Section 3.6.
Capitalization and Related Matters
.
(a) The
authorized capital stock of the Company consists of 439,800,000 shares of Company Common Stock and 20,000,000 shares of Company's preferred stock (the
"
Company Preferred Stock
"). As of May 31, 2014, 137,965,604 shares of Company Common Stock were issued and outstanding (comprised of 153,760,350
shares of common stock less 15,794,746 of treasury shares not retired), and there are no shares of Company Preferred Stock issued or outstanding. As of May 31, 2014, there were
(i) Company Options to purchase an aggregate of 426,581 shares of Company Common Stock, with a weighted average exercise price of $12.54 per share, issued and outstanding, (ii) 1,629,730
shares of Company Common Stock underlying outstanding and unvested Company Restricted Stock Awards, (iii) 2,098,926 shares of Company Common Stock underlying
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unvested
Company RSU Awards, and (iv) 12,415,604 shares of Company Common Stock available for issuance under the Company Benefit Plans (comprised of 11,811,746 shares of Company Common Stock
available for issuance under the Company Stock Plans and 603,858 shares of Common Stock available for issuance under the ESPP).
(b) The
issued and outstanding shares of Company Common Stock (i) have been duly authorized and validly issued and are fully paid and nonassessable and
(ii) were issued in compliance with all applicable U.S. federal and state securities laws. Except as set forth above in Section 3.6(a), and except for (x) shares of Company Common
Stock issued since May 31, 2014 pursuant to Company Options or Company RSU Awards or Company Restricted Stock Awards outstanding as of May 31, 2014 and (y) a Company Restricted
Stock Award granted on June 5, 2014 with respect to 3,938 shares of Company Common Stock and shares that may be issued pursuant to such Company Restricted Stock Award, no shares of capital
stock of the Company are issued and outstanding and the Company does not have outstanding any securities convertible into or exchangeable for any shares of capital stock of the Company, any rights to
subscribe for or to purchase or any options for the purchase of, or any agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments or known claims of any other
character relating to the issuance of, any capital stock of the Company, or any stock or securities convertible into or exchangeable for any capital stock of the Company; and, the Company is not
subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire, or to register under the Securities Act, any shares of capital stock of the Company. The Company does
not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the
stockholders of the Company on any matter. Except as set forth above in Section 3.6(a) or in clause (y) of the second sentence of this Section 3.6(b), there are no outstanding
stock options, restricted stock units, restricted stock, stock appreciation rights, "phantom" stock rights, performance units, or other compensatory rights or awards (in each case, issued by the
Company or any of its Subsidiaries), that are convertible into or exercisable for a share of Company Common Stock on a deferred basis or otherwise or other rights that are linked to, or based upon,
the value of Company Common Stock. All Company Equity Awards are evidenced by award agreements in the forms previously made available to Parent.
(c) The
Company has no rights plan, "poison-pill" or, other similar agreement or arrangement or any anti-takeover provision in the Company Organizational Documents that is,
or at the Effective Time shall be, applicable to the Company, the Company Common Stock, the Combination or the other transactions contemplated by this Agreement.
(d) All
of the outstanding shares of capital stock, or membership interests or other ownership interests of, each Subsidiary of the Company, as applicable, are validly
issued, fully paid and nonassessable and are owned of record and beneficially by the Company, directly or indirectly. The Company has, as of the date hereof and shall have on the Closing Date, valid
and marketable title to all of the shares of capital stock of, or membership interests or other ownership interests in, each Subsidiary of the Company, free and clear of any Liens other than Permitted
Liens. Such outstanding shares of capital stock of, or membership interests or other ownership interests in, the Subsidiaries of the Company, as applicable, are the sole outstanding securities of such
Subsidiaries; the Subsidiaries of the Company do not have outstanding any securities convertible into or exchangeable for any capital stock of, or membership interests or other ownership interests in,
such Subsidiaries, any rights to subscribe for or to purchase or any options for the purchase of, or any agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments
or claims of any other character relating to the issuance of, any capital stock of, or membership interests or other ownership interests in, such Subsidiaries, or any stock or securities convertible
into or exchangeable for any capital stock of, or membership interests or other ownership interests in,
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such
Subsidiaries; and neither the Company or any of its Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire, or to register under the
Securities Act, any capital stock of, or membership interests or other ownership interests in, any Subsidiary of the Company.
Section 3.7.
Subsidiaries and Equity Investments
.
The Company and its Subsidiaries do not directly or indirectly own, or hold any rights to acquire, any material capital stock or any other material securities, interests or investments
in any other Person other than investments that constitute cash or cash equivalents. No Subsidiary of the Company owns any shares of capital stock of the Company. There are no outstanding stock
options, restricted stock units, restricted stock, stock appreciation rights, "phantom" stock rights, performance units, or other compensatory rights or awards (in each case, issued by the Company or
any of its Subsidiaries) that are convertible into or exercisable for any capital stock of, or membership interests or other ownership interests in, any Subsidiary of the Company, on a deferred basis
or otherwise or other rights that are linked to, or based upon, the value of any capital stock of, or membership interests or other ownership interests in, any Subsidiary of the Company.
Section 3.8.
Company SEC Reports
.
(a) The
Company and its Subsidiaries have filed each report and definitive proxy statement (together with all amendments thereof and supplements thereto) required to be
filed by the Company or any of its Subsidiaries pursuant to the Exchange Act with the SEC since January 1, 2011 (as such documents have since the time of their filing been amended or
supplemented, the "
Company SEC Reports
"). As of their respective dates, after giving effect to any amendments or supplements thereto filed prior to the
date hereof, the Company SEC Reports (i) complied as to form in all material respects with the requirements of the Exchange Act, and (ii) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not
misleading.
(b) The
audited consolidated financial statements and unaudited interim consolidated financial statements (including, in each case, the notes, if any, thereto) included in
the Company SEC Reports complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto, were prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be indicated therein or in the notes thereto and except with respect to unaudited statements as permitted by Form 10-Q of the SEC)
and fairly present (subject, in the case of the unaudited interim financial statements included therein, to normal year-end adjustments and the absence of complete footnotes) in all material respects
the consolidated financial position of the Company and its consolidated Subsidiaries as of the respective dates thereof and the consolidated results of their operations and cash flows for the
respective periods then ended.
Section 3.9.
Absence of Certain Changes or Events
.
(a) Since
December 31, 2013, there has not been any Company Material Adverse Effect.
(b) Since
December 31, 2013 through the date hereof, there has not been:
(i) any
material loss, damage, destruction or other casualty to the assets or properties of either of the Company or any of its Subsidiaries (other than (x) any for
which insurance awards have been received or guaranteed and (y) for such failures as would not individually or in the aggregate have a Company Material Adverse Effect);
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(ii) any
change in any method of financial accounting or financial accounting practice of either of the Company or any of its Subsidiaries except for any such change
required by reason of a concurrent change in GAAP; or
(iii) any
loss of the employment, services or benefits of the chief executive officer of the Company or members of the Company's senior management.
(c) Since
December 31, 2013 through the date hereof, each of the Company and each of its Subsidiaries has operated in the ordinary course of business and has not:
(i) (A)
lent money to any Person (other than to the Company or any of its Wholly Owned Subsidiaries) or incurred or guaranteed any Indebtedness for borrowed money or
(B) entered into any capital lease obligation, in each case, in excess of $500,000 in the aggregate, other than among the Company or any of its Wholly Owned Subsidiaries;
(ii) failed
to discharge or satisfy any material Lien or pay or satisfy any obligation or liability or accounts payable (whether absolute, accrued, contingent or otherwise)
in excess of $1,000,000, other than Permitted Liens and obligations and liabilities being contested in good faith and for which adequate reserves have been provided in accordance with GAAP;
(iii) mortgaged,
pledged or subjected to any Lien (other than Permitted Liens) any of its assets, properties or rights in excess of $1,000,000;
(iv) sold
or transferred any of its material assets or cancelled any material debts or claims or waived any material rights in excess of $1,000,000;
(v) other
than increases in accordance with past practice not exceeding 5% of the annual base compensation then in effect of a Senior Vice President or above of the Company
(a "
Company Key Employee
"), a director of the Company or an executive officer of the Company, granted a material increase in the compensation or
benefits of any Company Key Employee, director of the Company or executive officer of the Company;
(vi) entered
into, adopted or amended any change of control, retention or severance agreement or arrangement with respect to any Company Key Employee, director of the
Company or executive officer of the Company, other than, in each case, in accordance with past practice;
(vii) in
the case of the Company and any Subsidiary that is not a Wholly Owned Subsidiary, declared, paid, or set aside for payment any dividend or other distribution in
respect of shares of its capital stock, membership interests or other securities, or redeemed, purchased or otherwise acquired, directly or indirectly, any shares of its capital stock, membership
interests or other securities, or agreed to do so;
(viii) (A)
changed any of its material accounting methods, principles or practices, except as required by GAAP or by the SEC, or (B) changed its material Tax
elections, or entered into any material closing agreement or settled or compromised any material claim or assessment, in each case in respect of material Taxes;
(ix) entered
into any agreement or made any commitment to do any of the foregoing; or
(x) been
notified in writing of any change, cancellation or modification to any Customer Contract or Vendor Contract that would materially and adversely affect the Company's
relationship with the applicable Customer or Vendor.
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Section 3.10.
Tax Matters
.
(a) Except
as would not, individually or in the aggregate, have a Company Material Adverse Effect:
(i) (A)
the Company and each of its Subsidiaries have filed when due all Tax Returns required by applicable law to be filed with respect to the Company and each of its
Subsidiaries, (B) all such Tax Returns were true, correct and complete in all respects as of the time of such filing, and (C) all Taxes owed by the Company and each of its Subsidiaries
(including any Taxes that are required to be deducted and withheld in connection with any amounts paid or owing to any employee, creditor, independent contractor or other third party), if required to
have been paid, have been paid, except, in each case of clauses (A) through (C), for Taxes or Tax matters contested in good faith or that have been adequately provided for, in accordance with
GAAP, in the Company SEC Reports filed prior to the date hereof;
(ii) there
is no action, suit, proceeding, investigation or audit now pending with respect to the Company or any of its Subsidiaries in respect of any Tax, nor has any
claim for additional Tax been asserted in writing by any taxing authority;
(iii) since
January 1, 2011, no claim has been made in writing by any taxing authority in a jurisdiction where the Company or any of its Subsidiaries has not filed
income or franchise Tax Returns that it is or may be subject to income or franchise Tax by such jurisdiction;
(iv) (A)
there is no outstanding request for any extension of time for the Company or any of its Subsidiaries to pay any Taxes or file any Tax Returns, other than any such
request made in the ordinary course of business; (B) there is no waiver or extension of any applicable statute of limitations for the assessment or collection of any Taxes of the Company or any
of its Subsidiaries that is currently in force; and (C) neither the Company nor any of its Subsidiaries is a party to or bound by any agreement (other than (1) any commercial contract
entered into in the ordinary course and not primarily related to Taxes or (2) any agreement solely among the Company and/or its Subsidiaries) providing for the payment of Taxes, payment for Tax
losses, entitlements to refunds or similar Tax matters;
(v) neither
the Company nor any of its Subsidiaries has participated in any "listed transaction" as defined in Treasury Regulations Section 1.6011-4(b)(2);
(vi) within
the last two years, neither the Company nor any of its Subsidiaries has distributed stock of another Person, or has had its stock distributed by another Person,
in a transaction that was purported or intended to be governed in whole or in part by Section 355 of the Code;
(vii) there
is no Lien, other than a Permitted Lien, on any of the assets or properties of the Company and its Subsidiaries that arose in connection with any failure or
alleged failure to pay any Tax;
(viii) neither
the Company nor any of its Subsidiaries has any liability for the Taxes of any Person (other than any of the Company and its Subsidiaries) under Treasury
Regulations § 1.1502-6 (or any similar provision of U.S. state or local or non-U.S. law), or as a transferee or successor; and
(ix) the
Company and its Subsidiaries are not bound with respect to the current or any future taxable period by any closing agreement (within the meaning of
Section 7121(a) of the Code) or other written agreement with a taxing authority.
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(b) Neither
the Company nor any of its Subsidiaries has taken or agreed to take any action, or is aware of the existence of any fact or circumstance, that would prevent the
Combination from qualifying as a reorganization within the meaning of Section 368(a) of the Code.
(c) As
of December 31, 2013, the consolidated federal income Tax Return group of which the Company is the common parent had federal net operating loss carryforwards
of at least $800 million. As of the date hereof, such net operating loss carryforwards are not subject to limitation under Section 382 of the Code or any similar provision of applicable
law.
Section 3.11.
Absence of Undisclosed Liabilities
.
There are no liabilities or obligations of the Company or any Subsidiary thereof of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise,
other than (A) liabilities or obligations disclosed, reflected or reserved against and provided for in the consolidated balance sheet of the Company as of December 31, 2013 included in
the Company SEC Reports filed prior to the date hereof or referred to in the notes thereto, (B) liabilities or obligations incurred in the ordinary course of business consistent with past
practice since December 31, 2013, (C) liabilities or obligations that would not, individually or in the aggregate, have a Company Material Adverse Effect, or (D) liabilities or
obligations incurred pursuant to this Agreement.
Section 3.12.
Company Property
.
(a) All
material real property (other than repeater or amplifier sites) owned by the Company and its Subsidiaries as of the date hereof is hereinafter referred to as the
"
Company Owned Real Property
". The Company and its Subsidiaries have good and valid title to all of the Company Owned Real Property free and clear of
Liens other than Permitted Liens. All leases, site leases, subleases and occupancy agreements, together with all material amendments thereto, in which either of the Company or its Subsidiaries has a
leasehold interest, license or similar occupancy rights, whether as lessor or lessee, and which involve payments by the Company or its Subsidiaries in excess of $500,000 per year are hereinafter each
referred to as a "
Company Lease
" and collectively as the "
Company Leases
; the property covered by
Company Leases under which either of the Company or its Subsidiaries is a lessee is referred to herein as the "
Company Leased Real Property
"; the
Company Leased Real Property, together with the Company Owned Real Property, collectively being the "
Company Property
".
(b) Since
December 31, 2013, no Company Lease has been modified or amended in writing in any way materially adverse to the business of the Company and its
Subsidiaries and no party to any Company Lease has given either of the Company or its Subsidiaries written notice of or, to the Knowledge of the Company, made a claim with respect to any breach or
default, except for such defaults or breaches that, individually or in the aggregate, would not have a Company Material Adverse Effect.
(c) Other
than with respect to IRUs, co-location, cross-connection, interconnection, entrance facilities or other rights incidental to the provision of services established
in the ordinary course of business, none of the material Company Owned Real Property is subject to any option or other agreement granting to any Person or entity any right to obtain title to all or
any portion of such property.
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Section 3.13.
Intellectual Property
.
(a) Except
as would not, individually or in the aggregate, have a Company Material Adverse Effect, (i) the Company and its Subsidiaries own all right, title and
interest in and to, or have valid and enforceable licenses to use, all the Company Intellectual Property; (ii) to the Knowledge of the Company, no third party is infringing any Company Owned
Intellectual Property; (iii) to the Knowledge of the Company, the Company and its Subsidiaries are not infringing, misappropriating or violating any Intellectual Property right of any third
party; and (iv) as of the date hereof, there is no claim, suit, action or proceeding pending or, to the Knowledge of the Company, threatened against the Company or its Subsidiaries:
(a) alleging any such violation, misappropriation or infringement of a third party's Intellectual Property rights; or (b) challenging the Company's or its Subsidiaries' ownership or use
of, or the validity or enforceability of, any Company Owned Intellectual Property.
(b) All
material issued Patents, registered trademarks and service marks, registered copyrights, and applications for any of the foregoing, in each case issued by, filed
with, or recorded by, any Governmental Entity and constituting Company Owned Intellectual Property are hereinafter referred to as the "
Company Registered Intellectual
Property
." All Company Registered Intellectual Property is owned by the Company and/or its Subsidiaries, free and clear of all Liens other than Permitted Liens.
Section 3.14.
Licenses and Permits
.
(a) The
Company and its Subsidiaries own or possess all right, title and interest in and to each of their respective material licenses, permits, franchises, registrations,
authorizations and approvals issued or granted to any of the Company or its Subsidiaries by any Governmental Entity as of the date hereof (the "
Company Licenses and
Permits
"). The Company has taken all necessary action to maintain such Company Licenses and Permits, except for such failures that would not, individually or in the aggregate,
have a Company Material Adverse Effect. Each Company License and Permit has been duly obtained, is valid and in full force and effect, and is not subject to any pending or, to the Knowledge of the
Company, threatened administrative or judicial proceeding to revoke, cancel, suspend or declare such Company License and Permit invalid in any respect, except, in each case, as would not, individually
or in the aggregate, have a Company Material Adverse Effect. The Company Licenses and Permits are sufficient and adequate in all material respects to permit the continued lawful conduct of the
business of the Company and its Subsidiaries as presently conducted, and none of the operations of the Company or its Subsidiaries is being conducted in a manner that violates in any material respects
any of the terms or conditions under which any Company License and Permit was granted, except for such failures that would not, individually or in the aggregate, have a Company Material Adverse
Effect.
(b) The
operations of the Company and its Subsidiaries are in compliance in all material respects with the terms and conditions of the Communications Act of 1934, as amended
by the Telecommunications Act of 1996 (the "
Communications Act
"), applicable U.S. state or non-U.S. law and the published rules, regulations, and
policies promulgated by any Governmental Entity, and neither the Company nor its Subsidiaries have done anything or failed to do anything which reasonably could be expected to cause the loss of any of
the material Company Licenses and Permits.
(c) No
petition, action, investigation, notice of violation or apparent liability, notice of forfeiture, order to show cause, complaint, or proceeding seeking to revoke,
reconsider the grant of, cancel, suspend, or modify any of the material Company Licenses and Permits is pending or, to the Knowledge of the Company, threatened before any Governmental Entity except
for such failures that would not, individually or in the aggregate have a Company Material Adverse Effect. No notices have been received by and, no claims have been filed against, the Company or its
Subsidiaries
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alleging
a failure to hold any material requisite permits, regulatory approvals, licenses or other authorizations.
Section 3.15.
Compliance with Law
.
(a) Since
January 1, 2011, the operations of the business of the Company and its Subsidiaries have been conducted in accordance in all material respects with all
applicable laws, regulations, orders and other requirements of all Governmental Entities having jurisdiction over such entity and its assets, properties and operations. Since January 1, 2011,
none of the Company or its Subsidiaries has received notice of any violation (or any investigation with respect thereto) of any such law, regulation, order or other legal requirement, and none of the
Company or its Subsidiaries is in default with respect to any order, writ, judgment, award, injunction or decree of any national, federal, state or local court or governmental or regulatory authority
or arbitrator, domestic or foreign, applicable to any of its assets, properties or operations, except for any of the foregoing that would not, individually or in the aggregate, have a Company Material
Adverse Effect.
(b) The
Company and each of its officers are in compliance in all material respects with (i) the applicable provisions of the Sarbanes-Oxley Act of 2002 and the
related rules and regulations promulgated under such act or the Exchange Act (the "
Sarbanes-Oxley Act
") and (ii) the applicable listing and
corporate governance rules and regulations of the Nasdaq Global Select Market. Except as permitted by the Exchange Act, including, without limitation, Sections 13(k)(2) and (3), since the
enactment of the Sarbanes-Oxley Act, neither the Company nor any of its Affiliates has made, arranged or modified (in any material way) personal loans to any executive officer or director of the
Company.
(c) The
management of the Company has (i) implemented (x) disclosure controls and procedures to ensure that material information relating to the Company,
including its consolidated Subsidiaries, is made known to the management of the Company by others within those entities and (y) a system of internal control over financial reporting sufficient
to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, and (ii) disclosed,
based on its most recent evaluation prior to the date hereof, to the Company's auditors and the audit committee of the Company's Board of Directors (A) any significant deficiencies in the
design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize and report financial data and has identified for the Company's auditors any
material weaknesses in internal controls and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls.
Section 3.16.
Litigation
.
Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, there are no claims, actions, suits, proceedings, subpoenas or investigations pending or,
to the Knowledge of the Company, threatened, before any Governmental Entity, or before any arbitrator of any nature, brought by or against any of the Company or its Subsidiaries or any of their
officers or directors involving or relating to the Company or its Subsidiaries, the assets, properties or rights of any of the Company and its Subsidiaries or the transactions contemplated by this
Agreement. There is no material judgment, decree, injunction, ruling or order of any Governmental Entity or before any arbitrator of any nature outstanding, or to the Knowledge of the Company,
threatened, against either of the Company or any of its Subsidiaries.
Section 3.17.
Contracts
.
(a) Schedule 3.17(a)
sets forth a complete and correct list in all material respects of all Contracts as of the date hereof.
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(b) Each
Contract is valid, binding and enforceable against the Company or its Subsidiaries and, to the Knowledge of the Company, against the other parties thereto in
accordance with its terms, and in full force and effect subject to the rights of creditors generally and the availability of equitable remedies, except to the extent the failure to be in full force
and effect would not have, individually or in the aggregate, a Company Material Adverse Effect. Each of the Company and its Subsidiaries has performed all obligations required to be performed by it to
date under, and is not in default or delinquent in performance, status or any other respect (claimed or actual) in connection with, any Contract, and no event has occurred which, with due notice or
lapse of time or both, would, individually or in the aggregate, constitute such a default except as would not have a Company Material Adverse Effect. To the Knowledge of the Company, as of the date
hereof, no other party to any Contract is in default in respect thereof, and no event has occurred which, with due notice or lapse of time or both, would, individually or in the aggregate, constitute
such a default except as would not have a Company Material Adverse Effect.
(c) A
"
Contract
" means any written agreement, contract or commitment (provided, that in the case of Customer Contracts and
Vendor Contracts, all such written agreements, contracts or commitments relating to such customer or vendor shall be deemed one Contract) to which either of the Company or any of its Subsidiaries is a
party or by which it or any of its assets are bound constituting:
(i) a
contract or agreement with one of the top 20 customers (each, a "
Customer
") by revenue derived by the Company and its
Subsidiaries (taken together), for the year ended December 31, 2013, pursuant to which the Company or any of its Subsidiaries has sold goods and/or services (the
"
Customer Contracts
");
(ii) a
contract or agreement with one of the top 20 vendors that provide the Company or any of its Subsidiaries with equipment, telecommunications access services or fiber
IRUs (each, a "
Vendor
") by dollar amount paid to such vendors by the Company and its Subsidiaries (taken together), for the year ended
December 31, 2013 (the "
Vendor Contracts
");
(iii) a
material peering agreement of the Company and its Subsidiaries;
(iv) a
mortgage, indenture, security agreement, guaranty, pledge or other agreement or instrument relating to the borrowing of money or extension of credit (other than
accounts receivable or accounts payable in the ordinary course of business and consistent with past practice) in an amount in excess of $500,000;
(v) a
contract or agreement creating a capital lease obligation in excess of $1,000,000;
(vi) a
joint venture, partnership or limited liability company agreement with third parties;
(vii) other
than Company permits restricting operations to a specific geographical territory, a non-competition agreement or any other agreement or obligation (other than
customary agency, sales representative and distribution agreements entered into in the ordinary course) which purports to limit in any material respect (i) the manner in which, or the
localities in which, the business of the Company or its Subsidiaries may be conducted or (ii) the ability of either of the Company or its Subsidiaries to provide any type of service;
(viii) an
agreement limiting or restricting the ability of either of the Company or its Subsidiaries to make distributions or declare or pay dividends in respect of its
capital stock or membership interests, as the case may be;
(ix) an
agreement (other than capital leases) requiring capital expenditures (other than capital lease obligations) in excess of $500,000, provided that this
clause (ix) shall not include customer agreements, purchase orders or statements of work for software development entered
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into
in the ordinary course of business consistent with the Company's capital expenditure forecast;
(x) an
agreement or offer to acquire all or a substantial portion of the capital stock, business, property or assets of any other Person in each case that would be material
to the Company; or
(xi) an
agreement pursuant to which the Company or its Subsidiaries uses or has the right to use material network infrastructure, including fiber, conduit, space, power and
other associated property necessary to operate a fiber optic network requiring payments by the Company in excess of $1,000,000 in a fiscal year.
Section 3.18.
Employee Plans
.
(a) Schedule 3.18(a)
contains a correct and complete list of each Company Benefit Plan pursuant to which the Company or any of its Subsidiaries would reasonably be
expected to have aggregate obligations or liabilities in excess of $250,000 per year.
(b) The
Company has provided or made available to Parent or its counsel with respect to each and every material Company Benefit Plan a true and complete copy of all plan
documents, if any, including related trust agreements, funding arrangements, and insurance contracts and all amendments thereto; and, to the extent applicable, (i) the most recent determination
letter received by the Company or any of its Subsidiaries from the IRS regarding the tax-qualified status of such Company Benefit Plan; (ii) the most recent financial statements for such
Company Benefit Plan; (iii) the most recent actuarial valuation report; (iv) the current summary plan description and any summaries of material modifications; and
(v) Form 5500 Annual Returns/Reports, together with all schedules thereto, for the most recent plan year.
(c) No
Company Benefit Plan is (i) subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code, (ii) a "multiemployer plan" as
defined in Section 3(37) of ERISA, or (iii) a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063
of ERISA, and none of the Company or any of its ERISA Affiliates has withdrawn at any time within the preceding six years from any multiemployer plan, or incurred any withdrawal liability which
remains unsatisfied, and no events have occurred and no circumstances exist that would reasonably be expected to result in any such liability to the Company or any of its Subsidiaries.
(d) With
respect to each Company Benefit Plan that is intended to qualify under Section 401(a) of the Code, such plan, and its related trust, has received, has an
application pending or remains within the remedial amendment period for obtaining, a determination letter from the IRS that it is so qualified and that its trust is exempt from Tax under
Section 501(a) of the Code, and nothing has occurred with respect to the operation of any such plan which would reasonably be expected to cause the loss of such qualification or exemption or
the imposition of any material liability, penalty or Tax under ERISA or the Code.
(e) There
are no pending or, to the Knowledge of the Company, threatened material actions, claims or lawsuits against or relating to any Company Benefit Plan or against any
fiduciary of any Company Benefit Plan with respect to the operation of such plan (other than routine benefits claims).
(f) Each
Company Benefit Plan has been established and administered in all material respects in accordance with its terms, and in compliance in all material respects with
the applicable provisions of ERISA, the Code and other applicable laws, and all contributions (including all employer contributions and employee salary reduction contributions) required to have been
made under any of the Company Benefit Plans to any funds or trusts established thereunder or in connection therewith have been made or have been accrued and reported on the Company's financial
statements.
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(g) None
of the Company Benefit Plans provide retiree health or life insurance benefits except as may be required by Section 4980B of the Code and Section 601
of ERISA or any other applicable law or at the expense of the participant or the participant's beneficiary. There has been no material violation of the "continuation coverage requirement" of "group
health plans" as set forth in Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA with respect to any Company Benefit Plan to which such continuation coverage
requirements apply.
(h) Except
as provided in this Agreement, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby or thereby will
(either alone or in combination with another event) (i) result in any payment becoming due, or increase the amount of any compensation or benefits due, to any current or former employee of the
Company and its Subsidiaries or with respect to any Company Benefit Plan; (ii) increase any benefits otherwise payable under any Company Benefit Plan; or (iii) result in the acceleration
of the time of payment or vesting of any such compensation or benefits.
(i) Neither
the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby or thereby will (either alone or in combination with
another event) result in the payment of any amount that would, individually or in combination with any other such payment, not be deductible as a result of Section 280G of the Code.
(j) Except
as would not reasonably be expected to result in a material liability to the Company or its Subsidiaries, each Company Benefit Plan that is a "nonqualified
deferred compensation plan" (as defined in Section 409A(d)(1) of the Code) is in documentary compliance with, and has been administered (i) in good faith compliance with
Section 409A of the Code for the period beginning October 1, 2004 through December 31, 2008, and (ii) in compliance with Section 409A of the Code since
January 1, 2009.
(k) With
respect to any Company Equity Award, (i) each grant of a Company Equity Award was duly authorized no later than the date on which the grant of such Company
Equity Award was by its terms to be effective (the "
Grant Date
") by all necessary corporate action, including, as applicable, approval by the Board of
Directors of the Company, or a committee thereof, or a duly authorized delegate thereof, and any required approval by the stockholders of the Company by the necessary number of votes or written
consents, and the award agreement governing such grant, if any, was duly executed and delivered by each party thereto within a reasonable time following the Grant Date, (ii) each such grant was
made in accordance with the terms of the applicable Company Benefit Plan (including the applicable Company Stock Plan), the Exchange Act and all other applicable Law, including the rules of NASDAQ,
and (iii) the per share exercise price of each Company Option was not less than the fair market value of a share of Company Common Stock on the applicable Grant Date.
(l) Except
as would not reasonably be expected to result in a material liability to the Company or its Subsidiaries, all Company Benefit Plans subject to the laws of any
jurisdiction outside of the United States (i) have been maintained in accordance with all applicable requirements, (ii) that are intended to qualify for special Tax treatment, meet all
requirements for such treatment, and (iii) that are intended to be funded and/or book-reserved, are fully funded and/or book reserved, as appropriate, based upon reasonable actuarial
assumptions.
Section 3.19.
Insurance
.
All material policies of title, liability, fire, casualty, business interruption, workers' compensation and other forms of insurance and bonds insuring each of the Company and its
Subsidiaries and their assets, properties and operations are in full force and effect. None of the Company or its Subsidiaries is in material default under any provisions of any such policy of
insurance nor has any of the Company or its Subsidiaries received notice of cancellation of or cancelled any such material insurance.
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Section 3.20.
Affiliate Transactions
.
There are no transactions, agreements, arrangements or understandings between the Company or any of its Subsidiaries, on the one hand, and any director or executive officer of the
Company, on the other hand, that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act other than ordinary course of business employment agreements
and similar employee arrangements otherwise set forth on Schedule 3.20.
