unless ATS shall otherwise
consent in writing, Gearon shall:
(a) conduct its business in the ordinary and usual course of
business and consistent with past practice which includes the
acquisition and construction of communications sites and towers;
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(b) not (i) amend or propose to amend their respective Organic
Documents, (ii) split, combine or reclassify (whether by stock dividend
or otherwise) its outstanding capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of, or in
substitution for shares of its capital stock, or (iii) declare, set
aside or pay any dividend or distribution payable in cash, stock,
property or otherwise;
(c) not issue, sell, pledge or dispose of, or agree to issue,
sell, pledge or dispose of, any shares of Gearon Common Stock,
Convertible Securities or Option Securities;
(d) not (i) incur or become contingently liable with respect
to any indebtedness other than short-term unsecured borrowings not to
exceed the excess of (x) $5,000,000 in the aggregate outstanding at any
one time over (y) the principal amount at the time outstanding under
the Gearon Notes, (ii) redeem, purchase, acquire or offer to purchase
or acquire any shares of its capital stock, Convertible Securities or
Option Securities, (iii) sell, lease, license, pledge, dispose of or
encumber any properties or assets or sell any businesses other than
pursuant to agreements in effect on the date hereof and set forth in
Section 7.7 of the Gearon Disclosure Schedule or Liens arising in
accordance with the provisions of indebtedness in effect on the date
hereof and in accordance with their present terms, or (iv) make any
loans, advances or capital contributions to, or investments in, any
other Person, except to officers and employees of Gearon for travel,
business or relocation expenses in the ordinary course of business;
(e) use reasonable business efforts to preserve intact its
business organization and goodwill, keep available the services of its
present officers and key employees, and preserve the goodwill and
business relationships with customers and others having business
relationships with them and not engage in any action, directly or
indirectly, with the intent to adversely impact the transactions
contemplated by this Agreement;
(f) confer on a regular and frequent basis with one or more
representatives of ATS to report material operational matters and the
general status of ongoing operations;
(g) not adopt, enter into, amend or terminate any employment,
severance, special pay arrangement with respect to termination of
employment or other similar arrangements or agreements with any
directors, officers or key employees;
(h) maintain with financially responsible insurance companies
insurance on the Gearon Assets and the Gearon Business in such amounts
and against such risks and losses as are consistent with past practice;
(i) not make any Tax election that could reasonably be likely
to have a material adverse effect on Gearon or settle or compromise any
material income Tax liability;
(j) except in the ordinary course of business or except as
would not reasonably be likely to have a material adverse effect on
Gearon, not modify, amend or terminate any Material Agreement to which
Gearon is a party or by which any of the Gearon Assets may be bound or
to which any of them may be subject or waive, release or assign any
material rights or claims thereunder;
(k) not make any material change to its accounting methods,
principles or practices, except as may be required by GAAP;
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(l) not acquire or agree to acquire (i) by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any Person or other
business organization or division thereof or (ii) any assets that,
individually or in the aggregate, are material to Gearon, in each case,
other than pursuant to agreements in effect on the date hereof and set
forth in the Section 7.7 of the Gearon Disclosure Schedule (ATS agrees
not to unreasonably withhold, delay or condition a consent to any
matters described in this paragraph);
(m) except as set forth in Section 4.6(a) or Section 4.14 of
the Gearon Disclosure Schedule, (i) not grant to any executive officer
or other key employee of Gearon any increase in compensation, except
for normal increases in the ordinary course of business consistent with
past practice or as required under Benefit Arrangements in effect as of
September 30, 1997, (ii) not grant to any such executive officer any
increase in severance or termination pay, except as was required under
any Benefit Arrangements in effect as of September 30, 1997, (iii) not
adopt or amend any Plan or Benefit Arrangement (including change any
actuarial or other assumption used to calculate funding obligations
with respect to any Plan, or change the manner in which contributions
to any Plan are made or the basis on which such contributions are
determined) and (iv) except in the ordinary course, not enter into,
amend in any material respect or terminate any Governmental
Authorization (except as would not be reasonably likely to have a
material adverse effect on Gearon), material Private Authorization or
Contract;
(n) not voluntarily take or permit to be taken any action
which if taken between the end of its most recent fiscal quarter and
prior to the date of this Agreement would have been required to be
noted as an exception on Section 4.16 of the Gearon Disclosure
Schedule, other than pursuant to the conduct of its business in the
ordinary and usual course of business and consistent with past
practice; and
(o) not authorize or enter into any agreement that would
violate any of the foregoing.
7.8 Preliminary Title Reports. As promptly as practicable after the
execution of this Agreement, Gearon shall, at ATS' sole cost and expense,
deliver or cause to be delivered to ATS a standard preliminary title report (the
"Title Reports") dated on or after the date of this Agreement issued by such
title company or companies as Gearon and ATS shall mutually reasonably agree
with respect to those assets of Gearon comprised of the parcels of real property
owned by Gearon, as described in Section 7.8 of the Gearon Disclosure Schedule.
7.9 Environmental Site Assessments. As promptly as practicable after
the execution of this Agreement, ATS may at its own cost and expense obtain, and
deliver to Gearon full and complete copies of, Phase I environmental site
assessment reports (the "Environmental Reports") on any or all of those certain
parcels of real property described on Section 7.9 of the Gearon Disclosure
Schedule. Site assessments shall be conducted by such consultants and
professionals as ATS and Gearon shall mutually agree and shall be arranged at
times mutually convenient to the parties. Each of Gearon and ATS shall be
entitled to have representatives present at the time such site assessments are
conducted, and to have copies of all correspondence with the Environmental
Company.
7.10 Interim Financing for Gearon. ATSI agrees to provide interim debt
financing to Gearon in an aggregate amount at any one time outstanding not to
exceed $5,000,000 as from time to time requested on not less than three (3)
business days notice from Gearon. Any such financing shall be advanced against a
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secured note substantially in the form of Exhibit A attached hereto and made a
part hereof (the "Gearon Notes") and shall be secured by a security agreement
substantially in the form attached hereto as Exhibit B and made a part hereof
(the "Gearon Security Agreement"). Gearon shall use the proceeds of the sale of
the Gearon Notes to ATSI hereunder to complete the development of new
communication sites and capital improvements to its existing communication
sites, and for other general corporate purposes (other than the repayment of any
Indebtedness for Money Borrowed). The parties acknowledge that, simultaneously
with the execution and delivery of this Agreement, (a) Gearon has executed and
delivered the Gearon Note to ATSI, (b) Gearon and ATSI have executed and
delivered the Security Agreement, and (c) ATSI has not advanced any funds.
ARTICLE 8
CLOSING CONDITIONS
8.1 Conditions to Obligations of Each Party. The respective obligations
of each party to effect the Merger shall, except as hereinafter provided in this
Section, be subject to the satisfaction at or prior to the Closing Date of the
following conditions, any or all of which may be waived, in whole or in part, to
the extent permitted by Applicable Law:
(a) As of the Closing Date, no Legal Action shall be pending
before any Authority seeking to enjoin, restrain, prohibit or make
illegal or to impose any materially adverse conditions in connection
with, the consummation of the Merger or the other Transactions, it
being understood and agreed that a written request by any Authority for
information with respect to the Merger, which information could be used
in connection with such Legal Action, shall not in itself be deemed to
be a Legal Action pending before any such Authority; and
(b) All authorizations, consents, waivers, orders or approvals
required to be obtained from all Authorities, and all filings,
submissions, registrations, notices or declarations required to be made
by any of the parties with any Authority, prior to the consummation of
the Merger, shall have been obtained from, and made with, all such
Authorities, except for such authorizations, consents, waivers, orders,
approvals, filings, registrations, notices or declarations as are set
forth in Section 8.1(b) of the Gearon Disclosure Schedule or the
failure to obtain or make would not, in the reasonable business
judgment of ATS, have a material adverse effect on Gearon.
8.2 Conditions to Obligations of ATS and ATSI. The obligation of ATS to
cause ATSI to, and of ATSI to, effect the Merger shall be subject to the
satisfaction of the following conditions, any or all of which may be waived, in
whole or in part, to the extent permitted by Applicable Law:
(a) All agreements, certificates, opinions and other documents
required to be delivered pursuant to the provisions of this Agreement
shall be reasonably satisfactory in form, scope and substance to ATS
and its counsel, and ATS and its counsel shall have received all
information and copies of all documents, including records of corporate
proceedings, which they may reasonably request in connection therewith,
such documents where appropriate to be certified by proper Authorities
or corporate officers;
(b) Gearon shall have furnished ATS and, at ATS' request, any
bank or other financial institution providing credit to ATS, with a
favorable opinion, dated the Closing Date, of King &
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Spalding, counsel for Gearon and the Gearon Stockholder, with respect
to the matters set forth in Sections 4.1(a), (b) and (c), 4.6(b) and
4.21, Article 6 and with respect to such other matters arising after
the date of this Agreement and incident to the Merger, as ATS or its
counsel may reasonably request or which may be reasonably requested by
any such bank or financial institution or their respective counsel;
(c) The representations and warranties of Gearon and the
Gearon Stockholder contained in this Agreement or otherwise made in
writing by or on behalf of it or any of them pursuant hereto or
otherwise made in connection with the Merger shall be true and correct
at and as of the Closing Date with the same force and effect as though
made on and as of such date except those which speak as of a certain
date which shall continue to be true and correct as of such date on the
Closing Date (including without limitation giving effect to any later
obtained knowledge of Gearon, the Gearon Stockholder or ATS, except as
otherwise specifically provided herein); each and all of the agreements
and conditions to be performed or satisfied by Gearon or the Gearon
Stockholder hereunder at or prior to the Closing Date shall have been
duly performed or satisfied in all material respects; and Gearon and
the Gearon Stockholder shall have furnished ATS with such certificates
and other documents evidencing the truth of such representations,
warranties, covenants and agreements and the performance of such
agreements or conditions as ATS or its counsel shall have reasonably
requested;
(d) Except to the extent, if any, specifically set forth in
Section 8.2(d) of the Gearon Disclosure Schedule, all authorizations,
consents, waivers, orders or approvals required by the provisions of
this Agreement to be obtained from all Persons (other than Authorities)
prior to the consummation of the Merger, including without limitation
those required in order for Gearon to continue to own all of the Gearon
Assets and continue to operate the Gearon Business as conducted
immediately prior to the Closing (including without limitation, at the
cost and expense of Gearon, all modifications, if any, of Private
Authorizations, Leases and Material Agreements of Gearon set forth in
Section 8.2(d) of the Gearon Disclosure Schedule) shall have been
obtained, without the imposition, individually or in the aggregate, of
any condition or requirement which could materially adversely affect
Gearon;
(e) Between the date of this Agreement and the Closing Date,
there shall not have occurred and be continuing any material adverse
change in Gearon from that reflected in the most recent Gearon
Financial Statements; as of the Closing Date, the Governmental
Authorizations with respect to the ownership or operation of the assets
or the conduct of the business of Gearon shall not have been materially
and adversely affected by any act, or failure to act, of Gearon;
(f) The Gearon Stockholder and Gearon shall have delivered or
cause to be delivered to ATS all of the Collateral Documents and other
agreements, documents and instruments required to be delivered by the
Gearon Stockholder or Gearon to ATS at or prior to the Closing pursuant
to the terms of this Agreement;
(g) ATS shall have received from its independent accountants
(i) an unqualified report (as to the scope of the audit, access to the
books and records and the cooperation of management) on the financial
statements (consisting of balance sheets for each of the fiscal year
ended December 31, 1996 and the nine month period ended September 30,
1997, and statements of operations and cash flow for each of the year
ended December 31, 1996 and the nine month period ended September 30,
1997) of Gearon which financial statements shall have been prepared in
conformity with GAAP and
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Regulation S-X under the Securities Act, or (ii) such other
documentation as shall be reasonably satisfactory to ATS indicating
that such an unqualified report could be issued if requested by ATS;
(h) As of the Closing Date, except as otherwise set forth in
Section 4.6(a) of the Gearon Disclosure Schedule, no Legal Action shall
be pending before any Authority which might, in the reasonable business
judgment of ATS, based upon the advice of counsel, have a material
adverse effect on Gearon, it being understood and agreed that a written
request by any Authority for information with respect to the Merger,
which information could be used in connection with such Legal Action,
shall not be deemed to be a Legal Action pending before any such
Authority;
(i) J. Michael Gearon, Jr. shall have executed and delivered
to ATS an agreement substantially in the form attached hereto as
Exhibit C and made a part hereof (the "ATS Noncompetition Agreements");
(j) Gearon shall have delivered to ATS all use permits,
consents or other Governmental Authorizations of and all Leases from
the United States Forest Service set forth in Section 8.2(j) of the
Gearon Disclosure Schedule;
(k) The Environmental Reports shall not disclose any
exception, and no Event or Events shall have occurred subsequent to the
date hereof, which, individually or in the aggregate, would cause the
representations and warranties of Gearon set forth in Section 4.20
(without regard to knowledge) to be inaccurate or incomplete in any
material respect;
(l) ATS shall have received, at its expense, a copy of the
standard ALTA title insurance policy insuring Gearon's fee simple or
leasehold interest, as the case may be, in the land and improvements
located at each of the locations described in Section 8.2 (l) of the
Gearon Disclosure Schedule and the Title Reports shall not disclose any
exception, and no Event or Events shall have occurred subsequent to the
date hereof, which, individually or in the aggregate, would cause the
representations and warranties of Gearon set forth in Section 4.4
(without regard to knowledge) to be inaccurate or incomplete in any
material respect;
(m) All Convertible Securities and Option Securities of
Gearon, if any, outstanding immediately prior to the Closing shall be
canceled and, from and after the Closing, shall no longer be of any
force or effect;
(n) Michael Gearon, Jr., the chief executive officer of Gearon
and the Gearon Stockholder, shall have executed and delivered to ATS an
agreement substantially in the form attached hereto as Exhibit D and
made a part hereof (the "Gearon Employment Agreement");
(o) The Gearon Stockholder shall have executed and delivered
to ATS an agreement substantially in the form attached hereto as
Exhibit E and made a part hereof (the "Indemnity Escrow Agreement");
(p) The Gearon Stockholder shall have executed and delivered
to ATS an agreement substantially in the form attached hereto as
Exhibit F and made a part hereof (the "Registration Rights Agreement");
(q) The merger of Communications Towers, Inc., a Georgia
corporation ("CTI"), with and into ATSI (the "CTI Merger") with ATSI as
the surviving entity shall have been consummated
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in accordance with the GBCC and on terms and conditions reasonably
satisfactory to ATS; provided, however, that to the extent any
consideration is paid by ATS or ATSI pursuant to the CTI Merger, the
Exchange Merger Consideration shall be reduced by an equal amount; and
(r) Each of the stockholders of Gearon shall have executed and
delivered to ATS an investment letter substantially in the form of
Exhibit G attached hereto and made a part hereof (the "Gearon
Investment Letters").
8.3 Conditions to Obligations of Gearon. The obligation of Gearon to
effect the Merger shall be subject to the satisfaction of the following
conditions, any or all of which may be waived, in whole or in part, to the
extent permitted by Applicable Law:
(a) All agreements, certificates, opinions and other documents
required to be delivered pursuant to the provisions of this Agreement
shall be reasonably satisfactory in form, scope and substance to Gearon
and its counsel, and Gearon and its counsel shall have received all
information and copies of all documents, including records of corporate
proceedings, which they may reasonably request in connection therewith,
such documents where appropriate to be certified by proper Authorities
or corporate officers;
(b) ATS shall have furnished Gearon, with favorable opinions,
dated the Closing Date, of Sullivan & Worcester LLP, counsel for ATS,
with respect to the matters set forth in Section 5.1 (a), (b) and (c),
5.7(b) and 5.16(a) and with respect to such other matters arising after
the date of this Agreement and incident to the Merger, as Gearon or its
counsel may reasonably request;
(c) The representations and warranties of ATS and ATSI
contained in this Agreement or otherwise made in writing by it or on
its behalf pursuant hereto or otherwise made in connection with the
Merger shall be true and correct at and as of the Closing Date with the
same force and effect as though made on and as of such date except
those which speak as of a certain date which shall continue to be true
and correct as of such date on the Closing Date (including without
limitation giving effect to any later obtained knowledge of Gearon, the
Gearon Stockholder or ATS, except as otherwise specifically provided
herein); each and all of the agreements and conditions to be performed
or satisfied by ATS and ATSI hereunder at or prior to the Closing Date
shall have been duly performed or satisfied in all material respects;
and ATS and ATSI shall have furnished Gearon with such certificates and
other documents evidencing the truth of such representations,
warranties, covenants and agreements and the performance of such
agreements or conditions as Gearon or their counsel shall have
reasonably requested;
(d) ATS shall have delivered or cause to be delivered to
Gearon all of the Collateral Documents and other agreements, documents
and instruments required to be delivered by ATS to Gearon at or prior
to the Closing pursuant to the terms of this Agreement;
(e) Between the date of this Agreement and the Closing Date,
there shall not have occurred and be continuing any material adverse
change in ATS from that reflected in the most recent ATS Financial
Statements;
(f) As of the Closing Date, no Legal Action shall be pending
before any Authority which might, in the reasonable business judgment
of Gearon, based upon the advice of counsel, have a material adverse
effect on ATS, it being understood and agreed that a written request by
any Authority
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for information with respect to the Merger, which information could be
used in connection with such Legal Action, shall not be deemed to be a
Legal Action pending before any such Authority;
(g) ATSI shall have executed and delivered the Gearon
Employment Agreement to Gearon, and pursuant thereto the Gearon
Stockholder shall have been elected a director of ATS and a senior
executive officer of ATSI;
(h) Gearon shall have received evidence of the consummation of
the ATS Private Placement;
(i) ATS shall have executed and delivered to Gearon the
Registration Rights Agreement;
(j) The persons named in Section 8.3(j) of the Gearon
Disclosure Schedule shall have been elected to the positions with ATSI
set forth opposite their respective names, and ATSI shall have executed
and delivered an employment agreement in a form reasonably satisfactory
to ATS and Gearon; and
(k) Options to purchase an aggregate of not more than
1,000,000 shares of ATS Class A Common Stock pursuant to the 1997 ATS
Stock Option Plan shall have been granted to employees of Gearon named
in Section 8.3(k) of the Gearon Disclosure Schedule on terms and
conditions reasonably satisfactory to Gearon.
ARTICLE 9
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date:
(a) by mutual consent of Gearon and ATS; or
(b) by either ATS or Gearon if any permanent injunction,
decree or judgment by any Authority preventing the consummation of the
Merger shall have become final and nonappealable; or
(c) by Gearon in the event (i) neither Gearon nor the Gearon
Stockholder are in material breach of this Agreement and none of its of
their representations or warranties shall have become and continue to
be untrue in any manner that would cause the condition set forth in
Section 8.2(c) not to be satisfied, and (ii) either (A) the Merger has
not been consummated prior to the Termination Date, or (B) ATS is in
material breach of this Agreement or any of its representations or
warranties shall have become and continue to be untrue in any manner
that would cause the conditions set forth in Section 8.3(c) not to be
satisfied, and such a breach or untruth exists and is not capable of
being cured by and will prevent or delay consummation of the Merger by
or beyond the Termination Date; or
(d) by ATS in the event (i) ATS is not in material breach of
this Agreement and none of its representations or warranties shall have
become and continue to be untrue in any manner that would cause the
condition set forth in Section 8.3(c) not to be satisfied, and (ii)
either (A) the Merger has not been consummated prior to the Termination
Date, or (B) Gearon or the Gearon Stockholder
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are in material breach of this Agreement or any of Gearon's or any of
the Gearon Stockholder's representations or warranties shall have
become and continue to be untrue in any manner that would cause the
conditions set forth in Section 8.2(c) not to be satisfied, and such a
breach or untruth exists and is not capable of being cured by and will
prevent or delay consummation of the Merger by or beyond the
Termination Date.
The term "Termination Date" shall mean February 28, 1998 or such other
date as the parties may, from time to time, mutually agree.
The right of ATS or Gearon to terminate this Agreement pursuant to this
Section shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any party, any Person controlling any such
party or any of their respective Representatives whether prior to or after the
execution of this Agreement.
9.2 Effect of Termination.
(a) Except as provided in Sections 7.1 (with respect to
confidentiality), 7.3 and 11.2 and this Section, in the event of the termination
of this Agreement pursuant to Section 9.1, or in the event the Merger shall not
have been consummated prior to the end of business on the Termination Date,
except as otherwise provided in Section 9.2(b), this Agreement shall forthwith
become void, there shall be no liability on the part of any party, or any of
their respective shareholders, officers or directors, to the other and all
rights and obligations of any party shall cease; provided, however, that such
termination shall not relieve any party from liability for any misrepresentation
or breach of any of its warranties, covenants or agreements set forth in this
Agreement.
(b) In the event this Agreement is terminated by Gearon pursuant to the
provisions of Section 9.1(c), then Gearon shall be entitled to liquidated
damages in an amount equal to (i) if such termination occurs on or before
January 2, 1998, $5,000,000, and (ii) if such termination occurs after January
2, 1998, $10,000,000; the parties agree that such amount shall constitute full
payment for any and all damages suffered by Gearon by reason of ATS' failure to
consummate the Merger. ATS and Gearon agree in advance that actual damages would
be difficult to ascertain and that such liquidated damages is a fair and
equitable amount to reimburse Gearon for damages sustained due to ATS' failure
to consummate the Merger for the above-stated reasons. Notwithstanding the
foregoing, Gearon shall have the right to seek specific performance pursuant to
the provisions of Section 11.4.
(c) In the event this Agreement is terminated pursuant to the
provisions of Section 9.1(a), 9.1(b) or 9.1(d), except as provided in Section
9.2(a), none of the parties shall have any further rights or remedies.
ARTICLE 10
INDEMNIFICATION
10.1 Survival. The representations and warranties of the parties
contained in or made pursuant to this Agreement or any Collateral Document shall
survive the Closing and shall remain operative and in full force and effect for
a period of eighteen (18) months after the Closing Date, except that in the case
of matters of a nature referred to in Sections 4.1, 4.10, 4.11, 4.20 and 4.21,
Sections 5.1, 5.9, 5.11 and 5.16 and Article 6 which shall survive and remain
operative and in full force and effect for the applicable statute of
limitations,
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regardless of any investigation or statement as to the results thereof made by
or on behalf of any party hereto. The covenants and agreements of the parties
contained in or made pursuant to this Agreement or any Collateral Document shall
survive the Closing (unless any such covenant or agreement by its express terms
in this Agreement does not so survive) and shall remain operative and in full
force and effect for the statute of limitations applicable to contractual
obligations. The term "Indemnity Period" shall mean the applicable period with
respect to which a representation, warranty, covenant or agreement survives the
Closing as provided in this Section. No claim for indemnification, other than
with respect to fraud or intentional and willful breach or misrepresentation,
may be asserted after the expiration of the Indemnity Period. Notwithstanding
anything herein to the contrary, any representation, warranty, covenant and
agreement which arises and is the subject of a Claim which is asserted in
writing prior to the expiration of the applicable Indemnity Period shall survive
with respect to such Claim or any dispute with respect thereto until the final
resolution thereof.
10.2 Indemnification.
(a) The Gearon Stockholder agrees that on and after the Closing he
shall indemnify and hold harmless ATS and ATSI and their respective
stockholders, directors, officers, employees and representatives (collectively,
the "ATS Indemnified Parties") from and against any and all damages, claims,
losses, expenses, costs, obligations, and liabilities including, without
limiting the generality of the foregoing, liabilities for all reasonable
attorneys', accountants' and experts' fees and expenses incurred, including
those incurred to enforce the terms of this Agreement or any Collateral Document
(collectively, "Loss and Expense"), suffered by the ATS Indemnified Parties by
reason of, or arising out of any breach of representation or warranty made by
Gearon or the Gearon Stockholder pursuant to this Agreement or any Collateral
Document or any failure by Gearon or the Gearon Stockholder to perform or
fulfill any of its or any of their covenants or agreements set forth in this
Agreement or any Collateral Document.
(b) ATS and ATSI, jointly and severally, agree that on and after the
Closing they will indemnify the Gearon Stockholder and hold him harmless from
and against all Loss and Expense suffered by any of them by reason of, or
arising out of :
(i) any breach of representation or warranty made by ATS or
ATSI pursuant to this Agreement or any Collateral Document or any
failure by ATS or ATSI to perform or fulfill any of its covenants or
agreements set forth in this Agreement or any Collateral Document; or
(ii) any Legal Action or other Claim by any third party
relating to ATS or ATSI or the ownership or operations of Gearon's
business and properties subsequent to the Closing, including without
limitation any and all obligations and liabilities under Governmental
Authorizations, Private Authorizations, Leases, Material Agreements,
Employment Arrangements, Plans, Benefit
Arrangements and Contractual Obligations.
10.3 Limitation of Liability.
(a) Notwithstanding the provisions of Section 10.2, after the Closing,
except as otherwise provided in Section 10.6, the ATS Indemnified Parties, on
the one hand, and Gearon, on the other hand, shall be entitled to recover its
Loss and Expense in respect of any Claim only in the event that the aggregate
Loss and Expense for all Claims exceeds, in the aggregate, $100,000, in which
event the indemnified party shall be entitled to recover all such Loss and
Expense (including without limitation such $100,000).
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(b) In the case any event shall occur which would otherwise entitle any
party to assert a claim for indemnification hereunder, no Loss and Expense shall
be deemed to have been sustained by such party to the extent of any proceeds
received by such party from any insurance policies with respect thereto.
10.4 Notice of Claims. If an indemnified party believes that it has
suffered or incurred any Loss and Expense, it shall notify the indemnifying
party promptly in writing, and in any event within the applicable Indemnity
Period specified in Section 10.1, describing such Loss and Expense, all with
reasonable particularity and containing a reference to the provisions of this
Agreement in respect of which such Loss and Expense shall have occurred. If any
Legal Action is instituted by a third party with respect to which an indemnified
party intends to claim any liability or expense as Loss and Expense under this
Article, such indemnified party shall promptly notify the indemnifying party of
such Legal Action, but the failure to so notify the indemnifying party shall not
relieve such indemnifying party of its obligations under this Article, except to
the extent such failure to notify prejudices such indemnifying party's ability
to defend against such Claim.
10.5 Defense of Third Party Claims. The indemnifying party shall have
the right to conduct and control, through counsel of their own choosing,
reasonably acceptable to the indemnified party, any third party Legal Action or
other Claim, but the indemnified party may, at its election, participate in the
defense thereof at its sole cost and expense; provided, however, that if the
indemnifying party shall fail to defend any such Legal Action or other Claim,
then the indemnified party may defend, through counsel of its own choosing, such
Legal Action or other Claim, and (so long as it gives the indemnifying party at
least fifteen (15) days' notice of the terms of the proposed settlement thereof
and permits the indemnifying party to then undertake the defense thereof) settle
such Legal Action or other Claim and to recover the amount of such settlement or
of any judgment and the reasonable costs and expenses of such defense. The
indemnifying party shall not compromise or settle any such Legal Action or other
Claim without the prior written consent of the indemnified party, which consent
shall not unreasonably be withheld, delayed or conditioned if the terms and
conditions of such compromise or settlement proposed by the indemnifying party
and agreed to in writing by the claimant in such Legal Action or other Claim
(the "Settlement Proposal") (a) include a full release of the indemnified party
from the Legal Action or other Claim which is the subject of the Settlement
Proposal, and (b) if the indemnified party is an ATS Indemnified Party, do not
include any term or condition which would restrict in any material manner the
continued ownership or operations of the Gearon Assets or the conduct of the
Gearon Business in substantially the manner then being theretofore owned,
operated and conducted by ATS or Gearon (or any successor or assign). No matter
whether an indemnifying party defends or prosecutes any third party Legal Action
or Claim, the indemnified and indemnifying parties shall cooperate in the
defense or prosecution thereof. Such cooperation shall include access during
normal business hours afforded to the indemnifying party to, and reasonable
retention by the indemnified party of, records and information which are
reasonably relevant to such third party Legal Action or Claim, and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder, and the
indemnifying party shall reimburse the indemnified party for all its reasonable
out-of-pocket expenses in connection therewith.
10.6 Exclusive Remedy. Except for fraud, willful or intentional
misrepresentation or willful or intentional breach of warranty, covenant or
agreement or as otherwise provided in Section 11.4, the indemnification provided
in this Article shall be the sole and exclusive post-Closing remedy available to
any party against the other party for any Claim under this Agreement.
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ARTICLE 11
GENERAL PROVISIONS
11.1 Waivers; Amendments. Changes in or additions to this Agreement may
be made, or compli ance with any term, covenant, agreement, condition or
provision set forth herein may be omitted or waived (either generally or in a
particular instance and either retroactively or prospectively) with, but only
with, the consent in writing of the parties hereto. No delay on the part of
either party at any time or times in the exercise of any right or remedy shall
operate as a waiver thereof. Any consent may be given subject to satisfaction of
conditions stated therein. The failure to insist upon the strict provisions of
any covenant, term, condition or other provision of this Agreement or to
exercise any right or remedy thereunder shall not constitute a waiver of any
such covenant, term, condition or other provision thereof or default in
connection therewith. The waiver of any covenant, term, condition or other
provision thereof or default thereunder shall not affect or alter this Agreement
in any other respect, and each and every covenant, term, condition or other
provision of this Agreement shall, in such event, continue in full force and
effect, except as so waived, and shall be operative with respect to any other
then existing or subsequent default in connection therewith.
11.2 Fees, Expenses and Other Payments. All Hart-Scott-Rodino filing
fees shall be borne equally by Gearon and ATS, and all costs of preliminary
title reports to a date reasonably proximate to the Closing Date and all costs
of environmental studies shall be borne by ATS. All costs and expenses, incurred
in connection with any transfer taxes, sales taxes, recording or documentary
taxes, stamps or other charges levied by any Authority in connection with this
Agreement and the consummation of the Merger shall be borne by ATS and all other
costs and expenses incurred in connection with this Agreement and the
consummation of the Merger, including without limitation fees and disbursements
of counsel, financial advisors and accountants incurred by the parties hereto,
shall be borne solely and entirely by the party which has incurred such costs
and expenses.
11.3 Notices. All notices and other communications which by any
provision of this Agreement are required or permitted to be given shall be given
in writing and shall be deemed to have been delivered (a) three (3) days after
being mailed by first-class or express mail, postage prepaid, (b) the next day
when sent overnight by recognized courier service, (c) upon confirmation when
sent by telex, telegram, telecopy or other form of rapid transmission, confirmed
by mailing (by first class or express mail, postage prepaid, or by recognized
courier service) written confirmation at substantially the same time as such
rapid transmission, or (d) upon delivery when personally delivered to the
receiving party (which if other than an individual shall be an officer or other
responsible party of the receiving party). All such notices and communications
shall be mailed, sent or delivered as follows:
(a) If to ATS:
116 Huntington Avenue
Boston, Massachusetts 02116
Attention: Joseph L. Winn, Chief Financial Officer
Telecopier No.: (617) 375-7575
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with a copy to:
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
Attention: Norman A. Bikales, Esq.
Telecopier No.: (617) 338-2880
(b) If to Gearon or the Gearon Stockholder:
1760 The Exchange, N.W.
Suite 200
Atlanta, Georgia 30339
Attention: J. Michael Gearon, Jr., President
Telecopier No.: (770) 952-4999
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attention: William H. Hess, Esq.
Telecopier No.: (404) 572-5100
or to such other person(s), telex or facsimile number(s) or address(es) as the
party to receive any such communication or notice may have designated by written
notice to the other party.
11.4 Specific Performance; Other Rights and Remedies. Each party
recognizes and agrees that in the event the other party should refuse to perform
any of its obligations under this Agreement or any Collateral Document, the
remedy at law would be inadequate and agrees that for breach of such provisions,
each party shall, in addition to such other remedies as may be available to it
at law or in equity or as provided in Section 9.2(b) or Article 10, be entitled
to injunctive relief and to enforce its rights by an action for specific
performance to the extent permitted by Applicable Law. Each party hereby waives
any requirement for security or the posting of any bond or other surety in
connection with any temporary or permanent award of injunctive, mandatory or
other equitable relief. Nothing herein contained shall be construed as
prohibiting each party from pursuing any other remedies available to it pursuant
to the provisions of this Agreement or Applicable Law for such breach or
threatened breach, including without limitation the recovery of damages,
including, to the extent awarded in any Legal Action, punitive, incidental and
consequential damages (including without limitation damages for diminution in
value and loss of anticipated profits) or any other measure of damages permitted
by Applicable Law.
11.5 Severability. If any term or provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative, illegal or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the
conflicting of any provision with any constitution or statute or rule of public
policy or for any other reason, such circumstance shall not have the effect of
rendering the provision or provisions in question invalid, inoperative, illegal
or unenforceable in any other jurisdiction or in any other case or circumstance
or of rendering any other provision or provisions herein contained invalid,
inoperative, illegal or unenforceable to the extent that such other
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provisions are not themselves actually in conflict with such constitution,
statute or rule of public policy, but this Agreement shall be reformed and
construed in any such jurisdiction or case as if such invalid, inoperative,
illegal or unenforceable provision had never been contained herein and such
provision reformed so that it would be valid, operative and enforceable to the
maximum extent permitted in such jurisdiction or in such case. Notwithstanding
the foregoing, in the event of any such determination the effect of which is to
affect materially and adversely any party, the parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by Applicable Law
in an acceptable manner to the end that the Transactions are fulfilled and
consummated to the maximum extent possible.
11.6 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, binding upon all of the
parties. In pleading or proving any provision of this Agreement, it shall not be
necessary to produce more than one of such counterparts.
11.7 Section Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
11.8 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by, and construed in accordance
with, the applicable laws of the United States of America and the laws of the
State of New York applicable to contracts made and performed in such State and,
in any event, without giving effect to any choice or conflict of laws provision
or rule that would cause the application of domestic substantive laws of any
other jurisdiction.
11.9 Further Acts. Each party agrees that at any time, and from time to
time, before and after the consummation of the transactions contemplated by this
Agreement, it will do all such things and execute and deliver all such
Collateral Documents and other assurances, as any other party or its counsel
reasonably deems necessary or desirable in order to carry out the terms and
conditions of this Agreement and the transactions contemplated hereby or to
facilitate the enjoyment of any of the rights created hereby or to be created
hereunder.
11.10 Entire Agreement. This Agreement (together with the Gearon
Disclosure Schedule, the Exhibits and the other Collateral Documents delivered
or to be delivered in connection herewith) constitutes the entire agreement of
the parties with respect to the subject matter hereof and supersedes all prior
agreements, arrangements, covenants, promises, conditions, undertakings,
inducements, representations, warranties and negotiations, expressed or implied,
oral or written, between the parties, with respect to the subject matter hereof.
Each of the parties is a sophisticated legal entity that was advised by
experienced counsel and, to the extent it deemed necessary, other advisors in
connection with this Agreement. Each of the parties hereby acknowledges that (a)
none of the parties has relied or will rely in respect of this Agreement or the
transactions contemplated hereby upon any document or written or oral
information previously furnished to or discovered by it or its representatives,
other than this Agreement (or such of the foregoing as are delivered at the
Closing, (b) there are no covenants or agreements by or on behalf of any party
or any of its respective Affiliates or representatives other than those
expressly set forth in this Agreement and the Collateral Documents, and (c) the
parties' respective rights and obligations with respect to this Agreement and
the events giving rise thereto will be solely as set forth in this Agreement and
the Collateral Documents. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH
PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THIS AGREEMENT, NONE OF THE PARTIES MAKES ANY OTHER REPRESENTATIONS
OR WARRANTIES,
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AND EACH HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES MADE BY ITSELF
OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND LEGAL
ADVISORS OR OTHER REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, NOTWITHSTANDING THE
DELIVERY OR DISCLOSURE TO THE OTHER OR THE OTHER'S REPRESENTATIVES OF ANY
DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE
FOREGOING.
11.11 Assignment. This Agreement shall not be assignable by any party
and any such assignment shall be null and void, except that it shall inure to
the benefit of and by binding upon any successor to any party by operation of
law, including by way of merger, consolidation or sale of all or substantially
all of its assets, and ATS may assign its rights and remedies hereunder to any
bank or other financial institution which has loaned funds or otherwise extended
credit to it.
11.12 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any Person any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement,
except as otherwise provided in Section 11.11.
11.13 Mutual Drafting. This Agreement is the result of the joint
efforts of Gearon and ATS, and each provision hereof has been subject to the
mutual consultation, negotiation and agreement of the parties and there shall be
no construction against any party based on any presumption of that party's
involvement in the drafting thereof.
11.14 Due Diligence. Each of the parties shall have the right, during
the period between the date hereof and 11:59 p.m., Eastern Standard Time, on
December 1, 1997 (the "Due Diligence Period") (a) to continue their respective
due diligence investigation of the other party and (b) to give notice to the
other party that it is terminating this Agreement because such due diligence
investigation has indicated that (i) a material adverse change in the other
party has occurred of which the terminating party was unaware as of the date of
this Agreement, (ii) a material breach of the representations and warranties of
the other party has occurred of which the terminating party was unaware as of
the date of this Agreement and the terminating party reasonably believes that
such breach is not capable of being cured by the Termination Date, or (iii) in
the case of ATS and ATSI, as the terminating party, ATS has reasonably
determined that the Operating Cash Flow of Gearon for the quarter ending
December 31, 1997 set forth in the financial projection included in Section
11.14 of the Gearon Disclosure Schedule is not likely to be achieved and the
amount of such negative variance is reasonably likely to exceed 5 percent (5%);
provided, however, that such negative variance shall not give rise to a
termination right pursuant to the provisions of this Section if the amount of
such variance is reasonably likely to be recouped in all material respects on or
prior to March 31, 1998. In the event of any such termination, the terminating
party shall give the other party written notice thereof prior to the expiration
of the Due Diligence Period and, thereafter, the parties shall negotiate in good
faith to determine the validity of the grounds of such termination and, if
necessary, an adjustment in the Merger Consideration. If the parties are unable
within ten (10) business days following the giving of any such termination
notice to resolve their differences, either party may termination this
Agreement, whereupon it shall become void, there shall be no liability on the
part of any party, or any of their respective shareholders, officers or
directors, to the other and all rights and obligations of any party shall cease;
provided, however, that such termination shall not relieve any party from
liability for any misrepresentation or breach of any of its warranties,
covenants or agreements set forth in this Agreement.
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[SIGNATURES APPEAR ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have executed or caused this Agreement
to be executed by their respective officers thereunto duly authorized as of the
date first written above.
American Tower Systems Corporation
By: /s/ Joseph L. Winn
Name: Joseph L. Winn
Title: Chief Financial Officer
American Tower Systems, Inc.
By: /s/ Joseph L. Winn
Name: Joseph L. Winn
Title: Chief Financial Officer
Gearon & Co., Inc.
By: /s/ J. Michael Gearon, Jr.
Name: J. Michael Gearon, Jr.
Title: President
Gearon Stockholder
/s/ J. Michael Gearon, Jr.
J. Michael Gearon, Jr.
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APPENDIX A
DEFINITIONS
adverse, adversely, when used alone or in conjunction with other terms
(including without limitation "affect," "change" and "effect") shall mean any
Event which is reasonably likely, in the reasonable business judgment of the
relevant party, to be expected to (a) adversely affect the validity or
enforceability of this Agreement or the likelihood of consummation of the
Merger, or (b) adversely affect the business, operations, management, properties
or prospects, or the condition, financial or other, or results of operation of
the Gearon Business or the business of ATS or ATSI, as applicable, or (c) impair
such party's ability to fulfill its obligations under the terms of this
Agreement, or (d) adversely affect the aggregate rights and remedies of such
party under this Agreement. Notwithstanding the foregoing, and anything in this
Agreement to the contrary notwithstanding, any Event generally affecting the
economy or the tower communications business shall not be deemed to constitute
such a change, affect or effect.
Affiliate, Affiliated shall mean, with respect to any Person, (a) any
other Person at the time directly or indirectly controlling, controlled by or
under direct or indirect common control with such Person, (b) any other Person
of which such Person at the time owns, or has the right to acquire, directly or
indirectly, five percent (5%) or more of any class of the capital stock or
beneficial interest, (c) any other Person which at the time owns, or has the
right to acquire, directly or indirectly, five percent (5%) or more of any class
of the capital stock or beneficial interest of such Person, (d) any executive
officer or director of such Person, (e) with respect to any partnership, joint
venture or similar Entity, any general partner thereof, and (f) when used with
respect to an individual, shall include any member of such individual's
immediate family or a family trust.
Agreement shall mean this Agreement as originally in effect, including,
unless the context otherwise specifically requires, this Appendix A, the Gearon
Disclosure Schedule, the ATS Information Statement and all exhibits hereto, and
as any of the same may from time to time be supplemented, amended, modified or
restated in the manner herein or therein provided.
Alternative Transaction shall have the meaning given to it in Section
7.5.
Applicable Law shall mean any Law of any Authority, whether domestic or
foreign, including without limitation the FCA and all federal and state
securities and Environmental Laws, to which a Person is subject or by which it
or any of its business or operations is subject or any of its property or assets
is bound.
ATS shall have the meaning given to it in the Preamble.
ATS Class A Common Stock shall have the meaning given to it in Section
3.1(b).
ATS Financial Statements shall have the meaning given to it in Section
5.2
ATS Indemnified Parties shall have the meaning given to it in Section
10.2(a)
ATS Information Statement shall mean the Information Statement, draft
dated November 17, 1997, describing the business of ATS and certain other
matters heretofore delivered by ATS to Gearon.
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ATS' knowledge (or words of similar import) shall mean the actual
knowledge of any director or executive officer of ATS or ATSI, as such knowledge
exists on the date of this Agreement, after reasonable review of appropriate ATS
and ATSI records and after reasonable inquiry of appropriate ATS and ATSI
employees.
ATS Noncompetition Agreements shall have the meaning given to it in
Section 8.2(i).
ATS Private Placement shall mean the issue and sale by ATS of shares of
ATS Common Stock to certain officers and directors of ATS (or their Affiliates)
for an aggregate consideration of not less than $75.0 million, all as described
in the ATS Information Statement.
ATSI shall have the meaning given to it in the Preamble.
Authority shall mean any governmental or quasi-governmental authority,
whether administrative, executive, judicial, legislative or other, or any
combination thereof, including without limitation any federal, state,
territorial, county, municipal or other government or governmental or
quasi-governmental agency, arbitrator, authority, board, body, branch, bureau,
or comparable agency or Entity, commission, corporation, court, department,
instrumentality, mediator, panel, system or other political unit or subdivision
or other Entity of any of the foregoing, whether domestic or foreign, including
without limitation the FCC.
Benefit Arrangement shall mean any material benefit arrangement that is
not a Plan, including (a) any employment or consulting agreement (b) any
arrangement providing for insurance coverage or workers' compensation benefits,
(c) any incentive bonus or deferred bonus arrangement, (d) any arrangement
providing termination allowance, severance or similar benefits, (e) any equity
compensation plan, (f) any deferred compensation plan, and (g) any compensation
policy and practice, but only to the extent that it covers or relates to any
officer, employee or other Person involved in the ownership and operation of the
assets of Gearon or the conduct of the business of Gearon.
Cash Consideration shall have the meaning given to it in Section
3.1(b).
Certificate shall have the meaning given to it in Section 3.1(b).
Claims shall mean any and all debts, liabilities, obligations, losses,
damages, deficiencies, assessments and penalties, together with all Legal
Actions, pending or threatened, claims and judgments of whatever kind and nature
relating thereto, and all fees, costs, expenses and disbursements (including
without limitation reasonable attorneys' and other legal fees, costs and
expenses) relating to any of the foregoing.
Closing shall have the meaning given to it in Section 2.2.
Closing Date shall have the meaning given to it in Section 2.2.
COBRA shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, as set forth in Section 4980B of the Code and Part 6 of
Subtitle B of Title I of ERISA.
Code shall mean the Internal Revenue Code of 1986, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
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Collateral Documents shall mean the Indemnity Escrow Agreement, the ATS
Noncompetition Agreements, the Gearon Employment Agreement, the Gearon Notes,
the Gearon Security Agreement, the Gearon Investment Letters, the Certificate of
Merger, the Articles of Merger, and any other agreement, certificate, contract,
instrument, notice, opinion or other document delivered pursuant to the
provisions of this Agreement or any Collateral Document.
Confidential Information shall have the meaning given to it in Section
7.1(a).
Contract, Contractual Obligation shall mean any agreement, arrangement,
commitment, contract, covenant, indemnity, undertaking or other obligation or
liability which involves the ownership or operation of the assets of Gearon or
the conduct of the business of Gearon.
Control (including the terms "controlled," "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management or
policies of a Person, or the disposition of such Person's assets or properties,
whether through the ownership of stock, equity or other ownership, by contract,
arrangement or understanding, or as trustee or executor, by contract or credit
arrangement or otherwise.
Convertible Securities shall mean any evidences of indebtedness, shares
of capital stock (other than common stock) or other securities directly or
indirectly convertible into or exchangeable for shares of common stock, whether
or not the right to convert or exchange thereunder is immediately exercisable or
is conditioned upon the passage of time, the occurrence or non-occurrence or
existence or non-existence of some other Event, or both.
CTI shall have the meaning given to it in Section 8.2(q).
CTI Merger shall have the meaning given to it in Section 8.2(q).
GBCC shall have the meaning given to it in Section 2.1.
DCL shall have the meaning given to it in Section 2.1.
Distribution shall mean, with respect to any Person, (a) the
declaration or payment of any dividend (except dividends payable in common stock
of such Person) on or in respect of any shares of any class of capital stock of
such Person or any shares of capital stock of any Subsidiary owned by a Person
other than the Company or a Subsidiary, (b) the purchase, redemption or other
retirement of any shares of any class of capital stock of such Person or any
shares of capital stock of any Subsidiary of such Person owned by a Person other
than such Person or a Subsidiary of such Person, and (c) any other distribution
on or in respect of any shares of any class of capital stock of such Person or
any shares of capital stock of any Subsidiary of such Person owned by a Person
other than such Person or a Subsidiary of such Person.
Due Diligence Period shall have the meaning given to it in Section
11.14.
Effective Time shall have the meaning given to it in Section 2.3.
Employment Arrangement shall mean, with respect to Gearon, any
employment, consulting, retainer, severance or similar contract, agreement,
plan, arrangement or policy (exclusive of any which is terminable within thirty
(30) days without liability, penalty or payment of any kind by Gearon or any
Affiliate), or
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providing for severance, termination payments, insurance coverage (including any
self-insured arrangements), workers compensation, disability benefits, life,
health, medical, dental or hospitalization benefits, supplemental unemployment
benefits, vacation or sick leave benefits, pension or retirement benefits or for
deferred compensation, profit-sharing, bonuses, stock options, stock purchase or
appreciation rights or other forms of incentive compensation or post-retirement
insurance, compensation or post-retirement insurance, compensation or benefits,
or any collective bargaining or other labor agreement, whether or not any of the
foregoing is subject to the provisions of ERISA, but only to the extent that it
covers or relates to any officer, employee or other Person involved in the
ownership or operation of the Gearon Assets or the conduct of the Gearon
Business.
Encumber shall mean to suffer, accept, agree to or permit the
imposition of a Lien.
Entity shall mean any corporation, firm, unincorporated organization,
association, partnership, limited liability company, trust (inter vivos or
testamentary), estate of a deceased, insane or incompetent individual, business
trust, joint stock company, joint venture or other organization, entity or
business, whether acting in an individual, fiduciary or other capacity, or any
Authority.
Environmental Law shall mean any Law relating to or otherwise imposing
liability or standards of conduct concerning pollution or protection of the
environment, including without limitation Laws relating to emissions,
discharges, releases or threatened releases of Hazardous Materials or other
chemicals or industrial pollutants, substances, materials or wastes into the
environment (including, without limitation, ambient air, surface water, ground
water, mining or reclamation or mined land, land surface or subsurface strata)
or otherwise relating to the manufacture, processing, generation, distribution,
use, treatment, storage, disposal, cleanup, transport or handling of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances, materials
or wastes. Environmental Laws shall include without limitation the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 6901
et seq.), the Hazardous Material Transportation Act (49 U.S.C. Section 1801 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.),
the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control
Act (15 U.S.C. Section 2601 et seq.), the Occupational Safety and Health Act (29
U.S.C. Section 651 et seq.), the Federal Insecticide Fungicide and Rodenticide
Act (7 U.S.C. Section 136 et seq.), and the Surface Mining Control and
Reclamation Act of 1977 (30 U.S.C. Section 1201 et seq.), and any analogous
federal, state, local or foreign, Laws, and the rules and regulations
promulgated thereunder all as from time to time in effect, and any reference to
any statutory or regulatory provision shall be deemed to be a reference to any
successor statutory or regulatory provision.
Environmental Permit shall mean any Governmental Authorization required
by or pursuant to any Environmental Law.
Environmental Reports shall have the meaning given to it in Section
7.9.
ERISA shall mean the Employee Retirement Income Security Act of 1974,
and the rules and regulations thereunder, all as from time to time in effect, or
any successor law, rules or regulations, and any reference to any statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
ERISA Affiliate shall mean any Person that is treated as a single
employer with Gearon under Sections 414(b), (c), (m) or (o) of the Code or
Section 4001(b)(1) of ERISA.
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Event shall mean the existence or occurrence of any act, action,
activity, circumstance, condition, event, fact, failure to act, omission,
incident or practice, or any set or combination of any of the foregoing.
Exchange Act shall mean the Securities Exchange Act of 1934, and the
rules and regulations thereunder, all as from time to time in effect, or any
successor law, rules or regulations, and any reference to any statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
Exchange Merger Consideration shall have the meaning given to it in
Section 3.1(b).
FCA shall mean the Communications Act of 1934, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
FCC shall mean the Federal Communications Commission and shall include
any successor Authority.
Final Order shall mean, with respect to any Authority, including
without limitation the FCC, one with respect to which no appeal, no stay, no
petition or application for rehearing, reconsideration, review or stay, whether
on motion of the applicable Authority or other Person or otherwise, and no other
Legal Action contesting such consent or approval, is in effect or pending and as
to which the time or deadline for filing any such appeal, petition or
application or other Legal Action has expired or, if filed, has been denied,
dismissed or withdrawn, and the time or deadline for instituting any further
Legal Action has expired.
GAAP shall mean generally accepted accounting principles applied on a
consistent basis, (i) as set forth in Opinions of the Accounting Principles
Board of the American Institute of Certified Public Accountants ("AICPA") and/or
in statements of the Financial Accounting Standards Board that are applicable in
the circumstances as of the date in question, (ii) when not inconsistent with
such opinions and statements, as set forth in other AICPA publications and
guidelines and/or (iii) that otherwise arise by custom for the particular
industry, all as the same shall exist on the date of this Agreement.
Gearon shall have the meaning given to it in the Preamble and shall
include CTI, it being understood, without limiting the generality of the
foregoing, that the representations and warranties set forth in Article 4 and
the Gearon Disclosure Schedule assume that the CTI Merger had been consummated
immediately prior to the date of this Agreement, except as otherwise set forth
in the Gearon Disclosure Schedule.
Gearon Assets shall have the meaning given to it in Section 4.4(a).
Gearon Business shall have the meaning given to it in Section 4.4(b).
Gearon Common Stock Consideration shall have the meaning given to it in
Section 3.1(b).
Gearon Disclosure Schedule shall mean the Gearon Disclosure Schedule
dated as of the date of this Agreement delivered by Gearon to ATS.
Gearon Employees shall have the meaning given it in Section 4.14.
Gearon Employees Consideration shall have the meaning given to it in
Section 3.1(b).
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Gearon Employment Agreement shall have the meaning given to it in
Section 8.2(n).
Gearon Financial Statements shall have the meaning given to it in
Section 4.2.
Gearon Investment Letters shall have the meaning given to it in Section
8.2(r).
Gearon Notes shall have the meaning given to it in Section 7.10.
Gearon Security Agreement shall have the meaning given to it in Section
7.10.
Gearon Shares shall have the meaning given to it in Section 3.1(b).
Gearon Stockholder shall have the meaning given to it in the Preamble.
Gearon's knowledge (or words of similar import) shall mean the actual
knowledge of the Gearon Stockholder or any Gearon director or officer, as such
knowledge exists on the date of this Agreement, after reasonable review of
appropriate Gearon records and after reasonable inquiry of appropriate Gearon
employees.
Governmental Authorizations shall mean all approvals, concessions,
consents, franchises, licenses, permits, plans, registrations and other
authorizations of all Authorities, including without limitation the United
States Forest Service and the Federal Aviation Administration, in connection
with the ownership or operation of the Gearon Assets or the conduct of the
Gearon Business.
Governmental Filings shall mean all filings, including franchise and
similar Tax filings, and the payment of all fees, assessments, interest and
penalties associated with such filings, with all Authorities.
Hart-Scott-Rodino Act shall mean the Hart-Scott-Rodino Improvement Act
of 1976, as from time to time in effect, or any successor law, and any reference
to any statutory provision shall be deemed to be a reference to any successor
statutory provision.
Hazardous Materials shall mean and include any substance, material,
waste, constituent, compound, chemical, natural or man-made element or force (in
whatever state of matter): (a) the presence of which requires investigation or
remediation under any Environmental Law, or (b) that is defined as a "hazardous
waste" or "hazardous substance" under any Environmental Law; or (c) that is
toxic, explosive, corrosive, etiologic, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is regulated by any
applicable Authority or subject to any Environmental Law; or (d) the presence of
which on the real property owned or leased by such Person causes or threatens to
cause a nuisance upon any such real property or to adjacent properties or poses
or threatens to pose a hazard to the health or safety of persons on or about any
such real property; or (e) the presence of which on adjacent properties could
constitute a trespass by such Person; or (f) that contains gasoline, diesel fuel
or other petroleum hydrocarbons, or any by-products or fractions thereof,
natural gas, polychlorinated biphenyls ("PCBs") and PCB-containing equipment,
radon or other radioactive elements, ionizing radiation, electromagnetic field
radiation and other non-ionizing radiation, sonic forces and other natural
forces, lead, asbestos or asbestos-containing materials ("ACM"), or urea
formaldehyde foam insulation.
Indebtedness shall mean, with respect to any Person, (a) all items,
except items of capital stock or of surplus or of general contingency or
deferred tax reserves or any minority interest in any Subsidiary of such
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Person to the extent such interest is treated as a liability with indeterminate
term on the consolidated balance sheet of such Person, which in accordance with
GAAP would be included in determining total liabilities as shown on the
liability side of a balance sheet of such Person, (b) all obligations secured by
any Lien to which any property or asset owned or held by such Person is subject,
whether or not the obligation secured thereby shall have been assumed, and (c)
to the extent not otherwise included, all Contractual Obligations of such Person
constituting capitalized leases and all obligations of such Person with respect
to Leases constituting part of a sale and leaseback arrangement.
Indebtedness for Money Borrowed shall mean, with respect to Gearon,
money borrowed and Indebtedness represented by notes payable and drafts accepted
representing extensions of credit, all obligations evidenced by bonds,
debentures, notes or other similar instruments, the maximum amount currently or
at any time thereafter available to be drawn under all outstanding letters of
credit issued for the account of such Person, all Indebtedness upon which
interest charges are customarily paid by such Person, and all Indebtedness
(including capitalized lease obligations) issued or assumed as full or partial
payment for property or services, whether or not any such notes, drafts,
obligations or Indebtedness represent Indebtedness for money borrowed, but shall
not include (a) trade payables, (b) expenses accrued in the ordinary course of
business, (c) customer advance payments and customer deposits received in the
ordinary course of business, or (d) conditional sales agreements not prohibited
by the terms of this Agreement.
Indemnity Escrow Agreement shall have the meaning given to it in
Section 8.2(o).
Intangible Assets shall mean all assets and property lacking physical
properties the evidence of ownership of which must customarily be maintained by
independent registration, documentation, certification, recordation or other
means, and shall include, without limitation, concessions, copyrights,
franchises, license, patents, permits, service marks, trademarks, trade names,
and applications with respect to any of the foregoing, technology and know-how.
Intellectual Property shall mean any and all research, information,
inventions, designs, procedures, developments, discoveries, improvements,
patents and applications therefor, trademarks and applications therefor, service
marks, trade names, copyrights and applications therefor, logos, trade secrets,
drawing, plans, systems, methods, specifications, computer software programs,
tapes, discs and related data processing software (including without limitation
object and source codes) owned by such Person or in which it has an ownership
interest and all other manufacturing, engineering, technical, research and
development data and know-how made, conceived, developed and/or acquired by such
Person, which relate to the manufacture, production or processing of any
products developed or sold by such Person or which are within the scope of or
usable in connection with such Person's business as it may, from time to time,
hereafter be conducted or proposed to be conducted.
Law shall mean any (a) administrative, judicial, legislative or other
action, code, consent decree, constitution, decree, directive, enactment,
finding, law, injunction, interpretation, judgment, order, ordinance, policy
statement, proclamation, promulgation, regulation, requirement, rule, rule of
law, rule of public policy, settlement agreement, statute, or writ of any
Authority, domestic or foreign; (b) the common law, or other legal precedent; or
(c) arbitrator's, mediator's or referee's award, decision, finding or
recommendation.
Lease shall mean any lease of property, whether real, personal or
mixed, and all amendments thereto.
Legal Action shall mean, with respect to any Person, any and all
litigation or legal or other actions, arbitrations, counterclaims,
investigations, proceedings, requests for material information by or pursuant to
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the order of any Authority or suits, at law or in arbitration, equity or
admiralty, whether or not purported to be brought on behalf of such Person,
affecting such Person or any of such Person's business, property or assets.
Lien shall mean any of the following: mortgage; lien (statutory or
other); or other security agreement, arrangement or interest; hypothecation,
pledge or other deposit arrangement; assignment; charge; levy; executory
seizure; attachment; garnishment; encumbrance (including any easement,
exception, reservation or limitation, right of way, and the like); conditional
sale, title retention or other similar agreement, arrangement, device or
restriction; preemptive or similar right; any financing lease involving
substantially the same economic effect as any of the foregoing; the filing of
any financing statement under the Uniform Commercial Code or comparable law of
any jurisdiction; restriction on sale, transfer, assignment, disposition or
other alienation; or any option, equity, claim or right of or obligation to, any
other Person, of whatever kind and character.
Loss and Expense shall have the meaning given to it in Section 10.2(a).
material, materially or materiality for the purposes of this Agreement,
shall, unless specifically stated to the contrary, be determined without regard
to the fact that various provisions of this Agreement set forth specific dollar
amounts.
Material Agreement shall mean, with respect to Gearon, any Contractual
Obligation which (a) was not entered into in the ordinary course of business,
(b) was entered into in the ordinary course of business which (i) involved the
purchase, sale or lease of goods or materials, or purchase of services,
aggregating more than $50,000 during any of the last three fiscal years, (ii)
extends for more than three (3) months, or (iii) is not terminable on thirty
(30) days or less notice without penalty or other payment, (c) involves a
capitalized lease obligation or Indebtedness for Money Borrowed, (d) is or
otherwise constitutes a written agency, broker, dealer, license,
distributorship, sales representative or similar written agreement, (e)
accounted for more than three percent (3%) of the revenues of the Gearon
Business in any of the last three fiscal years or is likely to account for more
than three percent (3%) of revenues of the Gearon Business during the current
fiscal year, (f) is with the United States Forest Service or any other
Authority, or (g) involves the management by Gearon of any communication tower
of any other Person.
Merger shall have the meaning given to it in the first Whereas
paragraph.
Merger Consideration shall have the meaning given to it in Section
3.1(b).
Multiemployer Plan shall mean a Plan which is a "multiemployer plan"
within the meaning of Section 4001(a)3 of ERISA.
Net Working Capital shall mean, with respect to Gearon, the amount by
which (a) the sum of (i) the current assets of Gearon and (ii) all amounts paid
by Gearon subsequent to October 31, 1997 with respect to the construction of
communications towers, exceeds (or is less than) (b) the sum of (i) the current
liabilities of Gearon, and, without duplication, (ii) the principal on any
Indebtedness, all as determined in accordance with GAAP consistently applied
with the Gearon Financial Statements.
Option Securities shall mean all rights, options and warrants, and
calls or commitments evidencing the right, to subscribe for, purchase or
otherwise acquire shares of capital stock or Convertible Securities, whether or
not the right to subscribe for, purchase or otherwise acquire is immediately
exercisable or is
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conditioned upon the passage of time, the occurrence or non-occurrence or the
existence or non-existence of some other Event.
Operating Cash Flow shall mean, with respect to Gearon, for any period:
(a) net revenues of Gearon, determined in accordance with GAAP, for such period,
less (b) operating expenses (inclusive of taxes and corporate overhead, selling
and administrative expenses); provided, however, that such corporate overhead,
selling and administrative expenses shall not include (i) non-cash operating
expenses, (ii) any expense attributable to the issue of shares of Gearon Common
Stock to the Gearon stockholders listed in Section 3.1(b)(i), or (iii) any
expenses attributable to special cash bonuses paid to Gearon stockholders to the
extent such bonuses are funded out of the sum of Net Working Capital at
September 30, 1997 and cash capital contributions made to Gearon by the Gearon
Stockholder subsequent to September 30, 1997.
Organic Document shall mean, with respect to a Person which is a
corporation, its charter, its by-laws and all shareholder agreements, voting
trusts and similar arrangements applicable to any of its capital stock and, with
respect to a Person which is a partnership, its agreement and certificate of
partnership, any agreements among partners, and any management and similar
agreements between the partnership and any general partners (or any Affiliate
thereof).
PBGC shall mean the Pension Benefit Guaranty Corporation and any Entity
succeeding to any or all of its functions under ERISA.
Permitted Liens shall mean (a) Liens for current taxes not yet due and
payable, (b) such imperfections of title, easements, encumbrances and mortgages
or other Liens, if any, as are not, individually or in the aggregate,
substantial in character, amount or extent and do not materially detract from
the value, or materially interfere with the present use, of the property subject
thereto or affected thereby, or otherwise materially impair the conduct of the
Gearon Business or the businesses of ATS and ATSI, as the case may be, and (c)
such other Liens as are permitted by the provisions of this Agreement to be in
place on the Closing Date.
Person shall mean any natural individual or any Entity.
Personal Property shall mean all of the machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant, inventory,
spare parts and other tangible personal property which are owned or leased by
Gearon and used or useful as of the date hereof in the conduct of the business
or operations of the Gearon Business, plus such additions thereto and deletions
therefrom arising in the ordinary course of business between the date hereof and
the Closing Date.
Plan shall mean, with respect to any Person and at a particular time,
any employee benefit plan which is covered by ERISA and in respect of which such
Person or an ERISA Affiliate is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA, but only to the extent that it covers or relates to any
officer, employee or other Person involved in the ownership and operation of the
Gearon Assets or the conduct of the business of the Gearon Business.
Private Authorizations shall mean all approvals, concessions, consents,
franchises, licenses, permits, and other authorizations of all Persons (other
than Authorities) including without limitation those with respect to
Intellectual Property.
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Real Property shall mean all of the fee estates and buildings and other
fixtures and improvements thereon, leasehold interest, easements, licenses,
rights to access, right-of- way, and other real property interest which are
owned or used by Gearon as of the date hereof, in the operations of the Gearon
Business, plus such additions thereto and deletions therefrom arising in the
ordinary course of business between the date hereof and the Closing Date.
Registration Rights Agreement shall have the meaning given to it in
Section 8.2(p)
Regulations shall mean the federal income tax regulations promulgated
under the Code, as such Regulations may be amended from time to time. All
references herein to specific sections of the Regulations shall be deemed also
to refer to any corresponding provisions of succeeding Regulations, and all
references to temporary Regulations shall be deemed also to refer to any
corresponding provisions of final Regulations.
Representatives shall have the meaning given to it in Section 7.1(a).
Securities Act shall mean the Securities Act of 1933, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
Settlement Proposal shall have the meaning given to it in Section 10.5.
Solvent shall mean, with respect to any Person on a particular date,
that on such date (i) the fair value of the assets of such Person (both at fair
valuation and at present fair saleable value) is, on the date of determination,
greater than the total amount of liabilities, including, without limitation,
contingent and unliquidated liabilities, of such Person, (ii) such Person is
able to pay all liabilities of such Person as they mature, and (iii) such Person
does not have unreasonably small capital with which to carry on its business. In
computing the amount of contingent or unliquidated liabilities at any time, such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability. For purposes of this
definition, "indebtedness" shall mean any liability on a claim, and "claim"
shall mean (a) right to payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal equitable, secured or unsecured, or (b) right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
Subsidiary shall mean, with respect to a Person, any Entity a majority
of the capital stock ordinarily entitled to vote for the election of directors
of which, or if no such voting stock is outstanding, a majority of the equity
interests of which, is owned directly or indirectly, legally or beneficially, by
such Person or any other Person controlled by such Person.
Surviving Corporation shall have the meaning given to it in Section
2.1.
Tax (and "Taxable", which shall mean subject to Tax), shall mean, with
respect to any Person, (a) all taxes (domestic or foreign), including without
limitation any income (net, gross or other including recapture of any tax items
such as investment tax credits), alternative or add-on minimum tax, gross
income, gross receipts, gains, sales, use, leasing, lease, user, ad valorem,
transfer, recording, franchise, profits, property (real or personal, tangible or
intangible), fuel, license, withholding on amounts paid to or by such Person,
payroll,
A-10
<PAGE>
employment, unemployment, social security, excise, severance, stamp, occupation,
premium, environmental or windfall profit tax, custom, duty or other tax, or
other like assessment or charge of any kind whatsoever, together with any
interest, levies, assessments, charges, penalties, addition to tax or additional
amount imposed by any Taxing Authority, (b) any joint or several liability of
such Person with any other Person for the payment of any amounts of the type
described in (a) and (c) any liability of such Person for the payment of any
amounts of the type described in (a) as a result of any express or implied
obligation to indemnify any other Person.
Tax Return or Returns shall mean all returns, consolidated or otherwise
(including without limitation information returns), required to be filed with
any Authority with respect to Taxes.
Taxing Authority shall mean any Authority responsible for the
imposition of any Tax.
Title Reports shall have the meaning given to it in Section 7.8.
Termination Date shall have the meaning given to it in Section 9.1.
Transactions shall mean the transactions contemplated to be consummated
on or prior to the Closing Date, including without limitation the Merger and the
execution, delivery and performance of the Collateral Documents.
A-11
EXHIBIT 2.3
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
By and Among
AMERICAN RADIO SYSTEMS CORPORATION,
CBS CORPORATION
and
R ACQUISITION CORP.
Dated as of
December 18, 1997
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C>
ARTICLE 1 DEFINED TERMS...................................................................................1
ARTICLE 2 THE MERGER......................................................................................2
2.1 The Merger.............................................................................2
2.2 Closing................................................................................2
2.3 Effective Time.........................................................................2
2.4 Effect of the Merger...................................................................2
2.5 Certificate of Incorporation...........................................................2
2.6 Bylaws.................................................................................2
2.7 Directors and Officers.................................................................2
ARTICLE 3 CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES..................................................3
3.1 Conversion of Capital Stock............................................................3
3.2 Exchange of Certificates. ............................................................4
3.3 Closing of American's Transfer Books...................................................5
3.4 Dissenting Shares......................................................................6
3.5 Tower Merger...........................................................................6
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF AMERICAN......................................................8
4.1 Organization and Business; Power and Authority; Effect of Transaction..................8
4.2 Financial and Other Information. ....................................................11
4.3 Changes in Condition..................................................................11
4.4 Properties............................................................................11
4.5 Compliance with Private Authorizations................................................11
4.6 Compliance with Governmental Authorizations and Applicable Law;
Litigation............................................................................12
4.7 Related Transactions..................................................................13
4.8 Taxes and Tax Matters.................................................................13
4.9 Employee Retirement Income Security Act of 1974.......................................14
4.10 Insurance.............................................................................17
4.11 Authorized Capital Stock..............................................................17
4.12 Employment Arrangements...............................................................18
4.14 Brokers...............................................................................18
4.15 Information Supplied..................................................................18
4.16 Ordinary Course of Business...........................................................19
4.17 Environmental Matters.................................................................19
4.18 Opinion of Financial Advisor..........................................................20
4.19 Contracts; Debt Instruments...........................................................20
4.20 State Takeover Statutes...............................................................21
4.21 Appraisal Rights......................................................................21
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF MERGEPARTY...................................................21
5.1 Organization and Business; Power and Authority; Effect of Transaction.................21
5.2 Compliance with Governmental Authorizations and Applicable Law;
Litigation............................................................................22
5.3 Mergeparty Financing..................................................................23
<PAGE>
ARTICLE 6 COVENANTS......................................................................................23
6.1 Access to Information; Confidentiality................................................23
6.2 Agreement to Cooperate................................................................23
6.3 Public Announcements..................................................................26
6.4 Notification of Certain Matters.......................................................26
6.5 Stockholder Approval. ................................................................26
6.6 Proxy Statement; Registration Statement. ............................................26
6.7 Miscellaneous.........................................................................27
6.8 Option Plans..........................................................................27
6.9 Conduct of Business by Mergeparty Pending the Merger..................................29
6.10 Conduct of Business by American Pending the Merger....................................29
6.11 Control of Operations.................................................................31
6.12 Directors', Officers' and Employees' Indemnification and Insurance....................31
6.13 Solicitation of Employees.............................................................32
6.14 Change of Name........................................................................33
6.15 Benefit Plans.........................................................................33
6.16 American Cumulative Preferred Stock...................................................33
6.17 American Tower Transaction............................................................33
6.18 Purchase Price Adjustment.............................................................39
6.19 Tower Leases..........................................................................41
6.20 Affiliates of American................................................................42
ARTICLE 7 CLOSING CONDITIONS.............................................................................42
7.1 Conditions to Obligations of Each Party to Effect the Merger..........................42
7.2 Conditions to Obligations of Mergeparty...............................................43
7.3 Conditions to Obligations of American.................................................44
ARTICLE 8 TERMINATION, AMENDMENT AND WAIVER..............................................................44
8.1 Termination...........................................................................44
8.2 Effect of Termination.
..............................................................................................45
ARTICLE 9 GENERAL PROVISIONS.............................................................................46
9.1 Amendment.............................................................................46
9.2 Waiver................................................................................46
9.3 Fees, Expenses and Other Payments.....................................................46
9.4 Notices...............................................................................47
9.5 Specific Performance; Other Rights and Remedies.......................................47
9.6 Survival of Representations, Warranties, Covenants and Agreements.....................48
9.7 Severability..........................................................................48
9.8 Counterparts..........................................................................48
9.9 Section Headings......................................................................48
9.10 Governing Law.........................................................................48
9.11 Further Acts..........................................................................48
9.12 Entire Agreement; No Other Representations or Agreements..............................49
9.13 Assignment............................................................................49
9.14 Parties in Interest...................................................................49
9.15 Mutual Drafting.......................................................................49
9.16 Obligations of American and of Mergeparty.............................................50
-ii-
<PAGE>
9.17 Mergeparty Agent for Mergeparty Subsidiary............................................50
APPENDIX A: Definitions
EXHIBITS:
EXHIBIT A: Restated Certificate of Incorporation
EXHIBIT B: Market Fee Schedule
EXHIBIT C: Form of Opinion of FCC Counsel to American
EXHIBIT D: Tower Merger Agreement
SCHEDULES: Schedule 4.1(e)
</TABLE>
-iii-
<PAGE>
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
Amended and Restated Agreement and Plan of Merger, dated as of December
18, 1997, by and among American Radio Systems Corporation, a Delaware
corporation ("American"), CBS Corporation (formerly, Westinghouse Electric
Corporation), a Pennsylvania corporation ("Mergeparty"), and R Acquisition
Corp., a Delaware corporation ("Mergeparty Subsidiary").
W I T N E S S E T H:
WHEREAS, American, Mergeparty and Mergeparty Subsidiary are parties to
an Agreement and Plan of Merger, dated as of September 19, 1997 (the "Original
Merger Agreement"), providing for the merger of Mergeparty Subsidiary with and
into American on the terms and conditions set forth therein; and
WHEREAS, American, Mergeparty and Mergeparty Subsidiary desire to amend
and restate the Original Merger Agreement in its entirety to make certain
changes to the Original Merger Agreement; and
WHEREAS, American, Mergeparty and Mergeparty Subsidiary have entered
into this Amended and Restated Agreement and Plan of Merger (this "Agreement")
providing that Mergeparty Subsidiary shall be merged with and into American,
which shall be the surviving corporation, on the terms and conditions set forth
in this Agreement (the "Merger").
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained and other
valuable consideration, the receipt and adequacy whereof are hereby
acknowledged, the parties hereto hereby, intending to be legally bound,
represent, warrant, covenant and agree as follows:
ARTICLE 1
DEFINED TERMS
As used herein, unless the context otherwise requires, the terms
defined in Appendix A shall have the respective meanings set forth therein.
Terms defined in the singular shall have a comparable meaning when used in the
plural, and vice versa, and the reference to any gender shall be deemed to
include all genders. Unless otherwise defined or the context otherwise clearly
requires, terms for which meanings are provided in this Agreement shall have
such meanings when used in either Disclosure Schedule and each Collateral
Document executed or required to be executed pursuant hereto or thereto or
otherwise delivered, from time to time, pursuant hereto or thereto. References
to "hereof," "herein" or similar terms are intended to refer to the Agreement as
a whole and not a particular section, and references to "this Section" or "this
Article" are intended to refer to the entire section or article and not a
particular subsection thereof. The term "either party" shall, unless the context
otherwise requires, refer to American, on the one hand, and Mergeparty and
Mergeparty Subsidiary, on the other hand.
<PAGE>
ARTICLE 2
THE MERGER
2.1 The Merger. (a) Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DCL"), at the Effective Time, Mergeparty Subsidiary shall be merged
with and into American. As a result of the Merger, the separate corporate
existence of Mergeparty Subsidiary shall cease and American shall continue as
the surviving corporation in the Merger (sometimes referred to, as such, as the
"Surviving Corporation").
2.2 Closing. Unless this Agreement shall have been terminated pursuant
to Section 8.1 and subject to the satisfaction or, to the extent permitted by
Applicable Law, waiver of the conditions set forth in Article 7, the closing of
the Merger (the "Closing") will take place, at 10:00 a.m., on the Closing Date,
at the offices of Cravath, Swaine & Moore, 825 Eighth Avenue, New York, New York
10019, on the date that is the second (2nd) day after the date on which all of
the conditions set forth in Article 7 (other than those which require delivery
of opinions or documents at the Closing) shall have been satisfied or waived,
unless another date, time or place is agreed to in writing by the parties. The
date on which the Closing occurs is herein referred to as the "Closing Date."
2.3 Effective Time. Subject to the provisions of this Agreement, as
promptly as practicable after the Closing, the parties hereto shall cause the
Merger to be consummated by filing a certificate of merger (the "Certificate of
Merger") and any related filings required under the DCL with the Secretary of
State of the State of Delaware. The Merger shall become effective at such time
as such documents are duly filed with the Secretary of State of the State of
Delaware, or at such later time as is specified in such documents (the
"Effective Time").
2.4 Effect of the Merger. The Merger shall have the effects provided
for under the DCL.
2.5 Certificate of Incorporation. The Certificate of Incorporation of
American, as in effect immediately prior to the Effective Time, shall be amended
as of the Effective Time to read in its entirety as set forth in Exhibit A and,
as so amended, such Certificate of Incorporation, together with the Certificates
of Designation of (i) 113/8% Series B Cumulative Exchangeable Preferred Stock,
par value $.01 per share, of American ("American Cumulative Preferred Stock")
and (ii) 7% Convertible Exchangeable Preferred Stock, par value $.01 per share,
of American ("American Convertible Preferred Stock" and, collectively with
American Cumulative Preferred Stock, "American Preferred Stock"), shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by Applicable Law. Such amendment
shall not be deemed to affect in any manner the Certificates of Designation of
American Preferred Stock.
2.6 Bylaws. The bylaws of American in effect at the Effective Time
shall be the bylaws of the Surviving Corporation until amended in accordance
with Applicable Law and the Organic Documents of the Surviving Corporation.
2.7 Directors and Officers. From and after the Effective Time, until
successors are duly elected or appointed and qualified, or upon their earlier
resignation or removal, in accordance with Applicable Law and the Organic
Documents of the Surviving Corporation, (a) the directors of Mergeparty
Subsidiary at the Effective Time shall be the directors of the Surviving
Corporation, and (b) the officers of American at the Effective Time shall be the
officers of the Surviving Corporation.
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<PAGE>
ARTICLE 3
CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
3.1 Conversion of Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of Mergeparty, Mergeparty
Subsidiary or American or their respective stockholders:
(a) Each share of Common Stock, par value $1.00 per share, of
Mergeparty Subsidiary issued and outstanding immediately prior to the Effective
Time shall be converted into and become one validly issued, fully paid and
nonassessable share of Common Stock, par value $.01 per share, of the Surviving
Corporation;
(b) Each share of American Cumulative Preferred Stock issued and
outstanding immediately prior to the Effective Time shall remain outstanding;
(c) Each share of American Convertible Preferred Stock issued and
outstanding immediately prior to the Effective Time shall remain outstanding;
(d) Subject to paragraph (e) below, each share of Class A Common Stock,
par value $.01 per share ("American Class A Common"), each share of Class B
Common Stock, par value $.01 per share ("American Class B Common"), and each
share of Class C Common Stock, par value $.01 per share ("American Class C
Common" and, collectively with American Class A Common and American Class B
Common, "American Common Stock"), of American issued and outstanding immediately
prior to the Effective Time (other than Dissenting Shares) shall be converted
into the right to receive the following:
(i) if the Tower Merger Effective Time shall not have
occurred, (A) $44.00 in cash and (B) one share of Tower Common Stock,
with (x) each share of American Class A Common being converted into the
right to receive one share of Class A Common Stock, par value $.01 per
share ("Tower Class A Common"), of American Tower Systems Corporation,
a Delaware corporation and a wholly-owned Subsidiary of American
("American Tower"), (y) each share of American Class B Common being
converted into the right to receive one share of Class B Common Stock,
par value $.01 per share ("Tower Class B Common"), of American Tower,
and (z) each share of American Class C Common being converted into the
right to receive one share of Class C Common Stock, par value $.01 per
share ("Tower Class C Common" and, collectively with Tower Class A
Common and Tower Class B Common, "Tower Common Stock"), of American
Tower (collectively, the "Tower Stock Consideration"); or
(ii) if the Tower Merger Effective Time shall have occurred,
an amount in cash determined by dividing $44.00 by the American
Conversion Fraction.
The term "Cash Consideration" shall mean the following: (x) if the Tower Merger
Effective Time shall not have occurred, $44.00, and (y) if the Tower Merger
Effective Time shall have occurred, the amount of cash determined pursuant to
the provisions of clause (ii) preceding. The term "Merger Consideration" shall
mean the Cash Consideration and, if the Tower Merger Effective Time shall not
have occurred, the Tower Stock Consideration.
(e) Each share of American Common Stock owned by American or any of its
Subsidiaries or Mergeparty or any of its Subsidiaries immediately prior to the
Effective Time shall automatically be canceled and extinguished without any
conversion thereof and no payment shall be made with respect thereto.