Section 3.21.
Vendors and Customers
.
(a) Schedule 3.21(a)
sets forth a list of the Vendors that are parties to the Vendor Contracts. Since December 31, 2013 and prior to the date hereof, no such
Vendor has expressed in writing to the Company or any of its Subsidiaries its intention to cancel or otherwise terminate, or materially reduce or modify, its relationship with the Company or any of
its Subsidiaries, except for any of the foregoing as would not, individually or in the aggregate, have a Company Material Adverse Effect.
(b) Schedule 3.21(b)
sets forth a list of the Customers that are parties to the Customer Contracts. Since December 31, 2013 and prior to the date hereof, no
Customer that is party to any Customer Contract has expressed in writing to the Company or any of its Subsidiaries its intention to cancel or otherwise terminate, or materially reduce or adversely
modify, its relationship with the Company or any of its Subsidiaries, except for any of the foregoing as would not, individually or in the aggregate, have a Company Material Adverse Effect.
Section 3.22.
Labor Matters
.
(a) Neither
the Company nor any of its Subsidiaries is a party to any collective bargaining agreement, labor union contract applicable to its employees or similar agreement
or work rules or practices with any labor union, works council, labor organization or employee association applicable to employees of the Company or any of its Subsidiaries nor does the Company have
Knowledge of any activities or proceedings of any labor union, works council, labor organization or employee association to organize any such employees.
(b) As
of the date hereof, there are no strikes or lockouts pending with respect to any employees of the Company or any of its Subsidiaries, there is no union organizing
effort pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries, there is no unfair labor practice, labor dispute (other than routine individual
grievances), or labor arbitration proceeding pending or, to the Knowledge of the Company, threatened, with respect to the employees of the Company or any of its Subsidiaries, and there is no slowdown
or work stoppage in effect or, to the Knowledge of the Company, threatened with respect to the employees of the Company or any of its Subsidiaries, except, in each case, as would not have, or would
not reasonably be expected to have, a Company Material Adverse Effect.
(c) Except
as would not have, or would not reasonably be expected to have, a Company Material Adverse Effect, (i) each of the Company and its Subsidiaries are, and
have been, in compliance in all respects with all applicable laws relating to employment and employment practices, the classification of employees, wages, overtime, hours, collective bargaining,
unlawful discrimination, civil rights, safety and health, workers' compensation and terms and conditions of employment, (ii) there are no charges with respect to or relating to either of the
Company or its Subsidiaries pending or, to the Knowledge of the Company, threatened before the Equal Employment Opportunity Commission or any national, federal, state or local agency, domestic or
foreign, responsible for the prevention of unlawful employment practices, and (iii) since January 1, 2011, neither the Company nor any of its Subsidiaries has received any written notice
from any national, federal, state or local agency, domestic or foreign, responsible for the enforcement of labor or employment laws of an intention to conduct an investigation of either of the Company
or its Subsidiaries and no such investigation is in progress.
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(d) Except
as would not have, or would not reasonably be expected to have, a Company Material Adverse Effect, neither the Company nor any of its Subsidiaries has incurred
any liability or obligations with respect to any "mass layoff" or "plant closing" as defined by, and pursuant to, the Worker Adjustment and Retraining Notification Act or any similar U.S. state or
local or non-U.S. "plant closing" law ("
WARN
") with respect to the current or former employees of the Company or its Subsidiaries.
(e) Except
as would not have, or would not reasonably be expected to have, a Company Material Adverse Effect, (i) all independent contractors of the Company and its
Subsidiaries (and any other independent contractor who previously rendered services for the Company or its Subsidiaries, at any time) have been, and currently are, properly classified and treated by
the Company and its Subsidiaries, as applicable, as independent contractors and not as employees, (ii) all such independent contractors have in the past been, and continue to be, properly and
appropriately treated as non-employees for all U.S. federal, state, and local and non-U.S. Tax purposes, (iii) the Company and its Subsidiaries have fully and accurately reported their
independent contractors' compensation on IRS Forms 1099 (or otherwise in accordance with applicable law) when required to do so, and the Company and its Subsidiaries do not have any liability
to provide benefits with respect to their independent contractors under the Company Benefit Plans or otherwise, and (iv) at no time within the preceding two years has any independent contractor
brought a claim against the Company or its Subsidiaries challenging his or her status as an independent contractor or made a claim for additional compensation or any benefits under any Company Benefit
Plan or otherwise.
Section 3.23.
Environmental Matters
.
(a) Except
as would not have a Company Material Adverse Effect, each of the Company and its Subsidiaries is, and has been, in compliance in all material respects with all
applicable laws, regulations, common law and other requirements of Governmental Entities relating to pollution, to the protection of the environment or to natural resources
("
Environmental Laws
").
(b) To
the Knowledge of the Company, since January 1, 2011:
(i) the
Company and its Subsidiaries have not received any notice of violation or potential liability under any Environmental Laws from any Person or any Governmental
Entity inquiry, request for information, or demand letter under any Environmental Law relating to operations or properties of the Company or its Subsidiaries which would be reasonably expected to
result in the Company or any of its Subsidiaries incurring material liability under Environmental Laws;
(ii) none
of the Company or its Subsidiaries is subject to any orders arising under Environmental Laws nor are there any administrative, civil or criminal actions, suits,
proceedings or investigations pending or, to the Knowledge of the Company, threatened, against the Company or its Subsidiaries under any Environmental Law which would reasonably be expected to result
in a Company Material Adverse Effect;
(iii) none
of the Company or its Subsidiaries has entered into any agreement pursuant to which the Company or its Subsidiaries has assumed or will assume any liability under
Environmental Laws, including without limitation, any obligation for costs of remediation, of any other Person that would reasonably be expected to result in a Company Material Adverse Effect; and
(iv) there
has been no release or threatened release of a hazardous substance, hazardous waste, contaminant, pollutant, toxic substance or petroleum and its fractions, the
presence of which requires investigation or remediation under any applicable Environmental Law ("
Hazardous Material
"), on, at or beneath any of the
Company Property or other properties currently or previously owned or operated by the Company or its Subsidiaries or any surface waters or groundwaters thereon or thereunder which requires any
material disclosure,
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investigation,
cleanup, remediation, monitoring, abatement, deed or use restriction by the Company, or which would be expected to give rise to any other material liability or damages to the Company or
its Subsidiaries under any Environmental Laws.
(c) Except
as would not have a Company Material Adverse Effect, none of the Company or its Subsidiaries has arranged for the disposal of any Hazardous Material, or
transported any Hazardous Material, in a manner that has given, or reasonably would be expected to give rise to any liability for any damages or costs of remediation.
Section 3.24.
No Brokers
.
No broker, finder or similar intermediary has acted for or on behalf of, or is entitled to any broker's, finder's or similar fee or other commission from the Company or its Subsidiaries
in connection with this Agreement or the transactions contemplated hereby other than Evercore Group L.L.C. The Company has heretofore furnished to Parent a complete and correct copy of all agreements
between the Company and Evercore Group L.L.C. pursuant to which Evercore Group L.L.C. would be entitled to any payment relating to the transactions contemplated hereby.
Section 3.25.
Network Operations and Building Access
.
(a) The
network of the Company and its Subsidiaries, taken as a whole, is in good working condition and is without any material defects for purposes of operating the
business of the Company and its Subsidiaries as operated by the Company and its Subsidiaries.
(b) The
Company and its Subsidiaries have good and valid title to or otherwise have the right to use all items and equipment necessary to operate and maintain the network of
the Company and its Subsidiaries and such items and equipment are in good operating condition and repair, free from all material defects, subject only to normal wear and tear, except for any of the
foregoing as would not, individually or in the aggregate, have a Company Material Adverse Effect.
(c) The
Company and its Subsidiaries have rights of access to the buildings served by its metropolitan fiber facilities that are consistent with reasonable industry
standards.
Section 3.26.
State Takeover Statutes
.
No "fair price", "moratorium", "control share acquisition" or other similar anti-takeover statute or regulation or any anti-takeover provision in the Company Organizational Documents is,
or at the Effective Time will be, applicable to the Company, the Company Common Stock, the Combination or the other transactions contemplated by this Agreement.
Section 3.27.
Opinion of Financial Advisor
.
The Board of Directors of the Company has received the opinion of Evercore Group L.L.C., dated as of the date hereof, to the effect that, as of such date, and subject to the limitations,
qualifications and assumptions set forth therein, the Merger Consideration to be received by the holders of the Company Common Stock pursuant to the Merger is fair from a financial point of view to
the holders of such Company Common Stock. A written copy of such opinion has been made available to Parent.
Section 3.28.
Board Approval
.
The Board of Directors of the Company, at a meeting duly called and held, by unanimous vote (i) determined that this Agreement and the transactions contemplated hereby, including
the Merger, are advisable and fair to, and in the best interests of, the Company and its stockholders, (ii) approved this Agreement and the transactions contemplated hereby and thereby,
including the Merger, and (iii) resolved, subject to Section 7.4, to recommend that the holders of the shares of Company Common Stock approve and adopt this Agreement and the
transactions contemplated hereby, including the Merger. The Company hereby agrees to the inclusion in the joint proxy statement/prospectus relating to the matters to be submitted to the holders of
Company Common Stock at the Company stockholders meeting to approve and adopt this Agreement and the Merger (the "
Company Stockholders Meeting
") and to
the holders of the
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shares
of Parent Common Stock at the Parent stockholders meeting (the "
Parent Stockholders Meeting
") to approve the issuance of shares of Parent Common
Stock in the Merger for purposes of the rules of the NYSE (the "
Parent Share Issuance
") and to approve and adopt the Parent Charter Amendment (such
joint proxy statement/prospectus, and any amendments or supplements thereto, the "
Joint Proxy Statement/Prospectus
"), of the recommendation of the Board
of Directors of the Company described in this Section 3.28 (subject to the right of the Board of Directors of the Company to withdraw, amend or modify such recommendation in accordance with
Section 7.4).
Section 3.29.
Vote Required
.
The affirmative vote of the holders of a majority of the outstanding shares of Company Common Stock entitled to vote thereon (the "
Required Company
Vote
") is the only vote of the holders of any class or series of the Company's capital stock necessary to approve and adopt this Agreement and the transactions contemplated
hereby, including the Merger.
Section 3.30.
No Improper Payments to Foreign Officials; Trade Laws
.
(a) Since
January 1, 2011, (i) the Company and its Subsidiaries, directors, officers and employees have complied in all material respects with the U.S. Foreign
Corrupt Practices Act of 1977, as amended (15 U.S.C. §§ 78a et seq. (1997 and 2000)) and any other material applicable foreign or domestic anticorruption or antibribery
Laws (collectively, the "
Fraud and Bribery Laws
"), and (ii) neither the Company, any Subsidiary of the Company nor, to the Knowledge of the
Company, any of the Company's directors, officers, employees, agents or other representatives acting on the Company's behalf have, directly or indirectly, in each case, in violation in any material
respects of the Fraud and Bribery Laws (A) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity,
(B) offered, promised, paid or delivered any fee, commission or other sum of money or item of value, however characterized, to any finder, agent or other party acting on behalf of or under the
auspices of a governmental or political employee or official or governmental or political entity, political agency, department, enterprise or instrumentality, in the United States or any other
country, (C) made any payment to any customer or supplier, or to any officer, director, partner, employee or agent of any such customer or supplier, for the unlawful sharing of fees to any such
customer or supplier or any such officer, director, partner, employee or agent for the unlawful rebating of charges, (D) engaged in any other unlawful reciprocal practice, or made any other
unlawful payment or given any other unlawful consideration to any such customer or supplier or any such officer, director, partner, employee or agent or (E) taken any action or made any
omission in violation of any applicable law governing imports into or exports from the United States or any foreign country, or relating to economic sanctions or embargoes, corrupt practices, money
laundering, or compliance with unsanctioned foreign boycotts.
(b) The
United States government has not notified the Company or any of its Subsidiaries of any actual or alleged violation or breach of the Fraud and Bribery Laws. Other
than the United States government, no Person has notified the Company or any of its Subsidiaries of any actual or, to the Knowledge of the Company, alleged violation or breach of the Fraud and Bribery
Laws. To the Knowledge of the Company, none of the Company or any of its Subsidiaries is under investigation by any government for alleged violation(s) of the Fraud and Bribery Laws.
Section 3.31.
No Other Representations or Warranties
.
Except for the representations and warranties contained in this Article III, neither the Company nor any other Person makes any other express or implied representation or warranty
on behalf of the Company with respect to the Company and its Subsidiaries.
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PARENT, MERGER SUB 1 AND MERGER SUB 2
Except as otherwise expressly disclosed in the Parent SEC Reports filed prior to the date hereof (other than (i) any information
that is contained solely in the "Risk Factors" section of such Parent SEC Reports and (ii) any forward-looking statements, or other statements that are similarly predictive or forward-looking
in nature, contained in such Parent SEC Reports) or as set forth in the corresponding sections or subsections of the Parent Disclosure Schedule (or, pursuant to Section 10.2(b), as set forth in
any section or subsection of the Parent Disclosure Schedule to the extent the applicability thereof is readily apparent from the face of the Parent Disclosure Schedule), Parent, Merger Sub 1 and
Merger Sub 2 hereby represent and warrant to the Company as follows:
Section 4.1.
Organization
.
(a) Parent
is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has all requisite corporate power to own its
properties and assets and to conduct its businesses as now conducted except where the failure to be so qualified or in good standing in such jurisdiction would not, individually or in the aggregate,
have a Parent Material Adverse Effect. Copies of the Parent Organizational Documents, with all amendments thereto to the date hereof, have been made available to the Company or its representatives,
and such copies are accurate and complete as of the date hereof.
(b) Each
of Merger Sub 1, Merger Sub 2 and Parent's other Subsidiaries is duly organized, validly existing and in good standing or similar concept under the laws of the
jurisdiction of its organization, and has all requisite corporate, limited liability company or limited partnership power (as the case may be) to own its properties and assets and to conduct its
businesses as now conducted except where the failure to be so qualified or in good standing in such jurisdiction would not, individually or in the aggregate, have a Parent Material Adverse Effect.
Copies of the organizational documents of Merger Sub 1, Merger Sub 2 and each material Subsidiary of Parent, with all amendments thereto to the date hereof, have been made available to the Company or
its representatives, and such copies are accurate and complete as of the date hereof.
Section 4.2.
Qualification to Do Business
.
Each of Parent, Merger Sub 1, Merger Sub 2 and Parent's other Subsidiaries is duly qualified to do business as a foreign corporation, limited liability company or partnership (as the
case may be) and is in good standing or similar concept in every jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, have a Parent Material Adverse Effect.
Section 4.3.
No Conflict or Violation
.
The execution, delivery and, subject to the receipt of the Required Parent Vote, performance by Parent, Merger Sub 1 and Merger Sub 2 of this Agreement do not and will not
(i) violate or conflict with any provision of any Parent Organizational Document or any of the organizational documents of Merger Sub 1, Merger Sub 2, or any of Parent's other Subsidiaries,
(ii) subject to the receipt of any consents set forth in Section 4.4 (including Schedule 4.4), violate any provision of law, or any order, judgment or decree of any Governmental
Entity, (iii) subject to the receipt of any consents set forth in Section 4.4 (including Schedule 4.4) result in the creation or imposition of any Lien (other than any Permitted
Lien) upon any of the assets, properties or rights of any of Parent, Merger Sub 1 or Merger Sub 2 or any of Parent's other Subsidiaries or result in or give to others any rights of cancellation,
modification, amendment, acceleration, revocation or suspension of any of the Parent Licenses and Permits or (iv) violate or result in a breach of or constitute (with due notice or lapse of
time or both) a default under or result in or give to others any rights of cancellation, modification, amendment, or
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acceleration
under, any contract, agreement, lease or instrument to which Parent, Merger Sub 1 or Merger Sub 2 or any of Parent's other Subsidiaries is a party or by which it is bound or to which any
of its properties or assets is subject, except in each case with respect to clauses (iii) and (iv), for any such violations, breaches or defaults that would not, individually or in the
aggregate, have a Parent Material Adverse Effect.
Section 4.4.
Consents and Approvals
.
No consent, waiver, authorization or approval of any Governmental Entity, and no declaration or notice to or filing or registration with any Governmental Entity, is necessary or required
in connection with the execution and delivery of this Agreement by Parent or the performance by Parent or its Subsidiaries of their obligations hereunder, except for: (i) the filing of the
Certificate of Merger with the Secretary of State in accordance with the DGCL; (ii) the filing of the Subsequent Certificate of Merger with the Secretary of State in accordance with the DGCL
and the DLLCA; (iii) the filing of a Notification and Report Form under the HSR Act; (iv) the filing of applications jointly by the parties with the FCC and U.S. state public utility
commissions for approval of the transfer of control of the Company, and receipt of such approvals; (v) applicable requirements of the Securities Act and of the Exchange Act; (vi) such
consents, waivers, authorizations or approvals of any Governmental Entity set forth on Schedule 4.4; and (vii) such consents, waivers, authorizations, approvals, declarations, notices,
filings or registrations as will be obtained or made prior to the Closing or which, if not obtained or made, would not have a Company Material Adverse Effect or prevent or materially delay the
consummation of the transactions contemplated by this Agreement.
Section 4.5.
Authorization and Validity of Agreement
.
Parent, Merger Sub 1 and Merger Sub 2 have all requisite corporate or limited liability power and authority to execute, deliver and, subject to receipt of the Required Parent Vote,
perform their respective obligations under this Agreement and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement by Parent, Merger Sub 1 and
Merger Sub 2 and the performance by Parent, Merger Sub 1 and Merger Sub 2 of their respective obligations hereunder and thereunder and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by the Board of Directors of each of Parent and Merger Sub 1 and the Board of Managers of Merger Sub 2 and all other necessary corporate or limited liability company
action on the part of Parent, Merger Sub 1 and Merger Sub 2, other than the Required Parent Vote, and no other corporate proceedings on the part of either Parent, Merger Sub 1 or Merger Sub 2 are
necessary to authorize this Agreement and the transactions contemplated hereby and thereby. This Agreement has been duly and validly executed and delivered by Parent, Merger Sub 1 and Merger Sub 2
and, assuming due execution and delivery by the Company, shall constitute a legal, valid and binding obligation of each of Parent, Merger Sub 1 and Merger Sub 2, enforceable against each of Parent,
Merger Sub 1 and Merger Sub 2 in accordance with its terms, subject to (i) the effect of bankruptcy, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or
affecting the enforcement of creditors' rights generally, and (ii) general equitable principles (whether considered in a proceeding in equity or at law).
Section 4.6.
Capitalization and Related Matters
.
(a) The
authorized capital stock of Parent consists of 343,333,333 authorized shares of Parent Common Stock and 10,000,000 authorized shares of preferred stock, par value
$0.01 per share ("
Parent Preferred Stock
"). As of June 12, 2014, 237,435,229 shares of Parent Common Stock were issued and outstanding and no
shares of Parent Preferred Stock were issued and outstanding. As of May 31, 2014, there were (i) Parent Options to purchase an aggregate of 10,665 shares of Parent Common Stock, with a
weighted average exercise price of $14.55 per share, issued and outstanding, (ii) 4,997,343 shares of Parent Common Stock underlying Parent SARs, assuming maximum achievement of any applicable
performance goals, (iii) 0 shares of Parent Common Stock underlying Parent Restricted Stock Awards, and (iv) 3,906,420 shares of Parent Common Stock
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underlying
Parent RSU Awards, assuming maximum achievement of any applicable performance goals. As of December 31, 2013, 15,278,650 shares of Parent Common Stock were available for grant under
the Parent Benefit Plans (all of which is issuable under the Parent Stock Plan).
(b) The
outstanding shares of Parent Common Stock (i) have been duly authorized and validly issued and are fully paid and nonassessable and (ii) were issued in
compliance with all applicable U.S. federal and state securities laws and any non-U.S. securities laws. Except as set forth above in Section 4.6(a) and except for (x) equity- or
equity-based awards granted under a Parent Benefit Plan and (y) shares of Parent Common Stock issued since May 31, 2014 pursuant to Parent Options or Parent SARs or Parent Restricted
Stock Awards, no shares of capital stock of Parent are outstanding and Parent does not have outstanding any securities convertible into or exchangeable for any shares of capital stock of Parent,
including Parent Equity Awards, any rights to subscribe for or to purchase or any options for the purchase of, or any agreements providing for the issuance (contingent or otherwise) of, or any calls,
commitments or known claims of any other character relating to the issuance of, any capital stock of Parent, or any stock or securities convertible into or exchangeable for any capital stock of
Parent; and Parent is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire, or to register under the Securities Act, any shares of capital stock of
Parent. Except as set forth above in Section 4.6(a), Parent does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or are
convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any matter. Except as set forth above in Section 4.6(a) or clause (x) of the
second sentence of this Section 4.6(b), there are no outstanding stock options, restricted stock units, restricted stock, stock appreciation rights, "phantom" stock rights, performance units,
or other compensatory rights or awards (in each case, issued by Parent or any of its Subsidiaries), that are convertible into or exercisable for a share of Parent Common Stock on a deferred basis or
otherwise or other rights that are linked to, or based upon, the value of Parent Common Stock. All Parent Equity Awards are evidenced by award agreements in the forms previously made available to the
Company.
(c) Except
for the Rights Agreement, Parent has no rights plan, "poison-pill" or other similar agreement or arrangement or any anti-takeover provision in the Parent
Organizational Documents that is, or at the Effective Time shall be, applicable to Parent, the Parent Common Stock, the Combination or the other transactions contemplated by this Agreement.
(d) All
of the outstanding shares of capital stock, or membership interests or other ownership interests of, Merger Sub 1 and Merger Sub 2 and each other Subsidiary of
Parent, as applicable, are validly issued, fully paid and nonassessable and are owned of record and beneficially by Parent, directly or indirectly. Parent has, as of the date hereof and shall have on
the Closing Date, valid and marketable title to all of the shares of capital stock of, or membership interests or other ownership interests in, Merger Sub 1 and Merger Sub 2 and each other Subsidiary
of Parent, free and clear of any Liens other than Permitted Liens. Such outstanding shares of capital stock of, or membership interests or other ownership interests in, Merger Sub 1 and Merger Sub 2
and each other Subsidiary of Parent, as applicable, are the sole outstanding securities of such Subsidiaries; the Subsidiaries of Parent do not have outstanding any securities convertible into or
exchangeable for any capital stock of, or membership interests or other ownership interests in, such Subsidiaries, any rights to subscribe for or to purchase or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments or claims of any other character relating to the issuance of, any capital stock of, or membership
interests or other ownership interests in, such Subsidiaries, or any stock or securities convertible into or exchangeable for any capital stock of, or membership interests or other ownership interests
in, such Subsidiaries; and neither Parent or any of its Subsidiaries are subject to any obligation (contingent or otherwise) to repurchase
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or
otherwise acquire or retire, or to register under the Securities Act, any capital stock of, or membership interests or other ownership interests in, any Subsidiary of Parent.
Section 4.7.
Subsidiaries and Equity Investments
.
Parent, Merger Sub 1, Merger Sub 2 and Parent's other Subsidiaries do not directly or indirectly own, or hold any rights to acquire, any material capital stock or any other material
securities, interests or investments in any other Person other than investments that constitute cash or cash equivalents. Parent, Merger Sub 1, Merger Sub 2 and Parent's other Subsidiaries do
not directly or indirectly own, or hold any rights to acquire, in any material amounts any cash equivalents consisting of auction-rate securities. There are no outstanding stock options, restricted
stock units, restricted stock, stock appreciation rights, "phantom" stock rights, performance units, or other compensatory rights or awards (in each case, issued by Parent or any of its Subsidiaries)
that are convertible into or exercisable for any capital stock of, or membership interests or other ownership interests in, any Subsidiary of Parent, on a deferred basis or otherwise or other rights
that are linked to, or based upon, the value of any capital stock of, or membership interests or other ownership interests in, any Subsidiary of Parent.
Section 4.8.
Parent SEC Reports
.
(a) Parent
and its Subsidiaries have filed each report and definitive proxy statement (together with all amendments thereof and supplements thereto) required to be filed by
Parent or any of its Subsidiaries pursuant to the Exchange Act with the SEC since January 1, 2011 (as such documents have since the time of their filing been amended or supplemented, the
"
Parent SEC Reports
"). As of their respective dates, after giving effect to any amendments or supplements thereto filed prior to the date hereof, the
Parent SEC Reports (i) complied as to form in all material respects with the requirements of the Exchange Act, and (ii) did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
(b) The
audited consolidated financial statements and unaudited interim consolidated financial statements (including, in each case, the notes, if any, thereto) included in
the Parent SEC Reports complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto, were prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be indicated therein or in the notes thereto and except with respect to unaudited statements as permitted by Form 10-Q of the SEC)
and fairly present (subject, in the case of the unaudited interim financial statements included therein, to normal year-end adjustments and the absence of complete footnotes) in all material respects
the consolidated financial position of Parent and its consolidated Subsidiaries as of the respective dates thereof and the consolidated results of their operations and cash flows for the respective
periods then ended.
Section 4.9.
Absence of Certain Changes or Events
.
(a) Since
December 31, 2013, there has not been any Parent Material Adverse Effect.
(b) Since
December 31, 2013, through the date hereof, there has not been:
(i) any
material loss, damage, destruction or other casualty to the assets or properties of either of Parent or any of its Subsidiaries (other than (x) any for which
insurance awards have been received or guaranteed and (y) for such failures as would not individually or in the aggregate have a Parent Material Adverse Effect);
(ii) any
change in any method of financial accounting or financial accounting practice of either of Parent or any of its Subsidiaries except for any such change required by
reason of a concurrent change in GAAP; or
(iii) any
loss of the employment, services or benefits of the chief executive officer of Parent and members of Parent's senior management.
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(c) Since
December 31, 2013 through the date hereof, each of Parent and each of its Subsidiaries has operated in the ordinary course of business and has not :
(i) (A)
lent money to any Person (other than to Parent or any of its Wholly Owned Subsidiaries) or incurred or guaranteed any Indebtedness for borrowed money in excess of
$2,500,000 in the aggregate, or (B) entered into any capital lease obligation, other than among Parent or any of its Wholly Owned Subsidiaries;
(ii) failed
to discharge or satisfy any material Lien or pay or satisfy any obligation or liability or accounts payable (whether absolute, accrued, contingent or otherwise)
in excess of $5,000,000, other than Permitted Liens and obligations and liabilities being contested in good faith and for which adequate reserves have been provided in accordance with GAAP;
(iii) mortgaged,
pledged or subjected to any Lien (other than Permitted Liens) any of its assets, properties or rights in excess of $5,000,000;
(iv) sold
or transferred any of its material assets or cancelled any material debts or claims or waived any material rights in excess of $5,000,000;
(v) in
the case of Parent and any Subsidiary that is not a Wholly Owned Subsidiary, declared, paid, or set aside for payment any dividend or other distribution in respect of
shares of its capital stock, membership interests or other securities, or redeemed, purchased or otherwise acquired, directly or indirectly, any shares of its capital stock, membership interests or
other securities, or agreed to do so;
(vi) (A)
changed any of its material accounting methods, principles or practices, except as required by GAAP or by the SEC, or (B) changed its material Tax elections,
or entered into any material closing agreement or settled or compromised any material claim or assessment, in each case in respect of material Taxes; or
(vii) entered
into any agreement or made any commitment to do any of the foregoing.
Section 4.10.
Tax Matters
.
(a) Except
as would not, individually or in the aggregate, have a Parent Material Adverse Effect:
(i) (A)
Parent and each of its Subsidiaries have filed when due all Tax Returns required by applicable law to be filed with respect to Parent and each of its Subsidiaries,
(B) all such Tax Returns were true, correct and complete in all respects as of the time of such filing, and (C) all Taxes owed by Parent and each of its Subsidiaries (including any Taxes
that are required to be deducted and withheld in connection with any amounts paid or owing to any employee, creditor, independent contractor or other third party), if required to have been paid, have
been paid, except, in each case of clauses (A) through (C), for Taxes or Tax matters contested in good faith or that have been adequately provided for, in accordance with GAAP, in the Parent
SEC Reports filed prior to the date hereof;
(ii) there
is no action, suit, proceeding, investigation or audit now pending with respect to Parent or any of its Subsidiaries in respect of any Tax, nor has any claim for
additional Tax been asserted in writing by any taxing authority;
(iii) since
January 1, 2011, no claim has been made in writing by any taxing authority in a jurisdiction where Parent or any of its Subsidiaries has not filed income
or franchise Tax Returns that it is or may be subject to income or franchise Tax by such jurisdiction;
(iv) (A)
there is no outstanding request for any extension of time for Parent or any of its Subsidiaries to pay any Taxes or file any Tax Returns, other than any such
request made in the
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ordinary
course of business; (B) there is no waiver or extension of any applicable statute of limitations for the assessment or collection of any Taxes of Parent or any of its Subsidiaries that
is currently in force; and (C) neither Parent nor any of its Subsidiaries is a party to or bound by any agreement (other than (1) any commercial contract entered into in the ordinary
course and not primarily related to Taxes or (2) any agreement solely among the Company and/or its Subsidiaries) providing for the payment of Taxes, payment for Tax losses, entitlements to
refunds or similar Tax matters;
(v) neither
Parent nor any of its Subsidiaries has participated in any "listed transaction" as defined in Treasury Regulations Section 1.6011-4(b)(2);
(vi) within
the last two years, neither Parent nor any of its Subsidiaries has distributed stock of another Person, or has had its stock distributed by another Person, in a
transaction that was purported or intended to be governed in whole or in part by Section 355 of the Code;
(vii) there
is no Lien, other than a Permitted Lien, on any of the assets or properties of Parent and its Subsidiaries that arose in connection with any failure or alleged
failure to pay any Tax;
(viii) neither
Parent nor any of its Subsidiaries has any liability for the Taxes of any Person (other than any of Parent and its Subsidiaries) under Treasury Regulations
§ 1.1502-6 (or any similar provision of U.S. state or local or non-U.S. law), or as a transferee or successor; and
(ix) Parent
and its Subsidiaries are not bound with respect to the current or any future taxable period by any closing agreement (within the meaning of
Section 7121(a) of the Code) or other written agreement with a taxing authority.