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<PAGE>
As a result of the Merger and without any action on the part of the
holder thereof, at the Effective Time all shares of American Common Stock shall
cease to be outstanding and shall be canceled and retired and shall cease to
exist, and each holder of any certificates formerly representing such shares
shall thereafter cease to have any rights with respect to such shares, except,
subject to paragraph (e) above, the right to receive, without interest, the
Merger Consideration, or, in the case of a holder of Dissenting Shares, the
right to perfect the right to receive payment for Dissenting Shares pursuant to
Section 262 of the DCL.
3.2 Exchange of Certificates.
(a) From time to time, on or prior to or after the Effective Time,
Mergeparty shall deposit or cause to be deposited with an exchange agent
selected by Mergeparty and not reasonably disapproved of by American (the
"Exchange Agent") in trust for the benefit of the holders of American Common
Stock cash in amounts and at times necessary for the prompt payment of the Cash
Consideration, and American shall deposit or cause to be deposited with the
Exchange Agent in trust for the benefit of the holders of American Common Stock
shares of Tower Common Stock in amounts and at times necessary for the prompt
delivery of the Tower Stock Consideration, if any, upon the surrender of
Certificates.
(b) Not more than five (5) business days subsequent to the Effective
Time, the Exchange Agent shall mail to each holder of record of a certificate or
certificates that immediately prior to the Effective Time represented
outstanding shares of American Common Stock (the "Certificates") (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon actual delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as American and Mergeparty may agree) and (ii) instructions for use
in effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of Certificates for cancellation to the Exchange
Agent, together with a duly executed letter of transmittal and such other
documents as the Exchange Agent shall reasonably require, the holder of such
Certificate shall receive in exchange therefor the Merger Consideration
multiplied by the number of shares of American Common Stock formerly represented
by such Certificates. The amount of Cash Consideration paid to the holder of
Certificates shall be in the form of a wire transfer of immediately available
funds if so requested by any holder entitled to receive not less than $500,000
in cash, and the cost of such wire transfers shall be borne by the Surviving
Corporation. Such letter of transmittal and instructions shall be available at
the Closing for holders of American Common Stock. Notwithstanding the foregoing,
neither the Exchange Agent nor any party hereto shall be liable to a holder of
shares of American Common Stock for any Merger Consideration delivered to a
public official pursuant to applicable abandoned property, escheat or similar
Laws.
(c) Promptly following the date which is six (6) months after the
Closing Date, the Exchange Agent shall deliver to Mergeparty all cash and any
shares of Tower Common Stock in its possession relating to the transactions
described in this Agreement that remain unclaimed, and the Exchange Agent's
duties shall terminate. Thereafter, each holder of a Certificate may surrender
such Certificate to the Surviving Corporation and (subject to applicable
abandoned property, escheat and similar Laws) receive in exchange therefor the
aggregate Merger Consideration to which such holder is entitled, without any
interest thereon, but together with dividends and distributions, if any, paid by
American Tower on or with respect to the Tower Common Stock in accordance with
the provisions of Section 3.2(d).
(d) Notwithstanding any other provisions of this Agreement, no
dividends or other distributions declared after the earlier to occur of the
Tower Merger Effective Time or the Effective Time on Tower Common Stock shall be
paid with respect to any shares of Tower Common Stock represented by a
Certificate until such Certificate is surrendered for exchange as provided
herein or, if the Tower Merger Effective Time shall have occurred, as provided
in the Tower Merger Agreement. Subject to the effect of Applicable Laws,
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<PAGE>
following surrender of any such Certificate, there shall be paid to the holder
of the shares of Tower Common Stock issued in exchange therefor, without
interest, (i) at the time of such surrender, the amount of dividends or other
distributions with a record date after the earlier to occur of the Tower Merger
Effective Time or the Effective Time theretofore payable with respect to such
shares of Tower Common Stock and not paid, less the amount of any withholding
taxes which may be required thereon, and (ii) at the appropriate payment date,
the amount of dividends or other distributions with a record date after the
earlier to occur of the Tower Merger Effective Time or the Effective Time but
prior to surrender and a payment date subsequent to surrender payable with
respect to such shares of Tower Common Stock, less the amount of any withholding
taxes which may be required thereon.
(e) If the Merger Consideration (or any portion thereof) is to be
delivered to a Person other than the Person in whose name the Certificate
surrendered in exchange therefor is registered, it shall be a condition to the
delivery of the Merger Consideration that the Certificate so surrendered shall
be properly endorsed or accompanied by appropriate stock powers (with signatures
guaranteed in accordance with the transmittal letter) and otherwise in proper
form for transfer, that such transfer otherwise be proper and that the Person
requesting such transfer pay to the Exchange Agent any transfer or other Taxes
payable by reason of the foregoing or establish to the satisfaction of the
Exchange Agent that such Taxes have been paid or are not required to be paid.
(f) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and subject to such other
reasonable conditions as the Exchange Agent may impose, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration (to the extent applicable) deliverable in respect thereof as
determined in accordance with this Article. When authorizing such issue of the
Merger Consideration in exchange therefor, the Exchange Agent may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed Certificate (if other than a recognized
financial institution) to give the Exchange Agent a bond or other surety in such
sum as it may reasonably direct as indemnity against any Claim that may be made
against the Exchange Agent with respect to the Certificate alleged to have been
lost, stolen or destroyed.
(g) At and after the Effective Time, the holder of a Certificate shall
cease to have any rights as a holder of shares of American Common Stock, except
for the right to surrender Certificates in the manner prescribed by Section 3.2
in exchange for delivery of the Merger Consideration, or, in the case of a
holder of Dissenting Shares, the right to perfect the right to receive payment
for Dissenting Shares pursuant to Section 262 of the DCL.
(h) The Surviving Corporation shall be entitled to, or shall be
entitled to cause the Exchange Agent to, deduct and withhold from the
consideration otherwise deliverable pursuant to this Agreement to any holder of
shares of American Common Stock such amounts as are required to be deducted and
withheld with respect to the making of such payment under the Code, or any
provision of state, local or foreign Tax Law. To the extent that amounts are so
withheld by the Surviving Corporation or the Exchange Agent, as the case may be,
such withheld amounts shall be treated for all purposes of this Agreement as
having been delivered to the holder of the shares of American Common Stock in
respect of which such deduction and withholding was made by the Surviving
Corporation or the Exchange Agent.
(i) The Exchange Agent shall invest any funds held by it for purposes
of this Section 3.2 as directed by Mergeparty, on a daily basis. Any interest
and other income resulting from such investments shall be paid to Mergeparty and
any risk of loss resulting from such investments shall be borne by Mergeparty.
-5-
<PAGE>
3.3 Closing of American's Transfer Books. At the Effective Time, the
stock transfer books of American relating to American Common Stock shall be
closed and no transfer of shares of American Common Stock which were outstanding
immediately prior to the Effective Time shall thereafter be made. If, after the
Effective Time, subject to the terms and conditions of this Agreement,
Certificates formerly representing American Common Stock are presented to the
Surviving Corporation, they shall be canceled and exchanged for the Merger
Consideration in accordance with the provisions of this Article.
3.4 Dissenting Shares.
(a) Notwithstanding any other provision of this Agreement to the
contrary, shares of American Common Stock that are outstanding immediately prior
to the Effective Time and which are held by American stockholders who shall have
not voted in favor of the Merger or consented thereto in writing and who shall
be entitled to and shall have demanded properly in writing appraisal rights for
such shares of American Common Stock in accordance with Section 262 of the DCL
and who shall not have withdrawn such demand or otherwise have forfeited
appraisal rights (collectively, the "Dissenting Shares"), shall not be converted
into or represent the right to receive the Merger Consideration payable in
respect of each share of American Common Stock represented thereby. Such
American stockholders shall be entitled to receive payment of the appraised
value of such shares of American Common Stock held by them in accordance with
the provisions of the DCL; provided, however, that all Dissenting Shares held by
American stockholders who shall have failed to perfect or who effectively shall
have withdrawn, forfeited or lost their appraisal rights with respect to such
shares of American Common Stock under the DCL shall thereupon be deemed to have
been converted into and to have become exchangeable for, as of the Effective
Time, the right to receive, without any interest thereon, the Merger
Consideration upon surrender, in the manner provided in Section 3.2, of the
Certificates with respect to such shares.
(b) American shall give Mergeparty prompt notice of any demands for
appraisal rights received by it, withdrawals of such demands, and any other
instruments served pursuant to the DCL and received by American and relating
thereto. American shall give Mergeparty the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal rights under
the provisions of the DCL. American shall not, except with the prior written
consent of Mergeparty, make any payment with respect to any demands for
appraisal rights, or offer to settle, or settle, any such demands.
(c) If the Tower Merger Effective Time shall not have occurred and the
Delaware Court of Chancery (the "Court") conducts an appraisal proceeding
pursuant to Section 262 of the DCL relating to an obligation to pay the
appraised value per share of American Common Stock ("Appraised Total Value") to
the holders of the Dissenting Shares, American Tower shall promptly pay to
American the portion of the Appraised Total Value attributable to the Tower
Stock Consideration (the "Tower Stock Payment") and American shall contribute
(without the payment of any amount or the issuance of any securities by American
Tower) to the capital of American Tower such shares of Tower Common Stock owned
by American that the holders of the Dissenting Shares would have been entitled
to receive had they not exercised their appraisal rights. The Tower Stock
Payment shall be determined pursuant to the following provisions:
(i) American shall request the Court to determine in writing
the Tower Stock Payment. If the Court shall make such determination the
Tower Stock Payment shall be the amount so determined; and
(ii) If the Court shall not make such determination within a
30-day period following such request (at which time such request shall
be withdrawn) (the "Determination Deadline"), American, American Tower
and Mergeparty shall submit to an arbitrator (the "Arbitrator") for
review
-6-
<PAGE>
and resolution the determination of the Tower Stock Payment. The
Arbitrator shall be a nationally recognized investment banking firm
which shall be agreed upon by American, Mergeparty and American Tower
in writing. The Arbitrator shall be requested to render a decision
resolving the amount of the Tower Stock Payment within 30 days
following the date of its selection. If the parties cannot agree on the
firm to be selected as Arbitrator within 15 days following the
Determination Deadline, then American and Mergeparty, on the one hand,
and American Tower, on the other hand, shall each choose one such firm
within 10 days following the expiration of such 15-day period to
review, resolve and agree on the determination of the Tower Stock
Payment, which determination, once agreed to in writing by both such
firms, shall be final, conclusive and binding on the parties. If such
two firms cannot agree on the amount of the Tower Stock Payment within
30 days following the date on which the second of such firms is
selected, then such two firms shall promptly select a third such firm
to make such determination, which determination shall be made by such
third firm within 30 days of the date on which such third firm is
selected. The determination of such third firm of the amount of the
Tower Stock Payment shall be final, conclusive and binding on the
parties. The cost of any such arbitration (including the fees of the
Arbitrator and any other firm selected hereunder) shall be borne 50% by
American and 50% by American Tower. American Tower shall promptly pay
to American the amount of the Tower Stock Payment once such amount is
determined in accordance with this clause (ii).
3.5 Tower Merger. Anything in this Agreement to the contrary
notwithstanding, if the Effective Time shall not have occurred by May 31, 1998
(as such date may be extended by American with the written consent of
Mergeparty, such consent not to be unreasonably withheld, delayed or
conditioned), on June 1, 1998 (or the date following the date, if any, to which
the May 31, 1998 date shall have been so extended), the Board of Directors of
American shall, in its sole discretion, either (i) consummate the merger of ATS
Merger Corporation, a Delaware corporation and a wholly-owned subsidiary of
American ("ATS Mergercorp"), with and into American, which will be the surviving
corporation (the "Tower Merger"), pursuant to the agreement and plan of merger
between American and ATS Mergercorp dated as of the date hereof and set forth as
Exhibit D hereto (the "Tower Merger Agreement"), or (ii) irrevocably elect to
abandon the Tower Merger. Pursuant to the Tower Merger Agreement, each share of
ATS Mergercorp Common Stock issued and outstanding immediately prior to the
effective time of the Tower Merger (the "Tower Merger Effective Time") shall, by
virtue of the Tower Merger and without any action on the part of the holder
thereof, be automatically canceled and extinguished and each share of American
Common Stock issued and outstanding immediately prior to the Tower Merger
Effective Time shall be converted into the right to receive:
(a) one share of Tower Common Stock, with (i) each share of
American Class A Common being converted into the right to receive one
share of Tower Class A Common, (ii) each share of American Class B
Common being converted into the right to receive one share of Tower
Class B Common, and (iii) each share of American Class C Common being
converted into the right to receive one share of Tower Class C Common
(collectively, the "Tower Merger Tower Consideration"); and
(b) a fraction (the "American Conversion Fraction") of a share
of American Common Stock of the same class as the class of American
Common Stock being converted, (i) the numerator of which is the
difference between (A) the denominator and (B) the value (determined as
set forth below) of one share of Tower Class A Common immediately prior
to the Tower Merger Effective Time, and (ii) the denominator of which
is the value (determined as set forth below) of one share of American
Class A Common immediately prior to the Tower Merger Effective Time
(collectively with the Tower Merger Tower Consideration, the "Tower
Merger Consideration").
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For purposes of determining the value of the American Class A Common and the
Tower Class A Common immediately prior to the Tower Merger Effective Time the
following principles shall apply:
(x) each share of American Class A Common shall be valued at
an amount equal to the average closing sales price of the American
Class A Common on the NYSE, as reported by the Wall Street Journal, for
the ten (10) consecutive trading days immediately preceding the second
trading date prior to the Tower Merger Effective Time; and
(y) each share of Tower Class A Common shall be valued at the
amount determined in good faith by the American Radio Board of
Directors to be its fair market value immediately prior to the Tower
Merger Effective Time.
No certificates in respect of fractional shares of American Common Stock shall
be issued in the Tower Merger, and cash shall be paid in lieu thereof as
provided in the Tower Merger Agreement. The certificates that immediately prior
to the Tower Merger Effective Time represented outstanding shares of American
Common Stock shall be deemed, without any action of the holders thereof, to
represent that number of shares of American Common Stock that the holder thereof
has the right to receive pursuant to clause 3.5(b), together with cash in lieu
of fractional shares as provided in the Tower Merger Agreement.
Immediately prior to the Tower Merger Effective Time, American shall
contribute to ATS Mergercorp a number of shares of Tower Common Stock equal to
the Tower Merger Tower Consideration.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF AMERICAN
Except as set forth with respect to specifically identified
representations and warranties in the American Disclosure Schedule or as
otherwise contemplated by this Agreement, American hereby represents and
warrants to Mergeparty and Mergeparty Subsidiary as follows:
4.1 Organization and Business; Power and Authority; Effect of
Transaction.
(a) American is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware and has all requisite
power and authority (corporate and other) to own or hold under lease its
properties and to conduct its business as now conducted and as presently
proposed to be conducted. American is duly qualified and in good standing as a
foreign corporation in each other jurisdiction (as shown on Section 4.1(a) of
the American Disclosure Schedule) in which the character of the property owned
or leased by it or the nature of its business or operations requires such
qualification, with full power and authority (corporate and other) to carry on
the business in which it is engaged, except in such jurisdictions where the
failure to be so qualified or in good standing, individually or in the
aggregate, is not reasonably likely to have a Material Adverse Effect on
American.
(b) Each of American and its Subsidiaries has all requisite power and
authority (corporate and other) to execute, deliver and perform its obligations
under this Agreement and each Collateral Document executed or required to be
executed by such party pursuant hereto or thereto and to consummate the Merger
and the other transactions contemplated hereby and thereby, and the execution,
delivery and performance of this Agreement and each Collateral Document executed
or required to be executed pursuant hereto or thereto have been duly authorized
by all requisite corporate or other action on the part of American and its
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Subsidiaries, other than the approval of the holders of shares of American
Common Stock contemplated by Section 4.13, and no other corporate proceedings on
the part of American or any of its Subsidiaries are necessary to authorize this
Agreement or the transactions contemplated hereby or to consummate the Merger or
the other transactions so contemplated (other than, with respect to the Merger,
the Required Vote and with respect to the Tower Merger, the Required Tower
Vote). This Agreement has been duly executed and delivered by American and
constitutes, and each Collateral Document executed or required to be executed by
American and its Subsidiaries pursuant hereto or to consummate the Merger when
executed and delivered by American and its Subsidiaries, as applicable, will
constitute, a valid and binding obligation of American and its Subsidiaries, as
applicable, enforceable in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, moratorium, insolvency and
similar laws affecting the rights and remedies of creditors and obligations of
debtors generally and by general principles of equity. As of the date hereof,
the Board of Directors of American, at a meeting duly called and held at which a
quorum was present throughout, has approved the Merger and this Agreement, and
the Tower Merger and the Tower Merger Agreement, and has recommended that the
holders of shares of American Common Stock approve and adopt this Agreement, the
Tower Merger Agreement and the transactions contemplated hereby and thereby,
including without limitation the Merger and the Tower Merger.
(c) The execution, delivery and performance by American and its
Subsidiaries, as applicable, of this Agreement and any Collateral Document
executed or required to be executed by such parties pursuant hereto or thereto
do not, and the consummation by American of the Merger and the other
transactions contemplated hereby and thereby, and compliance with the terms,
conditions and provisions hereof or thereof by such parties will not:
(i) (A) Except as set forth in Section 4.1(c) of the American
Disclosure Schedule, conflict with, or result in a breach or violation
of, or constitute a default under, any Organic Document of American or
its Subsidiaries, as applicable, or (B) conflict with, or result in a
breach or violation of, or constitute a default under, or permit the
termination, cancellation or acceleration of any obligation or
liability in, or but for any requirement of the giving of notice or
passage of time or both would constitute such a conflict with, breach
or violation of, or default under, or permit any such termination,
cancellation or acceleration of, any agreement, arrangement, contract,
undertaking, understanding, Applicable Law or other obligation or
Private Authorization of American or its Subsidiaries, as applicable,
except, in the case of clause (B), for such conflicts, breaches,
violations, terminations, cancellations, defaults or accelerations that
would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect on American; or
(ii) result in or permit the creation or imposition of any
Lien upon any property now owned or leased by American except for such
Liens that would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect on American; or
(iii) require any Governmental Authorization or Governmental
Filing except for (A) the FCC Consents, (B) filings under the
Hart-Scott-Rodino Act, (C) the filing with the Commission of (I) the
Proxy Statement, (II) the Tower Proxy Statement, (III) the Registration
Statement and (IV) such reports under Section 13(a) or 15(d) of the
Exchange Act as may be required in connection with this Agreement and
the transactions contemplated by this Agreement, (D) the filing of the
Certificate of Merger and a certificate of merger relating to the Tower
Merger with the Delaware Secretary of State and appropriate documents
with the relevant authorities of other states in which American is
qualified to do business and (E) such other Governmental Authorizations
and Governmental Filings the failure of which to be made or obtained
would not be individually or in the aggregate, reasonably likely to
have a Material Adverse Effect on American.
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(d) American does not have any direct or indirect Subsidiaries other
than those set forth on Section 4.1(d) of the American Disclosure Schedule (read
without the last three lines of the first page thereof) (and other than ATS
Mergercorp, American Tower, American Tower Systems (Delaware), Inc., ATS
Needham, LLC, Tower, LLC and Communications Systems Development, LLC). Each
direct or indirect Subsidiary of American (and other than ATS Mergercorp,
American Tower, American Tower Systems (Delaware), Inc., ATS Needham, LLC,
Tower, LLC and Communications Systems Development, LLC) is (i) wholly-owned
unless noted otherwise in Section 4.1(d) of the American Disclosure Schedule,
(ii) a corporation which is duly organized, validly existing and in good
standing under the laws of the respective state of incorporation set forth
opposite its name on Section 4.1(d) of the American Disclosure Schedule, and
(iii) duly qualified and in good standing as a foreign corporation in each other
jurisdiction (as shown on Section 4.1(d) of the American Disclosure Schedule) in
which the character of the property owned or leased by it or the nature of its
business or operations requires such qualification, with full power and
authority (corporate and other) to carry on the business in which it is engaged,
except where the failure to be so qualified or in good standing, individually or
in the aggregate, would not be reasonably likely to have a Material Adverse
Effect on American. American owns, directly or indirectly, all of the
outstanding capital stock and equity interests (as shown in Section 4.1(d) of
the American Disclosure Schedule) of such Subsidiaries, free and clear of all
Liens (except as set forth in the American Financial Statements or Section
4.1(d) of the American Disclosure Schedule), and all such stock has been duly
authorized and validly issued and is fully paid and nonassessable. There are no
outstanding Option Securities or Convertible Securities, or agreements or
understandings of any nature whatsoever, relating to the authorized and unissued
or outstanding capital stock of such Subsidiaries (except as set forth in the
American Financial Statements or Section 4.1(d) of the American Disclosure
Schedule.
(e) Each of ATS Mergercorp and American Tower is (i) a wholly-owned
subsidiary of American (in the case of American Tower, as of the date hereof)
and (ii) a corporation which is duly organized, validly existing and in good
standing under the DCL. American owns, directly or indirectly, all of the
outstanding capital stock and equity interests of each of ATS Mergercorp and
American Tower, free and clear of all Liens, subject, in the case of ATS
Mergercorp, to the receipt of Amendment No. 2 to American's Credit Agreements
referred to in Section 4.1(d) of the American Disclosure Schedule, a copy of
which has been delivered to Mergeparty prior to the date hereof, and all such
stock has been duly authorized and validly issued, is fully paid and
nonassessable and is not subject to any preemptive or similar rights. There are
no outstanding Option Securities or Convertible Securities, or agreements or
understandings of any nature whatsoever, relating to the authorized and unissued
outstanding capital stock of such Subsidiaries (except, with respect to American
Tower, pursuant to the following: (i) the Agreement and Plan of Merger, dated as
of December 12, 1997 (the "ATC Merger Agreement"), by and between American Tower
and American Tower Corporation, an unaffiliated Delaware corporation, a copy of
which has been delivered to Mergeparty prior to the date hereof, (ii) the
Agreement and Plan of Merger, dated as of November 21, 1997, by and among
American Tower, American Tower Systems (Delaware), Inc., Gearon & Co., Inc., and
J. Michael Gearon, Jr., a copy of which has been delivered to Mergeparty prior
to the date hereof, (iii) the proposed issue and sale of shares of Tower Common
Stock to certain officers and directors of American Tower (and their affiliates)
for an aggregate consideration of approximately $80,000,000, (iv) employee stock
options outstanding to purchase shares of American Tower Systems (Delaware),
Inc. which will be converted into options to acquire Tower Common Stock, and (v)
as contemplated by Section 6.8(b)). The authorized capital stock of (i) ATS
Mergercorp consists of 3,000 shares of common stock, par value $.01 per share
(the "ATS Mergercorp Common Stock"), and (ii) American Tower consists of
20,000,000 shares of preferred stock, 200,000,000 shares of Tower Class A
Common, 50,000,000 shares of Tower Class B Common, and 10,000,000 shares of
Tower Class C Common, and the terms of the Restated Certificate of Incorporation
of American Tower, a copy of which has been delivered to Mergeparty prior to the
date hereof, relating to each of the shares of Tower Class A Common,
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Tower Class B Common and Tower Class C Common (other than those relating to the
number of authorized shares) are identical to the terms of the Restated
Certificate of Incorporation of American as in effect on the date of the
Original Merger Agreement relating to the shares of American Class A Common,
American Class B Common and American Class C Common, respectively, except for
the following terms: (i) terms which permit dividends and other distributions of
securities of Persons other than American Tower (including Subsidiaries of
American Tower) to be made in the form of different classes of securities of
such Persons, (ii) terms which provide that if a holder of Tower Common Stock
grants a proxy, whether revocable or irrevocable, and whether general or
specific to a particular transaction, the granting of such proxy does not
constitute a transfer for purposes of requiring conversion of Tower Class B
Common to Tower Class A Common, (iii) terms which permit any CEA Holder (as
defined in the Restated Certificate of Incorporation of American Tower) to
convert shares of Tower Class C Common Stock into shares of Tower Class A Common
Stock upon approval of the Board of Directors of American Tower, and (iv) terms
clarifying the fact that holders of Tower Class A Common Stock and Tower Class B
Common Stock vote as a single class on all matters submitted for a stockholder
vote, including, notwithstanding the first sentence of Section 242(b)(2) of the
DCL, any amendment of the Restated Certificate of Incorporation of American
Tower which would increase or decrease the number of authorized shares of any
class of Tower Common Stock. The number of shares of American Tower which are
authorized and outstanding and owned by American is equal to the number of
authorized and outstanding shares of American Common Stock and the number of
shares of American Common Stock issuable upon the exercise of Option Securities
and upon the conversion of Convertible Securities (except with respect to shares
of American Common Stock subject to American Options set forth on Schedule
4.1(e) to this Agreement which are held by Tower Employees who have stated that
they will enter into definitive agreements to have such American Options assumed
by American Tower and converted into options to acquire Tower Common Stock in
accordance with Section 6.8(b)).
4.2 Financial and Other Information. American has heretofore furnished
to Mergeparty copies of the audited consolidated financial statements of
American and its Subsidiaries set forth in its Annual Report on Form 10-K (the
"American 10-K") for the fiscal year ended December 31, 1996 and the unaudited
consolidated financial statements of American and its Subsidiaries set forth in
its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1997 and
its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30,
1997 (the "American September 10-Q") (collectively, the "American Financial
Statements"). The American Financial Statements, including in each case the
notes thereto, comply as to form, in all material respects, with applicable
accounting requirements and the published rules and regulations of the
Commission with respect thereto, have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby, except as
otherwise noted therein, and fairly present in all material respects the
financial condition, results of operations and cash flows of American and its
Subsidiaries on the bases therein stated, as of the respective dates thereof,
and for the respective periods covered thereby subject, in the case of unaudited
financial statements, to normal year-end audit adjustments and accruals.
American has filed all required reports and other documents with the Commission
since July 1, 1995 (the "American SEC Documents"). Except as set forth in the
American SEC Documents filed and publicly available prior to the date of the
Original Merger Agreement (the "Filed American SEC Documents"), neither American
nor any of its Subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) which, individually or in
the aggregate, would be reasonably likely to have a Material Adverse Effect on
American. None of the American Disclosure Schedule or the American SEC Documents
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact required to be stated herein or therein or
necessary in order to make the statements contained herein or therein, in light
of the circumstances under which they were made, not misleading.
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4.3 Changes in Condition. Except as set forth in Section 4.3 of the
American Disclosure Schedule, between June 30, 1997 and the date of the Original
Merger Agreement, there has been no Material Adverse Change in American.
4.4 Properties. (a) American and each of its Subsidiaries (other than
the Tower Subsidiaries) has good and marketable title to all material parcels of
real property owned by it and good and merchantable title to all material items
of property and assets, tangible and intangible, (i) reflected in the financial
statements of American as of June 30, 1997, and (ii) acquired after June 30,
1997, except in each case for those sold or otherwise disposed of since June 30,
1997, in each case free and clear of all Liens, except (x) Permitted Liens and
(y) Liens set forth in the American Financial Statements or Section 4.4 of the
American Disclosure Schedule.
(b) All of the assets of American and its Subsidiaries material to the
continued operation of their respective businesses are in good operating
condition, reasonable wear and tear excepted, and usable in the ordinary course
of business, except where the failure to be in such condition or so usable would
not, individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect on American.
4.5 Compliance with Private Authorizations. American and each of its
Subsidiaries (other than the Tower Subsidiaries) has obtained all Private
Authorizations which are necessary for the ownership and operation by American
or its Subsidiaries of the business of American and its Subsidiaries, taken as a
whole, and the conduct of business thereof as now conducted and which, if not
obtained and maintained, would, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect on American. All such Private
Authorizations are, to American's knowledge, in full force and effect, and
neither American nor any of its Subsidiaries (other than the Tower Subsidiaries)
is, to American's knowledge, in breach or violation of, or in default in the
performance, observance or fulfillment of, any such Private Authorization, and,
to American's knowledge, no Event exists or has occurred, which constitutes, or
but for any requirement of the giving of notice or passage of time or both would
constitute, such a breach, violation or default, under any such Private
Authorization, except for such defaults, breaches or violations as would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect on American.
4.6 Compliance with Governmental Authorizations and Applicable Law;
Litigation.
(a) Section 4.6(a) of the American Disclosure Schedule contains a list
of each material Governmental Authorization (including without limitation all
material American FCC Licenses) required under Applicable Laws to own and
operate the business of American and its Subsidiaries (other than the Tower
Subsidiaries), including without limitation each of the American Stations, as
currently operated, all of which are in full force and effect, subject to such
qualifications and exceptions as may be set forth in Section 4.6(a) of the
American Disclosure Schedule. Certain of the Subsidiaries of American (other
than any of the Tower Subsidiaries) are the authorized legal holders of the
American FCC Licenses listed in Section 4.6(a) of the American Disclosure
Schedule, none of which is subject to any restriction or condition which would
limit in any material respect the operations of any of the American Stations as
currently conducted except as noted in Section 4.6(a) of the American Disclosure
Schedule. The American FCC Licenses listed in Section 4.6(a) of the American
Disclosure Schedule are valid and in full force and effect and are not impaired
in any material respect by any act or omission of American or any of its
Subsidiaries, subject to such qualifications and exceptions as may be set forth
in Section 4.6(a) of the American Disclosure Schedule; and the operation of each
of the American Stations is in accordance with such American FCC Licenses in all
material respects, except to the extent so listed in Sections 4.6(a) and (b) of
the American Disclosure Schedule. American is fully qualified to be the
transferor of control of the American FCC Licenses. All material reports, forms
and statements required to be filed by American or any of its Subsidiaries with
the FCC with respect to each of
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the American Stations have been filed and are true, complete and accurate in all
material respects. American or one of its Subsidiaries (other than the Tower
Subsidiaries) has obtained all Governmental Authorizations in addition to the
American FCC Licenses listed in Section 4.6(a) of the American Disclosure
Schedule which are necessary for the ownership or operations or the conduct of
the business of American and its Subsidiaries, taken as a whole (except with
respect to the American Brokered Stations), as now conducted and which, if not
obtained and maintained, would, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect on American and American's performance
with respect thereto, and the operation of the American Brokered Stations is in
accordance with all applicable Governmental Authorizations except where the
failure to be so in accordance would not be reasonably likely to have a Material
Adverse Effect on American. As of the date of the Original Merger Agreement,
except as noted in Section 4.6(a) of the American Disclosure Schedule, no
application, action or proceeding is pending for the renewal or material
modification of any of the American FCC Licenses and, to American's knowledge,
except as noted in Section 4.6(b) of the American Disclosure Schedule, there was
not as of the date of the Original Merger Agreement before the FCC any material
investigation, proceeding, notice of violation, order of forfeiture or complaint
against American or any of its Subsidiaries relating to any of the American
Stations or other FCC licensed facilities that, if adversely decided, would be
reasonably likely to have a Material Adverse Effect on American (and as of the
date of the Original Merger Agreement American did not have knowledge of any
basis that would cause the FCC not to renew any of the American FCC Licenses).
Except as noted in Schedule 4.6(b) of the American Disclosure Schedule, as of
the date of the Original Merger Agreement, there was not then pending and, to
American's knowledge, there was not threatened, any action by or before the FCC
to revoke, suspend, cancel, rescind or modify in any material respect any of the
American FCC Licenses that, if adversely decided, would be reasonably likely to
have a Material Adverse Effect on American (other than proceedings to amend FCC
rules of general applicability to the radio industry).
(b) Except as otherwise specifically set forth in Section 4.6(b) of the
American Disclosure Schedule, since January 1, 1996, American and its
Subsidiaries (other than the Tower Subsidiaries) have conducted its and each of
their respective businesses and owned and operated its and each of their
respective properties in accordance with all Applicable Laws (excluding
Environmental Laws) and Governmental Authorizations, except for such breaches,
violations and defaults as, individually or in the aggregate, have not had and
are not reasonably likely to have a Material Adverse Effect on American. Except
as otherwise specifically described in Section 4.6(b) of the American Disclosure
Schedule and except with respect to Environmental Laws, neither American nor any
of its Subsidiaries is in or is charged in writing by any Authority with, or, to
American's knowledge, is threatened or under investigation by any Authority with
respect to, any breach or violation of, or default in the performance,
observance or fulfillment of, any Applicable Law relating to the ownership and
operation of American's and its Subsidiaries' properties or the conduct of
American's and its Subsidiaries' business which will, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on American.
Except as otherwise specifically described in Section 4.6(b) of the American
Disclosure Schedule and except with respect to Environmental Laws, no Event
exists or has occurred, which constitutes, or but for any requirement of giving
of notice or passage of time or both would constitute, such a breach, violation
or default, under any Governmental Authorization or any Applicable Law, except
for such breaches, violations or defaults as, individually or in the aggregate,
have not had and would not be reasonably likely to have a Material Adverse
Effect on American. With respect to matters, if any, of a nature referred to in
Section 4.6(b) of the American Disclosure Schedule, except as otherwise
specifically described in Section 4.6(b) of the American Disclosure Schedule,
all such information and matters set forth in the American Disclosure Schedule,
if adversely determined against American or one of its Subsidiaries (other than
the Tower Subsidiaries), individually or in the aggregate, would not be
reasonably likely to have a Material Adverse Effect on American.
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(c) Except as disclosed in the Filed American SEC Documents or in
Section 4.6(c) of the American Disclosure Schedule, there are no Legal Actions
pending or, to the knowledge of American, threatened against or affecting
American or any of its Subsidiaries (other than the Tower Subsidiaries)
including any action by or before the FCC to revoke, suspend, cancel, rescind or
modify in any material respect any of the American FCC Licenses, except for
Legal Actions that, individually or in the aggregate, would not be reasonably
likely to have a Material Adverse Effect on American.
4.7 Related Transactions. Except as set forth in Section 4.7 of the
American Disclosure Schedule, as contemplated herein or as disclosed in the
Filed American SEC Documents, no director, officer, Affiliate or "associate" (as
such term is defined in Rule 12b-2 under the Exchange Act) of American or any of
its Subsidiaries is currently a party to any transaction which would be required
to be disclosed under Item 404 of Regulation S-K of the Securities Act.
4.8 Taxes and Tax Matters. Except as provided in Section 4.8 of the
American Disclosure Schedule:
(a) American has filed completely and correctly in all
material respects all Tax Returns which are required by all Applicable
Laws to be filed by it, and has paid, or made adequate provision for
the payment of, all material Taxes which have or may become due and
payable pursuant to said Tax Returns and all other Taxes, governmental
charges and assessments received to date other than those Taxes being
contested in good faith for which adequate provision has been made on
the most recent balance sheet forming part of the American Financial
Statements. The Tax Returns of American have been prepared, in all
material respects, in accordance with all Applicable Laws and generally
accepted principles applicable to taxation consistently applied;
(b) all material Taxes which American is required by law to
withhold and collect have been duly withheld and collected, and have
been paid over, in a timely manner, to the proper Taxing Authorities to
the extent due and payable;
(c) American has not executed any waiver to extend, or
otherwise taken or failed to take any action that would have the effect
of extending, the applicable statute of limitations in respect of any
Tax liabilities of American for the fiscal years prior to and including
the most recent fiscal year;
(d) American is not a "consenting corporation" within the
meaning of Section 341(f) of the Code. American has at all times been
taxable as a Subchapter C corporation under the Code;
(e) American has never been a member of any consolidated group
(other than with American and its Subsidiaries) for Tax purposes.
American is not a party to any tax sharing agreement or arrangement,
other than with its Subsidiaries;
(f) no Liens for Taxes exist with respect to any of the assets
or properties of American, except for statutory Liens for Taxes not yet
due or payable or that are being contested in good faith;
(g) all of the U.S. Federal income Tax Returns filed by or on
behalf of each of American and its Subsidiaries have been examined by
and settled with the Internal Revenue Service, or the statute of
limitations with respect to the relevant Tax liability expired, for all
taxable periods through and including the period ending on the date on
which the Effective Time occurs;
(h) all Taxes due with respect to any completed and settled
audit, examination or deficiency litigation with any Taxing Authority
have been paid in full;
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(i) there is no audit, examination, deficiency, or refund
litigation pending with respect to any Taxes and during the past three
years no Taxing Authority has given written notice of the commencement
of any audit, examination or deficiency litigation, with respect to any
Taxes;
(j) American is not bound by any currently effective private
ruling, closing agreement or similar agreement with any Taxing
Authority relating to a material amount of Taxes;
(k) except with respect to like-kind exchanges pursuant to
Section 1031 of the Code, American shall not be required to include in
a taxable period ending after the Effective Time, any taxable income
attributable to income that economically accrued in a prior taxable
period as a result of Section 481 of the Code, the installment method
of accounting or any comparable provision of state or local Tax law;
(l) (A) no material amount of property of American is "tax
exempt property" within the meaning of Section 168(h) of the Code, (B)
no material amount of assets of American is subject to a lease under
Section 7701(h) of the Code, and (C) American is not a party to any
material lease made pursuant to Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended and in effect prior to the date of
enactment of the Tax Equity and Fiscal Responsibility Act of 1982; and
(m) immediately following the Merger, American will not have
any material amount of income or gain that has been deferred under
Treasury Regulation Section 1.1502-13, or any material excess loss
account in a Subsidiary under Treasury Regulation Section 1.1502-19.