(b) Neither
Parent nor any of its Subsidiaries, including Merger Sub 1 and Merger Sub 2, has taken or agreed to take any action, or is aware of the existence of any fact or
circumstance, that would prevent the Combination from qualifying as a reorganization within the meaning of Section 368(a) of the Code.
(c) As
of December 31, 2013, the consolidated federal income Tax Return group of which Parent is the common parent had federal net operating loss carryforwards of at
least $9 billion. As of immediately after the Effective Time, such net operating loss carryforwards will not be subject to limitation under Section 382 of the Code or any similar
provision of applicable law.
Section 4.11.
Absence of Undisclosed Liabilities
.
There are no liabilities or obligations of Parent or any Subsidiary thereof of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, other
than (A) liabilities or obligations disclosed, reflected or reserved against and provided for in the consolidated balance sheet of Parent as of December 31, 2013 included in the Parent
SEC Reports filed prior to the date hereof or referred to in the notes thereto, (B) liabilities or obligations incurred in the ordinary course of business consistent with past practice since
December 31, 2013, (C) liabilities or obligations that would not, individually or in the aggregate, have a Parent Material Adverse Effect, or (D) liabilities or obligations
incurred pursuant to this Agreement.
Section 4.12.
Intellectual Property
.
(a) Except
as would not, individually or in the aggregate, have a Parent Material Adverse Effect, (i) Parent and its Subsidiaries own all right, title and interest in
and to, or have valid and enforceable licenses to use, all the Parent Intellectual Property; (ii) to the Knowledge of Parent, no third party is infringing any Parent Owned Intellectual
Property; (iii) to the Knowledge of Parent, Parent and its Subsidiaries are not infringing, misappropriating or violating any Intellectual Property right of any third party; and (iv) as
of the date hereof, there is no claim, suit, action or proceeding pending or, to the Knowledge of Parent, threatened against Parent or its Subsidiaries: (a) alleging any such violation,
misappropriation or infringement of a third party's Intellectual Property rights; or (b) challenging Parent's or its Subsidiaries' ownership or use of, or the validity or enforceability of, any
Parent Owned Intellectual Property.
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(b) All
Parent Registered Intellectual Property is owned by Parent and/or its Subsidiaries, free and clear of all Liens other than Permitted Liens.
Section 4.13.
Licenses and Permits
.
(a) Parent
and its Subsidiaries own or possess all right, title and interest in and to each of their respective material licenses, permits, franchises, registrations,
authorizations and approvals issued or granted to any of Parent or its Subsidiaries by any Governmental Entity as of the date hereof (the "
Parent Licenses and
Permits
"). Parent has taken all necessary action to maintain such Parent Licenses and Permits, except for such failures that would not, individually or in the aggregate, have a
Parent Material Adverse Effect. Each Parent License and Permit has been duly obtained, is valid and in full force and effect, and is not subject to any pending or, to the Knowledge of Parent,
threatened administrative or judicial proceeding to revoke, cancel, suspend or declare such Parent License and Permit invalid in any respect, except, in each case, as would not, individually or in the
aggregate, have a Parent Material Adverse Effect. The Parent Licenses and Permits are sufficient and adequate in all material respects to permit the continued lawful conduct of the business of Parent
and its Subsidiaries as presently conducted, and none of the operations of Parent or its Subsidiaries is being conducted in a manner that violates in any material respects any of the terms or
conditions under which any Parent License and Permit was granted, except for such failures that would not, individually or in the aggregate, have a Parent Material Adverse Effect.
(b) The
operations of Parent and its Subsidiaries are in compliance in all material respects with the terms and conditions of the Communications Act, applicable U.S. state
or non-U.S. law and the published rules, regulations, and policies promulgated by any Governmental Entity, and neither Parent nor its Subsidiaries have done anything or failed to do anything which
reasonably could be expected to cause the loss of any of the material Parent Licenses and Permits.
(c) No
petition, action, investigation, notice of violation or apparent liability, notice of forfeiture, order to show cause, complaint, or proceeding seeking to revoke,
reconsider the grant of, cancel, suspend, or modify any of the material Parent Licenses and Permits is pending or, to the Knowledge of Parent, threatened before any Governmental Entity except for such
failures that would not, individually or in the aggregate, have a Company Material Adverse Effect. No notices have been received by and, no claims have been filed against, Parent or its Subsidiaries
alleging a failure to hold any material requisite permits, regulatory approvals, licenses or other authorizations.
Section 4.14.
Compliance with Law
.
(a) Since
January 1, 2011, the operations of the business of Parent and its Subsidiaries have been conducted in accordance in all material respects with all
applicable laws, regulations, orders and other requirements of all Governmental Entities having jurisdiction over such entity and its assets, properties and operations. Since January 1, 2011,
none of Parent or its Subsidiaries has received notice of any violation (or any investigation with respect thereto) of any such law, regulation, order or other legal requirement, and none of Parent or
its Subsidiaries is in default with respect to any order, writ, judgment, award, injunction or decree of any national, federal, state or local court or governmental or regulatory authority or
arbitrator, domestic or foreign, applicable to any of its assets, properties or operations, except for any of the foregoing that would not, individually or in the aggregate, have a Parent Material
Adverse Effect.
(b) Parent
and each of its officers are in compliance in all material respects with (i) the applicable provisions of the Sarbanes-Oxley Act and (ii) the
applicable listing and corporate governance rules and regulations of the NYSE. Except as permitted by the Exchange Act, including, without limitation, Sections 13(k)(2) and (3), since the
enactment of the Sarbanes-Oxley Act, neither Parent nor any of its Affiliates has made, arranged or modified (in any material way) personal loans to any executive officer or director of Parent.
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(c) The
management of Parent has (i) implemented (x) disclosure controls and procedures to ensure that material information relating to Parent, including its
consolidated Subsidiaries, is made known to the management of Parent by others within those entities and (y) a system of internal control over financial reporting sufficient to provide
reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, and (ii) disclosed, based on
its most recent evaluation prior to the date hereof, to Parent's auditors and the audit committee of Parent's Board of Directors (A) any significant deficiencies in the design or operation of
internal controls which could adversely affect Parent's ability to record, process, summarize and report financial data and has identified for Parent's auditors any material weaknesses in internal
controls and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in Parent's internal controls.
Section 4.15.
Litigation.
Except
as would not have, individually or in the aggregate, a Parent Material Adverse Effect, there are no claims, actions, suits, proceedings, subpoenas or, to the Knowledge of Parent,
investigations pending or, to the Knowledge of Parent, threatened, before any Governmental Entity, or before any arbitrator of any nature, brought by or against any of Parent or its Subsidiaries or
any of their officers or directors involving or relating to Parent or its Subsidiaries, the assets, properties or rights of any of Parent and its Subsidiaries or the transactions contemplated by this
Agreement. There is no material judgment, decree, injunction, ruling or order of any Governmental Entity or before any arbitrator of any nature outstanding, or to the Knowledge of Parent, threatened,
against either of Parent or its Subsidiaries.
Section 4.16.
Contracts.
Each
contract between Parent and any of its Subsidiaries that is a "material contract" within the meaning of Item 601(b)(4), (9) and (10) of Regulation S-K of
the SEC to be performed after the date hereof (each such Contract, a "
Parent Material Contract
") is valid, binding and enforceable against Parent or its
Subsidiaries and, to the Knowledge of Parent, against the other parties thereto in accordance with its terms, and in full force and effect, subject to the rights of creditors generally and the
availability of equitable remedies, except to the extent the failure to be in full force and effect would not have, individually or in the aggregate, a Parent Material Adverse Effect. Each of Parent
and its Subsidiaries has performed all obligations required to be performed by it to date under, and is not in default or delinquent in performance, status or any other respect (claimed or actual) in
connection with, any Parent Material Contract, and no event has occurred which, with due notice or lapse of time or both, would constitute such a default, except as would not have a Parent Material
Adverse Effect. To the Knowledge of Parent, as of the date hereof, no other party to any Parent Material Contract is in material default in respect thereof, and no event has occurred which, with due
notice or lapse of time or both, would constitute such a default, except as would not have a Parent Material Adverse Effect.
Section 4.17.
Employee Plans
.
(a) Parent
has provided or made available to the Company or its counsel with respect to each and every material Parent Benefit Plan a true and complete copy of all plan
documents, if any, including related trust agreements, funding arrangements, and insurance contracts and all amendments thereto; and, to the extent applicable, (i) the most recent determination
letter received by Parent or any of its Subsidiaries from the IRS regarding the tax-qualified status of such Parent Benefit Plan; (ii) the most recent financial statements for such Parent
Benefit Plan; (iii) the most recent actuarial valuation report; (iv) the current summary plan description and any summaries of material modifications; and (v) Form 5500
Annual Returns/Reports, together with all schedules thereto, for the most recent plan year.
(b) With
respect to each Parent Benefit Plan that is a "single-employer plan" (within the meaning of Section 3(41) of ERISA) and is subject to Title IV or
Section 302 of ERISA or Section 412 or 4971 of the Code (each, a "
Title IV Plan
"): (i) the minimum funding standards (within
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the
meaning of Sections 412 and 430 of the Code or Section 302 of ERISA) are satisfied, whether or not waived, and no application for a waiver of the minimum funding standard has been
submitted to the IRS; (ii) no "reportable event" (within the meaning of Section 4043(c) of ERISA) for which the 30-day notice requirement has not been waived has occurred;
(iii) no liability other than for premiums to the Pension Benefit Guarantee Corporation ("
PBGC
") under Title IV of ERISA has been or is
reasonably expected to be incurred by Parent or any of its ERISA Affiliates, and all premiums to the PBGC have been timely paid in full; (iv) the PBGC has not instituted proceedings to
terminate any such plan, and, to the Knowledge of Parent, no condition exists that presents a risk that such proceedings will be instituted or which would constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer, any such plan; (v) no such plan is currently, or is reasonably expected to be, in "at-risk" status (as defined in
Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code); (vi) the fair market value of the assets and liabilities of such plan has been reported in accordance with GAAP by
Parent on the most recent financial statements of Parent; and (vii) neither Parent nor its Subsidiaries have engaged in a "substantial cessation of operations" within the meaning of
Section 4062(e) of ERISA, and the consummation of the transactions contemplated by this Agreement will not result in the occurrence of any such event. No Parent Benefit Plan is (i) a
"multiemployer plan" as defined in Section 3(37) of ERISA or (ii) a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning
of Section 4063 of ERISA, and none of Parent or any of its ERISA Affiliates has withdrawn at any time within the preceding six years from any multiemployer plan, or incurred any withdrawal
liability which remains unsatisfied, and no events have occurred and no circumstances exist that would reasonably be expected to result in any such liability to the Parent or any of its Subsidiaries.
(c) With
respect to each Parent Benefit Plan that is intended to qualify under Section 401(a) of the Code, such plan, and its related trust, has received, has an
application pending or remains within the remedial amendment period for obtaining, a determination letter from the IRS that it is so qualified and that its trust is exempt from Tax under
Section 501(a) of the Code, and nothing has occurred with respect to the operation of any such plan which would reasonably be expected to cause the loss of such qualification or exemption or
the imposition of any material liability, penalty or Tax under ERISA or the Code.
(d) There
are no pending or, to the Knowledge of Parent, threatened material actions, claims or lawsuits against or relating to any Parent Benefit Plan or against any
fiduciary of any Parent Benefit Plan with respect to the operation of such plan (other than routine benefits claims).
(e) Each
Parent Benefit Plan has been established and administered in all material respects in accordance with its terms, and in compliance in all material respects with the
applicable provisions of ERISA, the Code and other applicable laws, and all contributions (including all employer contributions and employee salary reduction contributions) required to have been made
under any of the Parent Benefit Plans to any funds or trusts established thereunder or in connection therewith have been made or have been accrued and reported on Parent's financial statements.
(f) None
of the Parent Benefit Plans provide retiree health or life insurance benefits except as may be required by Section 4980B of the Code and Section 601
of ERISA or any other applicable law or at the expense of the participant or the participant's beneficiary. There has been no material violation of the "continuation coverage requirement" of "group
health plans" as set forth in Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA with respect to any Parent Benefit Plan to which such continuation coverage
requirements apply.
(g) Except
as provided in this Agreement, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby or thereby will
(either alone or in combination with another event) (i) result in any payment becoming due, or increase the amount of
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any
compensation or benefits due, to any current or former employee of Parent and its Subsidiaries or with respect to any Parent Benefit Plan; (ii) increase any benefits otherwise payable under
any Parent Benefit Plan; or (iii) result in the acceleration of the time of payment or vesting of any such compensation or benefits.
(h) Neither
the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby or thereby will (either alone or in combination with
another event) result in the payment of any amount that would, individually or in combination with any other such payment, not be deductible as a result of Section 280G of the Code.
(i) Except
as would not reasonably be expected to result in a material liability to Parent or its Subsidiaries, each Parent Benefit Plan that is a "nonqualified deferred
compensation plan" (as defined in Section 409A(d)(1) of the Code) is in documentary compliance with, and has been administered (i) in good faith compliance with Section 409A of
the Code for the period beginning October 1, 2004 through December 31, 2008, and (ii) in compliance with Section 409A of the Code since January 1, 2009.
(j) With
respect to any Parent Equity Award, (a) each grant of a Parent Equity Award was duly authorized no later than the Grant Date by all necessary corporate
action, including, as applicable, approval by the Board of Directors of Parent, or a committee thereof, or a duly authorized delegate thereof, and any required approval by the stockholders of Parent
by the necessary number of votes or written consents, and the award agreement governing such grant, if any, was duly executed and delivered by each party thereto within a reasonable time following the
Grant Date, (b) each such grant was made in accordance with the terms of the applicable Parent Benefit Plan (including the applicable Parent Stock Plan), the Exchange Act and all other
applicable Law, including the rules of the NYSE, and (c) the per share exercise price of each Parent Option and Parent SAR was not less than the fair market value of a share of Parent Common
Stock on the applicable Grant Date.
(k) Except
as would not result in a material liability to Parent or its Subsidiaries, all Parent Benefit Plans subject to the laws of any jurisdiction outside of the United
States (i) have been maintained in accordance with all applicable requirements, (ii) that are intended to qualify for special Tax treatment, meet all requirements for such treatment, and
(iii) that are intended to be funded and/or book-reserved, are fully funded and/or book reserved, as appropriate, based upon reasonable actuarial assumptions.
Section 4.18.
Affiliate Transactions.
There
are no transactions, agreements, arrangements or understandings between Parent or any of its Subsidiaries, on the one hand, and any director or executive officer of Parent or any
of its Subsidiaries, on the other hand, that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act other than ordinary course of business employment
agreements and similar employee arrangements otherwise set forth on Schedule 4.18.
Section 4.19.
Labor Matters
.
(a) Neither
Parent nor any of its Subsidiaries is a party to any collective bargaining agreement, labor union contract applicable to its employees or similar agreement or
work rules or practices with any labor union, works council, labor organization or employee association applicable to employees of Parent or any of its Subsidiaries nor does Parent have Knowledge of
any activities or proceedings of any labor union, works council, labor organization or employee association to organize any such employees; except, in the case of employees of Parent or any of its
Subsidiaries who are employed outside of the United States, as would not have, or would not reasonably be expected to have, a Parent Material Adverse Effect.
(b) As
of the date hereof, there are no strikes or lockouts pending with respect to any employees of Parent or any of its Subsidiaries, there is no union organizing effort
pending or, to the
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Knowledge
of Parent, threatened against Parent or any of its Subsidiaries, there is no unfair labor practice, labor dispute (other than routine individual grievances), or labor arbitration proceeding
pending or, to the Knowledge of Parent, threatened, with respect to the employees of Parent or any of its Subsidiaries, and there is no slowdown or work stoppage in effect or, to the Knowledge of
Parent, threatened with respect to the employees of Parent or any of its Subsidiaries, except, in each case, as would not have, or would not reasonably be expected to have, a Parent Material Adverse
Effect.
(c) Except
as would not have, or would not reasonably be expected to have, a Parent Material Adverse Effect, (i) each of Parent and its Subsidiaries are, and have
been, in compliance in all respects with all applicable laws relating to employment and employment practices, the classification of employees, wages, overtime, hours, collective bargaining, unlawful
discrimination, civil rights, safety and health, workers' compensation and terms and conditions of employment, (ii) there are no charges with respect to or relating to either of Parent or its
Subsidiaries pending or, to the Knowledge of Parent, threatened before the Equal Employment Opportunity Commission or any national, federal, state or local agency, domestic or foreign, responsible for
the prevention of unlawful employment practices, and (iii) since January 1, 2011, neither Parent nor any of its Subsidiaries has received any written notice from any national, federal,
state or local agency, domestic or foreign, responsible for the enforcement of labor or employment laws of an intention to conduct an investigation of either of Parent or its Subsidiaries and no such
investigation is in progress.
(d) Except
as would not have, or would not reasonably be expected to have, a Parent Material Adverse Effect, neither Parent nor any of its Subsidiaries has incurred any
liability or obligations with respect to any "mass layoff" or "plant closing" as defined by, and pursuant to, WARN with respect to the current or former employees of Parent or its Subsidiaries.
(e) Except
as would not have, or would not reasonably be expected to have, a Parent Material Adverse Effect, (i) all independent contractors of Parent and its
Subsidiaries (and any other independent contractor who previously rendered services for Parent or its Subsidiaries, at any time) have been, and currently are, properly classified and treated by Parent
and its Subsidiaries, as applicable, as independent contractors and not as employees, (ii) all such independent contractors have in the past been, and continue to be, properly and appropriately
treated as non-employees for all U.S. federal, state, and local and non-U.S. Tax purposes, (iii) Parent and its Subsidiaries have fully and accurately reported their independent contractors'
compensation on IRS Forms 1099 (or otherwise in accordance with applicable law) when required to do so, and Parent and its Subsidiaries do not have any liability to provide benefits with
respect to their independent contractors under the Parent Benefit Plans or otherwise, and (iv) at no time within the preceding two years has any independent contractor brought a claim against
Parent or its Subsidiaries challenging his or her status as an independent contractor or made a claim for additional compensation or any benefits under any Parent Benefit Plan or otherwise.
Section 4.20.
Environmental Matters
.
(a) Except
as would not have a Parent Material Adverse Effect, each of Parent and its Subsidiaries is, and has been, in compliance in all material respects with all
applicable Environmental Laws.
(b) To
the Knowledge of Parent, since January 1, 2011:
(i) Parent
and its Subsidiaries have not received any notice of violation or potential liability under any Environmental Laws from any Person or any Governmental Entity
inquiry, request for information, or demand letter under any Environmental Law relating to operations or properties
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of
Parent or its Subsidiaries which would be reasonably expected to result in Parent or any of its Subsidiaries incurring material liability under Environmental Laws;
(ii) none
of Parent or its Subsidiaries is subject to any orders arising under Environmental Laws nor are there any administrative, civil or criminal actions, suits,
proceedings or investigations pending or,
to the Knowledge of Parent, threatened, against Parent or its Subsidiaries under any Environmental Law which would reasonably be expected to result in a Parent Material Adverse Effect;
(iii) none
of Parent or its Subsidiaries has entered into any agreement pursuant to which Parent or its Subsidiaries has assumed or will assume any liability under
Environmental Laws, including without limitation, any obligation for costs of remediation, of any other Person that would reasonably be expected to result in a Parent Material Adverse Effect; and
(iv) there
has been no release or threatened release of any Hazardous Material, on, at or beneath any of the Parent Property or other properties currently or previously
owned or operated by Parent or its Subsidiaries or any surface waters or groundwaters thereon or thereunder which requires any material disclosure, investigation, cleanup, remediation, monitoring,
abatement, deed or use restriction by Parent, or which would be expected to give rise to any other material liability or damages to Parent or its Subsidiaries under any Environmental Laws.
(c) Except
as would not have a Parent Material Adverse Effect, none of Parent or its Subsidiaries has arranged for the disposal of any Hazardous Material, or transported any
Hazardous Material, in a manner that has given, or reasonably would be expected to give rise to any liability for any damages or costs of remediation.
Section 4.21.
No Brokers.
The
Company will not be liable for any brokerage, finder's or other fee or commission to any consultant, broker, finder or investment banker in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of Parent, Merger Sub 1 or Merger Sub 2.
Section 4.22.
Financing.
As
of the date of this Agreement, Parent has delivered to the Company true, complete and correct copies of the fully executed Commitment Letter and the fully executed Fee Letter executed
in connection with the Financing (with only fee amounts, dates and certain other economic terms, including in respect of the "market flex" and "securities demand" provisions, redacted) (none of which
would adversely affect the amount or availability of the Financing other than through original issue discount). As of the date hereof, the Commitment Letter is in full force and effect and constitutes
the legal, valid, binding and enforceable obligations of Parent and, to the Knowledge of Parent, the other parties thereto (subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws affecting creditors' rights generally and general principles of equity). As of the date hereof, the Commitment Letter and Fee Letter have not been amended or
modified in any respect and, to the Knowledge of Parent, the commitments in the Commitment Letter have not been withdrawn or terminated. There are no conditions precedent to the funding of the full
amount of the Financing on the terms set forth in the Commitment Letter (as such terms may be altered in accordance with the "market flex" provisions set forth in the Fee Letter executed in connection
with the Financing) other than as expressly set forth as of the date hereof in the Commitment Letter. As of the date hereof, no event has occurred that, with or without notice, lapse of time or both,
would constitute a breach by Parent or any other party thereto under the Commitment Letter. Subject to the terms and conditions of the Commitment Letter, as of the date hereof, assuming satisfaction
of the conditions set forth in Section 8.1 and Section 8.2, the aggregate proceeds to be disbursed pursuant to the agreements contemplated by the Commitment Letter, together with other
financial resources of Parent, including its cash on hand and marketable securities, and cash on hand of the Company, will, in the aggregate, be sufficient to
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fund
the Cash Consideration, the cash payable to holders of Company Equity Awards, pursuant to Section 1.8, the payment of any debt required to be repaid, redeemed, retired, canceled,
terminated or otherwise satisfied or discharged in connection with the Merger as of the date hereof (including all Indebtedness of the Company and its Subsidiaries required to be repaid, redeemed,
retired, canceled, terminated or otherwise satisfied or discharged in connection with the Merger, including premiums and fees incurred in connection therewith (the "
Required
Indebtedness
")), and all other fees and expenses incurred by Parent, Merger Sub 1 and Merger Sub 2 in connection with the Merger and the other transactions contemplated hereby.
As of the date hereof, assuming satisfaction of the conditions set forth in Section 8.2, Parent has no reason to believe that either it or any other party will be unable to satisfy on a timely
basis any condition of the Financing under the Commitment Letter or any related Fee Letter or that the Financing contemplated by the Commitment Letter will not be made available to Parent on the
Closing Date. Assuming satisfaction of the conditions set forth in Sections 8.1 and 8.2, if the Closing were to occur on the date hereof, the incurrence of the indebtedness contemplated by the
Commitment Letter, including the liens and guarantees provided in connection therewith as set forth in the Commitment Letter, and the consummation of the transactions contemplated by this Agreement,
would not result in a default or event of default under the Parent Existing Credit Agreement, the Parent Existing Notes and the indentures governing the Parent Existing Notes. There are no other
letters, agreements or understandings (other than customary non-disclosure agreements and diligence non-reliance letters) between Parent, on the one hand, and the Financing Sources, on the other hand,
in connection with
the Financing. Parent has fully paid all fees and expenses and other amounts required to be paid on or prior to the date of this Agreement pursuant to the Commitment Letter.
Section 4.23.
Network Operations
.
(a) The
network of Parent and its Subsidiaries, taken as a whole, is in good working condition and is without any material defects for purposes of operating the business of
Parent and its Subsidiaries as operated by Parent and its Subsidiaries.
(b) Parent
and its Subsidiaries have good and valid title to or otherwise have the right to use all items and equipment necessary to operate and maintain the network of
Parent and its Subsidiaries and such items and equipment are in good operating condition and repair, free from all material defects, subject only to normal wear and tear.
Section 4.24.
State Takeover Statutes.
No
"fair price", "moratorium", "control share acquisition" or other similar anti-takeover statute or regulation or any anti-takeover provision in Parent Organizational Documents is, or
at the Effective Time will be, applicable to Parent, Parent Common Stock, the Merger or the other transactions contemplated by this Agreement.
Section 4.25.
Board Approval.
The
Board of Directors of Parent, at a meeting duly called and held, by unanimous vote (i) determined that this Agreement and the transactions contemplated hereby and thereby,
including the Merger, are advisable and fair to, and in the best interests of, Parent, (ii) approved this Agreement and the transactions contemplated hereby, including the Combination, and
(iii) resolved to recommend that the holders of the shares of Parent Common Stock approve the Parent Share Issuance and adopt the Parent Charter Amendment and directed that such matters be
submitted for consideration by Parent stockholders at the Parent Stockholders Meeting. Parent hereby agrees to the inclusion in the Joint Proxy Statement/Prospectus of the recommendation of the Board
of Directors of Parent described in this Section 4.25 (subject to the right of the Board of Directors of Parent to withdraw, amend or modify such recommendation in accordance with
Section 7.4).
Section 4.26.
Vote Required.
The
affirmative vote (i) to approve the Parent Share Issuance by the holders of Parent Common Stock representing a majority of the votes cast by such holders at a meeting of
stockholders of Parent called for such purpose and entitled to vote thereon (provided
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that
the total vote cast on the proposal represents over 50% in interest of all Parent Common Stock entitled to vote thereon) and (ii) to approve and adopt the Parent Charter Amendment by the
holders of Parent Common Stock representing at least a majority of the outstanding shares of Parent Common Stock (together, the "
Required Parent Vote
")
is the only vote or consent of the holders of any class or series of Parent's capital stock necessary in connection with the transactions contemplated by this Agreement and the transactions
contemplated hereby and thereby, including the Merger.
Section 4.27.
No Improper Payments to Foreign Officials; Trade Laws
.
(a) Since
January 1, 2011, (i) Parent and its Subsidiaries, directors, officers and employees have complied in all material respects with the Fraud and Bribery
Laws, and (ii) neither Parent, any Subsidiary of the Company nor, to the Knowledge of Parent, any of the Company's directors, officers, employees, agents or other representatives acting on
Parent's behalf have, directly or indirectly, in each case, in violation in any material respects of the Fraud and Bribery Laws (A) used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity, (B) offered, promised, paid or delivered any fee, commission or other sum of money or item of value, however
characterized, to any finder, agent or other party acting on behalf of or under the auspices of a governmental or political employee or official or governmental or political entity, political agency,
department, enterprise or instrumentality, in the United States or any other country, (C) made any payment to any customer or supplier, or to any officer, director, partner, employee or agent
of any such customer or supplier, for the unlawful sharing of fees to any such customer or supplier or any such officer, director, partner, employee or agent for the unlawful rebating of charges,
(D) engaged in any other unlawful reciprocal practice, or made any other unlawful payment or given any other unlawful consideration to any such customer or supplier or any such officer,
director, partner, employee or agent or (E) taken any action or made any omission in violation of any applicable law governing imports into or exports from the United States or any foreign
country, or relating to economic sanctions or embargoes, corrupt practices, money laundering, or compliance with unsanctioned foreign boycotts.
(b) The
United States government has not notified Parent or any of its Subsidiaries of any actual or alleged violation or breach of the Fraud and Bribery Laws. Other than
the United States government, no Person has notified Parent or any of its Subsidiaries of any actual or, to the Knowledge of Parent, alleged violation or breach of the Fraud and Bribery Laws. To the
Knowledge of Parent, none of Parent or any of its Subsidiaries is under investigation by any government for alleged violation(s) of the Fraud and Bribery Laws.
Section 4.28.
Opinion of Financial Advisor.
The
Board of Directors of the Parent has received the opinion of Rothschild Inc., dated as of the date hereof, to the effect that, as of its date, and subject to the limitations,
qualifications and assumptions set forth therein, the Merger Consideration to be paid by Parent pursuant to the Merger is fair from a financial point of view to Parent.
Section 4.29.
No Other Representations or Warranties.
Except
for the representations and warranties contained in this Article IV, none of Parent, Merger Sub 1, Merger Sub 2 or any other Person makes any other express or implied
representation or warranty on behalf of Parent, Merger Sub 1 or Merger Sub 2 with respect to Parent and its Subsidiaries.
Section 4.30.
Solvency.
None
of Parent, Merger Sub 1 or Merger Sub 2 is entering into this Agreement with the intent to hinder, delay or defraud creditors. Immediately after giving effect to all of the
transactions contemplated by this Agreement (including the Financing), the payment of aggregate Cash Consideration and any other repayment or refinancing of debt that may be contemplated, and payment
of all related fees and expenses, assuming (i) the satisfaction of the conditions to Parent's obligation to consummate the Merger set forth in Section 8.1 and Section 8.2
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and
(ii) the accuracy of the representations and warranties of the Company contained in Article III, the Parent and its Subsidiaries, taken as a whole, will be Solvent on the Closing
Date. For purposes of this Section 4.30, the term "Solvent" with respect to Parent and its Subsidiaries, taken as a whole, means that, as of any date of determination, (a) the amount of
the fair saleable value of the assets of Parent and its Subsidiaries, taken as a whole, exceeds, as of such date, the amount that will be required to pay the liabilities of Parent and its
Subsidiaries, taken as a whole, on its existing debts (including a reasonable estimate of contingent liabilities), (b) Parent and its Subsidiaries, taken as a whole, will not have, as of such
date, an unreasonably small amount of capital for the operation of the business in which it is engaged on such date, and (c) Parent and its Subsidiaries, taken as a whole, will be able to pay
its liabilities as they mature.