4.9 Employee Retirement Income Security Act of 1974.
(a) American (which for purposes of this Section 4.9 shall include any
ERISA Affiliate) currently sponsors, maintains and contributes only to the Plans
and Benefit Arrangements set forth in Section 4.9(a) of the American Disclosure
Schedule. American has delivered or made available to Mergeparty true, complete
and correct copies of (1) each Plan and Benefit Arrangement (or, in the case of
any unwritten Plans or Benefit Arrangements, reasonable descriptions thereof),
(2) the two most recent annual reports on Form 5500 (including all schedules and
attachments thereto) filed with the Internal Revenue Service with respect to
each Plan (if any such report was required by Applicable Law), (3) the most
recent summary plan description (or similar document) for each Plan for which
such a summary plan description is required by Applicable Law or was otherwise
provided to plan participants or beneficiaries and (4) each trust agreement and
insurance or annuity contract or other funding or financing arrangement relating
to any Plan. To the knowledge of American, each such Form 5500 and each such
summary plan description (or similar document) does not, as of the date hereof,
contain any material misstatements. Except as set forth in Section 4.9(a) of the
American Disclosure Schedule, as to all Plans and Benefit Arrangements listed in
Section 4.9(a) of the American Disclosure Schedule:
(i) all such Plans and Benefit Arrangements comply and have
been administered in form and in operation in accordance with their
respective terms, and with all Applicable Laws, in all material
respects, and American has not received any notice from any Authority
disputing or investigating such compliance;
(ii) all such Plans maintained by American that are intended
to comply with Sections 401 and 501 of the Code comply in all material
respects with all applicable requirements of such sections, and no
Event has occurred which is known to American which will give rise to
disqualification of any such Plan under such sections or to a tax under
Section 511 of the Code and each such Plan has been
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the subject of a determination letter from the Internal Revenue Service
to the effect that such Plan and related trust is qualified and exempt
from Federal income Taxes under Sections 401(a) and 501(a),
respectively, of the Code; no such determination letter has been
revoked, and, to the knowledge of American, revocation has not been
threatened. American has delivered or made available to Mergeparty a
copy of the most recent determination letter received with respect to
each Plan for which such a letter has been issued, as well as a copy of
any pending application for a determination letter. American has also
provided or made available to Mergeparty a list of all Plan amendments
as to which a favorable determination letter has not yet been received;
(iii) none of the assets of any such Plan are invested in
employer securities or employer real property;
(iv) there are no Claims (other than routine Claims for
benefits or actions seeking qualified domestic relations orders)
pending or, to American's knowledge, threatened involving such Plans or
the assets of such Plans, and, to American's knowledge, no facts exist
which are reasonably likely to give rise to any such Claims (other than
routine Claims for benefits or actions seeking qualified domestic
relations orders);
(v) no such Plan is subject to Title IV of ERISA, and American
has no actual or potential liability thereunder;
(vi) all group health Plans of American have been operated in
compliance in all material respects with the group health plan
continuation coverage requirements of COBRA;
(vii) neither American nor, to its knowledge, any of its
directors, officers, employees or any other fiduciary has committed any
breach of fiduciary responsibility imposed by ERISA or any similar
Applicable Law that would subject American or any of its respective
directors, officers or employees to liability under ERISA or any
similar Applicable Law;
(viii) American is not and never has been a party to any
Multiemployer Plan or made contributions to any such Plan;
(ix) except as set forth in the American Financial Statements
and pursuant to the provisions of COBRA, American does not maintain any
Plan that provides for post-retirement medical or life insurance
benefits, and American does not have any obligation or liability with
respect to any such Plan previously maintained by it, except as the
provisions of COBRA may apply to any former employees or retirees of
American;
(x) all material contributions to, and material payments from,
the Plans and Benefit Arrangements that may have been required to be
made in accordance with the terms of the Plans and Benefit
Arrangements, and any applicable collective bargaining agreement, have
been made. All such contributions to, and payments from, the Plans and
Benefit Arrangements, except those payments to be made from a trust
qualified under Section 401(a) of the Code, for any period ending
before the Closing Date that are not yet, but will be, required to be
made, will be properly accrued and reflected in the Closing Balance
Sheet;
(xi) (1) no "prohibited transaction" (as defined in Section
4975 of the Code or Section 406 of ERISA) has occurred that involves
the assets of any Plan; (2) no prohibited transaction has occurred that
could subject American, any of its employees, or, to the knowledge of
American, a trustee, administrator or other fiduciary of any trust
created under any Plan to the tax or sanctions on
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prohibited transactions imposed by Section 4975 of the Code or Title I
of ERISA; (3) none of American, any of its ERISA Affiliates or, to the
knowledge of American, any trustee, administrator or other fiduciary of
any Plan or any agent of any of the foregoing has engaged in any
transaction or acted in a manner that could, or has failed to act so as
to, subject American or any trustee, administrator or other fiduciary
to any liability for breach of fiduciary duty under ERISA or any other
Applicable Law;
(xii) American has not incurred any material liability to a
Plan (other than for contributions not yet due) which liability has not
been fully paid or accrued for payment as of the date of the Original
Merger Agreement;
(xiii) except as otherwise contemplated by this Agreement, no
current or former employee of American will be entitled to any
additional benefits or any acceleration of the time of payment or
vesting of any benefits under any Plan or Benefit Arrangement as a
result of the transactions contemplated by this Agreement;
(xiv) no compensation payable by American to any of its
employees under any existing Plan, Benefit Arrangement (including by
reason of the transactions contemplated hereby) will be subject to
disallowance under Section 162(m) of the Code;
(xv) any amount that could be received (whether in cash or
property or the vesting of property) as a result of any of the
transactions contemplated by this Agreement by any employee, officer,
director or independent contractor of American who is a "disqualified
individual" (as such term is defined in proposed Treasury Regulation
Section 1.280G-1) under any employment arrangement would not be
characterized as an "excess parachute payment" (as such term is defined
in Section 280G(b)(1) of the Code);
(xvi) no Plan which is an employee stock ownership plan (an
"ESOP") constitutes a leveraged employee stock ownership plan within
the meaning of Section 4975(e)(7) of the Code and there are no
unallocated shares of stock of American currently held under any such
ESOP in a suspense account; and
(xvii) there are no outstanding options (or contractual
obligations to issue options) to acquire American Common Stock or other
American securities other than options held by employees or directors
of American and issued under Benefit Arrangements (the aggregate number
of which are as set forth in Section 4.11 of the American Disclosure
Schedule).
(b) The execution, delivery and performance by American of this
Agreement and the Collateral Documents executed or required to be executed by
American pursuant hereto and thereto will not involve any prohibited transaction
within the meaning of ERISA or Section 4975 of the Code.
4.10 Insurance. All material fire and casualty, general liability,
business interruption, product liability, and sprinkler and water damage
insurance policies maintained by American or any of its Subsidiaries (other than
the Tower Subsidiaries) are with reputable insurance carriers, provide full and
adequate coverage, for American and such Subsidiaries (other than the Tower
Subsidiaries) and their respective properties and assets, and are in character
and amount at least equivalent to that carried by Persons engaged in similar
businesses and subject to the same or similar perils or hazards, except where
the failure to maintain such insurance policies, either individually or in the
aggregate, would not be reasonably likely to have a Material Adverse Effect on
American.
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4.11 Authorized Capital Stock. The authorized and outstanding capital
stock, Option Securities and Convertible Securities of American, as of September
18, 1997, are as set forth in Section 4.11 of the American Disclosure Schedule.
Except as set forth in Section 4.11 of the American Disclosure Schedule, since
September 18, 1997, American has not issued any shares of capital stock of any
class, any Option Securities or any Convertible Securities, except for the issue
of American Common Stock pursuant to the conversion of Convertible Securities or
the exercise of Option Securities outstanding on September 18, 1997 and in each
case in accordance with their present terms or as otherwise described or
contemplated by the Filed American SEC Documents. All of such outstanding
capital stock has been duly authorized and validly issued, is fully paid and
nonassessable and is not subject to any preemptive or similar rights. American
had, prior to the date of the Original Merger Agreement, made available to
Mergeparty a true and correct copy of the Restated Certificate of Incorporation
of American (the "Restated Certificate") as in effect on the date of the
Original Merger Agreement. Except as set forth in Section 4.11 of the American
Disclosure Schedule, there are no bonds, debentures, notes or other indebtedness
of American outstanding having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
stockholders of American may vote. Except as set forth in Section 4.11 of the
American Disclosure Schedule, or, except as set forth in the Restated
Certificate, there are no contractual obligations of American or any of its
Subsidiaries outstanding to repurchase, redeem or otherwise acquire any shares
of capital stock of American or any of its Subsidiaries. Except as otherwise
contemplated by this Agreement or as set forth in Section 4.11 of the American
Disclosure Schedule, there are no contractual obligations of American to vote or
to dispose of any shares of the capital stock of any of its Subsidiaries. No
adjustment in either the conversion price or the amount or nature of the
securities or other property issuable upon conversion of the shares of American
Convertible Preferred Stock is required as a result of (i) the Tower Merger,
other than an adjustment to the effect that, upon conversion, the holders
thereof shall have the right to receive the Tower Merger Consideration upon any
conversion following the Tower Merger Effective Time, as if such conversion had
been effected immediately prior to the Tower Merger Effective Time, and (ii) the
Merger, other than an adjustment to the effect that, upon conversion, the
holders thereof shall have the right to receive the Merger Consideration upon
any conversion following the Effective Time as if such conversion had been
effected immediately prior to the Effective Time. No adjustment in the exercise
price or the number of shares of American Common Stock or the amount or nature
of any other securities or property issuable upon the exercise of the American
Options is required as result of (i) the Tower Merger, other than an adjustment
to the effect that, upon exercise, the holders thereof shall have the right to
receive the Tower Merger Consideration upon any exercise following the Tower
Merger Effective Time, as if such exercise had been effected immediately prior
to the Tower Merger Effective Time and (ii) the Merger, other than an adjustment
to the effect that, upon exercise, the holders thereof shall have the right to
receive the Merger Consideration upon any exercise following the Effective Time
as if such exercise had been effected immediately prior to the Effective Time.
4.12 Employment Arrangements. Except as described in the Filed American
SEC Documents or in Section 4.12 of the American Disclosure Schedule, as of the
date of the Original Merger Agreement (i) none of the employees of American or
any of its Subsidiaries (other than the Tower Subsidiaries) was, or, to
American's knowledge, since November 1, 1993 and while an employee of American
or any of its Subsidiaries had been, represented by any labor union or other
employee collective bargaining organization, or were, as of the date of the
Original Merger Agreement, or, to American's knowledge, since
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November 1, 1993 to such date had been, parties to any labor or other collective
bargaining agreement, (ii) there are, to American's knowledge, no pending labor
strikes, work stoppages, lockouts, slow downs, grievances (including unfair
labor charges), disputes or controversies with any union or any other employee
or collective bargaining organization of such employees, or threats of such
labor strikes, work stoppages, lockouts or slowdowns or any pending demands for
collective bargaining by any union or other such organization, and (iii) neither
American nor any of its Subsidiaries (other than the Tower Subsidiaries) nor any
of its or any of their employees was, as of the date of the Original Merger
Agreement, or, to American's knowledge, since November 1, 1993 to such date had
been, subject to or involved in or, to American's knowledge, threatened with,
any union elections, petitions therefor or other organizational or recruiting
activities. American and its Subsidiaries (other than the Tower Subsidiaries)
have performed all obligations required to be performed under all Employment
Arrangements and none of them is in breach or violation of or in default or
arrears under any of the terms, provisions or conditions thereof, except for
such breaches, violations, defaults and arrears, which either individually or in
the aggregate, have not had and are not reasonably likely to have a Material
Adverse Effect on American.
4.13 Voting Requirements. The affirmative vote of the holders of shares
of American Common Stock, representing a majority of the outstanding voting
power of American Common Stock, voting as a single class, is (i) the only vote
necessary to approve and adopt this Agreement and the transactions contemplated
by this Agreement (other than the Tower Merger Agreement) (the "Required Vote")
and (ii) the only vote necessary to approve and adopt the Tower Merger Agreement
and the transactions contemplated by the Tower Merger Agreement (the "Required
Tower Vote").
4.14 Brokers. No broker, investment banker, financial advisor or other
person, other than Credit Suisse First Boston Corporation ("CSFB"), the fees and
expenses of which will be paid by American, and Merrill Lynch Pierce Fenner &
Smith Incorporated, the fees and expenses of which will be paid by American
Tower (or reimbursed to American by American Tower) following the Effective Time
in accordance with the provisions of Section 9.3(b), is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated or permitted by this Agreement.
American has furnished to Mergeparty true and complete copies of all agreements
under which any such fees or expenses may be payable and all indemnification and
other agreements related to the engagement of the persons to whom such fees may
be payable.
4.15 Information Supplied.
(a) Each of the Proxy Statement and the Tower Proxy Statement will not,
at the date it is first mailed to the holders of American Common Stock and at
the time of the American Stockholders Meeting (in the case of the Proxy
Statement) and the American Stockholders Tower Meeting (in the case of the Tower
Proxy Statement), contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. For purposes of the foregoing, the truth of any
information or the existence of any omissions at the time of the American
Stockholders Meeting and the American Stockholders Tower Meeting shall be
determined with reference to the Proxy Statement and the Tower Proxy Statement,
respectively, as then amended or supplemented. The Proxy Statement and the Tower
Proxy Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder.
Notwithstanding the foregoing, no representation or warranty is made by American
with respect to statements made or incorporated by reference therein based on
information specifically supplied by Mergeparty or Mergeparty Subsidiary for
inclusion or incorporation by reference in the Proxy Statement or the Tower
Proxy Statement.
(b) The Registration Statement to be filed with the Commission by
American Tower pursuant to the provisions of Section 6.6(b) will not (except to
the extent revised or superseded by amendments or supplements contemplated
hereby), at the time such Registration Statement is filed with the Commission,
at the time such Registration Statement is amended or supplemented or at the
time such Registration Statement becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
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4.16 Ordinary Course of Business. Except as may be described in the
Filed American SEC Documents or in Section 4.9(a) or Section 4.16 of the
American Disclosure Schedule, since June 30, 1997 to the date of the Original
Merger Agreement, (i) each of American and its Subsidiaries (other than the
Tower Subsidiaries) has operated its business in the normal, usual and customary
manner in the ordinary and regular course of business, consistent with prior
practice (it being understood and agreed for purposes of this Section 4.16 by
the parties that the acquisition, disposition and exchange of radio stations is
in the ordinary course of business) and (ii) there has not been by American and
its Subsidiaries (other than the Tower Subsidiaries) (a) any declaration,
setting aside or payment of any dividend or other distribution payable in cash,
stock, property or otherwise except for (x) the payment of dividends or the
making of distributions by a direct or indirect wholly-owned Subsidiary of
American and (y) the payment of dividends on shares of American Preferred Stock
in accordance with their terms, (b) any split, combination or reclassification
of any of its capital stock or any issuance or the authorization of any issuance
of any other securities in respect of, in lieu of or in substitution for shares
of its capital stock, (c) (I) any granting to any executive officer or other key
employee of American or any of its Subsidiaries of any increase in compensation,
except for normal increases in the ordinary course of business consistent with
past practice or as required under Benefit Arrangements, (II) any granting to
any such executive officer of any increase in severance or termination pay,
except as was required under any Benefit Arrangement, (III) except in the
ordinary course, any entering into, amendment in any material respect or
termination of any Governmental Authorization, Private Authorization or material
agreement, arrangement, contract, undertaking, understanding or other
obligation, or (IV) any adoption or amendment of any Plan or Benefit Arrangement
(including changing any actuarial or other assumption used to calculate funding
obligations with respect to any Plan, or changing the manner in which
contributions to any Plan are made or the basis on which such contributions are
determined) except as required to comply with changes in Applicable Law, (d)
except insofar as may have been disclosed in the Filed American SEC Documents or
required by a change in GAAP, any change in accounting methods, principles or
practices by American materially affecting its assets, liabilities or business,
(e) any sale, disposition or contract to dispose of any of its properties or
assets having a value in excess of $1,000,000 other than in the ordinary course,
and (f) any damage, destruction or loss, whether or not covered by insurance,
that has had a Material Adverse Effect on American.
4.17 Environmental Matters. Except as set forth in the American SEC
Documents or Section 4.17 of the American Disclosure Schedule, American:
(a) (i) has not been notified in writing that it is
potentially liable and, has not received any written request for
information or other correspondence concerning its potential liability
with respect to any site or facility, under or pursuant to any
Environmental Law, (ii) to the knowledge of American, is not a
potentially "responsible party" under, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the
Resource Conservation and Recovery Act, as amended, or any similar
state Law, and (iii) to the knowledge of American, is not the subject
of or, to the knowledge of American, threatened with any Legal Action
involving a demand for damages or other potential liability, including
any Lien, with respect to violations or breaches of any Environmental
Law;
(b) to the knowledge of American, is in compliance with all
Environmental Laws and has obtained all Environmental Permits required
under Environmental Laws, except for such noncompliances and failures
to obtain Environmental Permits as, individually or in the aggregate,
have not had and would not be reasonably likely to have a Material
Adverse Affect on American;
(c) (i) has not entered into or received any consent decree,
compliance order or administrative order issued pursuant to any
Environmental Law, and (ii) is not a party in interest or
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in default under any judgment, order, writ, injunction or decree of any
Final Order issued pursuant to any Environmental Law; and
(d) to the knowledge of American, there have not been any
releases, spills or disposal activities of or involving Hazardous
Materials, including without limitation from underground storage tanks,
on or from any property owned, operated or leased by American which
releases, spills or disposal activities resulted or could reasonably be
expected to result in investigation and cleanup expenditures which upon
payment of such expenditures would be reasonably likely to have a
Material Adverse Effect on American.
Notwithstanding anything to the contrary contained in this Agreement,
American makes no representation or warranty with respect to its compliance with
Environmental Laws or environmental matters generally, except as specifically
set forth in this Section 4.17.
4.18 Opinion of Financial Advisor. American has received the opinion of
CSFB, dated the date of the Original Merger Agreement, to the effect that, as of
such date, the Merger Consideration (as defined in the Original Merger
Agreement) to be received by the holders of American Common Stock in the Merger
is fair from a financial point of view to the holders of American Common Stock.
4.19 Contracts; Debt Instruments.
(a) Except as set forth in Section 4.20 of the American Disclosure
Schedule, neither American nor any of its Subsidiaries is in violation of or in
default under (nor does there exist any condition which upon the passage of time
or the giving of notice, or both, would cause such a violation of or default
under) any material agreement, arrangement, contract, undertaking, understanding
or other obligation, including the American Preferred Stock ("Contracts"), to
which it is a party or by which it or any of its properties or assets is bound,
except for violations or defaults, that individually or in the aggregate, would
not be reasonably likely to have a Material Adverse Effect on American, and none
of the Contracts prohibits American from incurring an additional $1.00 of
indebtedness.
(b) American has made available to Mergeparty (i) true and correct
copies of all Contracts to which any indebtedness of American or any of its
Subsidiaries (other than the Tower Subsidiaries) in an aggregate principal
amount in excess of $1,000,000 is outstanding or may be incurred and (ii)
accurate information regarding the respective principal amounts currently
outstanding as of the date of the Original Merger Agreement thereunder.
4.20 State Takeover Statutes. Except for Section 203 of the DCL, to
American's knowledge, no other state takeover Law, statute or similar statute or
regulation applies or purports to apply to the Merger, this Agreement or any of
the transactions contemplated by this Agreement.
4.21 Appraisal Rights. No appraisal rights under Section 262 of the DCL
are applicable to the Tower Merger or the Tower Merger Consideration.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF MERGEPARTY
Except as set forth with respect to specifically identified
representations and warranties in the Mergeparty Disclosure Schedule, Mergeparty
represents and warrants to American as follows:
5.1 Organization and Business; Power and Authority; Effect of
Transaction.
(a) Each of Mergeparty and Mergeparty Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of organization and has all requisite power and authority
(corporate and other) to own or hold under lease its properties and to conduct
its business as now conducted and as presently proposed to be conducted. Each of
Mergeparty and Mergeparty Subsidiary is duly qualified and in good standing as a
foreign corporation in each other jurisdiction (as shown on Section 5.1(a) of
the Mergeparty Disclosure Schedule) in which the character of the property owned
or leased by it or the nature of its business or operations requires such
qualification, with full power and authority (corporate and other) to carry on
the business in which it is engaged, except in such jurisdictions where the
failure to be so qualified and in good standing, individually or in the
aggregate, is not reasonably likely to have a Material Adverse Effect on
Mergeparty.
(b) Each of Mergeparty and Mergeparty Subsidiary has all requisite
power and authority (corporate and other) to execute, deliver and perform its
obligations under this Agreement and each Collateral Document executed or
required to be executed by Mergeparty and/or Mergeparty Subsidiary pursuant
hereto or thereto or to consummate the Merger and the other transactions
contemplated hereby and thereby, and the execution, delivery and performance of
this Agreement and each Collateral Document executed or required to be executed
pursuant hereto have been duly authorized by all requisite corporate or other
action on the part of Mergeparty and/or Mergeparty Subsidiary, and no other
corporate proceedings on the part of Mergeparty and/or Mergeparty Subsidiary are
necessary to authorize this Agreement or the transactions contemplated hereby or
to consummate the Merger or the other transactions so contemplated. This
Agreement has been duly executed and delivered by each of Mergeparty and
Mergeparty Subsidiary and constitutes, and each Collateral Document executed or
required to be executed pursuant hereto or to consummate the Merger when
executed and delivered by Mergeparty and/or Mergeparty Subsidiary will
constitute, a valid and binding obligation of Mergeparty and/or Mergeparty
Subsidiary, enforceable in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, moratorium, insolvency and
similar laws affecting the rights and remedies of creditors and obligations of
debtors generally and by general principles of equity.
(c) At the time of execution of this Agreement, Mergeparty and all of
its Affiliates or "associates" (as defined in the Exchange Act) collectively
beneficially own less than 5% of the outstanding shares of American Common
Stock.
(d) The execution, delivery and performance by each of Mergeparty
and/or Mergeparty Subsidiary of this Agreement and any Collateral Document
executed or required to be executed by such party pursuant hereto or thereto, do
not, and the consummation by Mergeparty Subsidiary of the Merger and the other
transactions hereby and thereby and compliance with the terms, conditions and
provisions hereof or thereof by Mergeparty and/or Mergeparty Subsidiary will
not:
(i) (A) conflict with, or result in a breach or violation of,
or constitute a default under, any Organic Document of Mergeparty or
Mergeparty Subsidiary or (B) any Applicable Law applicable to
Mergeparty or Mergeparty Subsidiary, or conflict with, or result in a
breach or violation of, or constitute a default under, or permit the
termination, cancellation or acceleration of any
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obligation or liability in, or but for any requirement of the giving of
notice or passage of time or both would constitute such a conflict
with, breach or violation of, or default under, or permit any such
termination, cancellation or acceleration of, any Contract or Private
Authorization of Mergeparty or Mergeparty Subsidiary, except, in the
case of clause (B), for such conflicts, breaches, violations,
terminations, cancellations or accelerations that would not,
individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect on Mergeparty; or
(ii) result in or permit the creation or imposition of any
Lien upon any property now owned or leased by Mergeparty or Mergeparty
Subsidiary except for such Liens that would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on
Mergeparty or Mergeparty Subsidiary; or
(iii) require any Governmental Authorization or Governmental
Filing except for (A) the FCC Consents, (B) filings under the
Hart-Scott-Rodino Act, (C) the filing with the Commission of such
reports under Section 13(a) or 15(d) of the Exchange Act as may be
required in connection with this Agreement and the transactions
contemplated by this Agreement, (D) the filing of the Certificate of
Merger with the Delaware Secretary of State and appropriate documents
with the relevant authorities of other states in which American is
qualified to do business and (E) such other Governmental Authorizations
and Governmental Filings the failure of which to be made or obtained
would, individually or in the aggregate, not be reasonably likely to
have a Material Adverse Effect on American.
(e) Mergeparty Subsidiary was formed solely for the purpose of engaging
in the transactions contemplated by this Agreement and has not engaged in any
business activities or conducted any operations other than in connection with
the transactions contemplated by this Agreement.
5.2 Compliance with Governmental Authorizations and Applicable Law;
Litigation. Except as disclosed in any report or other document filed by
Mergeparty with the SEC prior to the date of the Original Merger Agreement or in
Section 5.2 of the Mergeparty Disclosure Schedule, there are no Legal Actions
pending or, to the knowledge of Mergeparty, threatened against Mergeparty or any
of its Subsidiaries, except for Legal Actions that, individually or in the
aggregate, would not be reasonably likely to have a Material Adverse Effect on
Mergeparty or prevent or materially burden or materially impair the ability of
Mergeparty to consummate the transactions contemplated by this Agreement. Except
as set forth in Section 5.2 of the Mergeparty Disclosure Schedule, there are not
facts relating to Mergeparty (or any Affiliate thereof) under the FCA that would
disqualify it (or any Affiliate or assignee) from obtaining control of the
American FCC Licenses or that would prevent it (or any Affiliate or assignee)
from consummating the transactions contemplated by this Agreement or, to
Mergeparty's knowledge, materially delay the grant of the FCC Consents. Except
as may be set forth in Section 5.2 of the Mergeparty Disclosure Schedule, it is
not necessary for Mergeparty or any of its Subsidiaries or other Affiliates (or
assigns) to (a) seek or obtain any waiver from the FCC, (b) dispose of any
interest in any media or communications property or interest (including without
limitation any of the American Stations or the American Brokered Stations), (c)
terminate any venture or arrangement, or (d) effectuate any change or
restructuring of ownership (including without limitation the removal or
withdrawal of officers or directors or the conversion or repurchase of equity
securities in Mergeparty or any Affiliate) to obtain, or to avoid any delay in
obtaining, the FCC Consents. Mergeparty is able to certify on an FCC Form 315
that it is financially qualified.
5.3 Mergeparty Financing. On the Closing Date, Mergeparty will have
sufficient funds to consummate the transactions contemplated by this Agreement,
including without limitation the Merger, and to pay all related fees and
expenses.
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ARTICLE 6
COVENANTS
6.1 Access to Information; Confidentiality. American shall afford to
Mergeparty and its accountants, counsel, investment bankers, financial advisors
and other agents and representatives (the "Representatives") full access during
normal business hours throughout the period prior to the Closing Date to all of
its (and its Subsidiaries', other than those of the Tower Subsidiaries)
properties, books, contracts, commitments and records (including without
limitation Tax Returns) and, during such period, shall furnish promptly upon
request (i) a copy of each report, schedule and other document filed or received
by it pursuant to the requirements of any Applicable Law (including without
limitation the FCA) or filed by it or any of its Subsidiaries (other than the
Tower Subsidiaries) with any Authority in connection with the Merger or which
may have a material effect on it or its business, financial condition or results
of operations, and (ii) such other information concerning any of the foregoing
as Mergeparty shall reasonably request; provided, however, that the foregoing
shall not require American to permit any disclosure or to disclose any
information, that in the reasonable judgment of American would result in the
disclosure of any trade secrets of third parties or violate any of its
obligations with respect to confidentiality if American shall have used its best
efforts to obtain the consent of such third party to such inspections or
disclosure. All requests for information shall be directed to an executive
officer of American or such other Persons as may be designated by American. All
information disclosed pursuant to this Section or otherwise shall be governed by
the terms of the Confidentiality Agreement, the terms and provisions of which
are incorporated herein by reference with the same force and effect as though
set forth here in their entirety. No investigation pursuant to this Section or
otherwise shall affect any representation or warranty of American in this
Agreement or any condition to the obligations of Mergeparty hereto.
6.2 Agreement to Cooperate.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties hereto shall use best efforts (x) to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate the Merger and (y) to refrain from
taking, or cause to be taken, any action and to refrain from doing or causing to
be done, any thing which could impede or impair the consummation of the Merger,
including, in all cases, without limitation using its best efforts (i) to
prepare and file with the applicable Authorities as promptly as practicable
after the execution of this Agreement all requisite applications and amendments
thereto, together with related information, data and exhibits, necessary to
request issuance of orders approving the Merger by all such applicable
Authorities, (ii) to obtain all necessary or appropriate waivers, consents and
approvals, (iii) to effect all necessary registrations, filings and submissions,
(iv) to defend any suit, action or proceeding, whether judicial or
administrative, challenging the Merger or any of the transactions contemplated
by the Merger Agreement, including seeking to lift any injunction or other legal
bar to the Merger (and, in such case, to proceed with the Merger as
expeditiously as possible), and (v) to obtain the satisfaction of the conditions
specified in Article 7, including without limitation the securing of all
authorizations, consents, waivers, modifications, order or approvals referred to
in Sections 7.1(b) and 7.1(d) and, without limiting the generality of the
foregoing, and notwithstanding any provision contained in this Agreement to the
contrary, including without limitation the last sentence of Section 6.10,
American shall not, and shall not permit any Tower Subsidiary to, take any
action or enter into any agreement, plan or arrangement to take any action (a
"Prohibited Transaction") which could reasonably be expected to materially delay
the date of the American Stockholders Meeting or the Effective Time (it being
understood that any delay in excess of fifteen (15) business days which would
arise as a result of any such action shall be deemed "material" for purposes
hereof). American hereby agrees to provide Mergeparty with prior written
notification of any proposed action which could reasonably be expected to
constitute a Prohibited Transaction.
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(b) Without limiting the generality of the foregoing, the parties
acknowledge and agree that the transfer of control of the American FCC Licenses
as contemplated by this Agreement is subject to the prior consent and approval
of the FCC. American and Mergeparty acknowledge that they have heretofore filed
with the FCC appropriate applications requesting the FCC's written consent to
the transfer of control of the American FCC Licenses pursuant to this Agreement
and have caused all necessary persons to join in one or more such applications
filed with the FCC (the "Applications"). American and Mergeparty will use their
best efforts to take such steps as may be necessary (i) diligently to prosecute
the Applications and to prepare and file any further Applications or amendments
as may be necessary to obtain the consent for the transfer of control to
Mergeparty of the licenses held by the American Brokered Stations to be acquired
by American and (ii) to obtain the FCC Consents, including action by Mergeparty,
at its sole cost and expense (except as provided elsewhere in this Agreement),
to satisfy or cause to be removed all Divestiture Conditions, if any. The
failure by American or Mergeparty to use its best efforts to timely file or
diligently prosecute its portion of any Application or, in the case of
Mergeparty, the failure to use its best efforts to make any Required Divestiture
or otherwise satisfy or cause to be removed all Divestiture Conditions on or
before the Termination Date, shall be a material breach by American or
Mergeparty, as the case may be, of this Agreement. American agrees that any
delay in prosecuting the Applications or obtaining the FCC Consents resulting
from Mergeparty's good faith negotiations, subject to Applicable Law, with the
FCC, Antitrust Division or FTC with respect to the imposition of a Divestiture
Condition shall not constitute a failure by Mergeparty to use its best efforts
diligently to prosecute the Applications or obtain the FCC Consents and so long
as such negotiations do not interfere with satisfaction of all conditions to
Closing prior to the Termination Date. If reconsideration or judicial review is
sought with respect to any FCC Consent, American and Mergeparty shall (promptly
and with all due efforts) oppose such efforts to obtain reconsideration or
judicial review.
(c) Without limiting the generality of Section 6.2(a), the parties
undertake and agree to file as soon as practicable after the date hereof, and in
any event within sufficient time to be able to consummate the Merger prior to
the Termination Date, a Notification and Report Form under the Hart-Scott-Rodino
Act with the Federal Trade Commission (the "FTC") and the Antitrust Division of
the Department of Justice (the "Antitrust Division"). Each of the parties shall
(i) use its best efforts to comply as expeditiously as possible with all lawful
requests of the FTC or the Antitrust Division for additional information and
documents and (ii) not extend any waiting period under the Hart-Scott-Rodino Act
or enter into any agreement with the FTC or the Antitrust Division not to
consummate the transactions contemplated by this Agreement, except with the
prior written consent of the other party hereto; provided, however, that nothing
shall limit the ability of Mergeparty to extend the 20-day waiting period under
the Hart-Scott-Rodino Act following substantial compliance with any request for
additional information that may be forthcoming, if such extension is reasonably
necessary to allow the continuation of good-faith negotiations intended to
remove any objection to the transaction that the FTC or Antitrust Division may
have asserted, and if such extension will expire not less than 30 days prior to
the Termination Date.
(d) Anything in this Agreement, including without limitation Section
6.2(b), to the contrary notwithstanding, Mergeparty shall obtain the FCC
Consents and clearances under the Hart-Scott-Rodino Act and the grant of any
waivers in connection therewith prior to the Termination Date in accordance with
this Agreement unless the failure to obtain such FCC Consents, clearances and
waivers is primarily the result of one or more Uncontrollable Events. For
purposes of this Agreement, the term "Uncontrollable Events" shall mean (i) acts
or omissions on the part of American or any of its Subsidiaries in conducting
its respective operations other than those relating to the number of American
FCC Licenses or amount of revenues in a particular market, (ii) an unremedied or
unwaived material breach by American of its obligations under this Agreement, or
(iii) any change in or enactment of Applicable Law by Congress and signed by the
President and which (A) has the effect of decreasing the number of radio
licenses which a Person may own nationally or locally or (B) materially and
adversely relates to the concentration of radio licenses which a Person may
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own in a market, and as a result of the change or enactment referred to in
either clause (A) or (B) above, Mergeparty's performance of its obligations
under this Agreement would have a Material Adverse Effect on Mergeparty's radio
and television broadcasting business. Mergeparty shall file with the FCC, within
sufficient time to permit timely grant of the Applications, applications for
consent to assign or transfer, pursuant to trust arrangements satisfying the
FCC's local multiple ownership rules and policies, such radio broadcast stations
as Mergeparty may designate, so that the radio broadcast stations of Mergeparty
and American not designated for such trust arrangements may be held by the
Surviving Corporation in compliance with the FCC's local multiple ownership
rules and policies. Mergeparty shall, to the extent necessary to obtain grant of
the trust applications, thereafter promptly file or cause to be filed any
further applications (including applications to assign radio broadcast stations
to third party purchasers for value) that may be required by the FCC.
Notwithstanding the two preceding sentences, with regard to stations located in
the San Jose market, the obligations of Mergeparty to submit trust or sale
applications shall be excused for such stations to the extent and for the
duration of the period that Mergeparty is unable to identify the stations to be
placed in trust or sold because of the failure of American to notify Mergeparty
of the resolution of the Antitrust Division impediment impacting the American
transactions pending in the San Jose market.
(e) If Mergeparty or any of its Affiliates receives an administrative
or other order or notification relating to any violation or claimed violation of
the rules and regulations of the FCC, or of any other Authority (including
without limitation seeking or relating to a Divestiture Condition), that could
affect Mergeparty's or Mergeparty Subsidiary's ability to consummate the
transactions contemplated hereby, or if Mergeparty or any other Affiliate of
Mergeparty should become aware of any fact relating to the qualifications of
Mergeparty or any of its Affiliates that reasonably could be expected to cause
the FCC to withhold its consent to the assignment of the American FCC Licenses,
Mergeparty shall promptly notify American thereof and American shall do likewise
with Mergeparty and Mergeparty shall use its best efforts, and take such steps
as are necessary, in order to satisfy or remove the Divestiture Conditions to
enable the Closing to occur prior to the Termination Date. Mergeparty covenants
and agrees to keep American fully informed as to all matters concerning all
Required Divestitures and shall promptly notify American in writing of any and
all significant developments relating thereto and American agrees to do likewise
with Mergeparty.
(f) Mergeparty acknowledges and agrees that certain of the American
Stations and American Brokered Stations may file applications for renewal of
license during the time that an application for the FCC Consents is pending
before the FCC. To the extent any such application for renewal may be filed,
Mergeparty agrees to amend the transferee's portion of any application for the
FCC Consents and, as may be required, to amend any license renewal applications
for all of the American Stations or American Brokered Stations, to confirm
Mergeparty's intention to consummate this Agreement during the pendency of such
license renewal application, and to agree to assume the consequences associated
with succeeding to the place of American in such license renewal applications.
The making of this statement shall not be deemed to limit or waive any other
rights that Mergeparty may otherwise have under this Agreement.
(g) The parties shall cooperate with one another in the preparation,
execution and filing of all Tax Returns, questionnaires, applications, or other
documents regarding any real property transfer or gains, sales, use, transfer,
value added, stock transfer and stamp Taxes, any transfer, recording,
registration and other fees, and any similar Taxes which become payable in
connection with the Merger that are required or permitted to be filed on or
before the Closing Date.
(h) Subject to Applicable Laws relating to the exchange of information,
American, on the one hand, and Mergeparty, on the other hand, shall have the
right to review in advance, and to the extent practicable each will consult the
other with respect to, all the information relating to American or Mergeparty,
as the case may be, and any of their respective Subsidiaries, that appear in any
filing made with, or written materials submitted to, any Authority and/or other
Person in connection with the Merger and the other
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transactions contemplated by this Agreement. In exercising the foregoing right,
each of American and Mergeparty shall act reasonably and as promptly as
practicable.
6.3 Public Announcements. Until the Closing, or in the event of
termination of this Agreement, each party shall consult with the other before
issuing any press release or otherwise making any public statements with respect
to this Agreement or the Merger and shall not issue any such press release or
make any such public statement without the prior consent of the other.
Notwithstanding the foregoing, the parties acknowledge and agree that they may,
without each other's prior consent, issue such press releases or make such
public statements as may be required by Applicable Law, in which case, to the
extent practicable, they will consult with the other regarding the nature,
content and form of such press release or public statement.
6.4 Notification of Certain Matters. Each party shall give prompt
notice to the other, of the occurrence or non-occurrence of any Event the
occurrence or non-occurrence of which would be reasonably likely to cause (i)
any representation or warranty made by it contained in this Agreement to be
untrue or inaccurate in any material respect or (ii) any failure made by it to
comply with or satisfy, or be able to comply with or satisfy, in any material
respect, any covenant, condition or agreement to be complied with or satisfied
by it under this Agreement in any material respect, such that, in any such case,
one or more of the conditions of Closing would not be satisfied; provided,
however, that the delivery of any notice pursuant to this Section shall not
limit or otherwise affect the rights and remedies available hereunder to the
party receiving such notice or the obligations of the party delivering such
notice and shall not, in any event, affect the representations, warranties,
covenants and agreements of the parties or the conditions to their respective
obligations under this Agreement.
6.5 Stockholder Approval. American will, as soon as practicable
following the date thereof, establish separate record dates (which will be as
soon as practicable following the date hereof) for, duly call, give notice of,
convene and hold (on separate dates) (i) a meeting (the "American Stockholders
Meeting") of the holders of shares of American Common Stock for the purpose of
obtaining the Required Vote and (ii) a meeting (the "American Stockholders Tower
Meeting") of holders of shares of American Common Stock for the purpose of
obtaining the Required Tower Vote. American will, through its Board of
Directors, recommend to the holders of shares of American Common Stock approval
and adoption of this Agreement and the Tower Merger Agreement, subject, with
respect to approval and adoption of this Agreement, to the fiduciary duties of
the Board of Directors of American under Applicable Law.
6.6 Proxy Statement; Registration Statement.
(a) American shall prepare and file with the Commission as soon as is
reasonably practicable after the date hereof a proxy statement in connection
with the American Stockholders Meeting (the "Proxy Statement") and a proxy
statement in connection with the American Stockholders Tower Meeting (the "Tower
Proxy Statement"), in each case complying with applicable rules and regulations
of the Commission and the DCL.
(b) American shall cause American Tower to prepare and file with the
Commission as soon as is reasonably practicable after the date hereof a
registration statement on Form S-4 (the "Registration Statement") complying with
applicable rules and regulations of the Commission. The Registration Statement
shall cover the registration under the Securities Act of the shares of Tower
Common Stock to be delivered as the Tower Stock Consideration or Tower Merger
Tower Consideration to the holders of shares of American Common Stock at the
Effective Time or the Tower Merger Effective Time, as the case may be.
(c) Mergeparty and American shall, and American shall cause American
Tower to, promptly furnish to the other all information, and take such other
actions, as may reasonably be requested in connection
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with any action taken to comply with the provisions of this Section 6.6. Each of
American and Mergeparty shall, and American shall cause American Tower to,
correct promptly any information provided by it to be used specifically in the
Proxy Statement, the Tower Proxy Statement or the Registration Statement that
shall have become false or misleading in any material respect and shall take all
steps necessary to file with the Commission and have cleared by the Commission
any amendment or supplement to the Proxy Statement, the Tower Proxy Statement or
the Registration Statement so as to correct such Proxy Statement, such Tower
Proxy Statement or such Registration Statement and cause it to be disseminated
to the stockholders of American, to the extent required by Applicable Law.
Without limiting the generality of the foregoing, American shall, and American
shall cause American Tower to, notify Mergeparty promptly of the receipt of the
comments of the Commission and of any request by the Commission for amendments
or supplements to the Proxy Statement, the Tower Proxy Statement or the
Registration Statement, or for additional information, and shall supply
Mergeparty with copies of all correspondence between it or its representatives,
on the one hand, and the Commission or members of its staff, on the other hand,
with respect to the Proxy Statement, the Tower Proxy Statement or the
Registration Statement. Whenever any event occurs which should be described in
an amendment or a supplement to the Proxy Statement, the Tower Proxy Statement
or the Registration Statement, American shall, and American shall cause American
Tower to, upon learning of such event, promptly prepare, file and clear with the
Commission and, if prior to the Effective Time, mail to the holders of shares of
American Common Stock such amendment or supplement; provided, however, that,
prior to such mailing, (i) American shall, and American shall cause American
Tower to, consult with Mergeparty with respect to such amendment or supplement,
(ii) shall afford Mergeparty reasonable opportunity to comment thereon, and
(iii) each such amendment or supplement shall be reasonably satisfactory to
Mergeparty.