ARTICLE V.
COVENANTS OF THE COMPANY
The Company hereby covenants as follows:
Section 5.1.
Conduct of Business Before the Closing Date
.
(a) The
Company covenants and agrees that, during the period from the date hereof to the earlier of the termination of this Agreement in accordance with its terms and the
Effective Time (except as otherwise specifically contemplated by the terms of this Agreement), unless Parent shall otherwise consent in writing: (i) the businesses of the Company and its
Subsidiaries shall be conducted, in all material respects, in the ordinary course of business and in a manner consistent with past practice and, in all material respects, in compliance with applicable
laws, including without limitation the timely filing of all reports, forms or other documents with the SEC required pursuant to the Securities Act, the Exchange Act or the Sarbanes-Oxley Act, as well
as the timely filing of all reports, forms and other documents, and payment of all applicable regulatory fees and assessments, under applicable state and federal law; (ii) the Company shall use
its commercially reasonable efforts to, and shall cause its Subsidiaries to use their commercially reasonable efforts to, continue to maintain, in all material respects, its assets, properties, rights
and operations in accordance with present practice in a condition suitable for their current use; and (iii) the Company shall use its commercially reasonable efforts consistent with the
foregoing to preserve substantially intact the business organization of the Company and its Subsidiaries, to keep available the services of the present officers and the Company Key Employees and to
preserve, in all material respects, the present relationships of the Company and its Subsidiaries with persons with which the Company or any of its Subsidiaries has significant business relations.
Without limiting the generality of the foregoing, neither the Company nor any of its Subsidiaries shall (except as specifically contemplated by the terms of this Agreement or as set forth on
Schedule 5.1(a)), between the date of this Agreement and the earlier of the termination of this Agreement in accordance with its terms and the Effective Time, directly or indirectly, do any of
the following without the prior written consent of Parent (which shall not be unreasonably delayed, withheld or conditioned other than with respect to clauses (ii), (iii), (iv), (v) with
respect to acquisitions of any businesses, or (xiii)):
(i) make
any change in any of its organizational documents; issue any additional shares of capital stock (other than upon the exercise of options to purchase shares of
Company Common Stock or pursuant to the terms of Company RSU Awards, in each case outstanding on the date hereof), membership interests or partnership interests or other equity securities or grant any
option, warrant or right to acquire any capital stock, membership interests or partnership interests or other equity securities or issue any security convertible into or exchangeable for such
securities or alter in any way any of its outstanding securities or make any change in outstanding shares of capital stock, membership interests or partnership interests or other ownership interests
or its capitalization, whether by reason of a reclassification, recapitalization, stock split or combination, exchange or readjustment of shares, stock dividend or otherwise;
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(ii) make
any sale, assignment, transfer, abandonment, sublease or other conveyance of any material asset or Company Property that have a fair market value in excess of
$1,000,000 individually and $5,000,000 in the aggregate;
(iii) subject
any of its assets, properties or rights or any part thereof, to any Lien or suffer such to exist other than Permitted Liens;
(iv) (A)
redeem, retire, purchase or otherwise acquire, directly or indirectly, any shares of the capital stock (including restricted stock), membership interests or
partnership interests or other ownership interests of the Company, other than in connection with (i) the payment of the exercise price of Company Options with Company Common Stock (including
but not limited to in connection with "net exercises"), (ii) required Tax withholding in connection with the exercise of Company Options, the vesting of Company Restricted Stock Awards and the
vesting of Company RSU Awards, and (iii) forfeitures of Company Options, Company Restricted Stock Awards and Company RSU Awards, pursuant to their terms as in effect on the date of this
Agreement; (B) declare, set aside or pay any dividends or other distribution in respect of such shares or interests, other than for the purpose of satisfying withholding Tax obligations or the
purchase, redemption or other acquisition of shares of Company Common Stock from current or former employees or directors of the Company pursuant to the terms of any employment or option agreement or
Company Benefit Plan, (C) repurchase or retire any of the Company's Indebtedness, or (D) prepay or otherwise satisfy any obligations outstanding
under any of the Company's capital leases, other than pursuant to the applicable scheduled payments provided for under the corresponding capital leases;
(v) acquire,
lease or sublease any material assets or properties (including any real property) other than in the ordinary course of business consistent with the Company's
capital expenditure forecast as set forth on Schedule 5.1(a)(vii);
(vi) except,
in each case, (x) as required by the terms of any Company Benefit Plan, (y) as required by law or (z) as contemplated by this Agreement,
(A) increase the compensation or benefits payable or to become payable to any current or former employee, officer, director or consultant of the Company or any of its Subsidiaries, other than
increases in base compensation or wages in the ordinary course of business for employees who are not party to a Change of Control Employment Agreement or a Company Key Employee, (B) establish,
adopt, enter into or amend (except in the case of immaterial amendments that do not increase liabilities of the Company or its Subsidiaries) any Company Benefit Plan (or any benefit plan, agreement,
program, policy, commitment or other arrangement that would be a Company Benefit Plan if it were in existence on the date of this Agreement) or other collective bargaining, bonus, retention, profit
sharing, thrift, compensation, employment, termination, change in control, severance, stock incentive or other plan, agreement, trust, fund, policy or arrangement for the benefit of any current or
former director, officer, consultant or employee, (C) increase the compensation or benefits payable under any existing severance, termination, change in control or retention pay policy or
employment or other agreement, (D) take any affirmative action to accelerate the vesting of any stock or stock-based compensation except for administrative actions required under any applicable
agreement, (E) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement (including the grant of stock options, stock appreciation rights, stock based
or stock related awards, performance units, restricted stock, or other equity-based compensation, or the removal of existing restrictions in any outstanding agreement) except for administrative
actions required under any applicable agreement, (F) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan except for
administrative actions required under any applicable agreement, (G) grant or promise any Tax offset payment award under any Company Benefit Plan, (H) make any loan or cash advance to any
current or former director, officer, employee or
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independent
contractor, (I) hire, or promote any employee who would qualify as a Company Key Employee or whose annual cash compensation is expected to be in excess of $350,000 or any consultant
with annual cash compensation that is expected to be in excess of $350,000, (J) hire, promise to hire or promote any consultant or employee who is not covered by clause (I), other than
(1) in the ordinary course of business consistent with past practice, (2) to fill open positions or (3) in accordance with the Company's forecast, (K) terminate without
"cause" any employee, director or
consultant with aggregate annual cash compensation that is in excess of $350,000, or (L) implement any facility closings or employee layoffs that do not comply with WARN;
(vii) enter
into any agreement, contract, or commitment (or series of such similar transactions), that would require capital expenditures in the aggregate in excess of the
Company's capital expenditure forecast as set forth on Schedule 5.1(a)(vii), other than as may be necessary in connection with any unexpected repair, maintenance or replacement;
(viii) pay,
lend or advance any amount to, or sell, transfer or lease any properties or assets to, or enter into any agreement or arrangement with, any of its Affiliates
(other than Wholly Owned Subsidiaries);
(ix) fail
to keep in full force and effect insurance comparable in amount and scope to coverage currently maintained;
(x) make
any change in any method of financial accounting or financial accounting principle, method, estimate or practice except for any such change required by GAAP;
(xi) except
as required by law or in the ordinary course of business consistent with past practice (A) make or change any material Tax election, (B) change an
annual accounting period, (C) file any amended material Tax Return, (D) enter into any closing agreement with respect to a material amount of Tax, (E) settle any material Tax
claim or assessment relating to the Company or any of its Subsidiaries, or (F) surrender any right to claim a refund of material Taxes;
(xii) settle,
release or forgive any claim requiring net payments to be made by the Company or any of its Subsidiaries in excess of $750,000 individually or $4,000,000 in
the aggregate, other than intercompany claims or billing disputes or intercarrier compensation disputes with carriers in the ordinary course of business, or waive any right with respect to any
material claim held by the Company or any of its Subsidiaries other than in the ordinary course of business and consistent with past practice, or settle or resolve any claim against the Company or any
of its Subsidiaries on terms that require the Company or any of its Subsidiaries to materially alter its existing business practices, in each case other than any claim with respect to Taxes, which
shall be governed by Section 5.1(a)(xi);
(xiii) lend
money to any Person (other than to the Company or to Wholly Owned Subsidiaries) or incur or guarantee any Indebtedness for borrowed money (other than from the
Company or its Wholly Owned Subsidiaries; or
(xiv) commit
to do any of the foregoing.
(b) Nothing
contained in this Agreement shall give to Parent, Merger Sub 1 or Merger Sub 2, directly or indirectly, rights to control or direct the operations of the Company
or its Subsidiaries prior to the Closing Date. Prior to the Closing Date, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control
and supervision of its and its Subsidiaries' operations.
Section 5.2.
Notice of Breach.
From
and after the date hereof and until the earlier to occur of the Closing Date or the termination of this Agreement pursuant to Article IX hereof, the Company
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shall
promptly give written notice with particularity upon having Knowledge of (i) any matter that would constitute a material breach of any representation, warranty, agreement or covenant of
the Company contained in this Agreement or (ii) the existence of any event or circumstance that would reasonably be expected to cause any condition to the obligations of any party hereto to
effect the transactions contemplated by this Agreement not to be satisfied; provided, however that a failure to give notice pursuant to this Section 5.2) shall be excluded for purposes of the
condition set forth in Section 8.2.
ARTICLE VI.
COVENANTS OF PARENT, MERGER SUB 1 AND MERGER SUB 2
Parent, Merger Sub 1 and Merger Sub 2 hereby covenant as follows:
Section 6.1.
Conduct of the Business Before the Closing Date
.
(a) Parent
covenants and agrees that, during the period from the date hereof to the earlier of the termination of this Agreement in accordance with its terms and the
Effective Time (except as otherwise specifically contemplated by the terms of this Agreement), unless the Company shall otherwise consent in writing: (i) the businesses of Parent and its
Subsidiaries shall be conducted, in all material respects, in the ordinary course of business and in a manner consistent with past practice and, in all material respects, in compliance with applicable
laws, including without limitation the timely filing of all reports, forms or other documents with the SEC required pursuant to the Securities Act, the Exchange Act or the Sarbanes-Oxley Act, as well
as the timely filing of all reports, forms and other documents, and payment of all applicable regulatory fees and assessments, under applicable state and federal law; and (ii) Parent shall use
its commercially reasonable efforts to, and shall cause its Subsidiaries to use their commercially reasonable efforts to, continue to maintain, in all material respects, its assets, properties, rights
and operations in accordance with present practice in a condition suitable for their current use. Without limiting the generality of the foregoing, neither Parent nor any of its Subsidiaries shall
(except as specifically contemplated by the terms of this Agreement or as set forth on Schedule 6.1(a)), between the date of this Agreement and the earlier of the termination of this Agreement
in accordance with its terms and the Effective Time, directly or indirectly do, any of the following without the prior written consent of the Company (which shall not be unreasonably delayed, withheld
or conditioned other than with respect to clauses (i), (iii), (iv) with respect to acquisitions of any businesses and (vii)):
(i) make,
in the case of Parent, any change in any of its organizational documents; issue any additional shares of capital stock, membership interests or partnership
interests or other equity securities or grant any option, warrant or right to acquire any capital stock, membership interests or partnership interests or other equity securities or issue any security
convertible into or exchangeable for such securities or alter in any way any of its outstanding securities or make any change in outstanding shares of capital stock, membership interests or
partnership interests or other ownership interests or its capitalization, whether by reason of a reclassification, recapitalization, stock split or combination, exchange or readjustment of shares,
stock dividend or otherwise; except, in each case, for (A) grants of stock options or restricted stock units (including performance restricted stock units) under the Parent Benefit Plans in the
ordinary course of business consistent with past practice, (B) shares of Parent Common Stock issuable upon exercise of outperform stock appreciation rights or settlement of restricted stock
units, (C) shares of Parent Common Stock issuable upon conversion of outstanding convertible notes, (D) shares of Parent Common Stock issuable to directors of Parent in accordance with
Parent's director compensation plans or (E) as provided on Schedule 6.1(a);
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(ii) subject
any of its assets, properties or rights or any part thereof, to any Lien or suffer such to exist other than Permitted Liens in excess of $85 million in
the aggregate or in connection with the Financing or any Alternative Financing;
(iii) redeem,
retire, purchase or otherwise acquire, directly or indirectly, any shares of the capital stock, membership interests or partnership interests or other
ownership interests of Parent and its Subsidiaries or declare, set aside or pay any dividends or other distribution in respect of such shares or interests of Parent other than (A) the purchase,
redemption or other acquisition of Parent Common Stock or Parent RSU Awards from current or former employees of Parent as permitted or contemplated by the terms of any employment or option agreement
or Parent Benefit Plan or (B) the distribution of rights pursuant to the terms of the Rights Agreement;
(iv) acquire
any material assets, or properties (including any real property), or enter into any other transaction, other than in the ordinary course of business and
consistent with past practice, or in connection with transactions that would not reasonably be expected to (A) prevent, materially hinder or materially delay the receipt of the necessary or
required waiting period expirations or terminations, consents, approvals and authorizations for the transactions contemplated by this Agreement under the HSR Act or the Communications Act, or the
consents set forth on Schedule 8.1(e), (B) materially impair Parent's ability to obtain the Financing, (C) result in an ownership change of Parent pursuant to
Section 382(g) of the Code prior to or upon the Closing or (D) otherwise prevent or materially delay or materially impair the consummation of the Merger;
(v) make
any change in any method of accounting or accounting principle, method, estimate or practice except for any such change required by reason of a concurrent change
in GAAP, or write off as uncollectible any material accounts receivable except in the ordinary course of business and consistent with past practice;
(vi) except
as required by law or in the ordinary course of business consistent with past practice, (A) make or change any material Tax election, (B) change an
annual accounting period, (C) file any amended material Tax Return, (D) enter into any closing agreement with respect to a material amount of Tax, (E) settle any material Tax
claim or assessment relating to Parent or any of its Subsidiaries, or (F) surrender any right to claim a refund of material Taxes;
(vii) lend
money to any Person (other than Wholly Owned Subsidiaries) or incur or guarantee any Indebtedness for borrowed money or enter into any capital lease obligation
other than as permitted under the Commitment Letter as of the date hereof or in connection with the Required Indebtedness;
provided that
(A) Level 3 Financing may conduct a registered exchange offer with respect to each of the Floating Rate Senior Notes due 2018 and the Senior Notes due 2021 in connection with which it
may issue new Floating Rate Senior Notes due 2018 and new Senior Notes due 2021, in exchange for outstanding Floating Rate Senior Notes due 2018 and outstanding Senior Notes due 2021, respectively,
(B) Parent and its Subsidiaries may guarantee any Indebtedness of Parent and its Subsidiaries in existence on the date hereof or permitted to be incurred in compliance with the terms hereof
prior to the Termination Date, to the extent required under the terms of the agreement or indenture governing such Indebtedness; and (C) Parent and its Subsidiaries may incur additional
Indebtedness as set forth on Schedule 6.1(a)(vii)(C); or
(viii) commit
to do any of the foregoing.
(b) Nothing
contained in this Agreement shall give to the Company, directly or indirectly, rights to control or direct the operations of Parent or its Subsidiaries prior to
the Closing Date. Prior to the
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Closing
Date, Parent and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries' operations.
Section 6.2.
Employee Benefits
.
(a) From
and after the Effective Time, Parent shall, and Parent shall cause the Surviving Company to, honor all Company Benefit Plans and compensation arrangements and
agreements in accordance with their terms as in effect immediately before the Effective Time, provided that, for the avoidance of doubt, the foregoing shall not prohibit Parent from amending or
terminating the Company Benefit Plans in accordance with their terms. For the period commencing on the Effective Time and ending on the one (1) year anniversary of the Effective Time, Parent
agrees that each employee of the Company or its Subsidiaries who shall have been an employee of the Company or its Subsidiaries as of the Effective Time (each, a "
Continuing
Company Employee
"), while such Continuing Company Employee remains employed by Parent or any of its Subsidiaries (including, after the Effective Time, the Company and its
Subsidiaries), shall be eligible to either, at the sole discretion of Parent: (i) participate in Parent's employee benefit plans and programs, including any pension plan, defined benefit plan,
defined contribution plan, bonus plan, profit sharing plan, severance plan, medical plan, dental plan, life insurance plan, time off programs and disability plan, in each case to the same extent and
on the same terms (for the avoidance of doubt, including with respect to level of benefits) as similarly situated employees of Parent or its Subsidiaries; or (ii) continue to participate in
employee benefit plans, programs and policies of the Company and its Subsidiaries, which provide benefits that are no less favorable in the aggregate to the benefits provided to such Continuing
Company Employee under the Company Benefit Plans immediately before the Closing Date.
(b) Parent
agrees that any Continuing Company Employee whose employment is terminated by the Surviving Corporation without "cause" within the one (1) year period
commencing on the Effective Time, other than an employee who is party to an individual employment agreement or other Contract or other Company Benefit Plan which provides for the payment of severance,
will be entitled to cash severance benefits that are no less favorable, and welfare benefits that are no less favorable in the aggregate, in each case than the cash severance benefits and welfare
benefits, respectively, if any, determined in accordance with the terms of the applicable Company Benefit Plan providing for severance benefits to such Continuing Company Employee in effect as of the
date of this Agreement, subject to such employee providing a timely and effective release of claims in favor of Parent, the Surviving Corporation and their respective Affiliates to the extent not
otherwise required.
(c) With
respect to any Company Benefit Plan or Parent Benefit Plan in which any Continuing Company Employee first become eligible to participate on or after the Effective
Time (collectively, the "
New Plans
"), each Continuing Company Employee shall, to the extent permitted by applicable law, receive full credit for the
years of continuous service by such Continuing Company Employee recognized by the Company or its Subsidiaries prior to the Effective Time pursuant to a Company Benefit Plan to the same extent as if it
were service with Parent for all purposes other than benefit accrual under defined benefit pension plans, where such credit would result in a duplication of benefits or where such services were not
recognized under the corresponding Company Benefit Plan or no corresponding Company Benefit Plan existed. With respect to any New Plan that is a welfare benefit plan in which any Continuing Company
Employees first become eligible to participate on or after the Effective Time, Parent shall use commercially reasonable efforts to, (i) cause to be waived any eligibility requirements or
pre-existing condition limitations except to the extent such eligibility requirements or pre-existing conditions would apply under the analogous Company Benefit Plan in which any such Continuing
Company Employee was a participant or eligible to participate as of immediately prior to the Effective Time, and (ii) give effect, in determining any deductibles, co-insurance or maximum out of
pocket limitations, to amounts paid by such Continuing Company
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Employees
prior to the Effective Time under a Company Benefit Plan in which any such Continuing Company Employee was a participant as of immediately prior to the Effective Time (to the same extent
that such credit was given under such Company Benefit Plan prior to the Effective Time) in satisfying such requirements during the plan year in which the Effective Time occurs.
(d) Each
of the Company and Parent hereby acknowledges that a "change of control" (or similar phrase) within the meaning of the Company Benefit Plans will, for purposes of
the Company Benefit Plans only, occur at or prior to the Effective Time, as applicable.
(e) If
requested by Parent at least ten Business Days prior to the Closing Date, the Company shall take (or cause to be taken) all actions reasonably necessary or
appropriate to terminate, effective no later than the day immediately prior to the Closing Date, any defined contribution Company Benefit Plan that contains a cash or deferred arrangement intended to
meet the requirements of Section 401(k) of the Code (a "
Company Defined Contribution Plan
"); provided, however, that the effectiveness of such
termination may be conditioned on the consummation of the Merger. If the Company is required to terminate any Company Defined Contribution Plan, then the Company shall provide to Parent prior to the
Closing Date written evidence of the adoption by the Board of Directors of the Company of resolutions authorizing the termination of such Company Defined Contribution Plan (the form and substance of
which resolutions shall be subject to the prior review and approval of Parent, which approval shall not be unreasonably withheld or delayed). In the event that Parent requests that the Company Defined
Contribution Plan be terminated in accordance with this Section 6.2(e), Parent shall, or shall cause one of its Affiliates to, designate a tax-qualified defined contribution plan of Parent or
one of its Affiliates (the "
Parent Defined Contribution Plan
") that either (i) currently allows for the receipt from participants in the Company
Defined Contribution Plan of "eligible rollover distributions" (as such term is defined under Section 402 of the Code), including loans, or (ii) shall be amended prior to the Effective
Time to allow for the receipt from such participants of eligible rollover distributions, including loans. In the event that Parent requests that the Company Defined Contribution Plan be terminated in
accordance with this Section 6.2(e), each participant in the Company Defined Contribution Plan shall immediately as of the Closing Date be eligible to commence participation in the Parent
Defined Contribution Plan and be given the opportunity to receive a distribution of his or her account balance under the Company Defined Contribution Plan, and shall be given the opportunity to elect
to "roll over" such account balance (including any outstanding loan) to the Parent Defined Contribution Plan.
(f) Parent
and the Company agree to the additional provisions set forth in Schedule 6.2(f) of the Company Disclosure Letter.
(g) Prior
to making any broad-based communication or written communications that would reasonably be interpreted to create a legally binding right to any future compensation
on the part of a Continuing Employee, in each case, pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement (including any schedules hereto),
the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication, and Parent and the Company shall
cooperate in providing any such mutually agreeable communication.
(h) Nothing
contained in this Section 6.2 or any other provision of this Agreement, express or implied: (i) shall be construed to establish, amend, or modify
any benefit plan, program, agreement or arrangement, including without limitation, any Company Benefit Plan or any Parent Benefit Plan, (ii) shall alter or limit the ability of any of Parent,
the Surviving Company, or any of their respective Subsidiaries to amend, modify or terminate any benefit plan, program, agreement or arrangement at any time assumed, established, sponsored or
maintained by any of them, (iii) is intended to confer upon any current or former employee any right to employment or continued employment for any period of time by reason of this Agreement, or
any right to a particular term or condition of
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employment,
or (iv) is intended to confer upon any Person (including for the avoidance of doubt any current or former employee, director, officer or other service provider or any participant in
a Company Benefit Plan or other employee benefit plan, agreement or other arrangement) any right as a third-party beneficiary of this Agreement.
Section 6.3.
Indemnification Continuation
.
(a) For
purposes of this Section 6.3, (i) "Indemnified Person" shall mean any person who is now, or has been at any time prior to the Effective Time,
(x) an officer or director of the Company or any of its Subsidiaries or (y) serving at the request of the Company as an officer or director of another corporation, joint venture or other
enterprise or general partner of any partnership or a trustee of any trust, and (ii) "Proceeding" shall mean any claim, action, suit, proceeding or investigation.
(b) From
and after the Effective Time, Parent shall, or Parent shall cause the Surviving Company, to the fullest extent permitted by applicable law, to provide
indemnification to each Indemnified Person in connection with any Proceeding based directly or indirectly (in whole or in part) on, or arising directly or indirectly (in whole or in part) out of, the
fact that such Indemnified Person is or was an officer or director of the Company or any of its Subsidiaries, or is or was serving at the request of the Company as an officer or director of another
corporation, joint venture or other enterprise or general partner of any partnership or a trustee of any trust, whether pertaining to any matter arising before or after the Effective Time. In the
event of any such claim, action, suit or proceeding, each Indemnified Person will be entitled to advancement of expenses incurred in the defense of any such claim, action, suit or proceeding from
Parent or the Surviving Company within a reasonable period of time following receipt by Parent or the Surviving Company from the Indemnified Person of a request therefor; provided that an Indemnified
Person shall repay Parent or the Surviving Company for any expenses incurred by Parent or Surviving Company in connection with the indemnification of such Indemnified Person pursuant to this
Section 6.3 if it is ultimately determined that such Indemnified Person did not meet the standard of conduct necessary for indemnification by Parent or the Surviving Company as set forth in the
Company Organizational Documents. The Surviving Company (i) shall not amend, repeal or otherwise modify the exculpation, indemnification and advancement of expenses provisions of the Company's
and any of its Subsidiaries' certificates of incorporation and by-laws or similar organizational documents as in effect immediately prior to the Effective Time in any manner that would adversely
affect the rights thereunder of any individuals who at the Effective Time were directors, officers or employees of the Company or any of its Subsidiaries and (ii) shall comply with and shall
not amend without the consent of the other parties thereto, any indemnification contracts of the Company or its Subsidiaries with any of their respective current or former directors, officers or
employees as in effect immediately prior to the Effective Time. In the event that Parent consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity
of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each such case, Parent shall cause proper
provision to be made so that the successors and assigns of Parent assume the obligations set forth in this Section 6.3, unless such assumption occurs by operation of law.
(c) Parent
shall cause the Surviving Company to, and the Surviving Company shall, maintain in effect for six years from the Effective Time the Company's current directors'
and officers' liability insurance policies covering acts or omissions occurring (or alleged to occur) prior to or at the Effective Time with respect to Indemnified Persons; provided, however, that in
no event shall the Surviving Company be required to expend pursuant to this Section 6.3(c) more than an amount per year equal to 300% of current annual premiums paid by the Company for such
insurance. In the event that, but for the proviso to the immediately preceding sentence, the Surviving Company would be required to expend more than 300% of current annual premiums, the Surviving
Company shall
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obtain
the maximum amount of such insurance obtainable by payment of annual premiums equal to 300% of current annual premiums. In lieu of the foregoing, the Company may purchase, prior to the
Effective Time, a six-year "tail" prepaid officers' and directors' liability insurance policy in respect of acts or omissions occurring prior to the Effective Time covering each such Indemnified
Person. If such "tail" policy has been established by the Company, Parent shall not terminate such policy and shall cause all obligations of the Company thereunder to be honored by it and the
Surviving Company.
(d) The
provisions of this Section 6.3 shall survive the consummation of the Merger for a period of six years and are expressly intended to benefit each of the
Indemnified Persons; provided, however, that in the event that any claim or claims for indemnification are asserted or made within such six-year period, all rights to indemnification in respect of any
such claim or claims shall continue until disposition of any and all such claims.
(e) Parent
shall, and shall cause the Surviving Company to, pay all reasonable expenses, including reasonable attorneys' fees, that may be incurred by any Indemnified Person
in enforcing the indemnity and other obligations provided in this Section 6.3 to the same extent and under the same conditions and procedures (and subject to the same conditions, including with
respect to the advancement of expenses) as such Indemnified Person is entitled on the date hereof under the Company Organizational Documents (or the corresponding organizational documents of any
Subsidiary of the Company).
Section 6.4.
Notice of Breach.
From
and after the date hereof and until the earlier to occur of the Closing Date or the termination of this Agreement pursuant to Article IX hereof, Parent shall promptly give
written notice with particularity upon having Knowledge of (i) any matter that would constitute a material breach of any representation, warranty, agreement or covenant of Parent contained in
this Agreement or (ii) the existence of any event or circumstance that would reasonably be expected to cause any condition to the obligations of any party hereto to effect the transactions
contemplated by this Agreement not to be satisfied or that would reasonably be expected to cause the Financing not to occur; provided, however that a failure to give notice pursuant to this
Section 6.4 shall be excluded for purposes of the condition set forth in Section 8.3.
ARTICLE VII.
ADDITIONAL COVENANTS OF THE PARTIES
Section 7.1.
Preparation of Joint Proxy Statement/Prospectus and Registration Statement; Stockholder
Meetings
.
(a) As
promptly as practicable, and in any event within 40 days after the execution of this Agreement, the Company and Parent shall cooperate in preparing and cause
to be filed with the SEC the Joint Proxy Statement/Prospectus, and Parent shall prepare, together with the Company, and file with the SEC the registration statement on Form S-4 or any amendment
or supplement thereto pursuant to which shares of Parent Common Stock issuable in the Merger will be registered with the SEC (the "
Registration
Statement
") (in which the Joint Proxy Statement/Prospectus will be included). Parent and the Company shall use their reasonable best efforts to cause the Registration Statement
to become effective under the Securities Act as soon after such filing as practicable and to keep the Registration Statement effective as long as is necessary to consummate the Merger. The Joint Proxy
Statement/Prospectus shall include the recommendation of each of the Boards of Directors of the Company and Parent in favor of approval and adoption of this Agreement and the Combination, and any
resolution required by Rule 14a-21(c) under the Exchange Act to approve, on an advisory basis, the compensation required to be disclosed in the Registration Statement pursuant to
Item 402(t) of Regulation S-K, except to the extent the Board of Directors of the Company shall have withdrawn or modified its approval or recommendation of this Agreement or the
Combination to
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the
extent such action is permitted by Section 7.4, and, with respect to the Board of Directors of Parent, in favor of approval and adoption of the Parent Share Issuance and the Parent Charter
Amendment. Each of the Company and Parent shall use its reasonable best efforts to cause the Joint Proxy Statement/Prospectus to be mailed to its respective stockholders as promptly as practicable
after the Registration Statement becomes effective. The parties shall promptly provide copies, consult with each other and prepare written responses with respect to any written comments received from
the SEC with respect to the Joint Proxy Statement/Prospectus and the Registration Statement and advise one another of any oral comments received from the SEC. The Registration Statement and the Joint
Proxy Statement/Prospectus shall, at the time of each of the Company Stockholders Meeting and the Parent Stockholders Meeting, comply as to form in all material respects with the Securities Act and
the Exchange Act and the rules and regulations promulgated by the SEC thereunder.