6.7 Miscellaneous. Nothing contained in this Agreement shall prohibit
American from (a) taking and disclosing to its stockholders a position
contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or
(b) making any disclosure to American's stockholders if, in the good faith
judgment of the majority of the members of the Board of Directors of American,
after consultation with independent counsel, failure to so disclose would be
inconsistent with Applicable Laws.
6.8 Option Plans.
(a) All unexpired options to purchase American Common Stock that are
outstanding immediately prior to the Effective Time (each, an "American
Option"), except as provided otherwise in this Section 6.8, will be canceled by
American immediately prior to the Effective Time. Each employee or director of
American or any of its Subsidiaries immediately prior to the Effective Time
(each, an "Optionholder") shall receive, with respect to each share of American
Common Stock subject to an unexpired American Option of the Optionholder so
canceled by American, the Merger Consideration, or, if the Tower Merger
Effective Time shall have occurred, the cash that the Optionholder would have
received pursuant to the Merger and shares of American Tower Common Stock that
the Optionholder would have received pursuant to the Tower Merger, in each case
with respect to each share of American Common Stock subject to an unexpired
American Option of the Optionholder had such American Option been exercised
immediately prior to the Tower Merger Effective Time, in all cases reduced by an
amount of cash (and, to the extent necessary, Tower Common Stock) equal to the
exercise price per share of American Common Stock subject to such American
Option. Except as provided in the preceding sentence, no other consideration
will be paid by American to an Optionholder in respect of his or her canceled
American Options. If the Merger is not consummated, the cancellation of the
Optionholder's American Options shall be rescinded and the Optionholder shall
continue to hold such American Options upon their original terms and conditions.
At the election of any Optionholder who is a "disqualified individual" (as such
term is defined in proposed Treasury Regulation Section 1.280G-1), this Section
6.8(a) will be inoperative with respect to such American Options as he or she
may specify to the extent that the acceleration, vesting cancellation and
cash-out of American Options at the Effective Time as provided herein would
constitute an "excess parachute payment" (as such term is defined in Section
280G(b)(1) of the
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Code). Any Optionholder who makes such election shall forfeit the American
Options which are subject to such election and shall receive no consideration
therefor.
(b) With respect to American Options held by Tower Employees,
notwithstanding the foregoing provisions of this Section 6.8 and in lieu
thereof, and subject to the approval of the provisions of this Section 6.8 by
the Board of Directors of American and the Compensation Committee thereof, such
Tower Employees may elect to have their American Options assumed by American
Tower and converted into options to acquire Tower Common Stock as of the earlier
to occur of the Tower Merger Effective Time and the Effective Time, such
conversion to be effectuated in a manner that will preserve the spread in such
American Options between the option exercise price and the fair market value of
American Common Stock at the time of such conversion, and the ratio of the
spread to the exercise price prior to such conversion and, to the extent
applicable, otherwise in conformity with the rules under Section 424(a) of the
Code and the regulations promulgated thereunder. To the extent that Tower
Employees elect to so convert their American Options into options to acquire
Tower Common Stock, American shall contribute (without the payment of any amount
or the issuance of any securities by American Tower) to the capital of American
Tower at the time of such conversion a number of shares of Tower Common Stock
equal to the excess, if any, of (i) the number of shares of Tower Common Stock
owned by American immediately prior to the Tower Merger Effective Time or the
Effective Time, as the case may be, over (ii) the number of shares of Tower
Common Stock required to be delivered (x) to the holders of shares of American
Common Stock, (y) to holders of American Options pursuant to the provisions of
Section 6.8(a), and (z) upon conversion of American Convertible Preferred Stock.
If the Tower Employees set forth on Schedule 4.1(e) do not enter into definitive
agreements prior to the earlier to occur of the Tower Merger Effective Time and
the Effective Time to convert the American Options which are held by such Tower
Employees and set forth on such Schedule into options to acquire Tower Common
Stock in accordance with this Section 6.8(b), American shall, prior to the
earlier to occur of the Tower Merger Effective Time and the Effective Time,
cause American Tower to issue to American in exchange for payment of the par
value thereof a number of shares of Tower Common Stock equal to the aggregate
number of shares of American Common Stock subject to such American Options set
forth on such Schedule. American shall cause American Tower to file with, and
cause to be declared effective prior to the earlier to occur of the Tower Merger
Effective Time or the Effective Time under the Securities Act by, the
Commission, a registration statement on Form S-8 to register the shares of Tower
Common Stock subject to such converted American Options under the Securities
Act.
(c) American will use its best efforts (including best efforts to
obtain any consents of Optionholders, if required) to cause the cancellation of
all of the American Options immediately prior to the Effective Time.
(d) Notwithstanding the foregoing provisions of this Section 6.8, in
the event that any amount payable under Section 6.8(a) to an Optionholder in
respect of his American Options would fail to be deductible by American (or any
successor thereto) solely by reason of ss.162(m) of the Code (after taking into
account all amounts paid or reasonably expected to be payable to the
Optionholder in the same taxable year in which the payments under Section 6.8(a)
are made to the Optionholder and which are not otherwise exempt from Code
ss.162(m) in determining whether any amount payable to the Optionholder will
fail to be deductible thereunder), then, with respect to such portion of the
Optionholder's American Options the cancellation and cash-out of which would be
nondeductible under said ss.162(m) (the "ss.162(m) Options"), such ss.162(m)
Options shall be canceled in accordance with the foregoing provisions of this
Section 6.8, but the payments contemplated in Section 6.8(a) in respect of the
Optionholder's ss.162(m) Options shall be made to the Optionholder on the 110th
day following the Effective Time. American shall use its best efforts to obtain
the written consent of each Optionholder affected by this Section 6.8(e) to the
foregoing provisions hereof.
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(e) All amounts payable hereunder to an Optionholder shall be reduced
by any applicable withholding taxes.
Notwithstanding anything to the contrary in this Agreement, American
shall have the right, in its sole and absolute discretion, to accelerate, on
such terms and conditions as it shall determine, in whole or in part, the
vesting of any or all of the American Options outstanding on the date hereof
(other than the ss.162(m) Options) so that such American Options are exercisable
in full prior to the Effective Time.
6.9 Conduct of Business by Mergeparty Pending the Merger. Except as
otherwise contemplated by this Agreement, or as has been publicly disclosed
prior to the date of the Original Merger Agreement, after the date of the
Original Merger Agreement and prior to the Closing Date or earlier termination
of this Agreement unless American shall otherwise agree in writing, with respect
to Mergeparty's media business, Mergeparty shall, and shall cause its
Subsidiaries, to:
(i) conduct their respective businesses in the ordinary and
usual course of business and consistent with past practice, which
includes the acquisition of other radio broadcasting stations;
(ii) not amend or propose to amend its Organic Documents in
any manner materially adverse to the holders of the American Preferred
Stock;
(iii) use all best efforts to preserve intact their respective
business organizations and goodwill, keep available the services of
their respective present officers and key employees, and preserve the
goodwill and business relationships with customers and others having
business relationships with them and not engage in any action, directly
or indirectly, with the intent to adversely affect the transactions
contemplated by this Agreement; and
(iv) not authorize or enter into any agreement that would
violate any of the foregoing.
6.10 Conduct of Business by American Pending the Merger. Except as set
forth in Section 6.10 of the American Disclosure Schedule or as otherwise
contemplated by this Agreement, including without limitation the transactions
contemplated by the Tower Documentation and Section 6.19 hereof, after the date
of the Original Merger Agreement and prior to the Closing Date or earlier
termination of this Agreement, unless Mergeparty shall otherwise consent in
writing, American shall, and shall cause its Subsidiaries, to:
(i) conduct their respective businesses in the ordinary and
usual course of business and consistent with past practice;
(ii) not (A) amend or propose to amend their respective
Organic Documents, (B) split, combine or reclassify (whether by stock
dividend or otherwise) their outstanding capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu
of, or in substitution for shares of its capital stock, or (C) declare,
set aside or pay any dividend or distribution payable in cash, stock,
property or otherwise, except for (x) the payment of dividends or the
making of distributions by a direct or indirect wholly-owned Subsidiary
of American and (y) the payment of dividends on shares of the American
Preferred Stock in accordance with their terms;
(iii) not issue, sell, pledge or dispose of, or agree to
issue, sell, pledge or dispose of, any shares of its capital stock,
Convertible Securities or Option Securities, except that American may
issue shares of American Common Stock upon conversion of Convertible
Securities and exercise of Option Securities outstanding on the date
hereof and in accordance with their present terms;
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(iv) not (A) incur or become contingently liable with respect
to any indebtedness other than (x) short-term borrowings not to exceed
$25 million in the aggregate outstanding at any one time, (y)
borrowings to finance pending acquisitions of radio stations set forth
in Section 6.10 of the American Disclosure Schedule and, pursuant to
agreements in effect on the date of the Original Merger Agreement and
(z) borrowings not to exceed $120 million to finance a capital
contribution by American to Tower, (B) redeem, purchase, acquire or
offer to purchase or acquire any shares of its capital stock,
Convertible Securities or Option Securities, except pursuant to the
conversion or exercise thereof, as the case may be, or except to the
extent required by the present terms thereof, (C) sell, lease, license,
pledge, dispose of or encumber any properties or assets or sell any
businesses other than pursuant to agreements in effect on the date of
the Original Merger Agreement and set forth in Section 6.10 of the
American Disclosure Schedule or Liens arising in accordance with the
provisions of indebtedness in effect on the date of the Original Merger
Agreement and in accordance with their present terms, or (D) make any
loans, advances or capital contributions to, or investments in, any
other Person, other than to any direct or indirect wholly owned
Subsidiary of American (other than the Tower Subsidiaries) and, except
as provided in clause (z) above, or to officers and employees of
American or any of its Subsidiaries for travel, business or relocation
expenses in the ordinary course of business;
(v) use all reasonable efforts to preserve intact their
respective business organizations and goodwill, keep available the
services of their respective present officers and key employees, and
preserve the goodwill and business relationships with customers and
others having business relationships with them and not engage in any
action, directly or indirectly, with the intent to adversely impact the
transactions contemplated by this Agreement;
(vi) confer on a regular and frequent basis with one or more
representatives of Mergeparty to report material operational matters
and the general status of ongoing operations;
(vii) not adopt, enter into, amend or terminate any
employment, severance, special pay arrangement with respect to
termination of employment or other similar arrangements or agreements
with any directors, officers or key employees;
(viii) maintain with financially responsible insurance
companies insurance on their respective tangible assets and their
respective businesses in such amounts and against such risks and losses
as are consistent with past practice;
(ix) not make any Tax election that could reasonably be likely
to have a Material Adverse Effect on American or settle or compromise
any material income Tax liability;
(x) except in the ordinary course of business or except as
would not reasonably be likely to have a Material Adverse Effect on
American, not modify, amend or terminate any Material Agreement to
which American or any Subsidiary is a party or waive, release or assign
any material rights or claims thereunder;
(xi) not make any material change to its accounting methods,
principles or practices, except as may be required by GAAP;
(xii) not acquire or agree to acquire (x) by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any Person or other
business organization or division thereof or (y) any assets that,
individually or in the aggregate, are material to American and its
Subsidiaries taken as a whole, in each case, other than pursuant to
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agreements in effect on the date of the Original Merger Agreement and
set forth in the Section 6.10 of the American Disclosure Schedule
(Mergeparty agrees not to unreasonably withhold, delay or condition a
consent to any matters described in this paragraph);
(xiii) except as set forth in Section 4.9(a) or Section 4.16
of the American Disclosure Schedule, (a) not grant to any executive
officer or other key employee of American or any of its Subsidiaries
any increase in compensation, except for normal increases in the
ordinary course of business consistent with past practice or as
required under Benefit Arrangements in effect as of June 30, 1997, (b)
not grant to any such executive officer any increase in severance or
termination pay, except as was required under any Benefit Arrangements
in effect as of June 30, 1997, (c) not adopt or amend any Plan or
Benefit Arrangement (including change any actuarial or other assumption
used to calculate funding obligations with respect to any Plan, or
change the manner in which contributions to any Plan are made or the
basis on which such contributions are determined) and (d) except in the
ordinary course, not enter into, amend in any material respect or
terminate any Governmental Authorization (except as would not be
reasonably likely to have a Material Adverse Effect on American),
material Private Authorization or Contract; and
(xiv) not authorize or enter into any agreement that would
violate any of the foregoing.
Anything in this Section to the contrary notwithstanding, the provisions of this
Section (other than clause (ii) hereof) shall not apply to any of the Tower
Subsidiaries.
6.11 Control of Operations. Nothing contained in this Agreement shall
give to Mergeparty, directly or indirectly, rights to control or direct
American's operations prior to the Effective Time. Prior to the Effective Time,
American shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision of its operations. Nothing contained
in this Agreement shall give to American, directly or indirectly, rights to
control or direct Mergeparty's operations prior to the Effective Time. Prior to
the Effective Time, Mergeparty shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision of its
operations.
6.12 Directors', Officers' and Employees' Indemnification and
Insurance.
(a) The Organic Documents of the Surviving Corporation shall contain
provisions no less favorable with respect to indemnification than are set forth
in the Organic Documents of American, as in effect on the date of the Original
Merger Agreement, which provisions shall not be amended, repealed or otherwise
modified for a period of six (6) years from the Effective Time in any manner
that would affect adversely the rights thereunder of individuals who at any time
prior to the Effective Time were directors, officers or employees of American or
any of its Subsidiaries, unless such modification shall be required by
Applicable Law.
(b) From and after the Effective Time, Mergeparty shall indemnify,
defend and hold harmless the present and former officers, directors and
employees of American or any of its Subsidiaries (collectively, the "Indemnified
Parties") against all losses, expenses, claims, damages, liabilities or amounts
that are paid in settlement of, or otherwise in connection with any claim,
action, suit, proceeding or investigation (as used in this Section, a "claim")
(including, without limitation, in connection with this Agreement, the Merger
and the transactions contemplated hereby), based in whole or in part on the fact
that the Indemnified Party (or the Person controlled by the Indemnified Party)
is or was a director, officer or employee of American or any of its Subsidiaries
and arising out of actions or omissions occurring at or prior to the Effective
Time whether asserted or claimed prior to, at or after the Effective Time, in
each case to the fullest extent permitted under
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the DCL (and shall pay any
expenses, as incurred, in advance of the final disposition of any such action or
proceeding to each Indemnified Party to the fullest extent permitted under the
DCL). Without limiting the foregoing, in the event any such claim is brought
against any of the Indemnified Parties, (i) such Indemnified Parties may retain
counsel (including local counsel) satisfactory to them and which shall be
reasonably satisfactory to Mergeparty and they shall pay all reasonable fees and
expenses of such counsel for such Indemnified Parties; and (ii) Mergeparty shall
use its best efforts to assist in the defense of any such claim; provided,
however, that Mergeparty shall not be liable for any settlement effected without
its written consent, which consent shall not be unreasonably withheld, delayed
or conditioned. Notwithstanding the foregoing, nothing contained in this Section
shall be deemed to grant any right to any Indemnified Party which is not
permitted to be granted to an officer, director or employee of Mergeparty under
the DCL, assuming for such purposes that Mergeparty's Organic Documents provide
for the maximum indemnification permitted by the DCL.
(c) Mergeparty will cause to be maintained for a period of not less
than six (6) years from the Effective Time American's current directors' and
officers' insurance and indemnification policy to the extent that it provides
coverage for events occurring prior to the Effective Time ("D&O Insurance") for
all Persons who are directors and officers of American on the date of this
Agreement, so long as the annual premium therefor would not be in excess of 200%
of the last annual premium therefor paid prior to the date of the Original
Merger Agreement (the "Maximum Premium"); provided, however, that if the annual
premiums of such insurance coverage exceed such amount, Mergeparty shall only be
obligated to obtain the greatest coverage available under such policy for a cost
not exceeding such amount, provided further, however, that Mergeparty may, in
lieu of maintaining such existing D&O Insurance as provided above, cause
coverage to be provided under any policy maintained for the benefit of
Mergeparty or any of its Subsidiaries, so long as the terms thereof are no less
advantageous to the intended beneficiaries thereof than the existing D&O
Insurance. If the existing D&O Insurance expires, is terminated or canceled
during such six-year period, Mergeparty will use its best efforts to cause to be
obtained as much D&O Insurance as can be obtained for the remainder of such
period for an annualized premium not in excess of the Maximum Premium, on terms
and conditions no less advantageous to the covered Persons than the existing D&O
Insurance. American represents to Mergeparty that the Maximum Premium is not
greater than $500,000.
(d) In the event Mergeparty or Mergeparty Subsidiary or any of their
respective successors or assigns (i) consolidates with or merges into any other
person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, then and in each such case, proper
provisions shall be made so that the successors and assigns of Mergeparty or
Mergeparty Subsidiary, as the case may be, shall assume the obligations set
forth in this Section.
(e) This Section is intended to be for the benefit of, and shall be
enforceable by, the Indemnified Parties, their heirs and personal
representatives and shall be binding on Mergeparty, Mergeparty Subsidiary and
their respective successors and assigns.
6.13 Solicitation of Employees. If this Agreement is terminated,
Mergeparty agrees that neither it nor any of its Subsidiaries or other
Affiliates will, for a period of eighteen (18) months from the date of such
termination, solicit or actively seek to hire any key employees (including
without limitation any station manager, sales manager, program director or any
individual senior to any of such individuals) who during such period is employed
by American or any of its Subsidiaries, whether or not such individual would
commit breach of such individual's employment agreement or contract in leaving
such employment; provided, however, that the foregoing shall not prevent
Mergeparty from taking any action permitted by the Confidentiality Agreement.
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6.14 Change of Name. Within ten (10) days after the Closing, Mergeparty
shall cause each of its Subsidiaries, if necessary, to file certificates of
amendment with the appropriate Secretary of State, amending such company's
Organic Documents to change the name of such company to any name which does not
include the words "American Radio". Immediately prior to the Closing, American
will assign to American Tower or its designee all right, title and interest,
including all the goodwill related thereto, in and for past infringements of the
name "American Radio" and related trademarks, service marks, logos and the like.
As soon as commercially practicable, but in no event later than six (6) months
from the Closing Date, Mergeparty Subsidiary and its Subsidiaries shall cease
all use of the name "American Radio" in all modes.
6.15 Benefit Plans. Mergeparty shall take such action as may be
necessary so that on and after the Effective Time and for one (1) year
thereafter, officers and employees of American and its Subsidiaries (other than
Tower Employees) shall be provided employee benefits, plans and programs
(excluding equity incentive arrangements) which are no less favorable in the
aggregate than those generally available pursuant to those employee benefit
plans and programs in effect for such officers and employees immediately prior
to the Effective Time; it being understood that Mergeparty shall determine the
types and levels of specific benefits to be so provided. For purposes of
eligibility to participate and vesting in all benefits provided to officers and
employees of American and its Subsidiaries (other than Tower Employees), such
officers and employees of American and its Subsidiaries will be credited with
their years of service with American and its Subsidiaries and prior employers to
the extent service with American and its Subsidiaries and prior employers is
taken into account under the applicable plans of American and its Subsidiaries
as in effect as of the date of the Original Merger Agreement. Upon termination
of any health plan of American or any of its Subsidiaries, individuals who were
officers or employees of American or its Subsidiaries at the Effective Time
(other than Tower Employees) shall if employed by Mergeparty or its Subsidiaries
become eligible to participate in such health plans as may be established or
maintained by Mergeparty or its Subsidiaries to the extent that such individuals
were eligible to participate in the applicable health plan of American or its
Subsidiaries immediately prior to the Effective Time. Amounts paid during the
calendar year in which the Effective Time occurs, but before the Effective Time,
by officers and employees of American and its Subsidiaries (other than Tower
Employees) under any health plans of American shall after the Effective Time be
taken into account in applying deductible and out-of-pocket limits applicable
under the health plans of Mergeparty or its Subsidiaries provided during such
calendar year to the same extent as if such amounts had been paid under such
health plans of Mergeparty or its Subsidiaries and Mergeparty shall cause to be
waived under its health plans any pre-existing conditions as of the date of
termination of the American health plan and eligibility to participate in such
health plan to the extent such conditions would be waived under the applicable
plans of American and its Subsidiaries as in effect on the date of the Original
Merger Agreement. Nothing in this Agreement shall be construed as granting to
any employee of American or its Subsidiaries any rights of continuing
employment.
6.16 American Cumulative Preferred Stock. To the extent permitted under
Contracts, pursuant to which any indebtedness for money borrowed of American or
any of its Subsidiaries is outstanding as of the date of the Original Merger
Agreement, and by the American Preferred Stock, American shall pay all dividends
in respect of the American Cumulative Preferred Stock in cash.
6.17 American Tower Transaction. As soon as practicable following the
execution of the Original Merger Agreement and in any event prior to the
consummation of the Merger, American shall prepare, in consultation with
Mergeparty and its counsel, the definitive documentation to be executed by
American and American Tower to effect the delivery of the shares of Tower Common
Stock as part of the Tower Merger Consideration or the Merger Consideration, as
the case may be (the "Tower Separation"), and submit such documentation to
Mergeparty for its approval, which approval shall not be unreasonably withheld,
delayed
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or conditioned (as approved, the "Tower Documentation"), and American and
American Tower shall execute and deliver the Tower Documentation in the form so
approved. Mergeparty and American agree that the Tower Documentation shall
include or be prepared on a basis consistent with the following:
(a) American Tower shall indemnify, defend and hold
Mergeparty, American and Subsidiaries of American (other than the Tower
Subsidiaries, collectively in this Section the "American Tower Group")
harmless from and against any liabilities to which American or any of
its Subsidiaries (other than the American Tower Group or, in the case
of clauses (B) and (C) below of this paragraph (a), any of their
officers or directors) may be or become subject that relate to or arise
from the assets, business, operations, debts or liabilities of ATS
Mergercorp or the American Tower Group (other than, in the case of the
American Tower Group, income tax liabilities), including without
limitation (i) the assets to be transferred to American Tower pursuant
to Section 6.17(f), (ii) liabilities (A) in connection with the
distribution of the shares of Tower Common Stock as part of the Tower
Merger Consideration or the Merger Consideration, as the case may be,
(B) relating to or arising from any agreement, arrangement or
understanding (other than the Tower Documentation) entered into by
American, ATS Mergercorp or any member of the American Tower Group (x)
for the benefit of any member of the American Tower Group, (y) in
contemplation of the Tower Separation, or (z) with respect to the sale,
assignment, transfer or other disposition of shares of American Tower
Common Stock, (C) relating to or arising from any untrue statement or
alleged untrue statements of a material fact contained in the Proxy
Statement, the Tower Proxy Statement, the Registration Statement or in
any document filed or required to be filed in connection with the
Merger, or in any document filed or required to be filed by American,
ATS Mergercorp or any member of the American Tower Group in connection
with the preceding clause (B) or any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, except with respect to
information provided by or relating solely to American (excluding ATS
Mergercorp and the American Tower Group) which is contained in or
expressly consistent with the Filed American SEC Documents or the
American September 10-Q, (iii) any economic impact related to or
arising from the failure to obtain any Governmental Authorizations,
Private Authorizations or other third party consents, or to make any
Governmental Filings, necessary to consummate the Tower Separation, and
(iv) the rental and related expenses for the relevant portion of the
leased premises located at 116 Huntington Avenue, Boston, Massachusetts
in the event of the failure to obtain the landlord's consent to the
assignment of the obligations relating to, or sublease of, such
relevant portion of such premises.
(b) American shall indemnify, defend and hold the American
Tower Group harmless from and against any liabilities (other than
income tax liabilities) to which the American Tower Group may be or
become subject that relate to or arise from the assets, business,
operations, debts or liabilities of American or its Subsidiaries (other
than the American Tower Group) whether arising prior to, concurrent
with or after the Merger.
(c) The Tower Documentation shall include an agreement that
addresses issues of the allocation of Tax liabilities and
deconsolidation of American and the American Tower Group which shall
contain principles to the following effect:
(i) The tax sharing agreement among members of the
American Tower Group and American and its other Subsidiaries
shall be terminated as of the earlier of (x) the effective
date of the Merger, and (y) the date (the "Tower
Deconsolidation Date") that the American Tower Group is no
long eligible to be included in the consolidated tax returns
of American and its other Subsidiaries under Sections 1501 to
1504 of the Code (the "Tower
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Deconsolidation") and will have no further effect for any
taxable year (whether the current year, a future year, or a
past year).
(ii) American shall include the income of the
American Tower Group (including any deferred income triggered
into income by Reg. ss.1.1502-13 and Reg. ss.1.1502-14 and any
excess loss accounts taken into income under Reg.
ss.1.1502-19) on American's consolidated federal income Tax
returns and consolidated or combined state and local income
Tax returns to the extent such income is properly includible
thereon for all periods through the Tower Deconsolidation
Date, and pay any income Taxes attributable to such income.
American Tower shall reimburse American for any such federal,
state and local income Taxes payable by the American Tax Group
attributable to such income, as determined on a separate
company basis; provided, however, that American Tower shall
have no reimbursement obligation if American has no income Tax
liability on a consolidated basis as a result of a net
operating loss or to the extent that the income of the
American Tower Group is offset by a net operating loss under
the principles of clause 6.17(c)(v). The American Tower Group
will furnish Tax information to American for inclusion in
American's federal consolidated income Tax return for the
period through the Tower Deconsolidation Date in accordance
with American Tower's past custom and practice. The income of
the American Tower Group will be apportioned to the period up
to and including the Tower Deconsolidation Date and the period
after the Tower Deconsolidation Date by closing the books of
the American Tower Group as of the end of such date.
(iii) American Tower shall indemnify the American Tax
Group and Mergeparty for all Taxes imposed by any Taxing
Authority on any member of the American Tax Group or on
Mergeparty (or on any member of its consolidated tax group) as
a result of or in connection with the sale or transfer of
assets to the American Tower Group pursuant to Section 6.17(g)
(or between members of the American Tax Group prior to the
final transfer to a member of the American Tower Group or
between members of the American Tower Group), the Merger, the
Tower Merger, the Tower Separation, any other disposition or
issuance of stock of American Tower contemplated or permitted
hereby, or the merger of American Tower with any other Person,
as the case may be, including without limitation any Taxes on
any gain to any member of the American Tax Group arising under
Section 311 of the Code, any Taxes on any deferred gain to any
member of the American Tax Group triggered as a result of or
upon any such event, any gain attributable to any excess loss
account triggered upon any such event, any Taxes arising as a
result of the election or other transactions contemplated by
clause 6.17(c)(xii), income or gain arising as a result of
transactions described in Section 3.4(c) or the second
sentence of Section 6.8(a), and gain on the conversion of
American Convertible Preferred Stock into Tower Common Stock
and any transfer Taxes arising from any such event; provided,
however, that such indemnity shall only apply to the extent
that the additional liability for such Taxes payable by the
American Tax Group as a consequence of such events (on a "but
for" basis) exceeds $20,000,000.
(iv) If, as a result of any payment by American Tower
to any member of the American Tax Group or to Mergeparty
pursuant to this Section 6.17(c) (including this clause (iv)),
Mergeparty (or any member of its consolidated group for
Federal income tax purposes) or any member of the American Tax
Group becomes liable in any taxable year to pay any Taxes in
excess of the Taxes they would have owed in the absence of any
such payment by American Tower, American Tower will indemnify
such Person for such Tax liability and make such Person whole
on an after-tax basis for such Tax liability.
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(v) For the purposes of clauses 6.17(c)(ii) and
(iii), net operating losses of the American Tax Group shall be
reduced and deemed absorbed in the following order for each
taxable year of the American Tax Group: first, by all income
unrelated to the transactions contemplated by this Agreement
of members of the American Tax Group other than members of the
American Tower Group for the entire applicable taxable year of
the American Tax Group; second, by income of the American
Tower Group described in clause 6.17(c)(ii); and third, by
income of the American Tax Group described in Section
6.17(c)(iii). Neither the American Tax Group nor Mergeparty
(or any member of its consolidated group for Federal income
tax purposes) shall have any claim under either Section
6.17(c)(ii) or (iii) for additional Tax liability arising in
subsequent taxable years solely as a result of the absorption
of net operating losses of the American Tax Group in this
manner.
(vi) American shall control any audit or contest
relating to Taxes attributable to the American Tax Group. To
the extent such audit or contest relates to Taxes that
American Tower is obligated to reimburse or indemnify American
under this agreement, American shall (x) regularly consult
with American Tower in connection with such audit or contest;
(y) provide American Tower with periodic reports on the status
of such audit or contest; and (z) not enter into a settlement
agreement relating to such audit or contest that materially
prejudices American Tower without American Tower's consent.
(vii) If pursuant to any Tax audit or contest there
is an adjustment to any Taxes that are reimbursable or
indemnifiable by the American Tower Group to any member of the
American Tax Group under this Agreement, including clauses
6.17(c)(ii), (iii) and (iv), then (x) any additional Taxes
imposed on the American Tax Group as a result of such
adjustment shall be indemnified by the American Tower Group;
and (y) any refund of Taxes paid to the American Tax Group as
a result of such adjustment of amounts previously indemnified
by American Tower shall be promptly paid over to American
Tower (including additional amounts to make American Tower
whole on an after-Tax basis, not exceeding amounts previously
paid by American Tower Group with regard to such Taxes).
(viii) American Tower shall not have the right to any
refund, credit (or other reduction) of Taxes realized by the
American Tax Group resulting from a carry back of a
post-acquisition Tax attribute of any of the American Tower
Group into a Tax Return filed by the American Tax Group.
(ix) American Tower, American and Mergeparty agree to
attempt in good faith to mutually agree on such terms as
promptly as practicable after the date hereof. If American
Tower, American and Mergeparty cannot agree on such terms,
then any disagreement shall be resolved by an arbitrator
jointly selected by American Tower, American and Mergeparty.
The arbitrator shall be a law or accounting firm nationally
recognized in tax matters. The costs of such arbitration shall
be shared equally by American Tower and American. The decision
of the arbitrator shall be binding on all parties.
(x) American shall not elect to retain any net
operating loss carryovers or capital loss carryovers of the
American Tower Group.
(xi) The indemnities of the American Tower Group
described in this Section 6.17(c) shall apply to all
applicable Taxes whenever they shall arise.
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(xii) At the request of any member of the American
Tower Group, American agrees that it shall, and shall cause
its Subsidiaries or other appropriate Affiliates to, make
and/or cooperate with members of the American Tower Group (x)
in making an election under Section 336(e) of the Code with
respect to the Tower Separation, or (y) in effecting
intercompany sales or exchanges of assets designed to achieve
a comparable effect whereby deferred intercompany gains are
recognized immediately prior to the Tower Deconsolidation.
(d) The Tower Documentation shall provide that American shall
obtain all Governmental Authorizations, Private Authorizations or other
third party consents, and make any necessary Governmental Filings,
necessary to consummate the Tower Separation, except where the failure
to obtain such consents, in the aggregate, would not (i) be reasonably
likely to have any adverse effect on American, (ii) materially impair
the ability of American to perform its obligations under this Agreement
or the Tower Documentation, or (iii) materially delay or prevent the
consummation of the Merger. The Tower Documentation shall provide that
the Tower Separation shall be done in compliance with American's
certificate of incorporation and by-laws and in material compliance
with all Applicable Laws.
(e) At the Effective Time, a member of the American Tower
Group shall assume (i) to the extent permitted by the landlord, the
obligations under the lease of 116 Huntington Avenue, Boston,
Massachusetts, with respect to the relevant portion of such leased
premises or, if such permission is not obtained, sublease such relevant
portion, and (ii) all liabilities with respect to which indemnification
is provided under Section 6.17(a). American shall cause all members of
the American Tower Group to be released from all other liabilities;
provided, however, that American Tower agrees to reimburse American for
any expenses incurred in obtaining such release. American and its
Subsidiaries (other than the American Tower Group) shall release the
American Tower Group from all Claims by American or its Subsidiaries
(other than the American Tower Group), and the American Tower Group
shall release American and its other Subsidiaries from all Claims by
the American Tower Group, in each case except for Claims arising from
or attributable to the transactions contemplated by this Agreement or
any Collateral Document or otherwise asserted prior to the Effective
Time.
(f) Except as otherwise provided by Section 6.19, American
shall, or shall cause its Subsidiaries to, as applicable, contribute,
transfer or convey to American Tower the assets described in Section
6.17 of the American Disclosure Schedule, and American Tower shall
assume all of American's and such Subsidiaries' obligations with
respect to such assets to the extent so set forth.
(g) The Tower Documentation shall not include any
representations or warranties by American or American Tower relating to
the business, operations, assets, debts or liabilities of American and
its Subsidiaries (other than the American Tower Group) or the American
Tower Group.
(h) On the Closing Date, the employees of American listed in
Section 6.17 of the American Disclosure Schedule (the "Tower
Employees") shall be offered full-time employment by American Tower or
one of its Subsidiaries. Effective immediately prior to the Effective
Time, American Tower shall assume all obligations arising under any
Plan or Benefit Arrangement between American or any of its Subsidiaries
and the Tower Employees other than the rights, if any, of the Tower
Employees with respect to the American Options (which are being
satisfied by American as provided in Section 6.8) and all existing
rights to indemnification. Such assumption agreement shall provide that
American and its Subsidiaries, effective as of the Effective Time shall
be indemnified by
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American Tower from all obligations arising under such employment
agreements or arrangements (except in respect of any American Option
which is not converted into an option to acquire Tower Common Stock in
accordance with the provisions of Section 6.8(b) and all existing
rights to indemnification). For a period of eighteen (18) months
following the consummation of the Merger, members of the American Tower
Group shall not actively solicit or seek to hire any employees of
American or its Subsidiaries not currently engaged in the Tower
Business, other than the Tower Employees, it being understood and
agreed that such agreement shall not be deemed to prevent members of
the American Tower Group from placing general advertisements in
publications or on the Internet or soliciting any such employee who (i)
initiates employment discussions with a member of the American Tower
Group or (ii) is not employed by American or Mergeparty or any of their
respective Subsidiaries on the date such a member first solicits such
employee.
(i) At the request of American Tower and subject to the
requirements and restrictions imposed on American by any of its
financing documents (as from time to time amended), American shall,
from time to time after the date of the Original Merger Agreement and
prior to the Effective Time, permit American Tower to (i) acquire
(whether by merger, stock or asset acquisition or otherwise) additional
businesses engaged in the business in which American Tower is engaged,
(ii) construct additional communication towers, or (iii) make other
capital improvements on assets owned or leased by American Tower or its
Subsidiaries, and in each such case make additional capital
contributions in American Tower, or make loans to American Tower, of
the funds.
(j) The indemnification and other obligations referred to in
this Section shall survive the consummation of the Merger.
(k) The Tower Documentation shall provide that prior to the
Effective Time, American shall amend (i) its Section 401(k) Plan to
permit a transfer of the assets held thereunder for the benefit of the
Tower Employees to a Section 401(k) Plan to be established by American
Tower and, prior to the Effective Time, such assets will be so
transferred (along with any outstanding qualified domestic relations
orders and loans) and (ii) any other Benefit Plan arrangements with
respect to Tower Employees to reflect the Merger.
(l) The Tower Documentation shall provide that prior to the
Effective Time American shall, to the extent requested by Mergeparty,
cause the American Tower Group to perform its obligations under the
Tower Documentation.
(m) Mergeparty shall, at the written request of American in
its sole and absolute discretion, immediately prior to the Merger, and
subject to the satisfaction of all of the conditions to the
consummation of the transactions contemplated hereby, purchase, at
their then fair market value, shares of a new class of American
preferred stock that constitutes "Junior Securities" (as defined in the
American Cumulative Preferred Stock) in an amount (which shall not in
the aggregate exceed $200,000,000) necessary to enable (i) the Tower
Stock Consideration to be delivered to the holders of shares of
American Common Stock and holders of American Options pursuant to the
Merger, and (ii) Tower Common Stock to be delivered upon conversion of
the American Convertible Preferred Stock, without causing any conflict
with, or breach or violation of, or default under, or creating any
right to accelerate any obligation or liability in, or causing or
creating any of the foregoing after the giving of notice or passage of
time or both with, of, under or in any indebtedness of American or the
American Cumulative Preferred Stock; provided, however, that anything
in this Section or elsewhere in this Agreement to the contrary
notwithstanding, in such event such new class of American preferred
stock shall remain outstanding immediately following the Effective
Time.
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(n) The Tower Documentation shall provide that American shall
cause American Tower to file with, and cause to be declared effective
under the Securities Act prior to the Effective Time by, the Commission
a registration statement to permit the delivery of shares of Tower
Common Stock by American upon conversion of American Convertible
Preferred Stock following the Effective Time under the Securities Act.
Such Tower Documentation shall further provide that American Tower
shall maintain, on customary terms, the effectiveness of such
registration statement under the Securities Act until such time as
American Tower shall deliver to American an opinion of legal counsel
reasonably satisfactory to American and Mergeparty that such
registration statement is no longer required to permit such delivery in
accordance with the Securities Act.
6.18 Purchase Price Adjustment. (a) Within 90 days after the Closing
Date, Mergeparty shall prepare and deliver to American Tower (i) a consolidated
balance sheet (the "Closing Balance Sheet") of American and its Subsidiaries
(other than the Tower Subsidiaries) (the "Post-Closing American Group"),
prepared from the books and records of the Post-Closing American Group, and (ii)
a statement (the "Closing Statement") setting forth (A) Working Capital (as
defined below) as of the Effective Time ("Closing Working Capital") and (B) Net
Debt (as defined below) as of the Effective Time ("Closing Net Debt"), together
with a certificate of Mergeparty's chief financial officer that the Closing
Statement has been prepared in accordance with this Section 6.18.
During the 45-day period following American Tower's receipt of the
Closing Statement, American Tower shall be permitted to review (and make copies
of) the working papers of Mergeparty relating to the Closing Statement. The
Closing Statement shall become final and binding upon the parties on the
forty-sixth day following delivery thereof, unless American Tower gives written
notice of its disagreement with the Closing Statement ("Notice of Disagreement")
to Mergeparty prior to such date. Any Notice of Disagreement shall (i) specify
in reasonable detail the nature of any disagreement so asserted, (ii) only
include disagreements based on Closing Working Capital or Closing Net Debt (or
the components thereof) not being calculated in accordance with this Section
6.18 and (iii) be accompanied by a certificate of American Tower's chief
financial officer that he or she concurs with each of the positions taken by
American Tower in the Notice of Disagreement. If a Notice of Disagreement is
received by Mergeparty in a timely manner, then the Closing Statement (as
revised in accordance with clause (A) or (B) immediately following) shall become
final and binding on the earlier of (A) the date Mergeparty and American Tower
resolve in writing any differences they have with respect to the matters
specified in the Notice of Disagreement or (B) the date any disputed matters are
finally resolved in writing by the Accounting Firm (as defined below).
During the 30-day period following delivery of a Notice of
Disagreement, Mergeparty and American Tower shall seek in good faith to resolve
in writing any differences which they may have with respect to the matters
specified in the Notice of Disagreement. During such period Mergeparty shall
have access to (and shall be permitted to make copies of) the working papers of
American Tower prepared in connection with the Notice of Disagreement. At the
end of such 30-day period, Mergeparty and American Tower shall submit to an
independent accounting firm (the "Accounting Firm") for review and resolution
any and all matters which remain in dispute and which were properly included in
the Notice of Disagreement and each of Mergeparty and American Tower shall
submit a memorandum setting forth in reasonable detail the basis for its
positions. The Accounting Firm shall be a nationally recognized independent
public accounting firm agreed upon by Mergeparty and American Tower in writing.