(b) Parent
and the Company shall make all necessary filings with respect to the Merger and the transactions contemplated thereby under the Securities Act and the Exchange
Act and applicable "blue sky" laws and the rules and regulations thereunder. Each party will advise the other, promptly after it receives notice thereof, of the time when the Registration Statement
has become effective or any supplement or amendment has been filed, the issuance of any stop order, the suspension of the qualification of the Parent Common Stock issuable in connection with the
Merger for offering or sale in any jurisdiction, or any request by the SEC for amendment of the Joint Proxy Statement/Prospectus or the Registration Statement or comments thereon and responses thereto
or requests by the SEC for additional information. No amendment or supplement to the Joint Proxy Statement/Prospectus or the Registration Statement shall be filed without the approval of both parties
hereto, which approval shall not be unreasonably withheld, conditioned or delayed; provided that with respect to documents filed by a party which are incorporated by reference in the Joint Proxy
Statement/Prospectus or the Registration Statement, this right of approval shall apply only with respect to information relating to the other party or such other party's business, financial condition
or results of operations. If at any time prior to the Effective Time, any information relating to Parent or the Company, or any of their respective Affiliates, officers or directors, should be
discovered by Parent or the Company that should be set forth in an amendment or supplement to the Registration Statement or the Joint Proxy Statement/Prospectus, so that such documents would not
include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the
party which discovers such information shall promptly notify the other parties hereto and an appropriate amendment or supplement describing such information shall be promptly filed with the SEC and,
to the extent required by law, disseminated to the stockholders of the Company and Parent.
(c) The
Company shall cause the Company Stockholders Meeting to be duly called and held as soon as reasonably practicable for the purpose of obtaining the Required Company
Vote. In connection with such meeting, the Company will (i) subject to Section 7.4(b) and Section 7.4(c), use its reasonable best efforts to obtain the Required Company Vote and
(ii) otherwise comply with all legal requirements applicable to such meeting. The information supplied or to be supplied by the Company specifically for inclusion or incorporation in the
Registration Statement shall not at the time the Registration Statement is declared effective by the SEC 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 not misleading. The information supplied or to be supplied by the Company specifically for inclusion in the Joint Proxy
Statement/Prospectus, which shall be included in the Registration Statement, shall not, on the date(s) the Joint Proxy Statement/Prospectus is first mailed to the stockholders of the Company and the
stockholders of Parent, respectively, or at the time of the Company Stockholders Meeting or the Parent Stockholders Meeting, respectively, or at the Effective Time, 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
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circumstances
under which they were made, not misleading. Notwithstanding the foregoing, if on a date for which the Company Stockholders Meeting is scheduled, the Company has not received proxies
representing a sufficient number of shares of Company Common Stock to obtain the Required Company Vote, whether or not a quorum is present, the Company shall have the right on one or more occasions to
postpone or adjourn the Company Stockholders Meeting for not more than an aggregate of forty (40) days, solely for the purpose of soliciting shares of Company Common Stock to obtain the
Required Company Vote.
(d) Parent
shall cause the Parent Stockholders Meeting to be duly called and held as soon as reasonably practicable for the purpose of obtaining the Required Parent Vote. In
connection with such meeting, Parent will (i) subject to Section 7.4(h), use its reasonable best efforts to obtain the Required Parent Vote and (ii) otherwise comply with all
legal requirements applicable to such meeting. The information supplied or to be supplied by Parent specifically for inclusion or incorporation in the Registration Statement shall not at the time the
Registration Statement is declared effective by the SEC 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 not misleading. The information supplied or to be supplied by Parent specifically for inclusion in the Joint Proxy Statement/Prospectus, which shall be included in the
Registration Statement, shall not, on the date(s) the Joint Proxy Statement/Prospectus is first mailed to the stockholders of the Company and the stockholders of Parent, respectively, or at the time
of the Company Stockholders Meeting or the Parent Stockholders Meeting, respectively, or at the Effective Time, 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. Notwithstanding the foregoing, if on a
date for which the Parent Stockholders Meeting is scheduled, Parent has not received proxies representing a sufficient number of shares of Parent Common Stock to obtain the Required Parent Vote,
whether or not a quorum is present, Parent shall have the right on one or more occasions to postpone or adjourn the Parent Stockholders Meeting for not more than an aggregate of forty
(40) days, solely for the purpose of soliciting shares of Parent Common Stock to obtain the Required Parent Vote. Parent shall cause the Parent Charter Amendment to be duly filed with the
Secretary of the State of Delaware such that it is effective no later than the Closing Date, immediately prior to Closing.
Section 7.2.
Access to Information
.
Upon
reasonable notice, each of Parent and the Company shall (and shall cause its respective Subsidiaries to) afford to the other party hereto and its representatives (including
Financing Sources and their representatives) reasonable access during normal business hours, during the period prior to the Effective Time, to all its officers, employees, properties, offices, plants
and other facilities and to all books and records, including financial statements, other financial data and monthly financial statements within the time such statements are customarily prepared, and,
during such period, each of Parent and the Company shall (and shall cause its respective Subsidiaries to) furnish promptly to the other party hereto and its representatives (including Financing
Sources and their representatives), consistent with its legal obligations, all other information concerning its business, properties and personnel as such Person may reasonably request;
provided
,
however
, that either party hereto may restrict the foregoing access to the extent that, in
such Person's reasonable judgment, (i) providing such access would result in the waiver of any attorney-client privilege, in the disclosure of any trade secrets of third parties or violate any
of its obligations with respect to confidentiality if such Person shall have used all reasonable efforts to obtain the consent of such third party to such access, or (ii) any law, treaty, rule
or regulation of any Governmental Entity applicable to such Person requires such Person or its Subsidiaries to preclude the other party and its representatives from gaining access to any properties or
information. Each party hereto will hold any such information that is non-public in confidence to the extent required by, and in accordance
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with,
the provisions of that certain agreement, dated May 22, 2014 (the "
Confidentiality Agreement
"), between the Company and Parent.
Section 7.3.
Efforts
.
(a) Subject
to the terms and conditions of this Agreement, each party will use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable under applicable laws and regulations to consummate the Merger and the other transactions contemplated by this Agreement as soon as practicable after
the date hereof, including, without limitation, (i) preparing and filing, in consultation with the other party and as promptly as practicable and advisable after the date hereof, all
documentation to effect all necessary applications, notices, petitions, filings, and other documents and to obtain as promptly as practicable all waiting period expirations or terminations, consents,
clearances, waivers, licenses, orders, registrations, approvals, permits, and authorizations necessary or advisable to be obtained from any third party and/or any Governmental Entity in order to
consummate the Merger or any of the other transactions contemplated by this Agreement and (ii) taking all steps as may be necessary to obtain all such waiting period expirations or
terminations, consents, clearances, waivers, licenses, registrations, permits, authorizations, orders and approvals; provided, however, that efforts in connection with the Financing and the Required
Indebtedness shall be governed by Section 7.12 and not this Section 7.3. In furtherance and not in limitation of the foregoing, each party hereto agrees (i) to make an appropriate
filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated hereby as promptly as practicable, and in any event within 15 Business Days after the
execution of this Agreement, and to supply as promptly as practicable any additional information and documentary material that may be requested pursuant to the HSR Act and to take all other actions
necessary to cause the expiration or termination of the applicable waiting periods under the HSR Act as soon as practicable, (ii) to file all applications required to be filed with the FCC
within 30 calendar days after the execution of this Agreement; and (iii) to file all notices and applications with PUCs within 15 Business Days after the execution of this Agreement.
(b) Each
of Parent and the Company shall, in connection with the efforts referenced in Section 7.3(a) to obtain all waiting period expirations or terminations,
consents, clearances, waivers, licenses, orders, registrations, approvals, permits, and authorizations for the transactions contemplated by this Agreement under the HSR Act, the Communications Act or
any other Regulatory Law (as defined below), (i) cooperate in all respects and consult with each other in connection with any communication, filing or submission and in connection with any
investigation or other inquiry, including any proceeding initiated by a private party, including by allowing the other party and/or its counsel to have a reasonable opportunity to review in advance
and comment on drafts of any communications, filings and submissions (and documents submitted therewith); (ii) promptly inform the other party of any communication received by such party from,
or given by such party to, the Antitrust Division of the Department of Justice (the "
DOJ
"), the Federal Trade Commission (the
"
FTC
"), the FCC, any other Governmental Entity or, in connection with any proceeding by a private party, with any other person, including by promptly
providing copies to the other party of any such written communications, and of any material communication received or given in connection with any proceeding by a private party, in each case regarding
any of the transactions contemplated by this Agreement, and (iii) permit the other party to review any communication it gives to, and consult with each other in advance of any meeting
substantive telephone call, or conference with the DOJ, the FTC, FCC, or such other Governmental Entity or other person, and to the extent permitted by the DOJ, the FTC, the FCC, or any other
applicable Governmental Entity or other Person, give the other party and/or its counsel the opportunity to attend and participate in such meetings, substantive telephone calls and conferences,
provided, however, that materials may be redacted (x) to remove references concerning the valuation of
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Parent,
the Company or any of their Subsidiaries, (y) as necessary to comply with contractual arrangements, and (z) as necessary to address reasonable privilege or confidentiality
concerns. Parent and the Company may, as each deems advisable and necessary, reasonably designate any competitively sensitive material to be provided to the other under this Section 7.3(b) as
"Antitrust Counsel Only Material." Such materials and the information contained therein shall be given only to the outside counsel of the recipient and will not be disclosed by such outside counsel to
employees, officers or directors of the recipient unless express permission is obtained in obtained in advance from the source of the materials (Parent or the Company, as the case may be) or its legal
counsel. For purposes of this Agreement, "
Regulatory Law
" means the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act, the Federal Trade
Commission Act, as amended, the Communications Act, and all other national, federal or state, domestic or foreign, if any, statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines and other laws that are designed or intended to (i) prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or affecting
competition or market conditions through merger, acquisition or other transaction or (ii) regulate telecommunications businesses. In furtherance and not in limitation of the covenants of the
parties contained in Section 7.3(a) and this Section 7.3(b), each party hereto shall use its reasonable best efforts to resolve objections, if any, as may be asserted with respect to the
transactions contemplated by this Agreement under any Regulatory Law. Notwithstanding anything to the contrary contained in this Agreement, Parent shall not be required to (and without the consent of
the Company shall not) agree to any terms, conditions or modifications (including Parent, the Company or any of their respective Subsidiaries having to cease operating, sell or otherwise dispose of
any assets or business (including the requirement that any such assets or businesses be held separate)) with respect to obtaining the expiration or termination of any
waiting period or any consents, permits, waivers, approvals, authorizations or orders in connection with the Combination or the consummation of the transactions contemplated by this Agreement that
would result in, or would be reasonably likely to result in, either individually or in the aggregate, a material adverse effect on Parent and its Subsidiaries, taken as a whole, after giving effect to
the Combination (assuming Parent and its Subsidiaries, taken as a whole, after to giving effect to the Combination, are the size of the Company and its Subsidiaries, taken as a whole, prior to giving
effect to the Combination) (a "
Specified Material Adverse Effect
");
provided
,
however,
that nothing
contained in this Agreement shall require Company to agree to, or take, any action in connection with Section 7.3 of this
Agreement unless such agreement or action is conditioned upon the consummation of the Transactions contemplated herein.
(c) Each
of Parent and the Company shall use its reasonable best efforts to obtain the expiration or termination of all waiting periods and all consents, waivers,
authorizations and approvals of all third parties, including Governmental Entities (except those contemplated by Section 7.3(b), which shall be governed by that Section), necessary, proper or
advisable for the consummation of the transactions contemplated by this Agreement and to provide any notices to third parties required to be provided prior to the Effective Time; provided that,
without the prior written consent of Parent, the Company shall not incur any significant expense or liability, enter into any significant new commitment or agreement or agree to any significant
modification to any contractual arrangement to obtain such consents or certificates in each case, that would have a material adverse effect on the business or operations of the Company and its
Subsidiaries, taken as a whole.
Section 7.4.
Acquisition Proposals
.
(a) Except
as otherwise expressly permitted by this Section 7.4, none of the Company or any of its Subsidiaries shall (whether directly or indirectly through
Affiliates, directors, officers, employees, representatives, advisors or other intermediaries), nor shall (directly or indirectly) the Company authorize or permit any of its or their controlled
Affiliates, officers, directors, representatives, advisors
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or
other intermediaries or Subsidiaries to: (i) solicit, initiate or knowingly encourage the submission of inquiries, proposals or offers from any Person (other than Parent) relating to any
Company Acquisition Proposal, or agree to or endorse any Company Acquisition Proposal; (ii) enter into any agreement to (x) consummate any Company Acquisition Proposal,
(y) approve or endorse any Company Acquisition Proposal or (z) in connection with any Company Acquisition Proposal, require it to abandon, terminate or fail to consummate the
Combination; (iii) enter into or participate in any discussions or negotiations in connection with any Company Acquisition Proposal or inquiry with respect to any Company Acquisition Proposal,
or furnish to any Person any non-public information with respect to its business, properties or assets in connection with any Company Acquisition Proposal; or (iv) agree to resolve to take, or
take, any of the actions prohibited by clause (i), (ii) or
(iii) of this sentence. The Company shall immediately cease, and cause its representatives, advisors and other intermediaries to immediately cease, any and all existing activities, discussions
or negotiations with any parties conducted heretofore with respect to any of the foregoing. The Company shall promptly inform its representatives and advisors of the Company's obligations under this
Section 7.4. Any violation of this Section 7.4 by any representative of the Company or its Subsidiaries shall be deemed to be a breach of this Section 7.4 by the Company. For
purposes of this Section 7.4, the term "Person" means any person, corporation, entity or "group," as defined in Section 13(d) of the Exchange Act, other than, with respect to the
Company, Parent or any Subsidiaries of Parent and, with respect to Parent, the Company.
"
Company Acquisition Proposal
" means any offer or proposal for a merger, amalgamation, reorganization, recapitalization, consolidation,
scheme of arrangement, share exchange, business combination or other similar transaction involving the Company or any of its Subsidiaries or any proposal or offer to acquire, directly or indirectly,
securities representing more than 20% of the voting power of the Company or more than 20% of the assets of the Company and its Subsidiaries taken as a whole, other than the Merger contemplated by this
Agreement.
(b) Notwithstanding
the foregoing, the Board of Directors of the Company, directly or indirectly through Affiliates, directors, officers, employees, representatives,
advisors or other intermediaries, may, prior to the Company Stockholders Meeting, (i) comply with Rule 14d-9 and Rule 14e-2 promulgated under the Exchange Act with regard to any
Company Acquisition Proposal, so long as any such compliance rejects any Company Acquisition Proposal and reaffirms its recommendation of the transactions contemplated by this Agreement, except to the
extent such action is permitted by Section 7.4(c), or issue a "stop, look and listen" statement, (ii) engage in negotiations or discussions with any Person (and its representatives,
advisors and intermediaries) that has made an unsolicited bona fide written Company Acquisition Proposal not resulting from or arising out of a breach of Section 7.4(a), and/or
(iii) furnish to such Person information relating to the Company or any of its Subsidiaries pursuant to a confidentiality agreement with confidentiality provisions that are no less favorable to
the Company than those contained in the Confidentiality Agreement (it being understood that such confidentiality agreement need not contain standstill provisions) and to the extent nonpublic
information that has not been made available to Parent is made available to such Person, make available or furnish such nonpublic information to Parent substantially concurrent with the time it is
provided to such Person; provided that the Board of Directors of the Company shall be permitted to take an action described in the foregoing clauses (ii) or (iii) if, and only if, prior
to taking such particular action, the Board of Directors of the Company has determined in good faith after consultation with its financial advisors and outside legal counsel that such Company
Acquisition Proposal constitutes or would reasonably be expected to result in, a Company Superior Proposal.
"
Company Superior Proposal
" means any proposal (on its most recently amended or modified terms, if amended or modified) made by a third
party that is not affiliated with the Company to enter into any transaction involving a Company Acquisition Proposal that the Board of Directors of the Company determines in its good faith judgment
(after consultation with the Company's financial
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advisors
and outside legal counsel) would be, if consummated, more favorable to the Company's stockholders than this Agreement, and the Combination, taking into account all terms and conditions of
such transaction (including any breakup fees, expense reimbursement provisions and financial terms) and the anticipated timing and prospects for completion of such transaction, including the prospects
for obtaining regulatory approvals and financing, and any third party approvals, except that the reference to "20%" in the definition of "Company Acquisition Proposal" shall be deemed to be a
reference to "50%". Reference to "this Agreement", and "the Combination" in this paragraph shall be deemed to include any proposed alteration of the terms of this Agreement or the Combination that are
agreed to by Parent pursuant to Section 7.4(d).
(c) Notwithstanding
anything in Section 7.1 or this Section 7.4 to the contrary, at any time prior to the receipt of the Required Company Vote, the Company's
Board of Directors may (x) withdraw, modify or amend in any manner adverse to Parent its approval or recommendation of this Agreement or the Combination ("
Company Change
in Recommendation
") (i) in response to a Company Intervening Event, or (ii) following receipt of an unsolicited bona fide written Company Acquisition Proposal
that did not result from or arise out of a breach of this Section 7.4 and which the Company's Board of Directors determines in good faith, in consultation with its financial advisors and
outside legal counsel is a Company Superior Proposal, in each case, if and only if, the Company's Board of Directors has determined in good faith, after consultation with its financial advisors and
outside legal counsel, that the failure to take such action is inconsistent with the fiduciary duties of the Company's Board of Directors to the Company's stockholders under applicable law and the
Company complies with Section 7.4(d) or (y) following receipt a bona fide written Company Acquisition Proposal which the Company's Board of Directors determines in good faith, in
consultation with its financial advisors and outside legal counsel is a Company Superior Proposal, terminate this Agreement for the purpose of entering into a definitive acquisition agreement, merger
agreement or similar definitive agreement (a "
Company Alternative Acquisition Agreement
") with respect to such Company Superior Proposal, if, and only
if, the Company's Board of Directors has determined in good faith, after consultation with its financial advisors and outside legal counsel, that the failure to take such action is inconsistent with
the fiduciary duties of the Company's Board of Directors to the Company's stockholders under applicable law and the Company complies with Section 7.4(d) and concurrently with entering into a
Company Alternative Acquisition Agreement with respect to such Company Superior Proposal, (1) the Company terminates this Agreement in accordance with the provisions of Section 9.1(g)
and (2) the Company pays the Company Termination Fee and the Parent Expenses in accordance with Section 9.2(f).
(d) Prior
to the Company taking any action permitted (i) under Section 7.4(c)(x)(i), the Company shall provide Parent with five (5) Business Days' prior
written notice advising Parent it intends to effect a Company Change in Recommendation and specifying, in reasonable detail, the reasons therefor and, during such five (5) Business Day period,
if requested by Parent, the Company engages in good faith negotiations with Parent to amend the terms of this Agreement in a manner that obviates the need to effect a Company Change in Recommendation
or (ii) under Section 7.4(c)(x)(ii) or Section 7.4(c)(y) the Company shall provide Parent with five (5) Business Days' prior written notice (it being understood and agreed
that any material amendment to the amount or form of consideration payable in connection with the applicable Company Acquisition Proposal shall require a new notice and an additional two
(2) Business Day period) advising Parent that the Company's Board of Directors intends to take such action, and specifying the material terms and conditions of the Company Superior Proposal and
that the Company shall, during such five (5) Business Day period (or subsequent two (2) Business Day period), negotiate in good faith with Parent to make such adjustments to the terms
and conditions of this Agreement such that such Company Acquisition Proposal would no longer constitute a Company Superior Proposal.
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(e) The
Company shall notify Parent promptly (but in any event within 24 hours) after receipt or occurrence of any Company Acquisition Proposal, of (i) the
material terms and conditions of any such Company Acquisition Proposal and (ii) the identity of the Person making any such Company Acquisition Proposal. In addition, the Company shall promptly
(but in any event within 24 hours) after the receipt thereof, provide to Parent copies of any written documentation material to understanding such Company Acquisition Proposal which is received
by the Company from the Person (or from any representatives, advisors or agents of such Person) making such Company Acquisition Proposal. The Company shall not, and shall cause each of its
Subsidiaries not to, terminate, waive, amend or modify any provision of any existing standstill or confidentiality agreement to which it or any of its Subsidiaries is a party, and the Company shall,
and shall cause its Subsidiaries to, enforce the provisions of any such agreement; provided, however, that, the Company may waive any such provision in response to a Company Acquisition Proposal to
the Board of Directors of the Company made under circumstances in which the Company is permitted under this Section 7.4 to participate in discussions regarding a Company Acquisition Proposal,
but only to the extent necessary to allow it to respond to such Company Acquisition Proposal as permitted under this Section 7.4. The Company shall keep Parent reasonably informed of the status
and material details (including any amendments or proposed amendments) of any such Company Acquisition Proposal and keep Parent reasonably informed as to the material details of all discussions or
negotiations with respect to any such Company Acquisition Proposal and shall provide to Parent within 24 hours after receipt thereof all copies of any other documentation material to
understanding such Company Acquisition Proposal (as determined by the Company in good faith) received by the Company from the Person (or from any representatives, advisors or agents of such Person)
making such Company Acquisition Proposal. The Company shall promptly provide to Parent any material non-public information concerning the Company provided to any other Person in connection with any
Company Acquisition Proposal that was not previously provided to Parent. The Board of Directors of the Company shall promptly consider in good faith (in consultation with its outside legal counsel and
financial advisors) any proposed alteration of the terms of this Agreement or the Combination proposed by Parent in response to any Company Acquisition Proposal. The Company shall not take any action
to exempt any Person from the restrictions on "business combinations" contained in any applicable law or otherwise cause such restrictions not to apply.
(f) Except
as otherwise expressly permitted by this Section 7.4, none of Parent or any of its Subsidiaries shall (whether directly or indirectly through Affiliates,
directors, officers, employees, representatives, advisors or other intermediaries), nor shall (directly or indirectly) Parent authorize or permit any of its or their controlled Affiliates, officers,
directors, representatives, advisors or other intermediaries or Subsidiaries to: (i) solicit, initiate or knowingly encourage the submission of inquiries, proposals or offers from any Person
(other than the Company) relating to any Parent Acquisition Proposal, or agree to or endorse any Parent Acquisition Proposal; (ii) enter into any agreement to (x) consummate any Parent
Acquisition Proposal, (y) approve or endorse any Parent Acquisition Proposal or (z) in connection with any Parent Acquisition Proposal, require it to abandon, terminate or fail to
consummate the Combination; (iii) enter into or participate in any discussions or negotiations in connection with any Parent Acquisition Proposal or inquiry with respect to any Parent
Acquisition Proposal, or furnish to any Person any non-public information with respect to its business, properties or assets in connection with any Parent Acquisition Proposal; or (iv) agree to
resolve to take, or take, any of the actions prohibited by clause (i), (ii) or (iii) of this sentence. Parent shall immediately cease, and cause its representatives, advisors and
other intermediaries to immediately cease, any and all existing activities, discussions or negotiations with any parties conducted heretofore with respect to any of the foregoing. Parent shall
promptly inform its representatives and advisors of Parent's obligations under this Section 7.4. Any violation of this Section 7.4 by any representative of Parent or its Subsidiaries
shall be deemed to be a breach of this Section 7.4 by Parent.
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"
Parent Acquisition Proposal
" means any offer or proposal for a merger, amalgamation, reorganization,
recapitalization, consolidation, scheme of arrangement, share exchange, business combination or other similar transaction involving Parent or any of its Subsidiaries or any proposal or offer to
acquire, directly or indirectly, securities representing more than 20% of the voting power of Parent or more than 20% of the assets of Parent and its Subsidiaries taken as a whole, other than the
Merger contemplated by this Agreement.
(g) Notwithstanding
the foregoing, the Board of Directors of Parent, directly or indirectly through Affiliates, directors, officers, employees, representatives, advisors or
other intermediaries, may, prior to the Parent Stockholders Meeting, (i) comply with Rule 14d-9 and Rule 14e-2 promulgated under the Exchange Act with regard to any Parent
Acquisition Proposal, so long as any such compliance rejects any Parent Acquisition Proposal and reaffirms its recommendation of the transactions contemplated by this Agreement, except to the extent
such action is permitted by Section 7.4(h), or issue a "stop, look and listen" statement, (ii) engage in negotiations or discussions with any Person (and its representatives, advisors
and intermediaries) that has made an unsolicited bona fide written Parent Acquisition Proposal not resulting from or arising out of a breach of Section 7.4(f), and/or (iii) furnish to
such Person information relating to Parent or any of its Subsidiaries pursuant to a confidentiality agreement with confidentiality provisions that are no less favorable to Parent than those contained
in the Confidentiality Agreement (it being understood that such confidentiality agreement need not contain standstill provisions) and to the extent nonpublic information that has not been made
available to the Company is made available to such Person, make available or furnish such nonpublic information to the Company substantially concurrent with the time it is provided to such Person;
provided that the Board of Directors of Parent shall be permitted to take an action described in the foregoing clauses (ii) or (iii) if, and only if, prior to taking such particular
action, the Board of Directors of Parent has determined in good faith after consultation with its financial advisors and outside legal counsel that such Parent Acquisition Proposal constitutes or
would reasonably be expected to result in, a Parent Superior Proposal.
"
Parent Superior Proposal
" means any proposal (on its most recently amended or modified terms, if amended or modified) made by a third
party that is not affiliated with Parent to enter into any transaction involving a Parent Acquisition Proposal that the Board of Directors of Parent determines in its good faith judgment (after
consultation with Parent's financial advisors and outside legal counsel) would be, if consummated, more favorable to Parent's stockholders than this Agreement and the Combination, taking into account
all terms and conditions of such transaction (including any breakup fees, expense reimbursement provisions and financial terms) and the anticipated timing and prospects for completion of such
transaction, including the prospects for obtaining regulatory approvals and financing, and any third party approvals, except that the reference to "20%" in the definition of "Parent Acquisition
Proposal" shall be deemed to be a reference to "50%". Reference to "this Agreement" and "the Combination" in this paragraph shall be deemed to include any proposed alteration of the terms of this
Agreement or the Combination that are agreed to by the Company pursuant to Section 7.4(h).
(h) Notwithstanding
anything in Section 7.1 or this Section 7.4 to the contrary, at any time prior to the receipt of the Required Parent Vote, Parent's Board
of Directors may (x) withdraw, modify or amend in any manner adverse to the Company its approval or recommendation of this Agreement or the Combination ("
Parent Change
in Recommendation
") (i) in response to a Parent Intervening Event, or (ii) following receipt of an unsolicited bona fide written Parent Acquisition Proposal that
did not result from or arise out of a breach of this Section 7.4 and which Parent's Board of Directors determines in good faith, in consultation with its financial advisors and outside legal
counsel is a Parent Superior Proposal, in each case, if and only if, Parent's Board of Directors has determined in good faith, after consultation with its financial advisors and outside legal counsel,
that the failure to take such action is inconsistent with the fiduciary duties of Parent's Board of Directors to Parent's
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stockholders
under applicable law and Parent complies with Section 7.4(i) or (y) following receipt of a bona fide written Parent Acquisition Proposal which Parent's Board of Directors
determines in good faith, in consultation with its financial advisors and outside legal counsel is a Parent Superior Proposal, terminate this Agreement for the purpose of entering into a definitive
acquisition agreement, merger agreement or similar definitive agreement (a "
Parent Alternative Acquisition Agreement
") with respect to such Parent
Superior Proposal, if, and only if, Parent's Board of Directors has determined in good faith, after consultation with its financial advisors and outside legal counsel, that the failure to take such
action is inconsistent with the fiduciary duties of Parent's Board of Directors to Parent's stockholders under applicable law and Parent complies with Section 7.4(i) and concurrently with
entering into a Parent Alternative Acquisition Agreement with respect to such Parent Superior Proposal, (1) Parent terminates this Agreement in accordance with the provisions of
Section 9.1(h) and (2) Parent pays the Parent Termination Fee and the Parent Expenses in accordance with Section 9.2(g).
(i) Prior
to Parent taking any action permitted (i) under Section 7.4(h)(x)(i), Parent shall provide the Company with five (5) Business Days' prior
written notice advising the Company it intends to effect a Parent Change in Recommendation and specifying, in reasonable detail, the reasons therefor and, during such five (5) Business Day
period, if requested by the Company, Parent engages in good faith negotiations with the Company to amend the terms of this Agreement in a manner that obviates the need to effect a Parent Change in
Recommendation or (ii) under Section 7.4(h)(x)(ii) or Section 7.4(h)(y) Parent shall provide the Company with five (5) Business Days' prior written notice (it being
understood and agreed that any material amendment to the amount or form of consideration payable in connection with the applicable Parent Acquisition Proposal shall require a new notice and an
additional two (2) Business Day period) advising the Company that Parent's Board of Directors intends to take such action and specifying the material terms and conditions of the Parent Superior
Proposal and that Parent shall, during such five (5) Business Day period (or subsequent two (2) Business Day period), negotiate in good faith with the Company to make such adjustments to
the terms and conditions of this Agreement such that such Parent Acquisition Proposal would no longer constitute a Parent Superior Proposal.
(j) Parent
shall notify the Company promptly (but in any event within 24 hours) after receipt or occurrence of any Parent Acquisition Proposal, of (i) the
material terms and conditions of any such Parent Acquisition Proposal and (ii) the identity of the Person making any such Parent Acquisition Proposal. In addition, Parent shall promptly (but in
any event within 24 hours) after the receipt thereof, provide to the Company copies of any written documentation material to understanding such Parent Acquisition Proposal which is received by
Parent from the Person (or from any representatives, advisors or agents of such Person) making such Parent Acquisition Proposal. Parent shall not, and shall cause each of its Subsidiaries not to,
terminate, waive, amend or modify any provision of any existing standstill or confidentiality agreement to which it or any of its Subsidiaries is a party, and Parent shall, and shall cause its
Subsidiaries to, enforce the provisions of any such agreement; provided, however, that, Parent may waive any such provision in response to a Parent Acquisition Proposal to the Board of Directors of
Parent made under circumstances in which Parent is permitted under this Section 7.4 to participate in discussions regarding a Parent Acquisition Proposal, but only to the extent necessary to
allow it to respond to such Parent Acquisition Proposal as permitted under this Section 7.4. Parent shall keep the Company reasonably informed of the status and material details (including any
amendments or proposed amendments) of any such Parent Acquisition Proposal and keep the Company reasonably informed as to the material details of all discussions or negotiations with respect to any
such Parent Acquisition Proposal and shall provide to the Company within 24 hours after receipt thereof all copies of any other documentation material to understanding such Parent Acquisition
Proposal (as determined by Parent in good faith) received by Parent from the Person (or from any representatives, advisors or agents of such Person) making such Parent Acquisition Proposal. Parent
shall promptly provide the Company
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any
material non-public information concerning Parent provided to any other Person in connection with any Parent Acquisition Proposal that was not previously provided to the Company. The Board of
Directors of Parent shall promptly consider in good faith (in consultation with its outside legal counsel and financial advisors) any proposed alteration of the terms of this Agreement or the
Combination proposed by the Company in response to any Parent Acquisition Proposal. Parent shall not take any action to exempt any Person from the restrictions on "business combinations" contained in
any applicable law or otherwise cause such restrictions not to apply.