Mergeparty and American Tower shall jointly use all reasonable efforts to cause
the Accounting Firm to render a decision within thirty (30) days following
submission or as promptly thereafter as is practicable. Mergeparty and American
Tower agree that judgment may be entered upon the determination of the
Accounting Firm in any court having jurisdiction over the party against which
such determination is to be enforced. The cost of any dispute resolution
(including the fees and expenses of
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the Accounting Firm and reasonable attorney fees and expenses of the parties)
pursuant to this Section 6.18 shall be borne by Mergeparty and American Tower in
inverse proportion as they may prevail on matters resolved by the Accounting
Firm, which proportionate allocations shall also be determined by the Accounting
Firm at the time the determination of the Accounting Firm is rendered on the
merits of the matters submitted.
(b) Subject to Section 6.18(d), if Closing Working Capital is less than
(i) $60,000,000 in the event the Closing Date is on or prior to March 31, 1998
or (ii) $70,000,000 in the event the Closing Date is after March 31, 1998 (the
"WC Amount"), American Tower shall, and if Closing Working Capital is greater
than the WC Amount, Mergeparty shall, owe the other the amount of such
difference. The term "Working Capital" shall mean Current Assets minus
Liabilities (in each case as defined below). The terms "Current Assets" and
"Liabilities" shall mean the current assets and liabilities of the Post-Closing
American Group calculated in accordance with GAAP except that (i) outstanding
principal amount of indebtedness and liquidation preference of preferred stock
shall be excluded, (ii) cash shall be excluded, (iii) accruals for Taxes shall
be included, except that (A) Tax liabilities which American Tower is obligated
to indemnify American and its Subsidiaries (other than the American Tower Group)
pursuant to the provisions of the Tower Documentation, and deferred income Tax
assets and liabilities that exist or arise from differences in basis for Tax and
financial reporting purposes attributable to acquisitions, exchanges and
dispositions or attributable to depreciation and amortization, shall not be
taken into account, (B) Tax benefits arising from the exercise or cancellation
of options between the date of the Original Merger Agreement and the Effective
Time shall not be taken into account, and (C) accruals for Taxes relating to
acquisitions, exchanges or dispositions shall be determined in accordance with
American's past accounting practices, (iv) Current Assets shall be increased by
an amount equal to the sum of (x) the amount derived by multiplying the Cash
Consideration by the number of shares of American Common Stock held in its
treasury as of the Effective Date and (y) the aggregate amount of the spread of
$44.00 over the exercise price of each American Option outstanding on the date
of the Original Merger Agreement terminated or cancelled prior to the Effective
Time or for which the holder has elected to receive an option to acquire Tower
Common Stock in lieu thereof, less the Tax benefit that would have been received
with respect to the exercise of such options, (v) Current Assets shall be (A)
increased (if the number of shares of American Common Stock issuable upon
conversion of the American Convertible Preferred Stock is fewer than 3,750,000
(or if the Tower Merger Effective Time shall have occurred, 3,750,000 multiplied
by the American Conversion Fraction)) by an amount equal to the amount derived
by multiplying the Cash Consideration by the excess of (I) 3,750,000 (or if the
Tower Merger Effective Time shall have occurred, 3,750,000 multiplied by the
American Conversion Fraction) less (II) the number of shares of American Common
Stock issuable upon conversion of the American Convertible Preferred Stock or
(B) decreased (if the number of shares of American Common Stock issuable upon
conversion of the American Convertible Preferred Stock is greater than 3,750,000
(or if the Tower Merger Effective Time shall have occurred, 3,750,000 multiplied
by the American Conversion Fraction) by an amount equal to the amount derived by
multiplying the Cash Contribution by the excess of (I) the number of shares of
American Common Stock issuable upon conversion of the American Convertible
Preferred Stock less (II) 3,750,000 (or if the Tower Merger Effective Time shall
have occurred, 3,750,000 multiplied by the American Conversion Fraction), (vi)
liabilities from the radio broadcasting rights contracts for St. Louis Rams
games shall be limited to $3,300,000 and (vii) amounts owed by American Tower to
American pursuant to Section 9.3(b) shall be excluded from Current Assets, and
liabilities of American, if any, with respect to such amounts shall be excluded
from Liabilities (it being understood that neither American nor Mergeparty shall
be responsible for any such liabilities).
(c) Subject to Section 6.18(d), if Closing Net Debt is greater than the
Debt Amount (as defined below) minus $50,419,000, minus cash received by the
Post-Closing American Group in respect of options exercised between the date of
the Original Merger Agreement and the Effective Time (the "CD Amount"), American
Tower shall, and if Closing Net Debt is less than the CD Amount, Mergeparty
shall, owe the other the amount of such difference. "Debt Amount" shall mean
$1,066,721,000, minus the consideration that was
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expected to be paid (as set forth on Section 6.10(a) of the American Disclosure
Schedule) with respect to all acquisitions set forth in Section 6.10(a) of the
American Disclosure Schedule which were not consummated prior to the Closing
Date, plus the consideration that was expected to be received (as set forth in
Section 6.10(a) of the American Disclosure Schedule) with respect to all
dispositions set forth in Section 6.10(a) of the American Disclosure Schedule
which were not consummated prior to the Closing Date, plus the consideration
paid in connection with acquisitions consummated prior to the Closing Date which
were not listed in Section 6.10(a) of the American Disclosure Schedule, minus
the consideration received in connection with dispositions consummated prior to
the Closing Date which were not listed in Section 6.10(a) of the American
Disclosure Schedule. The term "Net Debt" shall mean outstanding principal amount
of indebtedness (including, without duplication, guarantees of indebtedness)
plus outstanding liquidation preference of all preferred stock (other than the
American Convertible Preferred Stock) minus cash.
(d) Amounts owed pursuant to the first sentence of Section 6.18(b) and
the first sentence of 6.18(c) shall be aggregated or netted, as appropriate (the
resulting amount, the "Adjustment Amount"). In the event that the Adjustment
Amount minus $10,000,000 is greater than $0 (the "Final Adjustment Amount"), the
party that owes the Final Adjustment Amount shall make payment by wire transfer
of immediately available funds of the Final Adjustment Amount together with
interest thereon at a rate of interest equal to the lesser of (i) 10% per annum
and (ii) if American Tower is being charged a rate of interest by a financial
institution, such rate, but in not event lower than the prime rate as reported
in the Wall Street Journal on the date the Closing Statement becomes final and
binding on the parties, calculated on the basis of the actual number of days
elapsed divided by 365, from the date of the Effective Time to the date of
actual payment.
(e) The scope of the disputes to be resolved by the Accounting Firm is
limited to whether the Closing Statement was prepared in compliance with the
requirements of this Section 6.18 and the allocation of the costs of dispute
resolution, and the Accounting Firm is not to make any other determination.
(f) During the period of time from and after the delivery of the
Closing Statement to American Tower through the date the Closing Statement
becomes final and binding on Mergeparty, American and American Tower, Mergeparty
shall cause the Post-Closing American Group to afford to American Tower and any
accountants, counsel or financial advisors retained by American Tower in
connection with the adjustment contemplated by this Section 6.18 reasonable
access (with the right to make copies) during normal business hours to the books
and records of the Post-Closing American Group to the extent relevant to the
adjustment contemplated by this Section 6.18.
(g) Any adjustment pursuant to this Section 6.18 shall be taken into
account in the calculation of Tax liability pursuant to clause 6.17(c)(iii), and
any increase or decrease in the amount of Taxes that are reimbursable or
indemnifiable by the American Tower Group as a result of any such adjustment
shall be treated as an adjustment to Taxes for purposes of clause 6.17(c)(vii)
6.19 Tower Leases. In connection with the Tower Separation, Mergeparty
and American shall agree on the definitive documentation ("Tower Leases") to be
executed by American and American Tower with respect to certain broadcasting
towers set forth in Section 6.17(i) of the American Disclosure Schedules
("Towers"). The markets in which such Towers are located and the annual "market
price" for each antenna are set forth in Exhibit "B." Except as set forth in
Section 6.17(i) of the American Disclosure Schedule, such Towers are now owned
or leased by American and shall become the property of American Tower. Each of
the Tower Leases shall contain standard and customary terms and conditions and
Mergeparty and American specifically agree to the inclusion of the following in
each of the Tower Leases:
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(a) except as provided in clause (b) below with respect to
those Tower Leases set forth in Section 6.19 of the American Disclosure
Schedule, each Tower Lease shall be for a term of twenty (20) years
with four (4) renewal periods of five (5) years each, each such renewal
to be upon the same terms and conditions as the original Tower Lease;
(b) Prior to the Effective time, American shall use its best
efforts to extend the term of each lease set forth in Section 6.19 of
the American Disclosure Schedule ("Land Leases") to a minimum duration
of twenty (20) years, inclusive of renewal periods, if any, and provide
Mergeparty with respect to the Towers subject to the extended Land
Leases, tower leases with the equivalent benefits set forth in clauses
(c), (d) and (e) and for a minimum duration of twenty (20) years
("Extended Tower Leases"). With respect to any such Land Lease that is
not so extended (except with respect to the Land Lease for KUFX(FM),
which present term of approximately eighteen (18) remaining years shall
be deemed to satisfy the foregoing requirement of a minimum duration of
twenty (20) years), American, American Tower and Mergeparty shall
negotiate in good faith to agree upon definitive documentation to
provide Mergeparty with respect to the Towers subject to such Land
Leases, tower leases with the benefits equivalent of such Extended
Tower Leases or mutually agreed to alternative arrangements providing
equivalent value to Mergeparty;
(c) each Tower Lease shall provide that no payments shall be
payable by Mergeparty for a period of three (3) years from the
Effective Time; for the next three (3) years the payments shall be as
follows: one-third (1/3) of the market price as set forth in Exhibit B
corresponding to each FM antenna (or AM/FM antenna) for year four (4);
two-thirds (2/3) for year five (5) and full market price for year six
(6); thereafter, for the balance of the term and any renewals thereof,
the payments shall be the market price, together with an annual
increase every year, beginning for year seven (7), of the lesser of
five percent (5%) or the Consumer Price Index for all Urban Consumers
over the previous year's payments (except with respect to San Jose
(KUFX) and Boston (WNFT) which such payments shall begin at the
Effective Time, with respect to Mergeparty, and will begin on January
1, 1998 as between American and American Tower). Notwithstanding the
foregoing, Mergeparty acknowledges that Tower Lease payments at the
full "market price" indicated on Exhibit B by American to American
tower may commence upon such leases becoming the property of American
Tower and shall continue until the Effective Time;
(d) all expenses for taxes, insurance, maintenance and
utilities in respect of each Tower shall be paid by American Tower; and
(e) American Tower will assume the obligation and
responsibility for complying with all Applicable Law with respect to
the Towers.
6.20 Affiliates of American. American shall use its best efforts to
cause each principal executive officer, each director and each other person who
is an "affiliate" of American for purposes of Rule 145 under the Securities Act
at the times each of this Agreement and the Tower Merger Agreement is submitted
for a vote of the holders of shares of American Common Stock to deliver to
American Tower on or prior to the Effective Time and the Tower Merger Effective
Time, respectively, a written agreement (an "Affiliate Agreement"), reasonably
satisfactory in form, scope and substance to American and Mergeparty, to the
effect that such Person will not offer to sell, assign, transfer or otherwise
dispose of any shares of Tower Common Stock issued in the Merger or the Tower
Merger, as the case may be, except, in each case, pursuant to an effective
registration statement or in compliance with Rule 145, or in a transaction
which, in the opinion of legal counsel reasonably satisfactory to American and
Mergeparty, is exempt from the registration requirements of the Securities Act.
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ARTICLE 7
CLOSING CONDITIONS
7.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to effect the Merger shall, except as
hereinafter provided in this Section, be subject to the satisfaction at or prior
to the Closing Date of the following conditions, any or all of which may be
waived, in whole or in part, to the extent permitted by Applicable Law:
(a) the Required Vote shall have been obtained;
(b) the FCC shall have issued the FCC Order (as defined below)
approving the applications for transfer of control of American's FCC
Licenses in connection with the transactions contemplated herein, and
the FCC Order shall have been obtained without the imposition of
conditions that would have a Material Adverse Effect on Mergeparty's
television and radio broadcasting business; provided that without
triggering Mergeparty's right to approve such conditions or
restrictions, the FCC Order (i) may condition consummation of the
Merger on Mergeparty complying with the numerical limits on local
multiple radio ownership imposed by 47 C.F.R. ss. 73.3555(a) by
affording Mergeparty a period of at least six (6) months following the
Effective Time within which to comply with such rule through the use of
divestiture trusts on terms and conditions required by the FCC,
provided further, however, that to the extent that the FCC authority
for such divestiture trusts provides for a period of less than six (6)
months, (A) American has the right to postpone the Effective Time (and,
to the extent necessary, the Termination Date), so that Mergeparty is
afforded the six (6) month divestiture period, whether before or after
the Effective Time and (B) if American exercises such right,
Mergeparty's right to approve such condition shall not be triggered,
and (ii) may grant Mergeparty temporary, rather than permanent, waivers
of the "one-to-a-market" rule, 47 C.F.R. ss. 73.3555(c), so long as
such temporary waivers shall remain in effect until at least six (6)
months following the effective date of FCC action concluding the
ongoing rulemaking proceeding in MM Docket Nos. 91-221, 87-8 (FCC
94-322) or a successor rulemaking proceeding pending at the time of the
grant of the FCC Order, that considers the "one-to-a-market" rule. The
"FCC Order" shall be an action by the FCC approving the transfer of the
American FCC Licenses with respect to which, except as may be waived in
writing by Mergeparty in its sole discretion, (i) no timely request for
stay, petition for reconsideration or appeal or sua sponte action of
the FCC with comparable effect is pending, or (ii) if any of the
foregoing is pending, in the judgment of Mergeparty it lacks any
substantial merit or is contrary to established FCC precedent, or (iii)
if it were to be so granted, it would not have a Material Adverse
Effect on Mergeparty's television and radio broadcasting business; and
as to which the thirty (30) day time period specified in 47 U.S.C. ss.
405(a) for initiating a petition for reconsideration of the grant of
the FCC Order has expired;
(c) no Authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any Law (whether temporary,
preliminary or permanent) that remains in effect and restrains, enjoins
or otherwise prohibits consummation of the Merger; and
(d) the waiting period applicable to the consummation of the
Merger under the Hart- Scott-Rodino Act shall have expired or been
terminated.
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7.2 Conditions to Obligations of Mergeparty. The obligation of
Mergeparty and Mergeparty Subsidiary to effect the Merger shall be subject to
the satisfaction of the following conditions, any or all of which may be waived,
in whole or in part, to the extent permitted by Applicable Law:
(a) American shall have furnished Mergeparty, with an opinion,
dated the Closing Date of Dow, Lohnes & Albertson, FCC counsel for
American, substantially in the form attached hereto as Exhibit C;
(b) (i) the representations and warranties of American set
forth in this Agreement (other than in Sections 4.1(e), 4.11 and 4.13)
shall be true and correct as of the date of the Original Merger
Agreement and as of the Closing Date as though made on and as of the
Closing Date except (x) to the extent such representations and
warranties expressly speak as of an earlier date (in which case such
representations and warranties shall be true and correct as of such
earlier date) and (y) to the extent that the failure of such
representations and warranties to be true and correct, individually or
in the aggregate, would not have a Material Adverse Effect on American;
provided, however, that for the purpose of this clause (y),
representations and warranties that are qualified as to materiality
(including by reference to "Material Adverse Effect") shall not be
deemed to be so qualified, and (ii) the representations and warranties
of American set forth in Sections 4.1(e), 4.11 and 4.13 of this
Agreement shall be true and correct in all material respects as of the
date of the Original Merger Agreement and as of the Closing Date; and
(c) American shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or
prior to the Closing Date;
(d) between the date of the Original Merger Agreement and the
Closing Date, except as contemplated by this Agreement, and except as
set forth in Section 4.3 of the American Disclosure Schedule, there
shall not have occurred and be continuing any Material Adverse Change
in American.
7.3 Conditions to Obligations of American. The obligation of American
to effect the Merger shall be subject to the satisfaction of the following
conditions, any or all of which may be waived, in whole or in part, to the
extent permitted by Applicable Law:
(a) the representations and warranties of Mergeparty set forth
in this Agreement shall be true and correct as of the date of the
Original Merger Agreement and as of the Closing Date as though made on
and as of the Closing Date except (x) to the extent such
representations and warranties expressly speak as of an earlier date
(in which case such representations and warranties shall be true and
correct as of such earlier date) and (y) to the extent that the failure
of such representations and warranties to be true and correct,
individually or in the aggregate, would not have a Material Adverse
Effect on Mergeparty; provided, however, that for the purpose of this
clause (y), representations and warranties that are qualified as to
materiality (including by reference to "Material Adverse Effect") shall
not be deemed to be so qualified.; and
(b) Mergeparty shall have performed in all material respects
all obligations required to be performed by it under this Agreement at
or prior to the Closing Date.
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ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date, whether before or after receipt by American of the Required
Vote:
(a) by mutual written consent of American, Mergeparty and
Mergeparty Subsidiary;
(b) by either Mergeparty or American if any Authority of
competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any Law that shall have become final and
nonappealable and that restrains, enjoins or otherwise prohibits
consummation of the Merger, unless the party seeking such restraint,
injunction or prohibition or any Affiliate thereof was the terminating
party;
(c) by either Mergeparty or American if the Merger shall not
have been consummated by the Termination Date for any reason; provided,
however, that the right to terminate this Agreement under this Section
8.1(c) shall not be available to any party whose action or failure to
act (or the action or failure to act of any Affiliate) has been a
principal cause of or resulted in the failure of the Merger to occur on
or before such date and such action or failure to act constitutes a
breach of this Agreement;
(d) by either Mergeparty or American if the Required Vote
shall not have been obtained at the American Stockholders Meeting duly
convened therefor or at any adjournment or postponement thereof or by
written consent;
(e) by American in the event (i) American is not in material
breach of this Agreement and none of its representations or warranties
shall have been or become and continue to be untrue in any material
respect, and (ii) Mergeparty is in material breach of this Agreement or
any of its representations or warranties shall have become and continue
to be untrue in any manner that would cause the condition in Section
7.3(a) not to be satisfied, and such a breach or untruth exists and is
not capable of being cured by and will prevent or delay consummation of
the Merger by or beyond the Termination Date; or
(f) by Mergeparty in the event (i) Mergeparty is not in
material breach of this Agreement and none of its representations or
warranties shall have been or become and continue to be untrue in any
material respect, and (ii) American is in material breach of this
Agreement or any of its representations or warranties shall have become
and continue to be untrue in any manner that would cause the condition
in Section 7.2(b) not to be satisfied, and such a breach or untruth
exists and is not capable of being cured by and will prevent or delay
consummation of the Merger by or beyond the Termination Date.
The term "Termination Date" shall mean December 31, 1998, as such date may from
time to time be extended pursuant to the provisions of Section 7.1(b) or by
mutual agreement of the parties.
The right of Mergeparty or American to terminate this Agreement
pursuant to this Section shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of either party, any Person
controlling any such party or any of their respective Representatives, whether
prior to or after the execution of this Agreement.
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8.2 Effect of Termination.
Except as provided in Sections 6.1 (Access to Information;
Confidentiality), 6.3 (Public Announcements), and 9.3 (Fees, Expenses and other
Payments) and this Section, in the event of the termination of this Agreement
pursuant to Section 8.1, or in the event the Merger shall not have become
effective prior to the end of business on the day prior to the Termination Date,
this Agreement shall forthwith become void and have no effect, without any
liability on the part of any party, or any of its respective stockholders,
officers or directors, to the other; provided, however, that such termination
shall not relieve any party from liability for any breach of any of its
warranties, covenants or agreements set forth in this Agreement and, provided,
however that such termination will not terminate the Confidentiality Agreement.
ARTICLE 9
GENERAL PROVISIONS
9.1 Amendment. This Agreement may be amended from time to time by the
parties hereto at any time prior to the Closing Date but only by an instrument
in writing signed by the parties hereto and, after receipt of the Required Vote,
subject, in the case of American, to Applicable Law.
9.2 Waiver. At any time prior to the Closing Date, except to the extent
not permitted by Applicable Law, Mergeparty or American may, either generally or
in a particular instance and either retroactively or prospectively, extend the
time for the performance of any of the obligations or other acts of the other,
subject, however, to the provisions of Section 8.1, waive any inaccuracies in
the representations and warranties of the other contained herein or in any
document delivered pursuant hereto, and waive compliance by the other with any
of the agreements, covenants, conditions or other provision contained herein.
Any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party or parties to be bound thereby.
9.3 Fees, Expenses and Other Payments. (a) Subject to the provisions of
paragraph (b) of this Section 9.3, all costs and expenses incurred in connection
with any filing fees (including without limitation Hart-Scott-Rodino Act filings
and FCC filing fees), transfer Taxes, sales Taxes, document stamps or other
charges levied by any Authority in connection with this Agreement and the Merger
shall be borne equally by Mergeparty and American. Subject as aforesaid, all
other costs and expenses incurred in connection with the negotiation,
preparation, performance and enforcement of this Agreement (including all fees
and expenses of counsel, financial advisors, accountants, and other consultants,
advisors and representatives for all activities of such persons undertaken
pursuant to this Agreement) incurred by the parties hereto, shall be borne
solely and entirely by the party which has incurred such costs and expenses,
except to the extent, if any, otherwise specifically set forth in this
Agreement.
(b) Promptly following the Effective Time, American Tower shall pay to
American in immediately available funds (and make American whole on an after-tax
basis under the principles set forth in Section 6.17(c)(iv)) an amount equal to
the aggregate costs and expenses incurred by American in connection with any
agreement, arrangement or understanding (other than the Tower Documentation)
entered into by American, ATS Mergercorp or any member of the American Tower
Group following the date of the Original Merger Agreement (x) for the benefit of
any member of the American Tower Group, (y) in contemplation of the Tower
Separation or (z) in connection with the sale, assignment, transfer or other
disposition of shares of American Tower Common Stock, including without
limitation such costs and expenses incurred by American to Merrill Lynch Pierce
Fenner & Smith Incorporated and any such costs and expenses
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incurred by American
to CSFB in excess of those set forth in the engagement letter between American
and CSFB provided by American to Mergeparty in accordance with Section 4.14 of
the Original Merger Agreement.
(c) In the event that this Agreement is terminated by any party
pursuant to 8.1(d), American shall promptly, but in no event later than two (2)
days after the date of such termination, pay Mergeparty a fee equal to $35
million in immediately available funds, plus Expenses. "Expenses" shall mean
reasonable and reasonably documented out-of-pocket fees and expenses incurred or
paid by or on behalf of Mergeparty in connection with the Merger or the
consummation of any of the transactions contemplated by this Agreement,
including all fees and expenses of counsel, commercial banks, investment banking
firms, accountants, experts and consultants to Mergeparty in an aggregate amount
not to exceed $5 million.
9.4 Notices. All notices and other communications which by any
provision of this Agreement are required or permitted to be given shall be given
in writing and shall be (a) mailed by first-class or express mail, postage
prepaid, or by recognized courier service, (b) sent by telecopy or other form of
rapid transmission, confirmed by mailing (by first class or express mail,
postage prepaid, or by recognized courier service) written confirmation at
substantially the same time as such rapid transmission, or (c) personally
delivered to the receiving party (which if, other than an individual, shall be
an officer or other responsible party of the receiving party). All such notices
and communications shall be mailed, sent or delivered as follows:
(a) If to Mergeparty:
CBS Corporation
11 Stanwix Street
Pittsburgh, Pennsylvania 15222
Attention: Louis J. Briskman, Esq.
Telecopier No.: (412) 642-5224
with a copy to:
Cravath, Swaine & Moore
825 Eighth Avenue
New York, New York 10019
Attention: Allen Finkelson, Esq.
Telecopier No.: (212) 474-3700
(b) If to American:
American Radio Systems Corporation
116 Huntington Avenue
Boston, Massachusetts 02116
Attention: Steven B. Dodge, President and Chief Executive Officer
Telecopier No.: (617) 375-7575
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with a copy to:
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
Attention: Norman A. Bikales, Esq.
Telecopier No.: (617) 338-2880
or to such other person(s), telex or facsimile number(s) or address(es) as the
party to receive any such communication or notice may have designated by written
notice to the other party.
9.5 Specific Performance; Other Rights and Remedies. Each party
recognizes and agrees that in the event the other party should refuse to perform
any of its obligations under this Agreement or any Collateral Document, the
remedy at law would be inadequate and agrees that for breach of such provisions,
each party shall, in addition to such other remedies as may be available to it
at law or in equity or as provided in Article 8, be entitled to injunctive
relief and to enforce its rights by an action for specific performance to the
extent permitted by Applicable Law. Each party hereby waives any requirement for
security or the posting of any bond or other surety in connection with any
temporary or permanent award of injunctive, mandatory or other equitable relief.
Nothing herein contained shall be construed as prohibiting each party from
pursuing any other remedies available to it under Applicable Law or pursuant to
the provisions of this Agreement for such breach or threatened breach, including
without limitation the recovery of damages, including, to the extent awarded in
any Legal Action, punitive, incidental and consequential damages (including
without limitation damages for diminution in value and loss of anticipated
profits) or any other measure of damages permitted by Applicable Law.
9.6 Survival of Representations, Warranties, Covenants and Agreements.
None of the representations and warranties in this Agreement shall survive the
Merger, and after effectiveness of the Merger neither Mergeparty, American or
their respective officers, directors or shareholders shall have any further
obligation with respect thereto. This Section 9.6 shall not limit any covenant
or agreement of the parties which by its terms contemplates performance after
the Effective Time.
9.7 Severability. If any term or provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative, illegal or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the
conflicting of any provision with any constitution or statute or rule of public
policy or for any other reason, such circumstance shall not have the effect of
rendering the provision or provisions in question invalid, inoperative, illegal
or unenforceable in any other jurisdiction or in any other case or circumstance
or of rendering any other provision or provisions herein contained invalid,
inoperative, illegal or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative, illegal or unenforceable
provision had never been contained herein and such provision reformed so that it
would be valid, operative and enforceable to the maximum extent permitted in
such jurisdiction or in such case. Notwithstanding the foregoing, in the event
of any such determination, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by Applicable Law in an acceptable
manner to the end that the Merger is fulfilled and consummated to the maximum
extent possible.
9.8 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, binding upon
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all of the parties. In pleading or proving any provision of this Agreement, it
shall not be necessary to produce more than one of such counterparts.
9.9 Section Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
9.10 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by, and construed in accordance
with, the Applicable Laws of the United States of America and the laws of the
State of New York applicable to contracts made and performed in such State and,
in any event, without giving effect to any choice or conflict of laws provision
or rule that would cause the application of domestic substantive laws of any
other jurisdiction, except to the extent the corporate laws of the State of
Delaware are applicable. Anything in this Agreement to the contrary
notwithstanding, in the event of any dispute between the parties which results
in a Legal Action, the prevailing party shall be entitled to receive from the
non-prevailing party reimbursement for reasonable legal fees and expenses
incurred by such prevailing party in such Legal Action.
9.11 Further Acts. Each party agrees that at any time, and from time to
time, before and after the consummation of the transactions contemplated by this
Agreement, it will do all such things and execute and deliver all such
Collateral Documents and other assurances, as the other party or its counsel
reasonably deems necessary or desirable in order to carry out the terms and
conditions of this Agreement and the transactions contemplated hereby or to
facilitate the enjoyment of any of the rights created hereby or to be created
hereunder.
9.12 Entire Agreement; No Other Representations or Agreements. This
Agreement (together with the Disclosure Schedules and the Exhibits and the other
Collateral Documents delivered or to be delivered in connection herewith)
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes all prior agreements, arrangements, covenants,
promises, conditions, undertakings, inducements, representations, warranties and
negotiations, expressed or implied, oral or written, between the parties, with
respect to the subject matter hereof. Each of the parties is a sophisticated
legal entity that was advised by experienced counsel and, to the extent it
deemed necessary, other advisors in connection with this Agreement. Each of the
parties hereby acknowledges that (a) neither party has relied or will rely in
respect of this Agreement or the transactions contemplated hereby upon any
document or written or oral information previously furnished to or discovered by
it or its representatives, other than this Agreement (including the Exhibits and
the Disclosure Schedules and the other Collateral Documents) or such of the
foregoing as are delivered at the Closing, (b) there are no covenants or
agreements by or on behalf of either party hereto or any of its respective
Affiliates or representatives other than those expressly set forth in this
Agreement and the Collateral Documents, and (c) the parties' respective rights
and obligations with respect to this Agreement and the events giving rise
thereto will be solely as set forth in this Agreement and the Collateral
Documents. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH PARTY HERETO
AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
AGREEMENT, NEITHER AMERICAN NOR MERGEPARTY MAKES ANY OTHER REPRESENTATIONS OR
WARRANTIES, AND EACH HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES
MADE BY ITSELF OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL
AND LEGAL ADVISORS OR OTHER REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND
DELIVERY OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY,
NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR THE OTHER'S
REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY
ONE OR MORE OF THE FOREGOING.
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9.13 Assignment. This Agreement shall not be assignable by any party
and any such assignment shall be null and void, except that it shall inure to
the benefit of and be binding upon any successor to each party by operation of
Law, including by way of merger, consolidation or sale of all or substantially
all of its assets, and each party may assign its rights and remedies hereunder
to any bank or other financial institution which has loaned funds or otherwise
extended credit to it.
9.14 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party and their permitted successors and
assigns, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, except as otherwise provided in
Articles 2 and 3 and Sections 6.8(d), 6.12 and 9.13.
9.15 Mutual Drafting. This Agreement is the result of the joint efforts
of Mergeparty and American, and each provision hereof has been subject to the
mutual consultation, negotiation and agreement of the parties and there shall be
no construction against either party based on any presumption of that party's
involvement in the drafting thereof.
9.16 Obligations of American and of Mergeparty. Whenever this Agreement
requires a Subsidiary of American to take any action, such requirement shall be
deemed to include an undertaking on the part of American to cause such
Subsidiary to take such action. Whenever this Agreement requires a Subsidiary of
Mergeparty to take any action, such requirement shall be deemed to include an
undertaking on the part of Mergeparty to cause such Subsidiary to take such
action and, after the Effective Time, on the part of the Surviving Corporation
to cause such Subsidiary to take such action.
9.17 Mergeparty Agent for Mergeparty Subsidiary. Anything in this
Agreement to the contrary notwithstanding, Mergeparty Subsidiary hereby grants
Mergeparty an irrevocably power of attorney and hereby irrevocably appoints
Mergeparty its agent for all purposes of this Agreement, including without
limitation for the purpose of executing and delivering extensions of the time
for the performance of any of the obligations or other acts of Mergeparty,
waivers, terminations or amendments, and any action taken by Mergeparty pursuant
to such power of attorney and agency, and any such extension, waiver,
termination or amendment executed and delivered by Mergeparty, shall be binding
upon Mergeparty Subsidiary whether or not it has specifically approved such
action or executed such extension, waiver, termination or amendment.
9.18 Original Merger Agreement. Notwithstanding anything to the
contrary in Section 9.3 of the Original Merger Agreement, this Agreement shall
not amend or restate the Original Merger Agreement, and the Original Merger
Agreement shall continue in full force and effect without any amendment or
modification thereof pursuant to the provisions of this Agreement, until such
time as this Agreement shall have been approved and adopted by the Required
Vote.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, American, Mergeparty and Mergeparty Subsidiary have
caused this Amended and Restated Agreement and Plan of Merger to be executed,
pursuant to the authority and approval of each of their respective Boards of
Directors, as of the date first written above by their respective officers
thereunto duly authorized.
American Radio Systems Corporation
By: /s/ Steven B. Dodge
Name: Steven B. Dodge
Title: Chairman of the Board, President and
Chief Executive Officer
CBS Corporation
By: /s/ Frederic G. Reynolds
Name:
Title:
R Acquisition Corp.
By: /s/ Frederic G. Reynolds
Name:
Title:
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APPENDIX A
DEFINITIONS
Accounting Firm shall have the meaning given to it in Section 6.18.
Adjustment Amount shall have the meaning given to it in Section
6.18(d).
Adverse, Adversely, when used alone or in conjunction with other terms
(including without limitation "Affect," "Change" and "Effect") shall mean any
Event that has adversely affected or is reasonably likely to adversely affect
(a) the validity or enforceability of this Agreement or the likelihood of
consummation of the Merger, (b) the business, properties, financial condition or
results of operations of American and its Subsidiaries, taken as a whole, or the
Mergeparty and its Subsidiaries, taken as a whole, as the case may be, or (c)
American's or Mergeparty's, as the case may be, ability to fulfill its
obligations under the terms of this Agreement. Notwithstanding the foregoing,
and anything in this Agreement to the contrary notwithstanding, any Event
affecting the radio broadcasting industry or the national or any regional or
market economy generally shall not be deemed to constitute an Adverse Change,
have an Adverse Effect or to Adversely Affect within the meaning of any of the
foregoing clauses (a) through (c).
Affiliate, Affiliated shall mean, with respect to any Person, (a) any
other Person at the time directly or indirectly controlling, controlled by or
under direct or indirect common control with such Person, any other Person of
which such Person at the time owns, or has the right to acquire, directly or
indirectly, twenty percent (20%) or more of any class of the capital stock or
beneficial interest, (c) any other Person which at the time owns, or has the
right to acquire, directly or indirectly, twenty percent (20%) or more of any
class of the capital stock or beneficial interest of such Person, (d) any
executive officer or director of such Person, (e) with respect to any
partnership, joint venture or similar Entity, any general partner thereof, and
(f) when used with respect to an individual, shall include any member of such
individual's immediate family or a family trust.
Affiliate Agreement shall have the meaning given to it in Section 6.20.
Agreement shall have the meaning given to it in the third "Whereas"
paragraph and shall include any amendments executed and delivered by the parties
pursuant to the provisions of Section 9.1.
American shall have the meaning given to it in the Preamble.
American Brokered Stations shall mean the radio broadcast stations
which American has the right to acquire, but which as of the date of the
Original Merger Agreement it is operating pursuant to time brokerage, local
marketing or other similar agreements.
American Class A Common shall have the meaning given to it in Section
3.1(d).
American Class B Common shall have the meaning given to it in Section
3.1(d).
American Class C Common shall have the meaning given to it in Section
3.1(d).
American Common Stock shall have the meaning given to it in Section
3.1(d).
American Conversion Fraction shall have the meaning given to it in
Section 3.5.
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American Convertible Preferred Stock shall have the meaning given to it
in Section 2.5.
American Cumulative Preferred Stock shall have the meaning given to it
in Section 2.5.
American Disclosure Schedule shall mean the American Disclosure
Schedule dated as of the date of the Original Merger Agreement delivered by
American to Mergeparty simultaneously with the execution and delivery of the
Original Merger Agreement.
American FCC Licenses means all FCC Licenses issued to American or any
of its Subsidiaries and used in the business or operations of any of the
American Stations, including those listed on Section 4.6(a) of the American
Disclosure Schedule (other than those relating to the American Brokered
Stations, which shall be deemed American FCC Licenses only upon consummation of
the acquisition of the applicable American Brokered Station), and any additions
thereto between the date of the Original Merger Agreement and the Closing Date.
Auxiliary broadcast licenses issued pursuant to 47 C.F.R. Part 74 shall not be
deemed to be material American FCC Licenses.
American Financial Statements shall have the meaning given to it in
Section 4.2.
American Options shall have the meaning given to it in Section 6.8.
American Preferred Stock shall have the meaning given to it in Section
2.5.
American SEC Documents shall have the meaning given to it in Section
4.2.
American September 10-Q shall have the meaning given to it in Section
4.2.
American Stations means the radio broadcast stations owned by American,
or which it has the right to acquire (and acquires prior to the Closing Date but
only from and after such acquisition) as of the date of the Original Merger
Agreement; provided, however, that American Stations shall not include any
American Station disposed of by American subsequent to the date of the Original
Merger Agreement not in violation of the provisions of this Agreement; further,
provided, that American Stations shall include American Brokered Stations if the
context so requires.
American Stock means the American Common Stock and the American
Preferred stock.
American Stockholders Meeting shall have the meaning given to it in
Section 6.5.
American Stockholders Tower Meeting shall have the meaning given to it
in Section 6.5.
American 10-K shall have the meaning given to it in Section 4.2.
American Tax Group shall mean American and those of its Subsidiaries as
are included in the consolidated Federal Income Tax Returns of American.
American Tower shall have the meaning given to it in Section 3.1(d).
American Tower Group shall have the meaning given to it in Section
6.17.
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American's knowledge (including the term "to the knowledge of
American") means the actual knowledge of the Chief Executive Officer or the
Chief Financial Officer of American, and that such Officer shall have reason to
believe and shall believe that the subject representation or warranty is true
and accurate as stated.
Antitrust Division shall have the meaning given to it in Section
6.2(c).
Applicable Law shall mean, with respect to any Person, any Law of any
Authority, whether domestic or foreign, to which such Person is subject or by
which it or any of its business or operations is subject or any of its property
or assets is bound.
Applications shall have the meaning given to it in Section 6.2(b).
Appraised Total Value shall have the meaning given to it in Section
3.4(c).
Arbitrator shall have the meaning given to it in Section 3.4(c).
ATC Merger Agreement shall have the meaning given to it in Section
4.1(e).
ATS Mergercorp shall have the meaning given to it in Section 3.5.
ATS Mergercorp Common Stock shall have the meaning given to it in
Section 4.1(e).
Authority shall mean any governmental or quasi-governmental authority,
whether administrative, executive, judicial, legislative or other, or any
combination thereof, including without limitation any federal, state,
territorial, county, municipal or other government or governmental or
quasi-governmental agency, arbitrator, authority, board, body, branch, bureau,
central bank or comparable agency or Entity, commission, corporation, court,
department, instrumentality, master, mediator, panel, referee, system or other
political unit or subdivision or other Entity of any of the foregoing, whether
domestic or foreign.
Benefit Arrangement shall mean, with respect to any Person, any benefit
arrangement that is not a Plan, including (a) any employment, severance or
consulting agreement, (b) any arrangement providing for insurance coverage or
workers' compensation benefits, (c) any incentive bonus or deferred bonus
arrangement, (d) any arrangement providing termination allowance, severance or
similar benefits, (e) any equity compensation plan, and (f) any deferred
compensation plan which American or any ERISA Affiliate maintains, contributes
to or is required to contribute to for the benefit of any current or former
officers, employees, agents, directors or independent contractors of American or
any of its ERISA Affiliates.
Cash Consideration shall have the meaning given to it in Section
3.1(d).
Certificate of Merger shall have the meaning given to it in Section
2.3.
Certificates shall have the meaning given to it in Section 3.2(b).
CD Amount shall have the meaning given to it in Section 6.18(c).
Claims shall mean any and all debts, liabilities, obligations, losses,
damages, deficiencies, assessments and penalties, together with all Legal
Actions, pending or threatened, claims and judgments of whatever kind
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and nature relating thereto, and all fees, costs, expenses and disbursements
(including without limitation reasonable attorneys' and other legal fees, costs
and expenses) relating to any of the foregoing.
Closing shall have the meaning given to it in Section 2.2.
Closing Balance Sheet shall have the meaning given to it in Section
6.18.
Closing Date shall have the meaning given to it in Section 2.2.
Closing Net Debt shall have the meaning given to it in Section 6.18.
Closing Statement shall have the meaning given to it in Section 6.18.
Closing Working Capital shall have the meaning given to it in Section
6.18.
COBRA shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, as set forth in Section 4980B of the Code and Part 6 of
Subtitle B of Title I of ERISA.
Code shall mean the Internal Revenue Code of 1986, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
Collateral Document shall mean any agreement, certificate, contract,
instrument, notice, opinion or other document delivered pursuant to the
provisions of this Agreement, including without limitation, the Confidentiality
Agreement, the Tower Documentation and the Tower Merger Agreement.
Commission or SEC shall mean the Securities and Exchange Commission and
shall include any successor Authority.
Contracts shall have the meaning given to it in Section 4.19(a).
Confidentiality Agreement shall mean the letter agreement, dated August
21, 1997 between American and Mergeparty.
Control (including the terms "controlled," "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management or
policies of a Person, or the disposition of such Person's assets or properties,
whether through the ownership of stock, equity or other ownership, by contract,
arrangement or understanding, or as trustee or executor, by contract or credit
arrangement or otherwise.
Convertible Securities shall mean any evidences of indebtedness, shares
of capital stock (other than common stock) or other securities directly or
indirectly convertible into or exchangeable for shares of capital stock, whether
or not the right to convert or exchange thereunder is immediately exercisable or
is conditioned upon the passage of time, the occurrence or non-occurrence or
existence or non-existence of some other Event, or both.
Court shall have the meaning given to it in Section 3.4(c).
CSFB shall have the meaning given to it in Section 4.14.
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Current Assets shall have the meaning given to it in Section 6.18(b).
DCL shall have the meaning given to it in Section 2.1.
Debt Amount shall have the meaning given to it in Section 6.18(c).
Determination Deadline shall have the meaning given to it in Section
3.4(c).
Disclosure Schedule shall mean the Mergeparty Disclosure Schedule, if
any, or the American Disclosure Schedule, as the case may be.
Dissenting Shares shall have the meaning given to it in Section 3.4(a).
Divestiture Condition means any condition imposed or required by the
FCC (including conditions required by the FCC's multiple ownership rules or
policies), the Antitrust Division or the FTC as a condition to its consent to or
approval of the transfer of control of any of the American FCC Licenses or
otherwise to the transactions (or any of them) contemplated by this Agreement,
including without limitation the Merger, or as a condition to its agreement not
to institute any Legal Action to prevent the transfer of control of any of the
American FCC Licenses or otherwise to prevent any of the transactions
contemplated hereby, which would require Mergeparty or any of its Subsidiaries
or any of its other Affiliates to dispose of one or more of the American
Stations or American Brokered Stations, or in Mergeparty's sole discretion, one
or more of the radio broadcast stations owned by Mergeparty and operating in the
same Arbitron Survey area as any of the American Stations or American Brokered
Stations; provided, however, that with respect to compliance with any condition
imposed by the FCC, Mergeparty shall have been afforded a period of six months,
from Closing, through the use of trusts or otherwise, within which to comply
with the radio duopoly overlap rule, 47 C.F.R. ss. 73.3555(a), and Mergeparty
shall have been afforded temporary, rather than permanent, waivers of the
one-to-a-market rule, 47 C.F.R. ss. 73.3555(c), so long as such temporary
waivers shall remain in effect until at least 6 months following the effective
date of FCC action concluding the ongoing proceeding in MM Docket Nos. 91-221,
87-8 (FCC 94-322) or a successor rulemaking proceeding pending at the time of
the grant of the FCC Order, that considers the one-to-a-market rule.
D&O Insurance shall have the meaning given to it in Section 6.12(c).
Effective Time shall have the meaning given to it in Section 2.3.
Entity shall mean any corporation, firm, unincorporated organization,
association, partnership, limited liability company, trust (inter vivos or
testamentary), estate of a deceased, insane or incompetent individual, business
trust, joint stock company, joint venture or other organization, entity or
business, whether acting in an individual, fiduciary or other capacity, or any
Authority.
Environmental Law excluding any regulations issued by the FCC shall
mean any Law relating to or otherwise imposing liability or standards of conduct
concerning pollution or protection of the environment, including without
limitation, Laws relating to emissions, discharges, releases or threatened
releases of Hazardous Materials into the environment (including, without
limitation, ambient air, surface water, ground water, mining or reclamation of
mined land, land surface or subsurface strata) or otherwise that relate to the
manufacture, processing, generation, distribution, use, treatment, storage,
disposal, cleanup, transport or handling of pollutants, contaminants, chemicals
or industrial, toxic or hazardous substances, materials or wastes. Environmental
Laws shall include without limitation the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 6901 et seq.), the Hazardous
Material Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et
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seq.), the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.),
the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control
Act (15 U.S.C. Section 2601 et seq.), the Occupational Safety and Health Act (29
U.S.C. Section 651 et seq.), the Federal Insecticide, Fungicide and Rodenticide
Act (7 U.S.C. Section 136 et seq.), and the Surface Mining Control and
Reclamation Act of 1977 (30 U.S.C. Section 1201 et seq.), and any analogous
federal, state, local or foreign Laws, and the rules and regulations promulgated
thereunder, all as from time to time in effect, and any reference to any such
statutory or regulatory provision shall be deemed to be a reference to any
successor statutory or regulatory provision.
Environmental Permit shall mean, with respect to any Person, any
Governmental Authorization required by or pursuant to any Environmental Law.
ERISA shall mean the Employee Retirement Income Security Act of 1974,
and the rules and regulations thereunder, all as from time to time in effect, or
any successor law, rules or regulations, and any reference to any such statutory
or regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
ERISA Affiliate shall mean any Person that is treated as a single
employer with American under Sections 414(b), (c), (m) or (o) of the Code or
Section 4001(b)(1) of ERISA.
ESOP shall have the meaning given to it in Section 4.9(a)(xvi).
Event shall mean the existence or occurrence of any act, action,
activity, circumstance, condition, event, fact, failure to act, omission,
incident or practice, or any set or combination of any of the foregoing.
Exchange Act shall mean the Securities Exchange Act of 1934, and the
rules and regulations thereunder, all as from time to time in effect, or any
successor law, rules or regulations, and any reference to any such statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
Exchange Agent shall have the meaning given to it in Section 3.2(a).
Expenses shall have the meaning given to it in Section 9.3.
Extended Tower Lease shall have the meaning given to it in Section
6.19(b).
FCA shall mean the Communication Act of 1934, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any such statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
FCC shall mean the Federal Communications Commission and shall include
any successor Authority.
FCC Consents means actions by the FCC (including the Chief, Mass Media
Bureau, acting under delegated authority) granting its consent to the transfer
of control of the American FCC Licenses for each of the American Stations to
Mergeparty as contemplated by this Agreement whether or not such consent has
become a Final Order.
FCC Licenses means all of the licenses, permits and other
authorizations issued by the FCC to an owner and operator of radio broadcast
stations.
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FCC Order shall have the meaning given to it in Section 7.1(b).
Filed American SEC Documents shall have the meaning given to it in
Section 4.2.
Final Adjustment Amount shall have the meaning given to it in Section
6.18(d).
Final Order shall mean, with respect to any Authority, including
without limitation the FCC, a consent or approval with respect to which no
appeal, no stay, no petition or application for rehearing, reconsideration,
review or stay, whether on motion of the applicable Authority or other Person or
otherwise, and no other Legal Action contesting such consent or approval, is in
effect or pending and as to which the time or deadline for filing any such
appeal, petition or application or other Legal Action has expired or, if filed,
has been denied, dismissed or withdrawn, and the time or deadline for
instituting any further Legal Action has expired.
FTC shall have the meaning given to it in Section 6.2(c).
GAAP shall mean generally accepted accounting principles as in effect
from time to time in the United States of America.
Governmental Authorizations shall mean all approvals, concessions,
consents, franchises, licenses, permits, plans, registrations and other
authorizations of all Authorities, including the FCC Licenses, issued by the
FCC, the Federal Aviation Administration and any other Authority in connection
with the conduct of business or operations of any of the Stations.
Governmental Filings shall mean all filings, including franchise and
similar Tax filings, and the payment of all fees, assessments, interest and
penalties associated with such filings, with all Authorities.
Hart-Scott-Rodino Act shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, and the rules and regulations thereunder, all as from
time to time in effect, or any successor law, rules or regulations, and any
reference to any such statutory or regulatory provision shall be deemed to be a
reference to any successor statutory or regulatory provision.
Hazardous Materials shall mean and include any substance, material,
waste, constituent, compound, chemical, natural or man-made element or force (in
whatever state of matter): (a) the presence of which requires investigation or
remediation under any Environmental Law; or (b) that is defined as a "hazardous
waste" or "hazardous substance" under any Environmental Law; or (c) that is
toxic, explosive, corrosive, etiologic, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is regulated by any
applicable Authority or subject to any Environmental Law; or (d) that poses or
threatens to pose a hazard to the health or safety of persons; or (e) that
contains gasoline, diesel fuel or other petroleum hydrocarbons, or any
by-products or fractions thereof, natural gas, polychlorinated biphenyls
("PCBs") and PCB-containing equipment, radon or other radioactive elements,
ionizing radiation, lead, asbestos or asbestos- containing materials, or urea
formaldehyde foam insulation.
indebtedness shall mean, with respect to any Person, without
duplication, (A) all obligations of such Person for borrowed money, or with
respect to deposits or advances of any kind to such Person, (B) all obligations
of such Person evidenced by bonds, debentures, notes or similar instruments, (C)
all obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person, (D) all obligations of
such Person issued or assumed as the deferred purchase price of property or
services (excluding obligations of such Person to creditors for raw materials,
inventory, services and supplies
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incurred in the ordinary course of such Person's business), (E) all capitalized
lease obligations of such Person, (F) all obligations of others secured by any
Lien on property or assets owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (G) all obligations of such
Person under interest rate or currency hedging transactions (valued at the
termination value thereof), (H) all letters of credit issued for the account of
such Person and (I) all guarantees and arrangements having the economic effect
of a guarantee of such Person or any indebtedness of any other Person.
Indemnified Parties shall have the meaning given to it in Section
6.12(b).
Law shall mean any (a) administrative, judicial, legislative or other
action, code, consent decree, constitution, decree, directive, enactment,
finding, guideline, law, injunction, interpretation, judgment, order, ordinance,
proclamation, promulgation, regulation, requirement, rule, rule of law, rule of
public policy, settlement agreement, statute, or writ of any Authority, domestic
or foreign; (b) the common law, or other legal or quasi-legal precedent; or (c)
arbitrator's, mediator's or referee's award, decision, finding or
recommendation.
Legal Action shall mean, with respect to any Person, any and all
litigation or legal or other actions, arbitrations, counterclaims, hearings,
investigations, proceedings or suits, at law or in arbitration, equity or
admiralty, whether or not purported to be brought on behalf of such Person, by
or before any Authority, against such Person or involving any of such Person's
business or assets.
Liabilities shall have the meaning given to it in Section 6.18(b).
Lien shall mean any of the following: mortgage; lien (statutory or
other) or other security agreement, arrangement or interest; hypothecation,
pledge or other deposit arrangement; assignment; charge; levy; executory
seizure; attachment; garnishment; encumbrance (including any easement,
exception, reservation or limitation, right of way, and the like); conditional
sale, title retention or other similar agreement, arrangement, device or
restriction; any financing lease involving substantially the same economic
effect as any of the foregoing; the filing of any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction; or restriction on
sale, transfer, assignment, disposition or other alienation.
Material, Materially or materiality for the purposes of this Agreement,
shall, unless specifically stated to the contrary, be determined without regard
to the fact that various provisions of this Agreement set forth specific dollar
amounts.
Material Agreement shall mean, with respect to any Person, any
agreement, arrangement, contract, undertaking, understanding or other obligation
or liability which (a) was not entered into in the ordinary course of business,
it being understood and agreed by the parties that the acquisition, disposition
or exchange of radio stations is in the ordinary course of business, (b) was
entered into in the ordinary course of business which (i) involved the purchase,
sale or lease of goods or materials, or purchase of services, aggregating more
than $10,000,000 during any of the last three fiscal years of such Person, (ii)
extends for more than six (6) months from the date of the Original Merger
Agreement, or (iii) is not terminable on thirty (30) days or less notice without
material penalty or other payment, (c) involves indebtedness aggregating more
than $10,000,000, (d) is or otherwise constitutes a written agency, broker,
dealer, license, distributorship, sales representative or similar written
agreement, or (e) accounted for more than ten percent (10%) of the revenues of
Mergeparty or American Stations, as the case may be, in the last fiscal year of
such Person or is likely to account for more than ten percent (10%) of revenues
of Mergeparty or American, as the case may be, during the current fiscal year of
such Person.
A-8
<PAGE>
Maximum Premium shall have the meaning given to it in Section 6.12(c).
Merger Consideration shall have the meaning given to it in Section
3.1(d).
Mergeparty shall have the meaning given to it in the Preamble.
Mergeparty Brokered Stations shall mean the radio broadcast stations
which Mergeparty has the right to acquire but which as of the date of the
Original Merger Agreement it is operating pursuant to time brokerage, local
marketing or other similar agreements.
Mergeparty Disclosure Schedule shall mean the Mergeparty Disclosure
Schedule dated as of the date of the Original Merger Agreement delivered by
Mergeparty to American simultaneously with the execution and delivery of the
Original Merger Agreement.
Mergeparty Stations means the radio broadcast stations owned by
Mergeparty, or which it has the right to acquire (and acquires prior to the
Closing Date but only from and after such acquisition) as of the date of the
Original Merger Agreement; provided, however, that Mergeparty Stations shall not
include any Mergeparty Station disposed of by Mergeparty subsequent to the date
of the Original Merger Agreement not in violation of the provisions of this
Agreement; provided further, however, that the term Mergeparty Stations shall
include Mergeparty Brokered Stations if the context so requires.
Mergeparty Subsidiary shall have the meaning given to it in the
Preamble.
Mergeparty's knowledge (including the term "to the knowledge of
Mergeparty") means the actual knowledge of the Chief Executive Officer or the
Chief Financial Officer of Mergeparty, and that such Officer shall have reason
to believe and shall believe that the subject representation or warranty is true
and accurate as stated.
Merger shall have the meaning given to it in the third "Whereas"
paragraph.
Merger Consideration shall have the meaning given to it in Section
3.1(d).
Multiemployer Plan shall mean a Plan which is a "multiemployer plan"
within the meaning of Section 4001(a)(3) of ERISA.
Net Debt shall have the meaning given to it in Section 6.18(c).
Notice of Disagreement shall have the meaning given to it in Section
6.18.
NYSE shall mean the New York Stock Exchange.
Option Securities shall mean all rights, options, calls, contracts,
agreements, warrants, understandings, restrictions, arrangements or commitments,
including without limitation, any rights plan or other anti-takeover agreement
or arrangement, evidencing the right to subscribe for, purchase or otherwise
acquire, or otherwise providing for the issuance of shares of capital stock,
voting securities or Convertible Securities, whether or not the right to
subscribe for, purchase or otherwise acquire, or otherwise providing for the
issuance, is immediately exercisable or is conditioned upon the passage of time,
the occurrence or non-occurrence or the existence or non-existence of some other
Event.
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<PAGE>
Optionholder shall have the meaning given to it in Section 6.8(a).
Organic Document shall mean, with respect to a Person which is a
corporation, its charter, its by-laws and all stockholder agreements, voting
trusts and similar arrangements applicable to any of its capital stock and, with
respect to a Person which is a partnership, its agreement and certificate of
partnership, any agreements among partners, and any management and similar
agreements between the partnership and any general partners (or any Affiliate
thereof).
Original Merger Agreement shall have the meaning given to it in the
first "Whereas" paragraph.
Permitted Liens shall mean (a) Liens for current Taxes not yet due and
payable, and (b) such imperfections of title, easements, encumbrances and
mortgages or other Liens, if any, as are not, individually or in the aggregate,
substantial in character, amount or extent and do not materially detract from
the value, or materially interfere with the present use, of the property subject
thereto or affected thereby, or otherwise materially impair the business or
operations of the American Stations or the Mergeparty Stations, as the case may
be.
Person shall mean any natural individual or any Entity.
Plan shall mean, with respect to any Person and at a particular time,
any employee benefit plan which is covered by ERISA and in respect of which such
Person or an ERISA Affiliate is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA, which American or any ERISA Affiliate maintains,
contributes to or is required to contribute to for the benefit of any current or
former officers, employees, agents, directors or independent contractors of
American or any of its ERISA Affiliates.
Post-Closing American Group shall have the meaning given to it in
Section 6.18
Private Authorizations shall mean all approvals, concessions, consents,
franchises, licenses, permits, and other authorizations of all Persons (other
than Authorities) including without limitation those with respect to copyrights,
computer software programs, patents, service marks, trademarks, trade names,
technology and know-how.
Prohibited Transaction shall have the meaning given to it in Section
6.2(a).
Proxy Statement shall have the meaning given to it in Section 6.6(a).
Registration Statement shall have the meaning given to it in Section
6.6(b).
Regulations shall mean the federal income tax regulations promulgated
under the Code, as such Regulations may be amended from time to time. All
references herein to specific sections of the Regulations shall be deemed also
to refer to any corresponding provisions of succeeding Regulations, and all
references to temporary Regulations shall be deemed also to refer to any
corresponding provisions of final Regulations.
Representatives shall have the meaning given to it in Section 6.1.
Required Divestitures means all divestitures, terminations,
arrangements and restructurings identified in Section 5.2c) of the Mergeparty
Disclosure Schedule, if any, and all other divestitures, terminations,
arrangements or restructurings, if any, arising after the date of the Original
Merger Agreement that would have
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<PAGE>
been required to be listed on Section 5.2c) of
the Mergeparty Disclosure Schedule if known to be in existence as of such date
or that are necessary to satisfy any and all Divestiture Conditions.
Required Tower Vote shall have the meaning given to it in Section 4.13.
Required Vote shall have the meaning given to it in Section 4.13.
Required Divestitures means all divestitures, terminations,
arrangements and restructurings identified in Section 5.2c) of the Mergeparty
Disclosure Schedule, if any, and all other divestitures, terminations,
arrangements or restructurings, if any, arising after the date of the Original
Merger Agreement that would have been required to be listed on Section 5.2c) of
the Mergeparty Disclosure Schedule if known to be in existence as of such date
or that are necessary to satisfy any and all Divestiture Conditions.
Restated Certificate shall have the meaning given to it in Section
4.11.
ss.162(m) Options shall have the meaning given to it in Section 6.8(e).
Securities Act shall mean the Securities Act of 1933, and the rules and
regulations of the Commission thereunder, all as from time to time in effect, or
any successor law, rules or regulations, and any reference to any such statutory
or regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
Stations shall mean, collectively, the American Stations and the
Mergeparty Stations.
Subsidiary shall mean, with respect to a Person, any Entity a majority
of the capital stock ordinarily entitled to vote for the election of directors
of which, or if no such voting stock is outstanding, a majority of the equity
interests of which, is owned directly or indirectly, legally or beneficially, by
such Person or any other Person controlled by such Person.
Surviving Corporation shall have the meaning given to it in Section
2.1.
Tax (and "Taxable," which shall mean subject to Tax), shall mean, with
respect to any Person, (a) all taxes (domestic or foreign), including without
limitation any income (net, gross or other, including recapture of any tax items
such as investment tax credits), alternative or add-on minimum tax, gross
income, gross receipts, gains, sales, use, leasing, lease, user, ad valorem,
transfer, recording, franchise, profits, property (real or personal, tangible or
intangible), fuel, license, withholding on amounts paid to or by such Person,
payroll, employment, unemployment, social security, excise, severance, stamp,
occupation, premium, environmental or windfall profit tax, custom, duty or other
tax, or other like assessment or charge of any kind whatsoever, together with
any interest, levies, assessments, charges, penalties, additions to tax or
additional amounts imposed by any Taxing Authority, (b) any joint or several
liability of such Person with any other Person for the payment of any amounts of
the type described in (a) of this definition, and (c) any liability of such
Person for the payment of any amounts of the type described in (a) as a result
of any express or implied obligation to indemnify any other Person.
Tax Claim shall mean any Claim which relates to Taxes.
Tax Return or Returns shall mean all returns, consolidated or otherwise
(including without limitation information returns), required to be filed with
any Authority with respect to Taxes.
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<PAGE>
Taxing Authority shall mean any Authority responsible for the
imposition of any Tax.
Termination Date shall have the meaning given to it in Section 8.1.
Tower Business shall mean the business conducted by the Tower
Subsidiaries.
Tower Common Stock, Tower Class A Common, Tower Class B Common and
Tower Class C Common shall have the meaning given to such terms in Section
3.1(d).
Tower Deconsolidation shall have the meaning given to it in Section
6.17.
Tower Deconsolidation Date shall have the meaning given to it in
Section 6.17.
Tower Documentation shall have the meaning given to it in Section 6.17.
Tower Employees shall have the meaning given to it in Section 6.17.
Tower Leases shall have the meaning given to it in Section 6.19.
Tower Merger shall have the meaning given to it in Section 3.5.
Tower Merger Agreement shall have the meaning given to it in Section
3.5.
Tower Merger Consideration shall have the meaning given to it in
Section 3.5.
Tower Merger Effective Time shall have the meaning given to it in
Section 3.5.
Tower Merger Tower Consideration shall have the meaning given to it in
Section 3.5.
Tower Proxy Statement shall have the meaning given to it in Section
6.6(a).
Tower Separation shall have the meaning given to it in Section 6.17.
Tower Stock Consideration shall have the meaning given to it in Section
3.1(d).
Tower Stock Payment shall have the meaning given to it in Section
3.4(c).
Towers shall have the meaning given to it in Section 6.19.
Tower Subsidiaries shall mean American Tower and its Subsidiaries.
Uncontrollable Events shall have the meaning given to it in Section
6.2(d).
WC Amount shall have the meaning given to it in Section 6.18(b).
Working Capital shall have the meaning given to it in Section 6.18(b).
A-12
<PAGE>
EXHIBIT D
AGREEMENT AND PLAN OF MERGER
By and Between
AMERICAN RADIO SYSTEMS CORPORATION
and
ATS MERGER CORPORATION
Dated as of
December 18, 1997
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C>
ARTICLE 1 DEFINED TERMS...................................................................................1
ARTICLE 2 THE TOWER MERGER................................................................................2
2.1 The Tower Merger.......................................................................2
2.2 Closing................................................................................2
2.3 Effective Time.........................................................................2
2.4 Effect of the Merger...................................................................2
2.5 Certificate of Designation.............................................................2
2.6 Bylaws.................................................................................2
2.7 Directors and Officers.................................................................2
ARTICLE 3 CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES..................................................3
3.1 Conversion of Capital Stock............................................................3
3.2 Exchange of Certificates. ............................................................4
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF ATS MERGERCORP................................................6
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF ARS...........................................................8
ARTICLE 6 CLOSING CONDITIONS..............................................................................9
6.1 Conditions to Obligations of Each Party to Effect the Merger...........................9
6.2 Conditions to Obligations of ATS Mergercorp............................................9
6.3 Conditions to Obligations of ARS......................................................10
ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER..............................................................10
7.1 Termination...........................................................................10
7.2 Effect of Termination. ............................................................10
ARTICLE 8 GENERAL PROVISIONS.............................................................................11
8.1 Amendment.............................................................................11
8.2 Waiver................................................................................11
8.3 Fees, Expenses and Other Payments.....................................................11
8.4 Notices...............................................................................11
8.5 Specific Performance; Other Rights and Remedies.......................................12
8.6 Survival of Representations, Warranties, Covenants and Agreements.....................12
8.7 Severability..........................................................................12
8.8 Counterparts..........................................................................13
8.9 Section Headings......................................................................13
8.10 Governing Law.........................................................................13
8.11 Further Acts..........................................................................13
8.12 Entire Agreement; No Other Representations or Agreements..............................13
8.13 Assignment............................................................................14
8.14 Parties in Interest...................................................................14
APPENDIX A: Definitions
</TABLE>
<PAGE>
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of December 18, 1997, by
and between ATS Merger Corporation., a Delaware corporation ("ATS Mergercorp"),
and American Radio Systems Corporation, a Delaware corporation ("ARS").
W I T N E S S E T H:
WHEREAS, ARS, CBS Corporation (formerly, Westinghouse Electric
Corporation), a Pennsylvania corporation ("CBS") and R Acquisition Corp., a
Delaware corporation ("CBS Sub") are parties to an Agreement and Plan of Merger,
dated as of September 19, 1997 (the "Original Merger Agreement"); and
WHEREAS, ARS, CBS and CBS Sub have simultaneously with the execution
and delivery of this Agreement entered into the Amended and Restated Agreement
and Plan of Merger (the "Restated Merger Agreement") providing for the merger of
CBS Sub with and into ARS on the terms and conditions set forth therein ("CBS
Merger");
WHEREAS, the Restated Merger Agreement provides that, under certain
circumstances, the distribution of ARS' tower business to the holders of ARS
Common Stock may be effect separate and apart from consummation of the CBS
Merger through the merger of ATS Mergercorp with and into ARS (the "Tower
Merger"); and
WHEREAS, the Boards of Directors of ARS and ATS Mergercorp have
determined that the Tower Merger on the terms and conditions set forth in this
Agreement and Plan of Merger (this "Agreement") is consistent with and in
furtherance of the long-term business strategy of each, and is fair to, and in
the best interests of, ATS Mergercorp, ARS and the stockholders of each; and
WHEREAS, ARS and ATS Mergercorp intend that the Tower Merger shall, for
federal income tax purposes, qualify as a tax-free reorganization under the
provisions of Section 368(a) of the Code; and
WHEREAS, the Boards of Directors of ARS and ATS Mergercorp have
approved and adopted this Agreement and the Tower Merger and the Board of
Directors of ARS has directed that this Agreement be submitted to its
stockholders for their adoption and approval; ARS, as the sole stockholder of
ATS Mergercorp has approved and adopted this Agreement;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained and other
valuable consideration, the receipt and adequacy whereof are hereby
acknowledged, the parties hereto hereby, intending to be legally bound,
represent, warrant, covenant and agree as follows:
ARTICLE 1
DEFINED TERMS
As used herein, unless the context otherwise requires, the terms
defined in Appendix A shall have the respective meanings set forth therein.
Terms defined in the singular shall have a comparable meaning when
<PAGE>
used in the plural, and vice versa, and the reference to any gender shall be
deemed to include all genders. Unless otherwise defined or the context otherwise
clearly requires, terms for which meanings are provided in this Agreement shall
have such meanings when used in each Collateral Document executed or required to
be executed pursuant hereto or thereto or otherwise delivered, from time to
time, pursuant hereto or thereto. References to "hereof," "herein" or similar
terms are intended to refer to the Agreement as a whole and not a particular
section, and references to "this Section" of "this Article" are intended to
refer to the entire section or article and not a particular subsection thereof.
The term "either party" shall, unless the context otherwise requires, refer to
ARS and ATS Mergercorp.
ARTICLE 2
THE TOWER MERGER
2.1 The Tower Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DCL"), at the Effective Time, ATS Mergercorp shall be merged with and
into ARS. As a result of the Tower Merger, the separate existence of ATS
Mergercorp shall cease and ARS shall continue as the surviving corporation in
the Tower Merger (sometimes referred to, as such, as the "Surviving
Corporation").
2.2 Closing. The closing of the Tower Merger (the "Closing") will take
place, on the Closing Date, at the offices of Sullivan & Worcester LLP, One Post
Office Square, Boston, Massachusetts, on the date that is the tenth (10th) day
after the date on which all of the conditions set forth in Article 6 (other than
those which require delivery at the Closing) shall have been satisfied or
waived, unless another date, time or place is agreed to in writing by the
parties or provided for herein. The date on which the Closing occurs is herein
referred to as the "Closing Date."
2.3 Effective Time. Subject to the provisions of this Agreement, as
promptly as practicable after the Closing, the parties hereto shall cause the
Tower Merger to be consummated by filing a certificate of merger (the
"Certificate of Merger") and any related filings required under the DCL with the
Secretary of State of the State of Delaware. The Tower Merger shall become
effective at such time as such documents are duly filed with the Secretary of
State of the State of Delaware or at such later time as is specified in such
documents (the "Effective Time").
2.4 Effect of the Tower Merger. From and after the Effective Time, the
Surviving Corporation shall possess all the rights, privileges, powers and
franchises and be subject to all of the restrictions, disabilities and duties of
ATS Mergercorp and ARS, and the Tower Merger shall otherwise have the effects
provided for under the DCL.
2.5 Certificate of Incorporation. The Restated Certificate of
Incorporation of ARS in effect at the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation unless amended in accordance with
Applicable Law.
2.6 Bylaws. The bylaws of ARS in effect at the Effective Time shall be
the bylaws of the Surviving Corporation unless amended in accordance with
Applicable Law.
2.7 Directors and Officers. From and after the Effective Time, until
successors are duly elected or appointed and qualified, or upon their earlier
resignation or removal, in accordance with Applicable Law,
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<PAGE>
(a) the directors of ARS at the Effective Time shall be the directors of the
Surviving Corporation, and (b) the officers of ARS at the Effective Time shall
be the officers of the Surviving Corporation.
ARTICLE 3
CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
3.1 Conversion of Capital Stock. At the Effective Time, by virtue of
the Tower Merger and without any action on the part of ATS Mergercorp or ARS or
their respective stockholders:
(a) Each share of the 113/8% Series B Cumulative Exchangeable Preferred
Stock, par value $.01 per share, of ARS (the "ARS Cumulative Preferred Stock")
issued and outstanding immediately prior to the Effective Time shall remain
outstanding;
(b) Each share of the 7% Convertible Exchangeable Preferred Stock, par
value $.01 per share, of ARS (the "ARS Convertible Preferred Stock") issued and
outstanding immediately prior to the Effective Time shall remain outstanding;
(c) Each share of Class A Common Stock, par value $.01 per share ("ARS
Class A Common Stock"), each share of Class B Common Stock, par value $.01 per
share ("ARS Class B Common Stock") and each share of Class C Common Stock, par
value $.01 per share ("ARS Class C Common Stock"), of ARS (collectively, the
"ARS Common Stock"), issued and outstanding immediately prior to the Effective
Time shall, by virtue of the Tower Merger and without any action on the part of
the holder thereof, be converted into the right to receive:
(i) one share of Common Stock, par value $.01 per share
("Tower Common Stock") of American Tower Systems Corporation ("American
Tower Systems"), with (i) each share of ARS Class A Common Stock being
converted into the right to receive one share of Class A Common Stock,
par value $.01 per share ("Tower Class A Common Stock") of American
Tower Systems, (ii) each share of ARS Class B Common Stock being
converted into the right to receive one share of Class B Common Stock,
par value $.01 per share ("Tower Class B Common Stock") of American
Tower Systems, and (iii) each share of ARS Class C Common being
converted into the right to receive one share of Class C Common Stock,
par value $.01 per share ("Tower Class C Common Stock") of American
Tower Systems; and
(ii) a fraction (the "ARS Conversion Fraction") of a share of
ARS Common Stock of the same class as the class of ARS Common Stock
being converted, (i) the numerator of which is the difference between
(A) the denominator and (B) the value (determined as set forth below)
of one share of Tower Class A Common Stock immediately prior to the
Effective Time, and (ii) the denominator of which is the value
(determined as set forth below) of one share of ARS Class A Common
Stock immediately prior to the Effective Time (the consideration set
forth in paragraph (a) above and this paragraph (b) being herein
collectively referred to as the "Merger Consideration").
For purposes of determining the value of the ARS Class A Common Stock and the
Tower Common Stock immediately prior to the Effective Time the following
principles shall apply:
(x) each share of ARS Class A Common Stock shall be valued at
an amount equal to the average closing sales price of the ARS Class A
Common Stock on the New York Stock Exchange (the
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<PAGE>
"NYSE"), as reported by the Wall Street Journal, for the ten (10)
consecutive trading days immediately preceding the second trading date
prior to the Effective Time; and
(y) each share of Tower Class A Common Stock shall be valued
at the amount determined in good faith by the ARS Board of Directors to
be its fair market value immediately prior to the Effective Time.
(d) Each share of Common Stock, par value $.01 per share of ATS
Mergercorp (the "ATS Mergercorp Common Stock") owned by ARS immediately prior to
the Effective Time shall automatically be canceled and extinguished without any
conversion thereof and no payment shall be made with respect thereto.
(e) The shares of ARS Common Stock owned by ARS as treasury shares
immediately prior to the Effective Time shall automatically, by virtue of the
Tower Merger and without any action on the part of ARS, be converted into a
number of shares of ARS Common Stock of the same class equal to the number of
shares owned by American immediately prior to the Effective Time multiplied by
the ARS Conversion Fraction.
As a result of the Tower Merger and without any action on the part of
the holder thereof, at the Effective Time all shares of ARS Common Stock issued
and outstanding shall cease to be outstanding and shall be canceled and retired
and shall cease to exist, and each holder of shares of ARS Common Stock shall
thereafter cease to have any rights with respect to such shares of ARS Common
Stock, except the right to receive, without interest, the Merger Consideration
and cash for fractional shares of ARS Common Stock in accordance with the
provisions of Section 3.2(d) upon the surrender of a certificate representing
such shares of ARS Common Stock.
3.2 Exchange of Certificates.
(a) Pursuant to an agreement reasonably satisfactory to ARS and ATS
Mergercorp (the "Exchange Agent Agreement") to be entered into at or prior to
the Closing Date between ARS, ATS Mergercorp and the transfer agent for the ARS
Common Stock (the "Exchange Agent"), at or immediately following the Effective
Time, ARS shall deposit or cause to be deposited in trust for the benefit of the
ARS common stockholders shares of Tower Class A Common Stock, Tower Class B
Common Stock and Tower Class C Common Stock representing the aggregate Merger
Consideration to which holders of ARS Common Stock shall be entitled at the
Effective Time pursuant to the provisions of this Article.
(b) Not less than five (5) business days subsequent to the Effective
Time, the Exchange Agent shall mail to each holder of record of a certificate or
certificates that immediately prior to the Effective Time represented
outstanding shares of ARS Common Stock (the "Certificates") (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon actual delivery of the
Certificates to the Exchange Agent) and (ii) instructions for use in effecting
the surrender of the Certificates in exchange for certificates representing
shares of ARS Common Stock and Tower Class A Common Stock, Tower Class B Common
Stock and Tower Class C Common Stock and cash in lieu of fractional shares as
hereinafter provided. Upon surrender of Certificates for cancellation to the
Exchange Agent, together with a duly executed letter of transmittal and such
other documents as the Exchange Agent shall reasonably require, the holder of
such Certificates shall be entitled to receive in exchange therefor (i) a
certificate representing that number of whole shares of ARS Common Stock to be
received pursuant to the provision of Section 3.1(c)(ii), (ii) cash in lieu of
fractional shares as hereinafter provided and (iii) certificates representing
the number of shares of Tower Class A Common Stock, Tower Class B Common Stock
and
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<PAGE>
Tower Class C Common Stock into which the shares of ARS Common Stock,
theretofore represented by the Certificates so surrendered, shall have been
converted pursuant to the provisions of Section 3.1(c)(i), and the Certificates
so surrendered shall be canceled. Notwithstanding the foregoing, neither the
Exchange Agent nor any party hereto shall be liable to a holder of shares of ARS
Common Stock for any shares of ARS Common Stock or Tower Common Stock or
dividends or distributions thereon delivered to a public official pursuant to
applicable abandoned property, escheat or similar Laws.
(c) Promptly following the date which is six (6) months after the
Closing Date, the Exchange Agent shall deliver to ARS all cash, certificates
(including any ARS Common Stock and ATS Mergercorp Class A Common Stock) and
other documents in its possession relating to the transactions described in this
Agreement, and the Exchange Agent's duties shall terminate. Thereafter, each
holder of a Certificate may surrender such Certificate to the Surviving
Corporation and (subject to applicable abandoned property, escheat and similar
Laws) receive in exchange therefor the Tower Merger Consideration to which such
holder is entitled, without any interest thereon. Notwithstanding the foregoing,
neither the Exchange Agent nor any party hereto shall be liable to a holder of
ARS Common Stock for any ARS Common Stock or Tower Common Stock delivered to a
public official pursuant to applicable abandoned property, escheat or similar
Laws.
(d) No certificates or scrip representing fractional shares of ARS
Common Stock shall be issued upon the surrender for exchange of Certificates,
and such fractional share interests shall not entitle the owner thereof to vote
or to any rights of a stockholder of ARS. As promptly as practicable following
the Effective Time, the Exchange Agent shall determine the excess of (i) the
number of shares of ARS Common Stock delivered to the Exchange Agent by ARS
pursuant to Section 3.2(a) over (ii) the aggregate number of whole shares of ARS
Common Stock to be distributed to holders of the Certificates pursuant to
Section 3.2(b) (such excess being herein called the "Excess Shares"). As soon
after the Effective Time as practicable, the Exchange Agent, as agent for the
holders of the Certificates, shall sell the Excess Shares at then prevailing
prices on the NYSE all in the manner provided in this Section 3.2((d). The sale
of the Excess Shares by the Exchange Agent shall be executed on the NYSE through
one or more member firms of the NYSE and shall be executed in round lots to the
extent practicable. The proceeds from such sale or sales available for
distribution to the holders of Certificates shall be reduced by the compensation
payable to the Exchange Agent and the expenses incurred by the Exchange Agent,
in each case, in connection with such sale or sales of the Excess Shares,
including all related commissions, transfer taxes and other out-of-pocket
transaction costs. Until the net proceeds of such sale or sales have been
distributed to the holders of the Certificates, the Exchange Agent shall hold
such proceeds in trust for the holders of the Certificates (the "Common Shares
Trust"). The Exchange Agent shall determine the portion of the Common Shares
Trust to which each holder of a Certificate shall be entitled, if any, by
multiplying the amount of the aggregate net proceeds comprising the Common
Shares Trust by a fraction, the numerator of which is the amount of the
fractional share interest to which such holder of a Certificate is entitled and
the denominator of which is the aggregate amount of fractional share interests
to which all holders of the Certificates are entitled. As soon as practicable
after the determination of the amount of cash, if any, to be paid to holders of
the Certificates in lieu of any fractional share interests, the Exchange Agent
shall make available such amounts, without interest, to such holders of the
Certificates who have surrendered their Certificates in accordance with this
Article III.
(e) If the Tower Merger Consideration (or any portion thereof) is to be
paid to a Person other than the Person in whose name the Certificate surrendered
in exchange therefor is registered, it shall be a condition to the payment of
the Tower Merger Consideration that the Certificate so surrendered shall be
properly endorsed or accompanied by appropriate stock powers (with signatures
guaranteed in accordance with the transmittal form) and otherwise in proper form
for transfer, that such transfer otherwise be proper and that the Person
requesting such transfer pay to the Exchange Agent any transfer or other Taxes
payable by reason of
-5-
<PAGE>
the foregoing or establish to the satisfaction of the Exchange Agent that such
Taxes have been paid or are not required to be paid.
(f) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and subject to such other
reasonable conditions as the Board of Directors of the Surviving Corporation may
impose, the Surviving Corporation shall issue in exchange for such lost, stolen
or destroyed Certificate the Tower Merger Consideration deliverable in respect
thereof as determined in accordance with this Article. When authorizing such
issue of the Tower Merger Consideration in exchange therefor, the Board of
Directors of the Surviving Corporation may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed Certificate to give the Surviving Corporation a bond or other surety
in such sum as it may reasonably direct as indemnity against any Claim that may
be made against the Surviving Corporation with respect to the Certificate
alleged to have been lost, stolen or destroyed.
(g) Notwithstanding any other provisions of this Agreement, no
dividends or other distributions declared after the Effective Time on ARS Common
Stock shall be paid with respect to any whole shares of ARS Common Stock or
Tower Common Stock represented by a Certificate until such Certificate is
surrendered for exchange as provided herein. Subject to the effect of Applicable
Laws, following surrender of any such Certificate, there shall be paid to the
holder of the shares of ARS Common Stock and Tower Common Stock issued in
exchange therefor, without interest, (i) at the time of such surrender, the
amount of dividends or other distributions with a record date after the
Effective Time theretofore payable with respect to such whole shares of ARS
Common Stock or Tower Common Stock, as the case may be, and not paid, less the
amount of any withholding taxes which may be required thereon, and (ii) at the
appropriate payment date, the amount of dividends or other distributions with a
record date after the Effective Time but prior to surrender and a payment date
subsequent to surrender payable with respect to such whole shares of ARS Common
Stock or Tower Common Stock, as the case may be, less the amount of any
withholding taxes which may be required thereon.