Section 7.5.
Stockholder Litigation.
Each of the Company and Parent
shall keep the other party hereto informed of, and cooperate with such party in connection with, any stockholder litigation or
claim against such party and/or its directors or officers relating to the Combination or the other transactions contemplated by this Agreement;
provided
,
however
, that no settlement in connection with such stockholder litigation shall be agreed to
without Parent's prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.
Section 7.6.
Maintenance of Insurance.
Each of Parent and the Company
will use commercially reasonable efforts to maintain in full force and effect through the Closing Date all material insurance
policies applicable to Parent and its Subsidiaries and the Company and its Subsidiaries, respectively, and their respective properties and assets in effect on the date hereof.
Section 7.7.
Public Announcements.
Except with respect to any Company
Change in Recommendation or Parent Change in Recommendation made in accordance with the terms of this Agreement and except in
connection with any Company Superior Proposal or Parent Superior Proposal, each of the Company, Parent, Merger Sub 1 and Merger Sub 2 agrees that no public release or announcement concerning the
transactions contemplated hereby shall be issued by any party without the prior written consent of the Company and Parent (which consent shall not be unreasonably withheld or delayed), except as such
release or announcement may be required by law or the rules or regulations of any applicable United States securities exchange, in which case the party required to make the release or announcement
shall use its commercially reasonable efforts to allow each other party reasonable time to comment on such release or announcement in advance of such issuance, it being understood that the final form
and content of any such release or announcement, to the extent so required, shall be at the final discretion of the disclosing party.
Section 7.8.
No Rights Plan.
From the date hereof through the earlier
of termination of this Agreement and the Effective Time, the Company will not adopt, approve, or agree to adopt, a rights
plan, "poison-pill" or other similar agreement or arrangement or any anti-takeover provision in the Company Organizational Documents that is, or at the Effective Time shall be, applicable to the
Company, the Company Common Stock, the Combination or the other transactions contemplated by this Agreement.
Section 7.9.
Section 16 Matters.
Assuming that the Company
delivers to Parent the Company Section 16 Information (as hereinafter defined) in a timely fashion prior to the Effective Time,
the Board of Directors of Parent, or a committee of non-employee directors thereof (as such term is defined for purposes of Rule 16b-3(d) under the Exchange Act), shall reasonably promptly
thereafter and in any event prior to the Effective Time adopt a resolution providing in substance that the receipt by the Company Insiders (as hereinafter defined) of Parent Common Stock in exchange
for Company Common Stock and derivative securities with respect to Company Common Stock pursuant to the transactions contemplated by this Agreement are intended to be exempt from liability pursuant to
Section 16(b) under the Exchange Act in accordance with Rule 16b-3 and interpretations of the SEC thereunder. In addition, the Board of Directors of the Company, or a committee of
non-employee Directors thereof, shall, prior to the Effective Time, adopt a resolution providing in substance that the dispositions by the Company Insiders of Company Common Stock (including
derivative securities with respect to Company Common Stock) in exchange for shares of Parent
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Common
Stock pursuant to the transactions contemplated by this Agreement are intended to be exempt from liability pursuant to Section 16(b) under the Exchange Act in accordance with
Rule 16b-3 and interpretations of the SEC thereunder. "
Company Section 16 Information
" shall mean information accurate in all material
respects regarding Company Insiders, the number of shares of Company Common Stock and derivative securities with respect to Company Common Stock held by each such Company Insider and expected to be
exchanged for shares of Parent Common Stock pursuant to the transaction contemplated by this Agreement and any other information that may be required under applicable interpretations of the SEC under
Rule 16b-3. "
Company Insiders
" shall mean those officers and directors of the Company who are subject to the reporting requirements of
Section 16(a) of the Exchange Act and who are listed in the Company Section 16 Information.
Section 7.10.
Reorganization
.
(a) The
parties intend that the Combination qualify as a reorganization within the meaning of Section 368(a) of the Code and will report it as such for U.S. federal,
state and local income Tax purposes. None of the parties will knowingly take any action or fail to take any action, which action or failure to act is reasonably likely to cause the Combination to fail
to qualify as a reorganization within the meaning of Section 368(a) of the Code and the regulations promulgated thereunder.
(b) Each
of the Company, Parent, Merger Sub 1 and Merger Sub 2 shall use its commercially reasonable efforts to (i) provide the representations referred to in
Section 8.2(c) and Section 8.3(c), respectively, as of the date of the Joint Proxy Statement/Prospectus, if required, and as of the Closing Date and (ii) obtain the opinions
referred to in Section 8.2(c) and Section 8.3(c), respectively.
Section 7.11.
Parent Board of Directors.
On or prior to the Effective
Time, Parent shall appoint to Parent's Board of Directors three members of the Company's Board of Directors selected by the Company
from any of the Directors elected at the 2014 Annual Meeting (all of whom are eligible for such selection) and approved by Parent; provided, however, that Parent shall not exercise its approval rights
to such an extent that it fails to approve at least three of the Company's current directors; provided, further, that if any of such Company-selected directors that have been approved by Parent are
unable or unwilling to serve on Parent's Board of Directors, then the number of Company-selected directors shall be decreased by the number of candidates unable or unwilling to serve. Subject to the
consent of the Company-selected directors appointed to the Parent's Board of Directors, Parent shall cause all such directors who are appointed pursuant to this Section 7.11 to be nominated for
election to the Parent's Board of Directors at the first annual meeting following the Closing.
Section 7.12.
Financing/Financing Assistance
.
(a) Parent
shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, advisable or proper to
consummate and obtain the Financing on the terms and conditions described in the Commitment Letter and Fee Letter, including using reasonable best efforts to (i) maintain in effect the
Commitment Letter, (ii) satisfy on a timely basis all conditions to the funding of the Financing set forth in the Commitment Letter, Fee Letter and any definitive agreements executed in
connection therewith, (iii) negotiate and enter into definitive agreements with respect thereto on the terms and conditions contemplated by the Commitment Letter and Fee Letter (including after
giving effect to any "market flex" provisions set forth in the Fee Letter executed in connection with the Financing) or on other terms, (iv) in the event that all conditions contained in the
Commitment Letter and Fee Letter have been satisfied and Parent and Merger Sub 1 and Merger Sub 2 are required to consummate the Closing pursuant to the terms hereof, draw a sufficient amount of the
Financing or Alternative Financing to enable Parent, Merger Sub 1 and Merger Sub 2 to consummate the Merger; it being understood that the
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receipt
of the Financing or Alternative Financing is not a condition to Parent's, Merger Sub 1's or Merger Sub 2's obligation to consummate the Closing on the terms and conditions set forth herein
(subject to the terms and conditions of Section 9.1 and Section 9.2); and (v) enforce the counterparties' obligations and Parent's rights under the Commitment Letter in the event
of a breach or repudiation by any party thereto that would reasonably be expected to materially impede or delay the Closing.
(b) Parent
shall not, and shall not permit Merger Sub 1 or Merger Sub 2 to, agree to or permit any amendment, replacements, supplement or other modification of, or waive any
of its rights or remedies under, the Commitment Letter or Fee Letter without the Company's prior written consent; provided that Parent may (x) enter into any amendment, replacement, supplement
or other modification to or waiver of any provision of the Commitment Letter or Fee Letter if such amendment, replacement, supplement or other modification or waiver does not (i) add new (or
adversely modify any existing) condition to the consummation of the Financing as compared to those in the Commitment Letter and Fee Letter as in effect on the date hereof, (ii) adversely affect
the ability of Parent to enforce its rights against the other parties to the Commitment Letter and Fee Letter as in effect on the date hereof or in any definitive agreements executed in connection
herewith, (iii) reduce the aggregate amount of the Financing contemplated thereunder, or (iv) contain any provisions that otherwise would reasonably be expected to prevent, materially
delay or materially impede the consummation of the Financing or the transactions contemplated by this Agreement; and (y) amend the Commitment Letter to add lenders, lead arrangers, book
runners, syndication agents or similar entities who had not executed the Commitment Letter as of the date of this Agreement so long as any such addition would not reasonably be expected to prevent,
materially hinder or materially delay the consummation of the Financing or the transactions contemplated by this Agreement or the availability of the Financing under the Commitment Letter. Parent
shall promptly deliver to the Company copies (redacted only as to fee amounts, dates and certain other economic terms, including in respect of the "market flex" and "securities demand" provisions, in
the case of the Fee Letter) of any such amendment, replacement, supplement or other modification or waiver of the Commitment Letter or Fee Letter.
(c) In
the event any portion of the Financing becomes unavailable on the terms and conditions described in or contemplated by the Commitment Letter (including after giving
effect to the "market flex" provisions set forth in the Fee Letter executed in connection with the Financing) for any reason, Parent shall, in consultation with the Company, use its reasonable best
efforts to arrange to obtain, as promptly as practicable following the occurrence of such event, alternative financing from the same or alternative sources (the "
Alternative
Financing
") in an amount sufficient (together with cash on hand of the Company) to fund the Cash Consideration, the cash payable to holders of Company Equity Awards pursuant to
Section 1.8, the Required Indebtedness and all other fees and expenses incurred by Parent, Merger Sub 1, Merger Sub 2 and the Company in connection with the Merger and the other transactions
contemplated hereby and which would not contain any provisions that would reasonably be expected to prevent, materially delay or materially impede the consummation of the Financing or Alternative
Financing or the transactions contemplated by this Agreement, including any conditions to the closing of such Financing or Alternative Financing that are materially less favorable to Parent than the
conditions to closing in the Commitment Letter (as defined immediately prior to such Alternative Financing). If an Alternative Financing is required in accordance with this Section 7.12(c),
Parent shall obtain, and when obtained, provide the Company with a copy of, a new financing commitment that provides for such Alternative Financing, and Parent shall comply with its covenants in
Section 7.12(a) and Section 7.12(b) with respect to the Commitment Letter (as defined immediately after receipt of such Alternative Financing).
(d) Parent
shall give the Company prompt written notice of any material breach or repudiation by any party of the Commitment Letter or Fee Letter of which Parent becomes
aware or any termination of the Commitment Letter or Fee Letter. Parent shall keep the Company informed on a reasonably current basis in reasonable detail of the status of its efforts to arrange and
consummate the Financing.
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(e) Parent,
Merger Sub 1, Merger Sub 2 or an affiliate thereof may (i) commence an offer to purchase with respect to any and all of the outstanding aggregate
principal amount of the Company's Notes for cash on price terms that are determined by Parent and in compliance with applicable law (including SEC rules and regulations) and the provisions of the
indentures governing the applicable series of Notes to be consummated substantially simultaneously with the Closing and no earlier than the Effective Time using funds provided by Parent (the
"
Offers to Purchase
"), and (ii) solicit the consent of the holders of each series of Notes, regarding certain proposed amendments to the
indenture governing such series of Notes (the "
Indenture Amendments
") as determined by Parent and in compliance with applicable law (including SEC rules
and regulations) and the provisions of the indentures governing the applicable series of Notes and as set forth in the tender offer and consent solicitation documents sent to holders of such series of
Notes to become effective substantially simultaneously with the Closing and no earlier than the Effective Time, which amendments may include the elimination of all or substantially all of the
restrictive covenants and certain other provisions contained in the indenture governing such series of Notes that can be eliminated upon the favorable vote of the holders of a majority of the
principal amount thereof (the "
Consent Solicitations
" and, together with the Offers to Purchase, the "
Debt Tender
Offer
"); provided, in each case, that this Agreement shall not have been terminated in accordance with Article IX. Any documentation relating to the Debt Tender Offer
(including all amendments or supplements thereto) (the "Offer Documents") and all material requested to be published or mailed to the holders of the Notes in connection with any Debt Tender Offer
shall be subject to the prior review of, and comment (which review shall be made as promptly as reasonably practical) of the Company and reasonably acceptable to the Company; provided that, in any
event, Parent and the Company hereby agree that (i) the terms and conditions of the Debt Tender Offer shall provide that the closing thereof shall be contingent upon the consummation of the
Merger at the Effective Time; (ii) the Indenture Amendments shall not require the consent of the holders of more than a majority of the outstanding principal amount of the applicable series of
Notes in the aggregate, and (iii) promptly upon expiration of the Consent Solicitations, assuming the requisite consents have been received with respect to such series of Notes, the Company
shall execute a supplemental indenture to the indentures governing each series of Notes that will not become operative prior to the Effective Time and shall use reasonable best efforts to cause the
trustee under each such indenture to enter into such supplemental indenture prior to or substantially simultaneously with the Closing. Concurrent with the Effective Time, and in accordance with the
terms of the Debt Tender Offer, the Surviving Company shall accept for purchase and purchase each series of Notes properly tendered and not properly withdrawn in the Debt Tender Offer using funds
provided by or at the direction of Parent. Parent hereby covenants and agrees to, promptly following the Effective Time, directly or indirectly pay for the Notes properly tendered and not withdrawn to
the extent required pursuant to the terms of the Debt Tender Offer. Any Indenture Amendments contemplated by the Debt Tender Offer shall revert to the form in effect prior to the effectiveness of any
Indenture Amendments and be of no further effect if the Closing does not occur.
(f) If
at any time prior to the completion of the Debt Tender Offer any information should be discovered by the Company or by Parent that the Company or Parent reasonably
believes should be set forth in an amendment or supplement to the Offer Documents, so that the Offer Documents shall not contain an 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, the party that discovers such
information shall promptly notify the other party, and an appropriate amendment or supplement prepared by Parent describing such information shall be disseminated by or on behalf of the Company to the
holders of the applicable Notes. The parties shall comply with the requirements of Rule 14e-1 under the Exchange Act, to the extent applicable, and any other applicable laws in connection with
the Debt Tender Offer.
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(g) Parent
shall pay the fees and out-of-pocket expenses of any dealer manager, information agent, depositary or other agent retained in connection with the Debt Tender
Offer. At Parent's expense, the Company shall provide all cooperation reasonably requested by Parent that is necessary or reasonably required in connection with the Debt Tender Offer, including,
without limitation, executing supplemental indentures to the indentures governing each series of Notes that will become operative only immediately upon the Effective Time, using reasonable best
efforts to cause the trustee under each such indenture to enter such supplemental indenture prior or substantially simultaneously with the Closing, and providing the information necessary to
distribute the applicable Offer Documents to the holders of the applicable series of Notes. The Company shall not be required to deliver or to cause its counsel to deliver any legal opinions in
connection with the Debt Tender Offer or the execution by the trustee under any indenture of any supplemental indentures required in connection with the consummation thereof.
(h) Notwithstanding
anything to the contrary contained in this Section 7.12, the Company shall not be required to take any action in connection with the Debt Tender
Offer that it believes, after consultation with counsel, (i) could reasonably be expected to cause the Company to violate (A) federal or state securities laws or (B) the
provisions of the indentures governing the applicable series of Notes or (ii) would reasonably be expected to cause the Company to materially violate the provisions of any other material
contract of the Company and its Subsidiaries. It is expressly agreed by the parties hereto that the failure to obtain the consent of the holders of the Notes in connection with any Debt Offer shall
not be deemed to be a breach by the Company under this Agreement or a failure of any condition hereto.
(i) Prior
to the Closing, the Company shall provide to Parent, Merger Sub 1 and Merger Sub 2, and shall cause its Subsidiaries to, and shall use its reasonable best efforts
to cause the respective officers, employees, agents and representatives of the Company and its Subsidiaries to, provide to Parent, Merger Sub 1 and Merger Sub 2 all cooperation reasonably requested by
Parent that is necessary or reasonably required in connection with the Financing, including the following: (i) using reasonable best efforts to make the Company's and its Subsidiaries' senior
management and other representatives available to participate in a reasonable number of meetings and calls, presentations, road shows, due diligence sessions (including accounting due diligence
sessions), drafting sessions and sessions with rating agencies, investors and prospective lenders on reasonable advance notice; (ii) assisting with the preparation of appropriate and customary
materials for rating agency presentations, offering and syndication documents, bank information memoranda, business projections, other marketing documentation and similar documents reasonably required
in connection with the Financing (and executing customary representation letters in connection therewith); provided, that any such marketing materials shall reflect that one or more of Parent and its
Subsidiaries will be the obligors at Closing and that the Company and its Subsidiaries shall have no obligations thereunder unless and until the Effective Time occurs; (iii) executing and
delivering definitive financing documents, (and assisting in the preparation of applicable schedules and other information necessary in connection therewith) including any pledge and security
documents, any loan agreements, currency or interest hedging agreements, certificates, and other definitive financing documents usual and customary for transactions of the type contemplated by the
Commitment Letter on terms reasonably requested by Parent, provided that no obligation of the Company or any of its Subsidiaries under any such document or agreement shall be effective until the
Effective Time; (iv) using reasonable best efforts to facilitate the pledging of collateral (including cooperation in connection with the pay-off of existing Indebtedness to the extent
contemplated by this Agreement and the release of related Liens and terminations of security interests), provided that no pledge or pay-off of existing Indebtedness shall be effective or required, as
the case may be, until the Effective Time; (v) using reasonable best efforts to furnish, on a confidential basis (other than the financial statements required by clause (vii) below), to
Parent, Merger Sub 1 and Merger Sub 2 and the Financing Sources, as promptly as reasonably practicable, financial and other pertinent information
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regarding
the Company as may be reasonably requested by Parent in connection with the Financing, including all financial statements and other financial data regarding the Company reasonably required
by the Commitment Letter (but excluding pro forma financial information); (vi) executing and delivering (or using reasonable best efforts to obtain from its advisors), and causing its
Subsidiaries to execute and deliver (or use reasonable best efforts to obtain from its advisors), customary certificates, accounting comfort letters (including consents of accountants for use of their
audit reports in any financial statements relating to the Financing) or other documents and instruments relating to guarantees and other matters ancillary to the Financing as may be reasonably
requested by Parent as necessary and customary in connection with the Financing, (vii) providing audited consolidated financial statements of the Company covering the three (3) fiscal
years immediately preceding the Closing for which audited consolidated financial statements are required to have been filed pursuant to the Exchange Act, and unaudited financial statements (excluding
footnotes) for any regular quarterly interim fiscal period or periods of the Company ended after the date of the most recent audited financial statements and at least 45 days prior to the
Closing Date (the information required to be delivered pursuant to this clause (vii) being referred to as the "
Required Financial Information
"),
(viii) requesting that its independent accountants cooperate with and assist Parent in preparing
customary and appropriate information packages and offering materials as the parties to the Commitment Letter may reasonably request for use in connection with the offering and/or syndication of debt
securities, (ix) using reasonable best efforts to assist in obtaining third party consents in connection with the Financing, and in extinguishing Existing Indebtedness of the Company and its
Subsidiaries and releasing liens securing such indebtedness, in each case to take effect at the Effective Time, (x) furnishing all documentation and other information required by Governmental
Entities under applicable "know your customer" and anti-money laundering rules and regulations, including the U.S.A. Patriot Act of 2001, but in each case, solely as relating to the Company and its
Subsidiaries to the extent reasonably requested by Parent or Merger Sub 1 or Merger Sub 2, and (xi) taking such other customary actions as are reasonably requested by Parent or the Financing
Sources to facilitate the satisfaction of all conditions precedent to obtaining the Financing set forth in the Commitment Letter to the extent within the control of the Company (including delivery of
the stock and other equity certificates of the Company's Subsidiaries to Parent); provided that nothing herein shall require until the Effective Time occurs, either the Company or any of its
Subsidiaries to (A) pay any fees, expenses or other amounts in connection with the Financing, (B) have any liability or obligation under any loan agreement or any related document or any
other agreement or document related to the Financing, (C) incur any liability in connection with the Financing contemplated by the Commitment Letter, (D) enter into any definitive
agreement or commitment that would be effective prior to the Effective Time (other than customary management representation letters), (E) provide any such cooperation to the extent that it
would interfere materially and unreasonably with the business or operations of the Company and its Subsidiaries, (F) deliver (x) any financial information in a form not customarily
prepared by the Company or its Subsidiaries or (y) any financial information with respect to a fiscal period that has not yet ended or (G) take any action that would conflict with or
violate the Company's or any of its Subsidiaries' organizational documents or any applicable laws. For the avoidance of doubt, the Board of Directors of the Company and each of its Subsidiaries, in
each case as constituted prior to the Effective Time, shall not be required to adopt any resolutions or take any other action in connection with the authorization of any of the Financing other than to
approve regulatory filings relating to the Company and its Subsidiaries in connection therewith.
(j) All
material non-public information regarding the Company and its Subsidiaries provided to Parent, Merger Sub 1, Merger Sub 2 and their respective representatives
pursuant to this Section 7.12 shall be kept confidential by them in accordance with the Confidentiality Agreement. The Company hereby consents to the use of all of its and its Subsidiaries'
logos in connection with the Financing; provided that such logos are used solely in a manner that is not intended to nor is
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reasonably
likely to harm or disparage the Company or any of its Subsidiaries, the reputation or goodwill of the Company or any of its Subsidiaries or any of their assets, including their logos and
marks.
(k) Parent
shall, promptly upon written request by the Company, reimburse the Company for all reasonable and documented out-of-pocket costs and expenses (including without
limitation professional fees and expenses of accountants, legal counsel and other advisors) to the extent such costs are incurred by the Company or its Subsidiaries in connection with cooperation
provided by the Company, its Subsidiaries, their respective officers, employees and other representatives pursuant to the terms of Section 7.12 (including in connection with the Financing
and/or the Debt Tender Offer), or in connection with compliance with its obligations under Section 7.12, and Parent hereby agrees to indemnify and hold harmless the Company and its Subsidiaries
and their respective officers, employees, agents and representatives (collectively, the "Financing Indemnitees") from and against any and all liabilities, damages, claims, costs, expenses or losses
suffered or incurred by them in connection with the Financing and Debt Tender Offers, any information utilized in connection therewith (other than arising from information provided in writing by the
Company or its Subsidiaries) and any misuse of the logos or marks of the Company or its Subsidiaries, except to the extent that such liabilities, damages, claims, costs, expenses or losses arose out
of or result from the willful misconduct of a Financing Indemnitee (the obligations in this sentence, the "
Financing Cooperation Indemnity
"). The
obligations of Parent in the foregoing sentence shall survive the consummation of the Merger and any termination of this Agreement. After the Effective Time, the Financing Cooperation Indemnity only
may be amended or waived in respect of any Financing Indemnitee with the consent of such Financing Indemnitee.
ARTICLE VIII.
CONDITIONS PRECEDENT
Section 8.1.
Conditions to Each Party's Obligation to Effect the Combination
.
The obligations of the Company, Parent, Merger Sub 1 and Merger Sub 2 to effect the Combination are subject to the satisfaction or waiver on or prior to the
Closing Date of the following conditions:
(a)
Company Stockholder Approval.
The Company shall have obtained the Required Company Vote in connection
with the approval and adoption of this Agreement and the Combination by the stockholders
of the Company.
(b)
Parent Stockholder Approval.
Parent shall have obtained the Required Parent Vote in connection with the
approval of the Parent Share Issuance and the approval and adoption of the Parent
Charter Amendment by the stockholders of Parent.
(c)
No Injunctions or Restraints, Illegality.
No statute, rule, regulation, executive order, decree or
ruling, shall have been adopted or promulgated, and no temporary restraining order, preliminary or
permanent injunction or other order issued by a court or other U.S. governmental authority of competent jurisdiction shall be in effect, having the effect of making the Combination illegal or
otherwise prohibiting consummation of the Combination; provided, however, that the provisions of this Section 8.1(c) shall not be available to any party whose failure to fulfill its obligations
pursuant to Section 7.3 shall have been the cause of, or shall have resulted in, such order or injunction.
(d)
HSR Act.
The waiting period (and any extension thereof) applicable to the Merger and the other
transactions contemplated pursuant to this Agreement under the HSR Act shall
have been terminated or shall have expired.
(e)
FCC and State Regulator Approvals.
The (i) authorization required to be obtained from the FCC and
(ii) Consents required to be obtained from the State Regulators or other Governmental
Entities set forth on Schedule 8.1(e) in connection with the consummation of the Merger shall have
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been
obtained, except, in the case of clause (ii), to the extent the failure to obtain such Consents would not have a Specified Material Adverse Effect or prevent Parent and its Subsidiaries
from operating in the relevant state following the Combination.
(f)
NYSE Listing.
The shares of Parent Common Stock to be issued in the Merger shall have been approved for
listing on the NYSE (or any successor inter-dealer quotation system or
stock exchange thereto) subject to official notice of issuance.
(g)
Effectiveness of the Registration Statement.
The Registration Statement shall have been declared
effective by the SEC under the Securities Act. No stop order suspending the effectiveness of the Registration
Statement shall have been issued by the SEC and no proceedings for that purpose shall have been initiated by the SEC.
Section 8.2.
Additional Conditions to Obligations of Parent, Merger Sub 1 and Merger Sub 2
.
The obligations of Parent, Merger Sub 1 and Merger Sub 2 to effect the Combination are subject to the satisfaction, or waiver by Parent, on or prior to the Closing Date, of the following
additional conditions:
(a)
Representations and Warranties.
(i) The representations and warranties of the Company contained in
Section 3.1(a) (Organization), Section 3.5 (Authorization and Validity of
Agreement), Section 3.6(c) and the first sentence of Section 3.6(b) (Capitalization and Related Matters), Section 3.24 (No Brokers), Section 3.28 (Board Approval) and
Section 3.29 (Vote Required) shall be true and correct in all material respects, in each case both when made and at and as of the Closing Date, as if made at and as of such time (except to the
extent expressly made as of an earlier date, in which case as of such date), (ii) the representations and warranties of the Company contained in Sections 3.6(a) and
(b) (Capitalization and Related Matters) (other than the first and last sentences of Section 3.6(b)) shall be true and correct in all respects (except for such inaccuracies as are de
minimis in the aggregate), in each case both when made and at and as of the Closing Date, as if made at and as of such date (except to the extent expressly made as of an earlier date, in which case as
of such date), (iii) the representation and warranty of the Company contained in Section 3.9(a) (Absence of Certain Changes or Events) shall be true and correct in all respects both when
made and at and as of the Closing Date, and (iv) all other representations and warranties of the Company set forth in this Agreement shall be true and correct both when made and at and as of
the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except, in the case of this clause (iv), where
the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to "materiality" or "Company Material Adverse Effect" set forth therein) does
not have, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Parent shall have received a certificate of an executive officer of the
Company to such effect.
(b)
Performance of Obligations of the Company.
The Company shall have performed in all material respects and
complied in all material respects with all agreements and covenants required to be performed or
complied with by it under this Agreement at or prior to the Closing Date. Parent shall have received a certificate of an executive officer of the Company to such effect.
(c)
Tax Opinion.
Parent shall have received from Willkie Farr & Gallagher LLP, counsel to
Parent, on the Closing Date, a written opinion dated as of such date in
form and substance reasonably satisfactory to Parent, to the effect that, on the basis of certain facts, representations and assumptions set forth or referred to in such opinion, for U.S. federal
income Tax purposes, the Combination will be treated as a reorganization within the meaning of Section 368(a) of the Code. In rendering such opinion, such counsel shall be entitled to receive
and rely upon representations of officers of Parent, Merger Sub 1, Merger Sub 2 and the Company. The condition set forth in this Section 8.2(c) shall not be waivable after receipt of the
approval and adoption of this Agreement by
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the
stockholders of Parent unless further stockholder approval is obtained with appropriate disclosure.
Section 8.3.
Additional Conditions to Obligations of the Company
.
The obligations of the Company to effect the Combination are subject to the satisfaction of, or waiver by the Company, on or prior to the Closing Date of the following additional
conditions:
(a)
Representations and Warranties.
(i) The representations and warranties of Parent, Merger Sub 1 and
Merger Sub 2 contained in Section 4.1(a) (Organization), Section 4.5
(Authorization and Validity of Agreement), Section 4.6(c) and the first sentence of Section 4.6(b) (Capitalization and Related Matters), Section 4.21 (No Brokers),
Section 4.25 (Board Approval) and Section 4.26 (Vote Required) shall be true and correct in all material respects, in each case both when made and at and as of the Closing Date, as if
made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), (ii) the representations and warranties of Parent contained in
Sections 4.6(a) and (b) (Capitalization and Related Matters) (other than the first and last sentences of Section 4.6(b)) shall be true and correct in all respects (except for such
inaccuracies as are de minimis in the aggregate), in each case both when made and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier
date, in which case as of such date), (iii) the representations and warranties of Parent, Merger Sub 1 and Merger Sub 2 contained in Section 4.9(a) (Absence of Certain Changes or Events)
shall be true and correct in all respects both when made and at and as of the Closing Date, and (iv) all other representations and warranties of Parent, Merger Sub 1 and Merger Sub 2 set forth
in this Agreement shall be true and correct both when made and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which
case as of such date), except in the case of this clause (iv),where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to
"materiality" or "Parent Material Adverse Effect" set forth therein) does not have, and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
The Company shall have received a certificate of an executive officer of Parent to such effect.