(h) ARS shall be entitled to, or shall be entitled to cause the
Exchange Agent to, deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of ARS Common Stock such
amounts as are required to be deducted and withheld with respect to the making
of such payment under the Code, or any provision of state, local or foreign tax
law. To the extent that amounts are so withheld by ARS or the Exchange Agent, as
the case may be, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the shares of ARS Common Stock in
respect of which such deduction and withholding was made by ARS or the Exchange
Agent.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF ATS MERGERCORP
ATS Mergercorp hereby represents, warrants and covenants to, and agrees
with, ARS as follows:
(a) ATS Mergercorp is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, has all requisite
power and authority (corporate and other) to own or hold under lease its
properties and to conduct its business as now conducted and as presently
proposed to be conducted, with full power and authority (corporate and other) to
carry on the business in which it is
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engaged, except where the failure to be so qualified and in good standing,
individually or in the aggregate, is not reasonably likely to have a Material
Adverse Effect on ATS Mergercorp.
(b) ATS Mergercorp has all requisite power and authority (corporate and
other) to execute, deliver and perform its obligations under this Agreement and
each Collateral Document executed or required to be executed by ATS Mergercorp
pursuant hereto or thereto or to consummate the Tower Merger, and the execution,
delivery and performance of this Agreement and each Collateral Document executed
or required to be executed pursuant hereto or thereto have been duly authorized
by all requisite corporate or other action on the part of ATS Mergercorp, other
than the approval of the sole stockholder of ATS Mergercorp contemplated by this
Agreement. This Agreement has been duly executed and delivered by ATS Mergercorp
and constitutes, and each Collateral Document executed or required to be
executed pursuant hereto or thereto or to consummate the Tower Merger when
executed and delivered by ATS Mergercorp will constitute, valid and binding
obligations of ATS Mergercorp, enforceable in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy, moratorium,
insolvency and similar laws affecting the rights and remedies of creditors and
obligations of debtors generally and by general principles of equity. The
provisions of Section 203 of the DCL will not apply to this Agreement or the
Tower Merger. As of the date hereof, the Board of Directors of ATS Mergercorp,
at a meeting duly called and held at which a quorum was present throughout, has
unanimously (i) determined that this Agreement and the transactions contemplated
hereby, including without limitation the Tower Merger, are fair to and in the
best interests of the holder of the ATS Mergercorp Common Stock and have
approved the same, and (ii) resolved to recommend that the sole stockholder of
ATS Mergercorp approve this Agreement and the transactions contemplated hereby,
including without limitation the Tower Merger.
(c) Except for such consents, the failure of which to obtain would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect on ATS Mergercorp, the execution and delivery by ATS Mergercorp
of this Agreement and any Collateral Document executed or required to be
executed by it pursuant hereto or thereto, do not, and the consummation by ATS
Mergercorp of the Tower Merger and compliance with the terms, conditions and
provisions hereof or thereof by ATS Mergercorp will not:
(i) conflict with, or result in a breach or violation of, or
constitute a default under, any Organic Document of ATS Mergercorp or
any Applicable Law applicable to ATS Mergercorp, or conflict with, or
result in a breach or violation of, or constitute a default under, or
permit the acceleration of any obligation or liability in, or but for
any requirement of the giving of notice or passage of time or both
would constitute such a conflict with, breach or violation of, or
default under, or permit any such acceleration in, any Indebtedness for
Money Borrowed of ATS Mergercorp, except for such conflicts, breaches,
violations or accelerations that would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on
ATS Mergercorp; or
(ii) result in or permit the creation or imposition of any
Lien upon any property now owned or leased by ATS Mergercorp; or
(iii) require any Governmental Authorization or Governmental
Filing or Private Autho rization, except for the FCC Consents, filings
under the Hart-Scott-Rodino Act, and other filing requirements under
Applicable Law in connection with the consummation of the Tower Merger.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF ARS
ARS hereby represents, warrants and covenants to, and agrees with, ATS
Mergercorp as follows:
(a) ARS is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware, has all requisite power
and authority (corporate and other) to own or hold under lease its properties
and to conduct its business as now conducted and as presently proposed to be
conducted, with full power and authority (corporate and other) to carry on the
business in which it is engaged, except where the failure to be so qualified or
in good standing, individually or in the aggregate, is not reasonably likely to
have a Material Adverse Effect on ARS.
(b) ARS has all requisite power and authority (corporate and other) to
execute, deliver and perform its obligations under this Agreement and each
Collateral Document executed or required to be executed by ARS pursuant hereto
or thereto or to consummate the Tower Merger, and the execution, delivery and
performance of this Agreement and each Collateral Document executed or required
to be executed pursuant hereto or thereto have been duly authorized by all
requisite corporate or other action on the part of ARS, other than the approval
of the ARS stockholders contemplated by this Agreement. This Agreement has been
duly executed and delivered by ARS and constitutes, and each Collateral Document
executed or required to be executed pursuant hereto or thereto or to consummate
the Tower Merger when executed and delivered by ARS will constitute, valid and
binding obligations of ARS, enforceable in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy, moratorium,
insolvency and similar laws affecting the rights and remedies of creditors and
obligations of debtors generally and by general principles of equity. The
provisions of Section 203 of the DCL will not apply to this Agreement or the
Tower Merger. As of the date hereof, the Board of Directors of ARS, at a meeting
duly called and held at which a quorum was present throughout, has unanimously
(i) determined that this Agreement and the transactions contemplated hereby,
including without limitation the Tower Merger, are fair to and in the best
interests of the holders of the ARS Common Stock and have approved the same, and
(ii) resolved to recommend that the ARS stockholders approve this Agreement and
the transactions contemplated hereby, including without limitation the Tower
Merger.
(c) Except for consents and authorizations, the failure of which to
obtain, would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect on ARS, the execution and delivery by ARS of this
Agreement and any Collateral Document executed or required to be executed by it
pursuant hereto or thereto do not, and the consummation by ARS of the Tower
Merger, and compliance with the terms, conditions and provisions hereof or
thereof by ARS will not:
(i) conflict with, or result in a breach or violation of, or
constitute a default under, any Organic Document of ARS or any
Applicable Law, or will conflict with, or result in a breach or
violation of, or constitute a default under, or permit the acceleration
of any obligation or liability in, or but for any requirement of the
giving of notice or passage of time or both would constitute such a
conflict with, breach or violation of, or default under, or permit any
such acceleration in, any Indebtedness for Money Borrowed of ARS,
except for such conflicts, breaches, violations or accelerations that
would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect on ARS; or
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(ii) result in or permit the creation or imposition of any
Lien upon any property now owned or leased by ARS; or
(iii) require any Governmental Authorization or Governmental
Filing or Private Autho rization, except for the FCC Consents, filings
under the Hart-Scott-Rodino Act, and other filing requirements under
Applicable Law in connection with the consummation of the Tower Merger.
ARTICLE 6
CLOSING CONDITIONS
6.1 Conditions to Obligations of Each Party to Effect the Tower Merger.
The respective obligations of each party to effect the Tower Merger shall,
except as hereinafter provided in this Section, be subject to the satisfaction
at or prior to the Closing Date of the following conditions, any or all of which
may be waived, in whole or in part, to the extent permitted by Applicable Law:
(a) The CBS Merger shall not have been consummated by 11:59
p.m. on May 31, 1998;
(b) This Agreement and the transactions contemplated hereby
shall have been approved and adopted by the requisite vote of the
stockholders of ARS and ATS Mergercorp under Applicable Law;
(c) The waiting period applicable to the consummation of the
Tower Merger under the Hart-Scott-Rodino Act shall have expired or been
terminated; and
(d) No Authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any Law (whether temporary,
preliminary or permanent) that remains in effect and restrains, enjoins
or otherwise prohibits consummation of the Tower Merger.
6.2 Conditions to Obligations of ATS Mergercorp. The obligation of ATS
Mergercorp to effect the Tower Merger shall be subject to the satisfaction of
the following conditions, any or all of which may be waived, in whole or in
part, to the extent permitted by Applicable Law:
(a) The representations and warranties of ARS set forth in
this Agreement shall be true and correct as of the date of this
Agreement and as of the Closing Date as though made on and as of the
Closing Date except (i) to the extent such representations and
warranties expressly speak as of an earlier date (in which case such
representations and warranties shall be true and correct as of such
earlier date) and (ii) to the extent that the failure of such
representations and warranties to be true and correct, individually or
in the aggregate, would not have a Material Adverse Effect on ARS;
provided, however, that for the purpose of this clause (ii),
representations and warranties that are qualified as to materiality
(including by reference to "Material Adverse Effect") shall not be
deemed to be so qualified;
(b) ARS shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or
prior to the Closing Date; and
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(c) Between the date of this Agreement and the Closing Date,
except as contemplated by this Agreement, as the case may be, there
shall not have occurred and be continuing any Material Adverse Change
in ARS.
6.3 Conditions to Obligations of ARS. The obligation of ARS to effect
the Tower Merger shall be subject to the satisfaction of the following
conditions, any or all of which may be waived, in whole or in part, to the
extent permitted by Applicable Law:
(a) The representations and warranties of ATS Mergercorp set
forth in this Agreement shall be true and correct as of the date of
this Agreement and as of the Closing Date as though made on and as of
the Closing Date except (i) to the extent such representations and
warranties expressly speak as of an earlier date (in which case such
representations and warranties shall be true and correct as of such
earlier date) and (ii) to the extent that the failure of such
representations and warranties to be true and correct, individually or
in the aggregate, would not have a Material Adverse Effect on ATS
Mergercorp; provided, however, that for the purpose of this clause
(ii), representations and warranties that are qualified as to
materiality (including by reference to "Material Adverse Effect") shall
not be deemed to be so qualified;
(b) ATS Mergercorp shall have performed in all material
respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date; and
(c) The Board of Directors of ARS shall not have determined to
abandon the Tower Merger.
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement shall terminate automatically, without
any action of either of the parties, upon consummation of the CBS Merger and may
be terminated at any time prior to the Closing Date, whether before or after
approval by the stockholders of ARS:
(a) by mutual written consent of ARS and ATS Mergercorp;
(b) by either ATS Mergercorp or ARS if any Authority of
competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any Law that shall have become final and
nonappealable and that restrains, enjoins or otherwise prohibits
consummation of the Tower Merger, unless the party seeking such
restraint injunction or prohibition or any Affiliate thereof was the
terminating party; and
(c) by ARS in the event it determines to abandon the Tower
Merger as not being in the best interests of the ARS common
stockholders.
The term "Termination Date" shall mean December 31, 1998, as such date may from
time to time be extended by mutual agreement of the parties.
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7.2 Effect of Termination. Except as provided in Section 8.3 (Fees,
Expenses and other Payments), in the event of the termination of this Agreement
pursuant to Section 7.1, or in the event the Tower Merger shall not have become
effective prior to the end of business on the day prior to the Termination Date,
this Agreement shall forthwith become void and have no effect, without any
liability on the part of any party, or any of its respective stockholders,
officers or directors, to the other.
ARTICLE 8
GENERAL PROVISIONS
8.1 Amendment. This Agreement may be amended from time to time by the
parties hereto at any time prior to the Closing Date but only by an instrument
in writing signed by the parties hereto and, subject, to Applicable Law.
8.2 Waiver. At any time prior to the Closing Date, except to the extent
not permitted by Applicable Law, ATS Mergercorp or ARS may, either generally or
in a particular instance and either retroactively or prospectively, extend the
time for the performance of any of the obligations or other acts of the other,
subject, however, to the provisions of Section 7.1, waive any inaccuracies in
the representations and warranties of the other contained herein or in any
document delivered pursuant hereto, and waive compliance by the other with any
of the agreements, covenants, conditions or other provision contained herein.
Any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party or parties to be bound thereby.
8.3 Fees, Expenses and Other Payments. All costs and expenses incurred
in connection with the negotiation, preparation, performance and enforcement of
this Agreement (including all fees and expenses of counsel, financial advisors,
accountants, and other consultants, advisors and representatives for all
activities of such persons undertaken pursuant to this Agreement) incurred by
the parties hereto shall be borne by ARS.
8.4 Notices. All notices and other communications which by any
provision of this Agreement are required or permitted to be given shall be given
in writing and shall be (a) mailed by first-class or express mail, postage
prepaid, or by recognized courier service, (b) sent by telecopy or other form of
rapid transmission, confirmed by mailing (by first class or express mail,
postage prepaid, or by recognized courier service) written confirmation at
substantially the same time as such rapid transmission, or (c) personally
delivered to the receiving party (which if, other than an individual, shall be
an officer or other responsible party of the receiving party). All such notices
and communications shall be mailed, sent or delivered as follows:
(a) If to ATS Mergercorp:
ATS Mergercorp Merger Corporation
116 Huntington Avenue
Boston, Massachusetts 02116
Attention: Steven B. Dodge, President and Chief Executive Officer
Telecopier No.: (617) 375-7575
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with a copy to:
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
Attention: Norman A. Bikales, Esq.
Telecopier No.: (617) 338-2880
(b) If to ARS:
American Radio Systems Corporation
116 Huntington Avenue
Boston, Massachusetts 02116
Attention: Steven B. Dodge, President and Chief Executive Officer
Telecopier No.: (617) 375-7575
with a copy to:
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
Attention: Norman A. Bikales, Esq.
Telecopier No.: (617) 338-2880
or to such other person(s), telex or facsimile number(s) or address(es) as the
party to receive any such communication or notice may have designated by written
notice to the other party.
8.5 Specific Performance; Other Rights and Remedies. Each party
recognizes and agrees that in the event the other party should refuse to perform
any of its obligations under this Agreement or any Collateral Document, the
remedy at law would be inadequate and agrees that for breach of such provisions,
each party shall, in addition to such other remedies as may be available to it
at law or in equity or as provided in Article 7, be entitled to injunctive
relief and to enforce its rights by an action for specific performance to the
extent permitted by Applicable Law. Each party hereby waives any requirement for
security or the post ing of any bond or other surety in connection with any
temporary or permanent award of injunctive, mandatory or other equitable relief.
Nothing herein contained shall be construed as prohibiting each party from
pursuing any other remedies available to it under Applicable Law or pursuant to
the provisions of this Agreement for such breach or threatened breach, including
without limitation the recovery of damages, including, to the extent awarded in
any Legal Action, punitive, incidental and consequential damages (including
without limitation damages for diminution in value and loss of anticipated
profits) or any other measure of damages permitted by Applicable Law.
8.6 Survival of Representations, Warranties, Covenants and Agreements.
None of the representations and warranties in this Agreement shall survive the
Tower Merger, and after effectiveness of the Tower Merger neither of the parties
or their respective officers, directors or stockholders shall have any further
obligation with respect thereto.
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8.7 Severability. If any term or provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative, illegal or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the
conflicting of any provision with any constitution or statute or rule of public
policy or for any other reason, such circumstance shall not have the effect of
rendering the provision or provisions in question invalid, inoperative, illegal
or unenforceable in any other jurisdiction or in any other case or circumstance
or of rendering any other provision or provisions herein contained invalid,
inoperative, illegal or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative, illegal or unenforceable
provision had never been contained herein and such provision reformed so that it
would be valid, operative and enforceable to the maximum extent permitted in
such jurisdiction or in such case. Notwithstanding the foregoing, in the event
of any such determination, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by Applicable Law in an acceptable
manner to the end that the Tower Merger is fulfilled and consummated to the
maximum extent possible.
8.8 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, binding upon all of the
parties. In pleading or proving any provision of this Agreement, it shall not be
necessary to produce more than one of such counterparts.
8.9 Section Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
8.10 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by, and construed in accordance
with, the Applicable Laws of the United States of America and the laws of the
State of Delaware applicable to contracts made and performed in such State and,
in any event, without giving effect to any choice or conflict of laws provision
or rule that would cause the application of domestic substantive laws of any
other jurisdiction. Anything in this Agreement to the contrary notwithstanding,
in the event of any dispute between the parties which results in a Legal Action,
the prevailing party shall be entitled to receive from the non-prevailing party
reimbursement for reasonable legal fees and expenses incurred by such prevailing
party in such Legal Action.
8.11 Further Acts. Each party agrees that at any time, and from time to
time, before and after the consummation of the transactions contemplated by this
Agreement, it will do all such things and execute and deliver all such
Collateral Documents and other assurances, as the other party or its counsel
reasonably deems necessary or desirable in order to carry out the terms and
conditions of this Agreement and the transactions contemplated hereby or to
facilitate the enjoyment of any of the rights created hereby or to be created
hereunder.
8.12 Entire Agreement; No Other Representations or Agreements. This
Agreement (together with the other Collateral Documents delivered or to be
delivered in connection herewith) constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior
agreements, arrangements, covenants, promises, conditions, undertakings,
inducements, representations, warranties and negotiations, expressed or implied,
oral or written, between the parties, with respect to the subject matter hereof.
Each of the parties is a sophisticated legal entity that was advised by
experienced counsel and, to the extent it deemed necessary, other advisors in
connection with this Agreement. Each of the parties hereby acknowledges that (a)
neither party has relied or will rely in respect of this Agreement or the
transactions
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contemplated hereby upon any document or written or oral information previously
furnished to or discovered by it or its representatives, other than this
Agreement (including the other Collateral Documents) or such of the foregoing as
are delivered at the Closing, (b) there are no covenants or agreements by or on
behalf of either party hereto or any of its respective Affiliates or
representatives other than those expressly set forth in this Agreement and the
Collateral Documents, and (c) the parties' respective rights and obligations
with respect to this Agreement and the events giving rise thereto will be solely
as set forth in this Agreement and the Collateral Documents. WITHOUT LIMITING
THE GENERALITY OF THE FOREGOING, EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, NEITHER ARS NOR ATS
Mergercorp MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY
DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND LEGAL ADVISORS OR OTHER
REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE
TO THE OTHER OR THE OTHER'S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER
INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING.
8.13 Assignment. This Agreement shall not be assignable by any party
and any such assignment shall be null and void, except that it shall inure to
the benefit of and be binding upon any successor to each party by operation of
Law, including by way of merger, consolidation or sale of all or substantially
all of its assets, and each party may assign its rights and remedies hereunder
to any bank or other financial institution which has loaned funds or otherwise
extended credit to it.
8.14 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party and their permitted successors and
assigns, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, except as otherwise provided in
Section 8.13.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, ARS and ATS Mergercorp have caused this Agreement
and Plan of Merger to be executed, pursuant to the authority and approval of
each of their respective Boards of Directors, as of the date first written above
by their respective officers thereunto duly authorized.
American Radio Systems Corporation
By: /s/ Steven B. Dodge
Name: Steven B. Dodge
Title: Chairman of the Board, President and
Chief Executive Officer
ATS Merger Corporation
By: /s/ Steven B. Dodge
Name: Steven B. Dodge
Title: Chairman of the Board, President and
Chief Executive Officer
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APPENDIX A
DEFINITIONS
Adverse, Adversely, when used alone or in conjunction with other terms
(including without limitation "Affect," "Change" and "Effect") shall mean any
Event that has adversely affected or is reasonably likely to adversely affect
(a) the validity or enforceability of this Agreement or the likelihood of
consummation of the Tower Merger, or (b) the financial condition or results of
operation of the ATS Mergercorp and its Subsidiaries, taken as a whole, or the
ARS and its Subsidiaries, taken as a whole, as the case may be, or (c) ARS' or
ATS Mergercorp', as the case may be, ability to fulfill its obligations under
the terms of this Agreement. Notwithstanding the foregoing, and anything in this
Agreement to the contrary notwithstanding, neither (i) any Event affecting the
radio broadcasting industry or the national or any regional or market economy
generally.
Affiliate, Affiliated shall mean, with respect to any Person, (a) any
other Person at the time directly or indirectly controlling, controlled by or
under direct or indirect common control with such Person, any other Person of
which such Person at the time owns, or has the right to acquire, directly or
indirectly, twenty percent (20%) or more of any class of the capital stock or
beneficial interest, (c) any other Person which at the time owns, or has the
right to acquire, directly or indirectly, twenty percent (20%) or more of any
class of the capital stock or beneficial interest of such Person, (d) any
executive officer or director of such Person, (e) with respect to any
partnership, joint venture or similar Entity, any general partner thereof, and
(f) when used with respect to an individual, shall include any member of such
individual's immediate family or a family trust.
Agreement shall have the meaning given to it in the third "Whereas"
paragraph and shall include any amendments executed and delivered by the parties
pursuant to the provisions of Section 8.1.
American Tower Systems shall have the meaning given to it in Section
3.1(c)(i).
Applicable Law shall mean, with respect to any Person, any Law of any
Authority, whether domestic or foreign, to which such Person is subject or by
which it or any of its business or operations is subject or any of its property
or assets is bound.
ARS shall have the meaning given to it in the Preamble.
ARS Class A Common Stock shall have the meaning given to it in Section
3.1(c).
ARS Class B Common Stock shall have the meaning given to it in Section
3.1(c).
ARS Class C Common Stock shall have the meaning given to it in Section
3.1(c).
ARS Common Stock shall have the meaning given to it in Section 3.1(c).
ARS Conversion Fraction shall have the meaning given to it in Section
3.1(c)(ii).
ARS Convertible Preferred Stock shall have the meaning given to it in
Section 3.1(b).
ARS Cumulative Preferred Stock shall have the meaning given to it in
Section 3.1(a).
<PAGE>
ATS Mergercorp shall have the meaning given to it in the Preamble.
ATS Mergercorp Common Stock shall have the meaning given to it in
Section 3.1(d).
Authority shall mean any governmental or quasi-governmental authority,
whether administrative, executive, judicial, legislative or other, or any
combination thereof, including without limitation any federal, state,
territorial, county, municipal or other government or governmental or
quasi-governmental agency, arbitrator, authority, board, body, branch, bureau,
central bank or comparable agency or Entity, commission, corporation, court,
department, instrumentality, master, mediator, panel, referee, system or other
political unit or subdivision or other Entity of any of the foregoing, whether
domestic or foreign.
CBS shall have the meaning given to it in the first "Whereas"
paragraph.
CBS Merger shall have the meaning given to it in the first "Whereas"
paragraph.
CBS Sub shall have the meaning given to it in the first "Whereas"
paragraph.
Certificate of Merger shall have the meaning given to it in Section
2.3.
Certificates shall have the meaning given to it in Section 3.2(b).
Closing shall have the meaning given to it in Section 2.2.
Closing Date shall have the meaning given to it in Section 2.2.
Code shall mean the Internal Revenue Code of 1986, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
Collateral Document shall mean any agreement, certificate, contract,
instrument, notice, opinion or other document delivered pursuant to the
provisions of this Agreement.
Common Shares Trust shall have the meaning given to it in Section
3.2(d).
Control (including the terms "controlled," "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management or
policies of a Person, or the disposition of such Person's assets or properties,
whether through the ownership of stock, equity or other ownership, by contract,
arrangement or understanding, or as trustee or executor, by contract or credit
arrangement or otherwise.
DCL shall have the meaning given to it in Section 2.1.
Effective Time shall have the meaning given to it in Section 2.3.
Entity shall mean any corporation, firm, unincorporated organization,
association, partnership, limited liability company, trust (inter vivos or
testamentary), estate of a deceased, insane or incompetent individual, business
trust, joint stock company, joint venture or other organization, entity or
business, whether acting in an individual, fiduciary or other capacity, or any
Authority.
-2-
<PAGE>
Event shall mean the existence or occurrence of any act, action,
activity, circumstance, condition, event, fact, failure to act, omission,
incident or practice, or any set or combination of any of the foregoing.
Excess Shares shall have the meaning given to it in Section 3.2(d).
Exchange Agent shall have the meaning given to it in Section 3.2(a).
Exchange Agent Agreement shall have the meaning given to it in Section
3.2(a).
FCC Consents means actions by the FCC (including the Chief, Mass Media
Bureau, acting under delegated authority) granting its consent to the transfer
of control of the American FCC Licenses for each of the American Stations to
Mergeparty as contemplated by this Agreement whether or not such consent has
become a Final Order.
Governmental Authorizations shall mean all approvals, concessions,
consents, franchises, licenses, permits, plans, registrations and other
authorizations of all Authorities, including the FCC Licenses, issued by the
FCC, the Federal Aviation Administration and any other Authority in connection
with the conduct of business or operations of any of the Stations.
Governmental Filings shall mean all filings, including franchise and
similar Tax filings, and the payment of all fees, assessments, interest and
penalties associated with such filings, with all Authorities.
Hart-Scott-Rodino Act shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, and the rules and regulations thereunder, all as from
time to time in effect, or any successor law, rules or regulations, and any
reference to any such statutory or regulatory provision shall be deemed to be a
reference to any successor statutory or regulatory provision.
Law shall mean any (a) administrative, judicial, legislative or other
action, code, consent decree, constitution, decree, directive, enactment,
finding, guideline, law, injunction, interpretation, judgment, order, ordinance,
proclamation, promulgation, regulation, requirement, rule, rule of law, rule of
public policy, settlement agreement, statute, or writ of any Authority, domestic
or foreign; (b) the common law, or other legal or quasi-legal precedent; or (c)
arbitrator's, mediator's or referee's award, decision, finding or
recommendation.
Legal Action shall mean, with respect to any Person, any and all
litigation or legal or other actions, arbitrations, counterclaims, hearings,
investigations, proceedings or suits, at law or in arbitration, equity or
admiralty, whether or not purported to be brought on behalf of such Person, by
or before any Authority, against such Person or involving any of such Person's
business or assets.
Lien shall mean any of the following: mortgage; lien (statutory or
other) or other security agreement, arrangement or interest; hypothecation,
pledge or other deposit arrangement; assignment; charge; levy; executory
seizure; attachment; garnishment; encumbrance (including any easement,
exception, reservation or limitation, right of way, and the like); conditional
sale, title retention or other similar agreement, arrangement, device or
restriction; any financing lease involving substantially the same economic
effect as any of the foregoing; the filing of any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction; or restriction on
sale, transfer, assignment, disposition or other alienation.
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<PAGE>
Material, Materially or materiality for the purposes of this Agreement,
shall, unless specifically stated to the contrary, be determined without regard
to the fact that various provisions of this Agreement set forth specific dollar
amounts.
Merger shall have the meaning given to it in the third "Whereas"
paragraph.
Merger Consideration shall have the meaning given to it in Section
3.1(e )(ii).
NYSE shall have the meaning given to it in Section 3.1(c).
Organic Document shall mean, with respect to a Person which is a
corporation, its charter, its by-laws and all stockholder agreements, voting
trusts and similar arrangements applicable to any of its capital stock and, with
respect to a Person which is a partnership, its agreement and certificate of
partnership, any agreements among partners, and any management and similar
agreements between the partnership and any general partners (or any Affiliate
thereof).
Person shall mean any natural individual or any Entity.
Private Authorizations shall mean all approvals, concessions, consents,
franchises, licenses, permits, and other authorizations of all Persons (other
than Authorities) including without limitation those with respect to copyrights,
computer software programs, patents, service marks, trademarks, trade names,
technology and know-how.
Regulations shall mean the federal income tax regulations promulgated
under the Code, as such Regulations may be amended from time to time. All
references herein to specific sections of the Regulations shall be deemed also
to refer to any corresponding provisions of succeeding Regulations, and all
references to temporary Regulations shall be deemed also to refer to any
corresponding provisions of final Regulations.
Representatives shall have the meaning given to it in Section 6.1(a).
Restated Merger Agreement shall have the meaning given to it in the
second "Whereas" paragraph.
Subsidiary shall mean, with respect to a Person, any Entity a majority
of the capital stock ordinarily entitled to vote for the election of directors
of which, or if no such voting stock is outstanding, a majority of the equity
interests of which, is owned directly or indirectly, legally or beneficially, by
such Person or any other Person controlled by such Person.
Surviving Corporation shall have the meaning given to it in Section
2.1.
Tax (and "Taxable," which shall mean subject to Tax), shall mean, with
respect to any Person, (a) all taxes (domestic or foreign), including without
limitation any income (net, gross or other, including recapture of any tax items
such as investment tax credits), alternative or add-on minimum tax, gross
income, gross receipts, gains, sales, use, leasing, lease, user, ad valorem,
transfer, recording, franchise, profits, property (real or personal, tangible or
intangible), fuel, license, withholding on amounts paid to or by such Person,
payroll, employment, unemployment, social security, excise, severance, stamp,
occupation, premium, environmental or windfall profit tax, custom, duty or other
tax, or other like assessment or charge of any kind whatsoever, together with
any interest, levies, assessments, charges, penalties, additions to tax or
additional amounts imposed by any Taxing Authority, (b) any joint or several
liability of such Person with any other Person for
-4-
<PAGE>
the payment of any amounts of the type described in (a) of this definition, and
(c) any liability of such Person for the payment of any amounts of the type
described in (a) as a result of any express or implied obligation to indemnify
any other Person.
Taxing Authority shall mean any Authority responsible for the
imposition of any Tax.
Termination Date shall have the meaning given to it in Section 7.1.
Tower Class A Common Stock shall have the meaning given to it in
Section 3.1(c)(i).
Tower Class B Common Stock shall have the meaning given to it in
Section 3.1(c)(i).
Tower Class C Common Stock shall have the meaning given to it in
Section 3.1(c)(i).
Tower Common Stock shall have the meaning given to it in Section
3.1(c)(i).
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EXHIBIT 2.4
FIRST AMENDMENT, dated as of December 19, 1997 (this "Amendment"), to
the Amended and Restated Agreement and Plan of Merger, dated as of December 18,
1997, by and among American Radio Systems Corporation, a Delaware corporation
("American"), CBS Corporation (formerly, Westinghouse Electric Corporation), a
Pennsylvania corporation ("Mergeparty"), and R Acquisition Corp., a Delaware
corporation ("Mergeparty Subsidiary").
WITNESSETH:
WHEREAS, American, Mergeparty and Mergeparty Subsidiary are parties to
an Agreement and Plan of Merger, dated as of September 19, 1997 (the "Original
Merger Agreement"), providing for the merger of Mergeparty Subsidiary with and
into American on the terms and conditions set forth therein; and
WHEREAS, American, Mergeparty and Mergeparty Subsidiary have entered
into an Amended and Restated Agreement and Plan of Merger, dated as of December
18, 1997 (the "Restated Merger Agreement"), to make certain changes to the
Original Merger Agreement; and
WHEREAS, American, Mergeparty and Mergeparty Subsidiary desire to amend
the Restated Merger Agreement.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained and other
valuable consideration, the receipt and adequacy whereof are hereby
acknowledged, the parties hereto hereby, intending to be legally bound,
represent, warrant, covenant and agree as follows:
1. Capitalized terms used and not defined herein shall have the
meanings given to such terms in the Restated Merger Agreement.
2. American hereby represents and warrants to Mergeparty and Mergeparty
Subsidiary as follows, which representations and warranties shall be deemed to
form part of the representations and warranties of American included in Article
Four of the Restated Merger Agreement for all purposes of the Restated Merger
Agreement: (a) Annex 1 to this Amendment sets forth a list of certain
stockholders of American (the "Consenting Stockholders") and the number of
shares of American Class A Common and American Class B Common owned of record by
each such stockholder on the date hereof, (b) on the date hereof, 29,966,377
votes constituted a majority of the outstanding voting power of American Common
Stock and (c) on the date hereof the Consenting Stockholders have delivered
written consents to American approving and adopting the Restated Merger
Agreement and the Tower Merger Agreement in accordance with Applicable Law,
including without limitation the DCL, such consents will, upon mailing by
American of the notice as described in paragraph 3 below, constitute the
Required Vote and no other approvals of the stockholders of American other than
such consents are required to effect either the Merger or the Tower Merger.
3. American will, promptly after the execution of this Amendment, mail,
in accordance with Section 228(d) of the DCL, notice of the corporate action
without a meeting taken by the Consenting Stockholders to those American
stockholders who have not consented to such action in writing and who, if the
action had been taken at a meeting of American stockholders, would have been
entitled to notice of the meeting if the record date for such meeting had been
the date that written consents signed by a sufficient number of holders to take
such action were delivered to
<PAGE>
American in accordance with Section 228(c) of the DCL. The covenant of American
in this Section 3 shall be deemed to form part of the covenants of American
included in Article Six of the Restated Merger Agreement for all purposes of the
Restated Merger Agreement.
4. All references to "Proxy Statement" in the Restated Merger Agreement
shall be deemed in all cases in the Restated Merger Agreement to be references
to "Information Statement" and all references to "Tower Proxy Statement" shall
be deemed in all cases in the Restated Merger Agreement to be references to
"Tower Information Statement."
5. Notwithstanding anything contained in the Restated Merger Agreement
to the contrary, including without limitation Section 6.5 thereof, American
shall not be required to hold either the American Stockholders Meeting or the
American Stockholders Tower Meeting.
6. This Amendment shall constitute a Collateral Document for all
purposes of the Restated Merger Agreement.
7. The validity, interpretation, construction and performance of this
Amendment shall be governed by, and construed in accordance with, the Applicable
Laws of the United States of America and the laws of the State of New York
applicable to contracts made and performed in such State and, in any event,
without giving effect to any choice or conflict of laws provision or rule that
would cause the application of domestic substantive laws of any other
jurisdiction, except to the extent the corporate laws of the State of Delaware
are applicable.
8. This Amendment may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other parties.
9. Except as expressly modified and amended by this Amendment, the
Restated Merger Agreement shall continue in full force and effect and is hereby
ratified and confirmed in all respects.
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<PAGE>
IN WITNESS WHEREOF, American, Mergeparty and Mergeparty Subsidiary have
caused this Amendment to be executed, pursuant to the authority and approval of
each of their respective Boards of Directors, as of the date first written above
by their respective officers thereunto duly authorized.
American Radio Systems Corporation
By: /s/ Steven B. Dodge
Name: Steven B. Dodge
Title: Chairman of the Board,
President and Chief Executive Officer
CBS Corporation
By: /s/ Frederic G. Reynolds
Name: Frederic G. Reynolds
Title:
Acquisition Corp.
By: /s/ Frederic G. Reynolds
Name: Frederic G. Reynolds
Title:
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AMERICAN TOWER SYSTEMS
FOR IMMEDIATE RELEASE Contact: Joe Winn, Chief Financial
Officer or Bruce Danziger, Director
of Investor Relations
Tel: (617) 375-7500
AMERICAN TOWER SYSTEMS
TO MERGE WITH AMERICAN TOWER CORPORATION
Boston, Massachusetts--December 15, 1997--American Tower Systems Corporation
(ATS), a wholly-owned subsidiary of American Radio Systems Corporation (NYSE:
AFM), announced today that it has reached an agreement to merge American Tower
Corporation (ATC) into ATS. American Tower Corporation, based in Houston, owns
and/or operates over 750 communications towers in 32 states, with significant
regional concentrations in California, Texas and along the Gulf Coast.
ATS will issue in the merger shares of common stock representing 35% of ATS' pro
forma capital stock to be outstanding after giving effect to the previously
announced merger of Gearon and Co., Inc. into ATS and a proposed private
placement of $80.0 million of ATS common stock, and to all ATS existing and
proposed stock options. The transaction, which is subject to regulatory
approval, is expected to be consummated in the first half of 1998. ATS will be
the surviving corporation and will be renamed American Tower Corporation
effective with the closing. Fred Lummis, Chief Executive Officer of ATC, and
Randall Mays, Chief Financial Officer of Clear Channel Communications, Inc.,
will join the Board of Directors of ATS. Clear Channel Communications currently
owns a 31% interest in ATC.
Steve Dodge, CEO of ATS, stated, "American Tower Corporation is a rapidly
growing company with terrific assets, talented management and a strong
orientation to customer service. We are delighted to have the opportunity to
combine their strengths with our own, and we believe that the new American Tower
Corporation will be uniquely positioned to benefit its customers, its people and
ultimately its shareholders. At the same time, we would like to remind
shareholders that in the early going we intend to invest heavily in customer
relationships, new tower development and in the creation of a deep and talented
management team. In doing so, we will be de-emphasizing -- at least initially --
a tidy and predictable quarterly earnings story."
Fred Lummis, CEO of ATC, commented, "American Tower Systems represents the ideal
merger partner for our company because of its quality people, assets and cash
flow. This combination will provide a strategic platform from which to
participate in the long-term growth of the wireless industry. We are now poised
to be a leading player in the tower business."
ATS develops, acquires, manages and markets antenna sites for the wireless
communications industry. Assuming the closing of all announced transactions,
including the ATC merger, ATS will own and/or manage over 1,750 communications
sites throughout the United States. ATS is headquartered in Boston and maintains
regional offices in Connecticut, New Jersey, Pennsylvania, Washington, D.C.,
Virginia, South Carolina, Florida, Texas and California.
On September 19, 1997, American Radio Systems entered into a merger agreement
with CBS Corporation pursuant to which its radio operations will become a wholly
owned subsidiary of CBS. Consummation of the transaction is subject to
regulatory approval. Around the same time and as a condition of the CBS merger,
American Radio Systems will distribute to its common shareholders the stock of
ATS.
AMERICAN RADIO SYSTEMS
FOR IMMEDIATE RELEASE Contact: Joe Winn, Chief Financial
Officer or Bruce Danziger, Director
of Investor Relations
Tel: (617) 375-7500
AMERICAN TOWER SYSTEMS
ACQUIRES GEARON COMMUNICATIONS
Boston, Massachusetts--December 3, 1997--American Tower Systems Corporation
(ATS), a wholly-owned subsidiary of American Radio Systems Corporation (NYSE:
AFM), announced today that it has reached an agreement to merge Gearon & Co.,
Inc. (Gearon) into ATS. Gearon is an Atlanta-based tower site acquisition and
construction management company with towers located in the southeastern U.S.
Gearon's customers include many of the large cellular and PCS providers.
ATS will pay approximately $32 million in cash and will issue approximately 5.3
million shares of common stock as consideration for the merger. The transaction,
which is subject to regulatory approval, is expected to close within the next
few weeks.
Steve Dodge, CEO of ATS, stated, "Michael Gearon has built a highly profitable
company with a deep and capable staff, strong customer relationships, and
forward momentum. We believe that the partnership of Gearon and American Tower
Systems will provide a very attractive alternative to various service providers
who may be considering outsourcing their investment in tower infrastructure. We
will now have the management expertise and the capital to both develop and
finance sites for our customers."
J. Michael Gearon, Jr., who is the principal owner of Gearon and who will become
a Director and Executive Vice President of ATS, commented, "This merger combines
American Tower's financial capabilities, successful tower management and
ownership experience with Gearon's extensive leadership in turnkey communication
site development. Our new company is now positioned to become the leader in this
emerging industry."
ATS develops, acquires, manages and markets antenna sites for the wireless
communications industry. Assuming the closing of all announced transactions, ATS
will own and/or manage over 1,000 communications sites throughout the United
States. ATS is headquartered in Boston and maintains regional offices in
Connecticut, New Jersey, Pennsylvania, Washington, D.C., Virginia, South
Carolina, Florida, Texas and
California.
On September 19, 1997, American Radio Systems entered into a merger agreement
with CBS Corporation pursuant to which its radio operations will become a wholly
owned subsidiary of CBS. Consummation of the transaction is subject to
regulatory approval. Around the same time and as a condition of the merger,
American Radio Systems will distribute to its shareholders the stock of ATS,
which operates its communications tower business.
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(617) 375-7500 FAX (617) 375-7575