(b)
Performance of Obligations of Parent.
Parent shall have performed in all material respects and complied
in all material respects with all agreements and covenants required to be performed or complied
with by it under this Agreement at or prior to the Closing Date. The Company shall have received a certificate of an executive officer of Parent to such effect.
(c)
Tax Opinion.
The Company shall have received from Wachtell, Lipton, Rosen & Katz, special
counsel to the Company, on the Closing Date, a written opinion dated as of
such date in form and substance reasonably satisfactory to the Company, to the effect that, on the basis of certain facts, representations and assumptions set forth or referred to in such opinion, for
U.S. federal income Tax purposes, the Combination will be treated as a reorganization within the meaning of Section 368(a) of the Code. In rendering such opinion, such counsel shall be entitled
to receive and rely upon representations of officers of Parent, Merger Sub 1, Merger Sub 2 and the Company. The condition set forth in this Section 8.3(c) shall not be waivable after receipt of
the approval and adoption of this Agreement by the stockholders of the Company unless further stockholder approval is obtained with appropriate disclosure.
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ARTICLE IX.
TERMINATION
Section 9.1.
Termination
.
This
Agreement may be terminated and the Combination abandoned at any time prior to the Effective Time, by action taken or authorized by the Board of Directors of the terminating party
or parties, and except as provided below, whether before or after approval of the matters presented in connection with the Merger by the stockholders of the Company or Parent:
(a) By
mutual written consent of Parent and the Company, by action of their respective Boards of Directors;
(b) By
either the Company or Parent if the Effective Time shall not have occurred on or before March 16, 2015, (the "
Termination
Date
"); provided, however, that if all of the conditions to Closing shall have been satisfied or shall be then capable of being satisfied, other than the conditions set forth
in Sections 8.1(d) and (e), the Termination Date may be extended by Parent or the Company, by written notice to the other party, to a date not later than June 15, 2015; provided,
further, that if the Termination Date is not extended pursuant to the preceding proviso, and the Marketing Period has commenced fewer than twenty days prior to the original Termination Date, the
Termination Date shall be automatically extended to the day following the final day of the Marketing Period; provided, further, that the right to extend or terminate this Agreement under this
Section 9.1(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the primary cause of the failure of the Effective Time to occur on or
before the Termination Date and such action or failure to perform constitutes a breach of this Agreement;
(c) By
either the Company or Parent if any Governmental Entity shall have issued an order, decree or ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting or making illegal the transactions contemplated by this Agreement, and such order, decree, ruling or other action shall have become final and nonappealable; provided that the
party hereto seeking to terminate this Agreement pursuant to this Section 9.1(c) shall have used its reasonable best efforts to remove such restraint or prohibition as required by this
Agreement; and provided, further, that the right to terminate this Agreement pursuant to this Section 9.1(c) shall not be available to any party hereto whose breach of any provision of this
Agreement results in the imposition of such order, decree or ruling or the failure of such order, decree or ruling to be resisted, resolved or lifted;
(d) By
either the Company or Parent if (i) the approval by the stockholders of the Company required for the consummation of the Merger shall not have been obtained by
reason of the failure to obtain the Required Company Vote at the Company Stockholders Meeting (or any adjournment or postponement thereof) or (ii) the approval by the stockholders of Parent
required for the Parent Share Issuance and the Parent Charter Amendment shall not have been obtained by reason of the failure to obtain the Required Parent Vote at the Parent Stockholders Meeting (or
any adjournment or postponement thereof);
(e) By
Parent (i) prior to the Company Stockholders Meeting, if there shall have been a Company Change in Recommendation or the Board of Directors of the Company
shall have approved or recommended a Company Superior Proposal (or the Board of Directors of the Company resolves to do any of the foregoing), whether or not permitted by Section 7.4,
(ii) if the Company shall fail to call or hold the Company Stockholders Meeting in violation of Section 7.1(c); or (iii) if the Company shall have committed an Intentional Breach
of any of its material obligations under Section 7.4;
(f) By
the Company (i) prior to the Parent Stockholders Meeting, if there shall have been a Parent Change in Recommendation or the Board of Directors of Parent shall
have approved or recommended a Parent Acquisition Proposal (or the Board of Directors of Parent resolves to do any
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of
the foregoing), whether or not permitted by Section 7.4, (ii) if Parent shall fail to call or hold the Parent Stockholders Meeting in violation of Section 7.1(d); or
(iii) if Parent shall have committed an Intentional Breach of any of its material obligations under Section 7.4;
(g) By
the Company, pursuant to Section 7.4(c), subject to compliance with the applicable provisions of Section 7.4(c), Section 7.4(d) and
Section 7.4(e);
(h) By
Parent, pursuant to Section 7.4(h), subject to compliance with the applicable provisions of Section 7.4(h), Section 7.4(i) and
Section 7.4(j);
(i) By
the Company if all the conditions set forth in Section 8.1 and 8.2 have been satisfied (other than those conditions that by their nature are to be satisfied at
Closing provided that such conditions are reasonably capable of being satisfied at Closing) and Parent has failed to obtain proceeds pursuant to the Commitment Letter (or any Alternative Financing)
sufficient to fund the Cash Consideration, the cash payable to holders of Company Equity Awards, the Required Indebtedness and all other fees and expenses as may be necessary to consummate the
transactions contemplated hereby by the end of the Marketing Period;
(j) By
the Company if there shall have been a breach of any representation, warranty, covenant or agreement on the part of Parent, Merger Sub 1 or Merger Sub 2 contained in
this Agreement (other than any breach of Section 4.22 or 7.12 or of Parent's obligation to consummate the transaction on the Closing Date under circumstances pursuant to Section 9.1(i)
in which the Company is entitled to terminate this Agreement) such that the conditions set forth in Section 8.3(a) or Section 8.3(b) would not be satisfied and (i) such breach is
not reasonably capable of being cured or (ii) in the case of a breach of a covenant or agreement (other than an Intentional Breach of Parent's obligations under Article I), if such
breach is reasonably capable of being cured, such breach shall not have been cured prior to the earlier of (A) 40 days following notice of such breach and (B) the Termination
Date; provided that the Company shall not have the right to terminate this Agreement pursuant to this Section 9.1(j) if the Company is then in material breach of any of its representations,
warranties, covenants or agreements contained in this Agreement; or
(k) By
Parent if there shall have been a breach of any representation, warranty, covenant or agreement on the part of the Company contained in this Agreement such that the
conditions set forth in Section 8.2(a) or Section 8.2(b) would not be satisfied and (i) such breach is not reasonably capable of being cured or (ii) in the case of a breach
of a covenant or agreement, if such breach is reasonably capable of being cured, such breach shall not have been cured prior to the earlier of (A) 40 days following notice of such breach
and (B) the Termination Date; provided that Parent shall not have the right to terminate this Agreement pursuant to this Section 9.1(k) if Parent, Merger Sub 1 or Merger Sub 2 is
then in material breach of any of its representations, warranties, covenants or agreements contained in this Agreement.
Section 9.2.
Effect of Termination
.
(a) In
the event of termination of this Agreement by either the Company or Parent as provided in Section 9.1, this Agreement shall forthwith become void and there
shall be no liability or obligation on the part of Parent or the Company or their respective officers or directors except with respect to this Section 9.2, Section 7.12(k) and
Article X, provided that, except as set forth in the following sentence, termination of this Agreement shall not relieve any party from any liability or damages incurred or suffered by a party
to the extent such liability or damages were the result of, fraud or any Intentional Breach of any covenant or agreement in this Agreement occurring prior to termination (in each case, which may be
pursued only by the party through actions expressly approved by the party's Board of Directors, as applicable), which liability or damages shall not be limited to reimbursement of the party's expenses
or out-of-pocket costs and may include, to the extent proven and recoverable under applicable law, other damages suffered by the party, and the calculation of
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damages
suffered by the party may include, to the extent proven, loss suffered by the party's shareholders (including the benefit of the bargain lost by the party's shareholders, taking into account
without limitation the total amount payable to such shareholders under this Agreement), which shall be deemed in such event to be damages only of the party and not of the party's shareholders
themselves. Each party agrees that notwithstanding anything in this Agreement to the contrary, including Section 10.4(a), in the event that any Company Termination Fee, Parent Termination Fee
or Financing Fee is payable to a party in accordance with this Agreement, other than in the case of a termination of this Agreement by the Company pursuant to Section 9.1(i), the payment of
such fee and any applicable expenses shall be the sole and exclusive remedy of such party, its Subsidiaries, stockholders, Affiliates, officers, directors, employees and representatives against the
other party or any of its representatives (including, with respect to Parent, Merger Sub 1 and Merger Sub 2, any Financing Source) or Affiliates for, and in no event will such party being paid any
such fee and expenses or any other such Person seek to recover any other money damages or seek any other remedy based on a claim in law or equity (including, without limitation, specific performance)
with respect to, (i) any loss suffered, directly or indirectly, as a result of the failure of the Merger to be consummated, (ii) the termination of this Agreement, (iii) any
liabilities or obligations arising under this Agreement, or (iv) any claims or actions arising out of or relating to any breach, termination or failure of or under this Agreement, and upon
payment of any Company Termination
Fee, Parent Termination Fee or Financing Fee, and any applicable expenses, in accordance with this Agreement, neither the party paying such fee and such expenses, nor any representative (including,
with respect to Parent, Merger Sub 1 and Merger Sub 2, any Financing Source) or Affiliate of such party shall have any further liability or obligation to the other party relating to or arising out of
this Agreement or the transactions contemplated hereby.
(b) If
Parent shall terminate this Agreement pursuant to Section 9.1(e), then the Company shall pay to Parent, not later than two (2) Business Days following
such termination, an amount in cash equal to Two Hundred Million Dollars ($200,000,000) (the "
Company Termination Fee
") plus the Parent Expenses, within
two Business Days after delivery to the Company of Parent's written notice of the amount of such Parent Expenses.
(c) If
(i) the Company or Parent shall terminate this Agreement pursuant to Section 9.1(b) or Section 9.1(d)(i), (ii) at or prior to the time of
the Company Stockholders Meeting there shall have been publicly disclosed or announced and not withdrawn prior to the Company Stockholders Meeting a bona fide written Company Acquisition Proposal and
(iii) within 9 months following the termination of this Agreement, the Company enters into a definitive agreement with respect to, or consummates, a Company Acquisition Proposal, then
the Company shall pay to Parent, not later than two Business Days after the execution of the definitive agreement or consummation of the transaction, as applicable, the Company Termination Fee plus
Parent Expenses (except to the extent the Company has previously paid any such Parent Expenses).
(d) If
the Company shall terminate this Agreement pursuant to Section 9.1(f) , Parent shall pay to the Company, not later than two Business Days after the termination
of the Agreement, an amount equal to Three Hundred Fifty Million Dollars ($350,000,000) (the "
Parent Termination Fee
") plus the Company Expenses, within
two Business Days after delivery to Parent of written notice of the amount of such Company Expenses.
(e) If
(i) the Company or Parent shall terminate this Agreement pursuant to Section 9.1(b) or Section 9.1(d)(ii), (ii) at or prior to the time of
the Parent Stockholders Meeting there shall have been publicly disclosed or announced and not withdrawn prior to the Parent Stockholders Meeting a bona fide written Parent Acquisition Proposal and
(iii) within 9 months following the termination of this Agreement, Parent enters into a definitive agreement with respect to, or consummates, a Parent Acquisition Proposal, then Parent
shall pay to the Company, not later than two Business Days after the execution of the definitive agreement or consummation of the transaction, as applicable, the
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Parent
Termination Fee plus the Company Expenses (except to the extent Parent has previously paid the Company Expenses).
(f) If
the Company shall terminate this Agreement pursuant to Section 9.1(g), then the Company shall pay, or cause to be paid, to Parent the Company Termination Fee
contemporaneously with such termination, plus the Parent Expenses, within two (2) Business Days after delivery to the Company of Parent's written notice of the amount of such Parent Expenses.
(g) If
Parent shall terminate this Agreement pursuant to Section 9.1(h), then Parent shall pay, or cause to be paid, to the Company the Parent Termination Fee
contemporaneously with such termination, plus the Company Expenses, within two (2) Business Days after delivery to the Parent of Company's written notice of the amount of such Company Expenses.
(h) If
the Company terminates this Agreement pursuant to Section 9.1(i), then Parent shall pay to the Company, not later than two (2) Business Days after the
termination of this Agreement, Four Hundred Fifty Million Dollars ($450,000,000) (the "
Financing Fee
").
(i) If
the Company or Parent shall terminate this Agreement pursuant to Section 9.1(d)(ii), then Parent shall pay to the Company, not later than two Business Days
after the termination of this Agreement, the Company Expenses, within two (2) Business Days after delivery to the Parent of Company's written notice of the amount of such Company Expenses.
(j) If
the Company or Parent shall terminate this Agreement pursuant to Section 9.1(d)(i), then the Company shall pay to Parent, not later than two Business Days
after notice of the termination of this Agreement, the Parent Expenses.
(k) All
payments under this Section 9.2 by (i) the Company shall be made by wire transfer of immediately available funds to an account designated by Parent,
and (ii) Parent shall be made by wire transfer of immediately available funds to an account designated by the Company.
(l) For
purposes of this Section 9.2, the term "
Company Acquisition Proposal
" shall have the meaning assigned to such
term in Section 7.4(a), except that the reference to "more than 20%" in the definition of "Company Acquisition Proposal" shall be deemed to be a reference to "more than 50%", and the term
"
Parent Acquisition Proposal
" shall have the meaning assigned to such term in Section 7.4(f), except that the reference to "more than 20%" in the
definition of "Parent Acquisition Proposal" shall be deemed to be a reference to "more than 50%".
(m) The
Company acknowledges that the agreements contained in this Section 9.2 are an integral part of the transactions contemplated by this Agreement and are not a
penalty, and that, without these agreements, Parent would not enter into this Agreement. If the Company fails to pay promptly the amounts due pursuant to this Section 9.2, the Company will also
pay to Parent Parent's reasonable costs and expenses (including legal fees and expenses) in connection with any action, including the filing of any lawsuit or other legal action, taken to collect
payment, together with interest on the unpaid amount under this Section 9.2, accruing from its due date, at an interest rate per annum equal to two percentage points in excess of the prime
commercial lending rate quoted by The Wall Street Journal. Any change in the interest rate hereunder resulting from a change in such prime rate will be effective at the beginning of the date of such
change in such prime rate. For the avoidance of doubt, in no event shall the Company be required to pay or cause to be paid under this Section 9.2 the Company Termination Fee more than once.
(n) Parent
acknowledges that the agreements contained in this Section 9.2 are an integral part of the transactions contemplated by this Agreement and are not a
penalty, and that, without these agreements, the Company would not enter into this Agreement. If Parent fails to pay promptly the amounts due pursuant to this Section 9.2, Parent will also pay
to the Company the Company's reasonable costs and expenses (including legal fees and expenses) in connection with any action,
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including
the filing of any lawsuit or other legal action, taken to collect payment, together with interest on the unpaid amount under this Section 9.2, accruing from its due date, at an
interest rate per annum equal to two percentage points in excess of the prime commercial lending rate quoted by The Wall Street Journal. Any change in the interest rate hereunder resulting from a
change in such prime rate will be effective at the beginning of the date of such change in such prime rate. For the avoidance of doubt, in no event shall Parent be required to pay or cause to be paid
under this Section 9.2 (i) the Parent Termination Fee more than once, (ii) the Financing Fee more than once, or (iii) more than one of the Parent Termination Fee and the
Financing Fee.
Section 9.3.
Amendment
.
This
Agreement may be amended by the parties hereto, by action taken or authorized by their respective Boards of Directors, at any time before or after approval of the matters presented
in connection with the Merger by the stock holders of the Company, but, after any such approval, no amendment shall be made which by law requires further approval by such stockholders or which reduces
the Merger Consideration or adversely affects the holders of Company Common Stock, without approval by such holders. This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto; provided that, notwithstanding anything to the contrary contained herein, none of Section 9.2(a), 10.3, 10.4 or 10.10 or this Section 9.3 (or any
other provision of this Agreement to the extent an amendment of such provision would modify the substance of any of Section 9.2(a), 10.3, 10.4 or 10.10 or this Section 9.3) may be
amended in a manner that is adverse in any respect to the Financing Sources and their respective Affiliates without the prior written consent of the Financing Sources.
Section 9.4.
Extension; Waiver
.
At
any time prior to the Effective Time, the parties hereto, by action taken or authorized by their respective Boards of Directors, may, to the extent legally allowed, (i) extend
the time for the performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in a written instrument signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise
shall not constitute a waiver of those rights.
ARTICLE X.
MISCELLANEOUS
Section 10.1.
Non-Survival of Representations, Warranties and Agreements
.
None
of the representations, warranties, covenants and other agreements in this Agreement or in any instrument delivered pursuant to this Agreement, including any rights arising out of
any breach of such representations, warranties, covenants and other agreements, shall survive the Effective Time, except for those covenants and agreements contained herein and therein that by their
terms apply or are to be performed in whole or in part after the Effective Time and this Article X, including but not limited to covenants and agreements of Parent contained in
Sections 6.3 and 7.12(k).
Section 10.2.
Disclosure Schedules
.
(a) The
inclusion of any information in the Disclosure Schedules accompanying this Agreement will not be deemed an admission or acknowledgment, in and of itself, solely by
virtue of the inclusion of such information in such Disclosure Schedule, that such information is required to be listed in such Disclosure Schedule or that such information is material to any party or
the conduct of the business of any party.
(b) Any
item set forth in the Disclosure Schedules with respect to a particular representation, warranty or covenant contained in the Agreement will be deemed to be
disclosed with respect to all
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other
applicable representations, warranties and covenants contained in the Agreement to the extent any description of facts regarding the event, item or matter is disclosed in such a way as to make
readily apparent from such description or specified in such disclosure that such item is applicable to such other representations, warranties or covenants whether or not such item is so numbered.
Section 10.3.
Successors and Assigns
.
No
party hereto shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other parties hereto and any such attempted assignment without
such prior written consent shall be void and of no force and effect;
provided
,
however
, that Merger Sub
1 or Merger Sub 2 may assign its rights and obligations under this Agreement to another direct Wholly Owned Subsidiary of Parent without the consent of the Company and Parent, Merger Sub 1 and Merger
Sub 2 may assign their rights under this Agreement as collateral security for the Financing and the existing secured term loan credit facility of Parent's financing Subsidiary. This Agreement shall
inure to the benefit of and shall be binding upon the successors and permitted assigns of the parties hereto. No assignment or purported assignment of this Agreement by any party hereto shall be valid
if and to the extent such assignment affects the treatment of the Combination under Section 368(a) of the Code and the Treasury Regulations promulgated thereunder.
Section 10.4.
Governing Law; Jurisdiction; Specific Performance
.
(a) This
Agreement shall be construed, performed and enforced in accordance with, and governed by, the laws of the State of Delaware. Each of the parties hereto irrevocably
agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this
Agreement and the rights and obligations arising hereunder brought by the other party(ies) hereto or its successors or assigns shall be brought and determined exclusively in the Delaware Court of
Chancery, or in the event (but only in the event) that such court does not have subject matter jurisdiction over such action or proceeding, in the United States District Court for the District of
Delaware. Each of the parties to this Agreement agrees that, notwithstanding anything to the contrary contained herein, it will not bring or support any action, cause of action, claim, cross-claim,
third-party claim or proceeding of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, against the Financing Sources in any way relating to this
Agreement or any of the transactions contemplated by this Agreement, including but not limited to any dispute arising out of or relating in any way to the Commitment Letter, the Financing (or any
commitment letter relating to any Alternative Financing) or the performance thereof, in any forum other than any New York State court or Federal court of the United States of America sitting in the
Borough of Manhattan, and any appellate court from any thereof.
(b) EACH
PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, INCLUDING, BUT NOT LIMITED TO, ANY DISPUTE ARISING OUT OF, OR
RELATING TO, THE COMMITMENT LETTER, THE FINANCING (OR ANY COMMITMENT LETTER RELATING TO ANY ALTERNATIVE FINANCING) OR THE PERFORMANCE THEREOF. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS,
(II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (III) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.4(b).
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(c) The
parties agree that irreparable damage would occur and that the parties would not have any adequate remedy at law in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were otherwise breached and that any defense in any action for specific performance that a remedy at law would be adequate is
hereby waived. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches or threatened breaches of this Agreement and to enforce specifically the
terms and provisions of this Agreement (in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative, except, in each case, as may be
limited by Section 9.2). Any requirements for the securing or posting of any bond with such remedy are waived. Notwithstanding anything to the contrary in this Agreement, it is explicitly
agreed that the Company shall be entitled to seek specific performance of Parent's obligation to consummate the transactions contemplated by this Agreement only if (A) all of the conditions set
forth in Section 8.1 and Section 8.2 shall have been satisfied or waived (other than those conditions that by their nature are to be satisfied at Closing provided that such conditions
are reasonably capable of being satisfied at Closing) and the Company has irrevocably confirmed to Parent that it is ready to close, (B) the Marketing Period has expired and (C) the
proceeds of the Financing are then available in full pursuant to the Commitment Letter (or Alternative Financing) (it being understood that the Company shall, in all events, be entitled to seek
specific performance of Parent's obligations in Section 7.12 of this Agreement to seek to obtain the Financing or Alternative Financing in full).
Section 10.5.
Expenses
.
All
fees and expenses incurred in connection with the Combination including, without limitation, all legal, accounting, financial advisory, consulting and all other fees and expenses of
third parties incurred by a party in connection with the negotiation and effectuation of the terms and conditions of this Agreement and the transactions contemplated hereby and thereby, shall be the
obligation of the respective party incurring such fees and expenses, except (a) Parent and the Company shall each bear and pay one-half of the expenses incurred in connection with the filing,
printing and mailing of the Registration Statement and Joint Proxy Statement/Prospectus, (b) as provided in Section 7.12(k), and (c) as provided in Section 9.2.
Section 10.6.
Certain Transfer Taxes
.
Except to the extent set forth in Section 2.2(c), any liability arising out of any documentary, sales, use, real property transfer, registration, transfer, stamp, recording and
similar Taxes with respect to the transactions contemplated by this Agreement shall be borne by the Surviving Company and expressly shall not be a liability of stockholders of the Company.
Section 10.7.
Severability; Construction
.
(a) In
the event that any part of this Agreement is declared by any court or other judicial or administrative body to be null, void or unenforceable, said provision shall
survive to the extent it is not so declared, and all of the other provisions of this Agreement shall remain in full force and effect.
(b) The
parties have participated jointly in the negotiation and drafting of this Agreement. If any ambiguity or question of intent arises, this Agreement will be construed
as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party because of the authorship of any provision of this Agreement.
Section 10.8.
Notices
.
All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (i) on the date of service if served
personally or by fax on the party to whom notice is to be given; (ii) on the day after delivery to Federal Express or similar overnight courier or the Express Mail service maintained by the
United States Postal Service; or (iii) on the fifth day after mailing, if mailed to the party to whom
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notice
is to be given, by first class mail, registered or certified, postage prepaid and properly addressed, to the party as follows:
If
to the Company:
tw
telecom inc.
10475 Park Meadows Drive
Littleton, CO 80124
Telecopy/Facsimile: (303) 566-1777
Attention: Tina Davis, Esq., Senior Vice President and
General Counsel
Copy
to (such copy not to constitute notice):
Wachtell,
Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Fax: (212) 403-1000
Attn: Steven A. Rosenblum
Stephanie J. Seligman
If
to Parent, Merger Sub 1 or Merger Sub 2:
Level 3
Communications, Inc.
1025 Eldorado Blvd.
Broomfield, CO 80303
Telecopy/Facsimile: 720-888-5127
Attention: John M. Ryan, Executive Vice President,
Chief Legal Officer and Secretary
Copy
to (such copy not to constitute notice):
Willkie
Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019
Fax: (212) 728-8111
Attn: David K. Boston
Laura L. Delanoy
Any
party may change its address for the purpose of this Section 10.8 by giving the other party written notice of its new address in the manner set forth above.
Section 10.9.
Entire Agreement
.
This Agreement and the Confidentiality Agreement contain the entire understanding among the parties hereto with respect to the transactions contemplated hereby and supersede and replace
all prior and contemporaneous agreements and understandings, oral or written, with regard to such transactions. All Exhibits and Schedules hereto and any documents and instruments delivered pursuant
to any provision hereof are expressly made a part of this Agreement as fully as though completely set forth herein.
Section 10.10.
Parties in Interest
.
Except for (i) the rights of the Company stockholders to receive the Merger Consideration (following the Effective Time) and the rights of holders of Company Equity Awards to
receive the consideration contemplated by Section 1.8 (following the Effective Time) in accordance with the terms of this Agreement (of which the stockholders and such holders of Company Equity
Awards are the intended beneficiaries following the Effective Time), and (ii) the rights to indemnification contemplated by Section 7.12(h) and the rights to continued indemnification
and insurance pursuant to Section 6.3 (of which in each case the Persons entitled to indemnification
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or
insurance, as the case may be, are the intended beneficiaries), nothing in this Agreement is intended to confer any rights or remedies under or by reason of this Agreement on any Persons other than
the parties hereto and their respective successors and permitted assigns; provided, that, nothing in this Section 10.10 shall limit the right of Parent or the Company to seek damages as
contemplated by Section 9.2;
provided further
that the Financing Sources are intended beneficiaries of, and shall be entitled to enforce,
Sections 9.2(a), 9.3, 10.3 and 10.4 and this Section 10.10. Nothing in this Agreement is intended to relieve or discharge the obligations or liability of any third Persons to the Company
or Parent. No provision of this Agreement shall give any third parties any right of subrogation or action over or against the Company or Parent.
Section 10.11.
Section and Paragraph Headings
.
The section and paragraph headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.
Section 10.12.
Counterparts
.
This Agreement may be executed in counterparts, (including by facsimile or other electronic transmission) each of which shall be deemed an original, but all of which shall constitute the
same instrument.
Section 10.13.
Definitions
.
As used in this Agreement:
"
Affiliate
" shall mean, with respect to any Person, any other Person that directly, or through one or more intermediaries, controls or is
controlled by or is under common control with such Person.
"
Agreement
" shall have the meaning set forth in the Preamble hereto.
"
Alternative Financing
" shall have the meaning set forth in Section 7.12(c).
"
Board of Directors
" shall mean the Board of Directors of any specified Person and any committees thereof.
"
Business Day
" shall mean any day other than (a) Saturday or Sunday or (b) any other day on which banks in the City of New
York are permitted or required to be closed.
"
Cash Consideration
" shall have the meaning set forth in Section 1.7(a)(i).
"
Cash Percentage
" shall mean the quotient of (i) the Cash Consideration divided by (ii) the Deemed Value of Merger
Consideration.
"
Certificate
" shall have the meaning set forth in Section 1.7(a)(ii).
"
Certificate of Merger
" shall have the meaning set forth in Section 1.3.
"
Closing
" shall have the meaning set forth in Section 1.2.
"
Closing Date
" shall have the meaning set forth in Section 1.2.
"
Code
" shall have the meaning set forth in the Recitals hereto.
"
Combination
" shall have the meaning set forth in the Recitals hereto.
"
Commitment Letter
" means that certain Commitment Letter (together with all annexes, exhibits, schedules, appendices and other attachments
thereto), dated the date hereof, by and between Parent and the Financing Sources, pursuant to which and subject to the terms and conditions thereof, the Financing Sources have agreed to provide the
loans or other indebtedness identified therein in the amounts set forth therein, for the purpose of (among other things) funding the Cash Consideration, the cash payable to holders of Company Equity
Awards, the Required Indebtedness, including premiums and fees incurred in connection therewith, and all other fees and expenses incurred by Parent, Merger Sub 1, Merger Sub 2 and the Company in
connection with the Merger and the other transactions contemplated hereby;
provided that
, after the date of this Agreement,
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(i) upon
any amendment, supplement or modification to, or waiver of, the Commitment Letter in accordance with Section7.12(b), the term "Commitment Letter" as used in this Agreement shall mean
the Commitment Letter as so amended, supplemented, modified or waived in accordance with Section 7.12(b) from and after the time Parent has delivered to the Company a true, correct and complete
copy of such amended, supplemented, modified or waived Commitment Letter and (ii) in the event that Parent obtains Alternative Financing in accordance with Section 7.12(c), the term
"Commitment Letter" shall mean the commitment letter or letters (as amended, supplemented or modified in accordance with Section 7.12) related to the Alternative Financing from and after the
time Parent has delivered to the Company a true, correct and complete copy of such alternative commitment letter or letters;
provided further
that, with
respect to the representations and warranties of Parent set forth in Section 4.24, references to the Commitment Letter as of the date hereof shall thereafter mean the Commitment Letter as so
amended, supplemented, waived, modified or replaced on the date so provided to and approved by the Company.
"
Communications Act
" shall have the meaning set forth in Section 3.14(b).
"
Company
" shall have the meaning set forth in the Preamble hereto.
"
Company Acquisition Proposal
" shall have the meaning set forth in Section 7.4(a).
"
Company Alternative Acquisition Agreement
" shall have the meaning set forth in Section 7.4(c).
"
Company Benefit Plans
" shall mean each "employee benefit plan" (within the meaning of Section 3(3) of ERISA) and all other
material employee compensation and benefits plans, policies, programs, arrangements or payroll practices, including multiemployer plans (within the meaning of Section 3(37) of ERISA), and each
other stock purchase, stock option, restricted stock, severance, retention, employment, consulting, change-of-control, collective bargaining, bonus, incentive, deferred compensation, employee loan,
fringe benefit and other benefit plan, agreement, program, policy, commitment or other arrangement, whether or not subject to ERISA (including any related award agreements and any related funding
mechanism now in effect or required in the future), in each case sponsored, maintained, contributed or required to be contributed to by the Company or its Subsidiaries or under which the Company or
any of its Subsidiaries has any current or potential liability.
"
Company Change in Recommendation
" shall have the meaning set forth in Section 7.4(c).
"
Company Common Stock
" shall have the meaning set forth in the Recitals.
"
Company Disclosure Schedule
" shall mean the disclosure schedule delivered by the Company on the date hereof.
"
Company Equity Award"
means any Company Option, Company RSU Award or Company Restricted Stock Award.
"
Company Expenses
" shall mean all of the Company's actual and reasonably documented out-of-pocket fees and expenses (including reasonable
fees and expenses of counsel, accountants and financial advisors) actually incurred by the Company and its Affiliates on or prior to the termination of this Agreement in connection with the
transactions contemplated by this Agreement, which amount shall not be greater than Ten Million Dollars ($10,000,000).
"
Company Key Employee
" shall have the meaning set forth in Section 3.9(c).
"
Company Insiders
" shall have the meaning set forth in Section 7.9.
"
Company Intellectual Property
" shall mean all Intellectual Property owned, used or held for use by the Company or any Subsidiary.
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"
Company Intervening Event
" shall mean a material event, fact, circumstance, development or occurrence that affects the business, assets
or operations of the Company that is unknown to or by the Company's Board of Directors as of the date of this Agreement (and which could not have become known through any further reasonable
investigation, discussion, inquiry or negotiation with respect to any event, fact, circumstance, development or occurrence known to or by the Company's Board of Directors as of the date of this
Agreement), which event, fact, circumstance, development or occurrence becomes known to or by the Company's Board of Directors prior to obtaining the Required Company Vote.
"
Company Leased Real Property
" shall have the meaning set forth in Section 3.12(a).
"
Company Leases
" shall have the meaning set forth in Section 3.12(a).
"
Company Licenses and Permits
" shall have the meaning set forth in Section 3.14(a).
"
Company Material Adverse Effect
" shall mean any event, change, circumstance, effect, development or state of facts that, individually or
in the aggregate: (a) is, or is reasonably likely to become, materially adverse to the business, assets, financial condition, properties, liabilities or results of operations of the Company and
its Subsidiaries, taken as a whole;
provided
,
however
, that Company Material Adverse Effect shall not
include the effect of any event, change, circumstance, effect, development or state of facts to the extent it results from or arises out of (i) general economic or political conditions
(including results of elections) or securities, credit, financial or other capital markets conditions, in each case in the United States or any foreign jurisdiction, (ii) changes or conditions
generally affecting the industries, businesses, or segments thereof, in which the Company
and its Subsidiaries operate, (iii) any change in applicable law, regulation or GAAP (or authoritative interpretation of any of the foregoing), (iv) the negotiation, execution,
announcement, pendency or performance of this Agreement or the transactions contemplated hereby and thereby or the consummation of the transactions contemplated by this Agreement, (v) acts of
war, armed hostilities, sabotage or terrorism, or any escalation or worsening of any such acts of war, armed hostilities, sabotage or terrorism threatened or underway as of the date of this Agreement,
(vi) earthquakes, hurricanes, floods, or other natural disasters, (vii) any failure, in and of itself, by Company to meet any internal or published projections, forecasts, estimates or
predictions in respect of revenues, earnings or other financial or operating metrics for any period (it being understood that the facts or occurrences giving rise to or contributing to such failure
may be taken into account in determining whether there has been or will be, a Company Material Adverse Effect to the extent not otherwise excluded hereunder), or (viii) any change, in and of
itself, in the market price or trading volume of Company's securities (it being understood that the facts or occurrences giving rise to or contributing to such change may be taken into account in
determining whether there has been or will be, a Company Material Adverse Effect to the extent not otherwise excluded hereunder), except, in the case of the foregoing clause (ii) to the extent
that such event, change, circumstance, effect, development or state of facts affects the Company and its Subsidiaries in a materially disproportionate manner when compared to the effect of such event,
change, circumstance, effect, development or state of facts on other Persons in the industries in which the Company and its Subsidiaries operate,
provided
further
, that the exception in the foregoing clause (iv) will not be deemed to apply to references to Company Material Adverse Effect in the representations and
warranties set forth in Section 3.3 and Section 3.4, and, to the extent related to Section 3.3 and Section 3.4, the condition set forth in Section 8.2(a); or
(b) would prevent or materially impair or materially delay the ability of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.
"
Company Options
" shall have the meaning set forth in Section 1.8(a).
"
Company Organizational Documents
" shall mean the Certificate of Incorporation and Bylaws of the Company, together with all amendments
thereto.
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"
Company Owned Intellectual Property
" shall mean all Intellectual Property owned by the Company or any Subsidiary.
"
Company Owned Real Property
" shall have the meaning set forth in Section 3.12(a).
"
Company Preferred Stock
" shall have the meaning set forth in Section 3.6(a).
"
Company Property
" shall have the meaning set forth in Section 3.12(a).
"
Company Registered Intellectual Property
" shall have the meaning set forth in Section 3.13(b).
"
Company Restricted Stock Award
" shall have the meaning set forth in Section 1.8(c).
"
Company RSU Award
" shall have the meaning set forth in Section 1.8(b).
"
Company SEC Reports
" shall have the meaning set forth in Section 3.8(a).
"
Company Section 16 Information
" shall have the meaning set forth in Section 7.9.
"
Company Stock Plan
" shall have the meaning set forth in Section 1.8(a).
"
Company Stockholders Meeting
" shall have the meaning set forth in Section 3.28.
"
Company Superior Proposal
" shall have the meaning set forth in Section 7.4(b).
"
Company Termination Fee
" shall have the meaning set forth in Section 9.2(b).
"
Confidentiality Agreement
" shall have the meaning set forth in Section 7.2.
"
Consent
" shall mean any consent, approval, clearance, waiver, permit or order.
"
Consent Solicitations
" shall have the meaning set forth in Section 7.12(e).
"
Continuing Company Employee
" shall have the meaning set forth in Section 6.2(a).
"
Contract
" shall have the meaning set forth in Section 3.17(c).
"
Customer
" shall have the meaning set forth in Section 3.17(c).
"
Customer Contracts
" shall have the meaning set forth in Section 3.17(c).
"
Debt Tender Offer
" shall have the meaning set forth in Section 7.12(e).
"
Deemed Value of Merger Consideration
" shall mean the sum of (x) the Cash Consideration and (y) the Deemed Value of Stock
Consideration.
"
Deemed Value of Stock Consideration
" shall mean the product of (x) the Exchange Ratio and (y) the Parent Common Stock
Price.
"
DGCL
" shall have the meaning set forth in the Recitals hereto.
"
DLLCA
" shall have the meaning set forth in the Recitals hereto.
"
Disclosure Schedules
" shall mean the Parent Disclosure Schedule and the Company Disclosure Schedule, collectively.
"
Dissenting Shares
" shall have the meaning set forth in Section 1.7(c).
"
DOJ
" shall have the meaning set forth in Section 7.3(b).
"
Effective Time
" shall have the meaning set forth in Section 1.3.
"
Environmental Laws
" shall have the meaning set forth in Section 3.23(a).
"
ERISA
" shall mean the Employee Retirement Income Security Act of 1974, as amended.
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"
ERISA Affiliate
" means any entity, trade or business that is, or was at the relevant time, a member of a group described in
Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes or included any other entity, trade or business, or that is, or was at the relevant
time, a member of the same "controlled group" as such other entity, trade or business pursuant to Section 4001(a)(14) of ERISA.
"
ESPP
" shall have the meaning set forth in Section 1.8(d).
"
Exchange Act
" shall have the meaning set forth in Section 3.4.
"
Exchange Agent
" shall have the meaning set forth in Section 2.1.
"
Exchange Fund
" shall have the meaning set forth in Section 2.1.
"
Exchange Ratio
" shall have the meaning set forth in Section 1.7(a)(i).
"
Existing Credit Agreement
" means that certain Second Amended and Restated Credit Agreement, dated as of April 17, 2013, among the
Company, tw telecom holdings, inc., the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent.
"
Existing Indebtedness
" shall mean all Indebtedness of the Company and its Subsidiaries (x) in existence on the date hereof or
(y) permitted to be incurred in compliance with the terms hereof prior to the Termination Date, as the case may be, until such amounts are repaid.
"
FCC
" shall mean the Federal Communications Commission.
"
Fee Letter
" means the fee letter referred to in the Commitment Letter; provided that, after the date of this Agreement, (i) upon
any amendment, supplement or modification to, or waiver of, the Fee Letter in accordance with the penultimate sentence of Section 7.12(a), the term "Fee Letter" as used in this Agreement shall
mean the Fee Letter as so amended, supplemented, modified or waived in accordance with Section 7.12(a) from and after the time Parent has delivered to the Company a true, correct and complete
copy of such amended, supplemented, modified or waived Fee Letter (with only fee amounts, dates and certain other economic terms, including in respect of the "market flex" and "securities demand"
provisions, redacted) and (ii) in the event that Parent obtains Alternative Financing in accordance with Section 7.12(c), the term "Fee Letter" shall mean the fee letter or letters (as
amended, supplemented or modified in accordance with Section 7.12) related to the Alternative Financing from and after the time Parent has delivered to the Company a true, correct and complete
copy of such alternative fee letter or letters (with only fee amounts, dates and certain other economic terms, including in respect of the "market flex" and "securities demand" provisions, redacted).
"
Financing
" means the debt financing facilities provided for in the Commitment Letter;
provided
, that after the date of this Agreement, in the event that Parent obtains
Alternative Financing, in accordance with Section 7.12(c), the
term "Financing" shall mean the Alternative Financing.
"
Financing Fee
" shall have the meaning set forth in Section 9.2(h).
"
Financing Sources
" shall mean Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Citigroup Global
Markets Inc., and any of their respective affiliates, each acting pursuant to the Commitment Letter (or any other financing source and its affiliates that may become party to the Commitment
Letter as the same may be amended, supplemented, modified, waived or replaced in accordance with the definition thereof), and any other institutions or persons who provide any portion of the
Financing.
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"
Floating Rate Senior Notes due 2018
" shall mean the $300,000,000 in aggregate principal amount of the Parent's
Floating Rate Senior Notes due 2018.
"
Fraud and Bribery Laws
" shall have the meaning set forth in Section 3.30.
"
FTC
" shall have the meaning set forth in Section 7.3(b).
"
GAAP
" shall mean United States generally accepted accounting principles as in effect from time to time, consistently applied.
"
Governmental Entity
" shall mean any national, federal, state, or local, domestic or foreign, governmental, regulatory or administrative
authority, branch, agency or commission or any court, tribunal or judicial body.
"
Grant Date
" shall have the meaning set forth in Section 3.18(k).
"
Hazardous Material
" shall have the meaning set forth in Section 3.23(c).
"
Hedging Obligations
" means, with respect to any specified Person, the obligations of such Person under:
(1) interest
rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements;
(2) other
agreements or arrangements designed to manage interest rates or interest rate risk; and
(3) other
agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.
"
HSR Act
" shall have the meaning set forth in Section 3.4.
"
Indebtedness
" means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade
payables), whether or not contingent:
(1) in
respect of borrowed money;
(2) evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
(3) in
respect of banker's acceptances;
(4) representing
capital lease obligations;
(5) representing
the balance deferred and unpaid of the purchase price of any property or services due more than one year after such property is acquired or such services
are completed; or
(6) representing
any Hedging Obligations,
if
and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared
in accordance with GAAP. In addition, the term "
Indebtedness
" includes all Indebtedness of others secured by a Lien on any asset of the specified Person
(whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the guarantee by the specified Person of any Indebtedness of any other Person.
Indebtedness shall be calculated without giving effect to the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would
otherwise increase or decrease an amount of Indebtedness for any purpose under the indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness.
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"
Indemnified Person
" shall have the meaning set forth in Section 6.3(a).
"
Indenture Amendments
" shall have the meaning set forth in Section 7.12(e).
"
Intellectual Property
" shall mean all of the following, whether registered or unregistered: (i) trademarks and service marks,
trade dress, trade names and other indications of origin, applications or registrations in any jurisdiction pertaining to the foregoing and all goodwill associated therewith; (ii) Patents;
(iii) trade secrets, including confidential information and the right in any jurisdiction to limit the use or disclosure thereof; (iv) copyrighted and copyrightable writings, designs,
software, mask works, applications or registrations in any jurisdiction for the foregoing; (v) domain names and registrations pertaining thereto and all intellectual property used in connection
with or contained in Web sites; and (vi) all similar proprietary rights.
"
Intentional Breach
" means, with respect to any representation, warranty, agreement or covenant, an action or omission (including a
failure to cure circumstances) taken or omitted to be taken that the breaching party intentionally takes (or intentionally fails to take) and knows (or reasonably should have known) would, or would
reasonably be expected to, cause a material breach of such representation, warranty, agreement or covenant.
"
IRS
" shall mean the United States Internal Revenue Service.
"
IRU
" shall mean any sale, license or lease of any indefeasible rights of use of the Company's or Parent's infrastructure, as the case may
be.
"
Joint Proxy Statement/Prospectus
" shall have the meaning set forth in Section 3.28.
"
Knowledge
" shall mean, (i) with respect to the Company, the actual knowledge of the executives of the Company listed on
Schedule 10.13(a) of the Company Disclosure Schedules, or (ii) with respect to Parent, the actual knowledge of the executives of Parent listed on Schedule 10.13(c).
"
Level 3 Financing
" means Level 3 Financing, Inc., a Delaware corporation and a direct Wholly Owned Subsidiary of
Parent.
"
Lien
" shall mean any mortgage, pledge, security interest, encumbrance or title defect, lien (statutory or other), conditional sale
agreement, claim, charge, limitation or restriction.
"
Marketing Period
" shall mean the first period of twenty (20) consecutive calendar days throughout which (i) Parent shall
have received from the Company all of the Required Financial Information and during which period such information shall remain compliant in all material respects at all times with the applicable
provisions of Regulation S-X and S-K under the Securities Act (it being understood that the foregoing shall not require the Required Information to comply at any time with Rule 3-09,
Rule 3-10 or Rule 3-16 of Regulation S-X, or to include Compensation Disclosure and Analysis required by Regulation S-K Item 402(b) or other information customarily
excluded from a Rule 144A offering memorandum, including subsidiary financial statements) and (ii) the conditions set forth in Section 8.1 shall be satisfied or waived (other than
those conditions that by their nature can only be satisfied on the Closing Date) and nothing has occurred and no condition exists that would cause any of the conditions set forth in Section 8.2
(other than those conditions that by their nature can only be satisfied at the Closing Date) to fail to be satisfied, assuming that the Closing Date were to be scheduled for any time during such
twenty (20) consecutive calendar day period;
provided
that such period shall exclude the dates July 3, 2014 and July 4, 2014; end
on or prior to August 15, 2014 or begin on or after September 2, 2014; exclude the dates November 24, 2014 through November 28, 2014; and end on or prior to
December 19, 2014 or begin on or after January 5, 2015;
provided
,
further
, that the
Marketing Period will not be deemed to have commenced if prior to the completion of the Marketing Period, (x) the Company's auditors shall have withdrawn their audit opinion contained in the
Required Financial Information in which case the
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Marketing
Period shall not be deemed to commence unless and until a new unqualified audit opinion is issued with respect thereto by the Company's auditors or another independent public accounting firm
reasonably acceptable to the Parent or (y) the Company issues a public statement indicating its intent to restate any historical financial statements of the Company or that any such restatement
is under consideration or may be a possibility in which case the Marketing Period shall not be deemed to commence unless and until such restatement has been completed and the relevant SEC report or
SEC reports have been amended or the Company has announced that it has concluded that no restatement shall be required in accordance with GAAP;
provided
,
further
, that the Marketing Period shall end on any earlier date that is the date on which the
Financing is funded in full;
provided
,
further
, that whether or not commenced, in no event shall the
Marketing Period extend beyond June 15, 2015.
"
Merger
" shall have the meaning set forth in the Recitals hereto.
"
Merger Consideration
" shall have the meaning set forth in Section 1.7(a)(i).
"
Merger Sub 1
" shall have the meaning set forth in the Preamble hereto.
"
Merger Sub 2
" shall have the meaning set forth in the Preamble hereto.
"
New Plans
" shall have the meaning set forth in Section 6.2(b).
"
Notes
" shall mean any of the Senior Notes due 2022 and the Senior Notes due 2023.
"
NYSE
" shall mean the New York Stock Exchange.
"
Offer Documents
" shall have the meaning set forth in Section 7.12(e).
"
Offers to Purchase
" shall have the meaning set forth in Section 7.12(e).
"
Parent
" shall have the meaning set forth in the Preamble hereto.
"
Parent Acquisition Proposal
" shall have the meaning set forth in Section 7.4(f).
"
Parent Alternative Acquisition Agreement
" shall have the meaning set forth in Section 7.4(h).
"
Parent Benefit Plan
" shall mean each "employee benefit plan" (within the meaning of Section 3(3) of ERISA) and all other material
employee compensation and benefits plans, policies, programs, arrangements or payroll practices, including multiemployer plans (within the meaning of Section 3(37) of ERISA), and each other
stock purchase, stock option, restricted stock, severance, retention, employment, consulting, change-of-control, collective bargaining, bonus, incentive, deferred compensation, employee loan, fringe
benefit and other benefit plan, agreement, program, policy, commitment or other arrangement, whether or not subject to ERISA (including any related award agreements and any related funding mechanism
now in effect or required in the future), in each case sponsored, maintained, contributed or required to be contributed to by Parent or its Subsidiaries or under which Parent or any of its
Subsidiaries has any current or potential liability.
"
Parent Change in Recommendation
" shall have the meaning set forth in Section 7.4(h).
"
Parent Charter Amendment
" shall mean the amendment to Parent's Restated Certificate of Incorporation, substantially in the form of
Exhibit A
hereto.
"
Parent Closing Price
" shall mean the closing price of Parent Common Stock on the NYSE on the Closing Date.
"
Parent Common Stock
" shall have the meaning set forth in the Recitals hereto.
"
Parent Common Stock Price
" means the volume-weighted sales price per share taken to four decimal places of Parent Common Stock on the
NYSE for the consecutive period beginning at 9:30 a.m. New York time on the thirteenth trading day immediately preceding the Closing Date and
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concluding
at 4:00 p.m. New York time on the third trading day immediately preceding the Closing Date, as calculated by Bloomberg Financial LP under the function "LVLT Equity AQR".
"
Parent Disclosure Schedule
" shall mean the disclosure schedule delivered by Parent, Merger Sub 1 and Merger Sub 2 on the date hereof.
"
Parent Equity Award
" means any Parent Option, Parent SAR, Parent RSU Award or Parent Restricted Stock Award.
"
Parent Existing Credit Agreement
" shall mean that certain Amended and Restated Credit Agreement dated as of October 4, 2013, among
Parent, Level 3 Financing, the lenders party thereto and Merrill Lynch Capital Corporation, as administrative agent and collateral agent, as in effect on the date hereof.
"
Parent Existing Notes
" shall have the meaning set forth in the Parent Existing Credit Agreement.
"
Parent Expenses
" shall mean all of Parent's actual and reasonably documented out-of-pocket fees and expenses actually incurred by Parent
and its Subsidiaries on or prior to the termination of this Agreement in connection with the transactions contemplated by this Agreement, including the financing thereof, which amount shall not be
greater than Ten Million Dollars ($10,000,000).
"
Parent Intellectual Property
" shall mean all Intellectual Property owned, used or held for use by Parent or any Subsidiary.
"
Parent Intervening Event
" shall mean a material event, fact, circumstance, development or occurrence that affects the business, assets or
operations of Parent that is unknown to or by Parent's Board of Directors as of the date of this Agreement (and which could not have become known through any further reasonable investigation,
discussion, inquiry or negotiation with respect to any event, fact, circumstance, development or occurrence known to or by Parent's Board of Directors as of the date of this Agreement), which event,
fact, circumstance, development or occurrence becomes known to or by Parent's Board of Directors prior to obtaining the Required Parent Vote.
"
Parent Lease
" shall mean all leases, site leases, subleases and occupancy agreements, together with all material amendments thereto, in
which either of Parent or its Subsidiaries has a leasehold interest, license or similar occupancy rights, whether as lessor or lessee, and which involve payments by Parent or its Subsidiaries in
excess of $1,000,000 per year.
"
Parent Leased Real Property
" shall mean the property covered by Parent Leases under which either of Parent or its Subsidiaries is a
lessee.
"
Parent Licenses and Permits
" shall have the meaning set forth in Section 4.13(a).
"
Parent Material Adverse Effect
" shall mean any event, change, circumstance, effect, development or state of facts that, individually or
in the aggregate, (a) is, or is reasonably likely to become, materially adverse to the business, materially adverse to the business, assets, financial condition, properties, liabilities or
results of operations of Parent and its Subsidiaries, taken as a whole;
provided
,
however
, that Parent
Material Adverse Effect shall not include the effect of any event, change, circumstance, effect, development or state of facts to the extent it results from or arises out of (i) general
economic or political conditions (including results of elections) or securities, credit, financial or other capital markets conditions, in each case in the United States or any foreign jurisdiction,
(ii) changes or conditions generally affecting the industries, businesses, or segments thereof, in which Parent and its Subsidiaries operate, (iii) any change in applicable Law,
regulation or GAAP (or authoritative interpretation of any of the foregoing), (iv) the negotiation, execution, announcement, pendency or performance of this Agreement or the transactions
contemplated hereby
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and
thereby or the consummation of the transactions contemplated by this Agreement, (v) acts of war, armed hostilities, sabotage or terrorism, or any escalation or worsening of any such acts of
war, armed hostilities, sabotage or terrorism threatened or underway as of the date of this Agreement, and (vi) earthquakes, hurricanes, floods, or other natural disasters, (vii) any
failure, in and of itself, by Company to meet any internal or published projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics for
any period (it being understood that the facts or occurrences giving rise to or contributing to such failure may be taken into account in determining whether there has been or will be, a Parent
Material Adverse Effect to the extent not otherwise excluded hereunder), or (viii) any change, in and of itself, in the market price or trading volume of Parent's securities (it being
understood that the facts or occurrences giving rise to or contributing to such change may be taken into account in determining whether there has been or will be, a Parent Material Adverse Effect to
the extent not otherwise excluded hereunder), except, in the case of the foregoing clause (ii), to the extent that such event, change, circumstance, effect, development or state of facts
affects Parent and its Subsidiaries in a materially disproportionate manner when compared to the effect of such event, change, circumstance, effect, development or state of facts on other Persons in
the industry in which Parent and its Subsidiaries operate, provided further, that the exception in the foregoing clause (iv) will not be deemed to apply to references to
Parent Material Adverse Effect in the representations and warranties set forth in Section 4.3 and 4.4, and to the extent related to Section 4.3, 4.4 or 4.10(c), the condition set forth
in Section 8.3(a); or (b) would prevent or materially impair or materially delay the ability of Parent to perform its obligations under this Agreement or to consummate the transactions
contemplated hereby.
"
Parent Material Contract
" shall have the meaning set forth in Section 4.16.
"
Parent Option
" means each option to purchase Parent Common Stock outstanding under any Parent Benefit Plan or otherwise.
"
Parent Organizational Documents
" shall mean the Restated Certificate of Incorporation and the Amended and Restated Bylaws of Parent,
together with all amendments thereto.
"
Parent Owned Intellectual Property
" shall mean all Intellectual Property owned by Parent or any Subsidiary.
"
Parent Owned Real Property
" shall mean all material real property owned by the Parent and its Subsidiaries.
"
Parent Preferred Stock
" shall have the meaning set forth in Section 4.6(a).
"
Parent Property
" shall mean the Parent Leased Real Property and Parent Owned Real Property.
"
Parent Registered Intellectual Property
" shall mean all material issued Patents, registered trademarks and service marks, registered
copyrights, and applications for any of the foregoing, in each case issued by, filed with, or recorded by, any Governmental Entity and constituting Parent Owned Intellectual Property.
"
Parent Restricted Stock Award
" shall mean any award of restricted Parent Common Stock outstanding under any Parent Benefit Plan or
otherwise.
"
Parent RSU Award
" shall mean the restricted stock units denominated with respect to Parent Common Stock outstanding under any Parent
Benefit Plan or otherwise.
"
Parent SAR
" means each stock appreciation right with respect to Parent Common Stock outstanding under any Parent Benefit Plan or
otherwise.
"
Parent SEC Reports
" shall have the meaning set forth in Section 4.8(a).
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"
Parent Share Issuance
" shall have the meaning set forth in Section 3.28.
"
Parent Stock Plan
" means, collectively, the Level 3 Communications, Inc. Stock Plan, as amended and the 2003 Global
Crossing Limited Stock Incentive Plan, as amended.
"
Parent Stockholders Meeting
" shall have the meaning set forth in Section 3.28.
"
Parent Superior Proposal
" shall have the meaning set forth in Section 7.4(g).
"
Parent Termination Fee
" shall have the meaning set forth in Section 9.2(d).
"
Patents
" shall mean all patent and patent applications in any jurisdiction, and all re-issues, reexamine applications, continuations,
divisionals, continuations-in-part or extensions of any of the foregoing.
"
PBGC
" shall have the meaning set forth in Section 4.17(b).
"
Permitted Liens
" shall mean (a) liens for utilities and current Taxes not yet due and payable or being contested in good faith,
(b) mechanics', carriers', workers', repairers', materialmen's, warehousemen's, lessor's, landlord's and other similar liens arising or incurred in the ordinary course of business not yet due
and payable or being contested in good faith, (c) liens for Taxes, assessments, or governmental charges or levies on a Person's properties if the same shall not at the time be delinquent or
thereafter can be paid without penalty or are being contested in good faith
by appropriate proceedings and for which appropriate reserves have been included on the balance sheet of the applicable Person, (d) Liens disclosed on the existing title policies, title
commitments and/or surveys which have been previously provided or made available to Parent or the Company, as applicable, none of which materially interfere with the business of Parent or its
Subsidiaries or the Company or its Subsidiaries, as applicable, or the operation of the property as presently conducted to which they apply, (e) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old age pensions or other social security or retirement benefits or similar legislation, (f) deposits securing liability to insurance
carriers under insurance or self-insurance arrangements, (g) deposits to secure the performance of bids, tenders, trade contracts (other than contracts for indebtedness for borrowed money),
leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business, (h) Liens arising from protective
filings, (i) Liens in favor of a banking institution arising as a matter of applicable law encumbering deposits (including the right of set-off) held by such banking institution incurred in the
ordinary course of business and which are within the general parameters customary in the banking industry and (j) Liens securing Indebtedness of the Company and its Subsidiaries, provided that
such Indebtedness shall be in existence on the date hereof.
"
Person
" shall mean an individual, corporation, limited liability company, partnership, association, trust, unincorporated organization,
other entity or group (as defined in the Exchange Act).
"
Proceeding
" shall have the meaning set forth in Section 6.3(a).
"
Registration Statement
" shall have the meaning set forth in Section 7.1(a).
"
Regulatory Law
" shall have the meaning set forth in Section 7.3(b).
"
Required Company Vote
" shall have the meaning set forth in Section 3.29.
"
Required Financial Information
" shall have the meaning set forth in Section 7.12(i).
"
Required Parent Vote
" shall have the meaning set forth in Section 4.26.
"
Required Indebtedness
" shall have the meaning set forth in Section 4.22.
"
Rights
" means the rights issued pursuant to the Rights Agreement.
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"
Rights Agreement
" means that certain rights agreement, dated as of April 10, 2011, as amended, between Parent and Wells Fargo
Bank, N.A., as rights agent.
"
Sarbanes-Oxley Act
" shall have the meaning set forth in Section 3.15(b).
"
SEC
" shall mean the United States Securities and Exchange Commission.
"
Secretary of State
" shall have the meaning set forth in Section 1.3.
"
Securities Act
" shall have the meaning set forth in Section 3.4.
"
Senior Notes due 2021
" shall mean the $640,000,000 in aggregate principal amount of the Parent's 6.125% Senior Notes due 2021.
"
Senior Notes due 2022
" shall mean the Company's 5
3
/
8
% Senior Notes due 2022.
"
Senior Notes due 2023
" shall mean the Company's 6
3
/
8
% Senior Notes due 2023.
"
Specified Material Adverse Effect
" shall have the meaning set forth in Section 7.3(b).
"
State Regulators
" shall mean the state or local public service or public utility commissions or other similar state or local regulatory
bodies.
"
Stock Consideration
" shall have the meaning set forth in Section 1.7.
"
Stockholder
" shall have the meaning set forth in the Recitals.
"
Stock Percentage
" shall mean the quotient of (i) the Deemed Value of Stock Consideration divided by (ii) the Deemed Value
of Merger Consideration.
"
Subsequent Certificate of Merger
" shall have the meaning set forth in Section 1.3.
"
Subsequent Effective Time
" shall have the meaning set forth in Section 1.3.
"
Subsequent Merger
" shall have the meaning set forth in the Recitals.
"
Subsidiary
" when used with respect to any Person shall mean (a) any corporation, partnership or other organization, whether
incorporated or unincorporated, (i) of which such Person or any other Subsidiary of such Person is a general partner (excluding partnerships, the general partnership interests of which held by
such Person or any Subsidiary of such Person do not have a majority of the voting interests in such partnership) or (ii) at least a majority of the securities or other interests of which having
by their terms ordinary voting power to elect a majority of the Board of Directors or others performing similar functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries, or (b) any partnership, limited liability
company, association, joint venture or other business entity, of which at least 50% of the partnership, joint venture or other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof.
"
Surviving Company
" shall have the meaning set forth in Section 1.1.
"
Surviving Corporation
" shall have the meaning set forth in Section 1.1.
"
Tax Return
" shall mean any report, return, information return, filing, claim for refund or other information, including any schedules or
attachments thereto, and any amendments to any of the foregoing supplied or required to be supplied to a taxing authority in connection with Taxes.
"
Taxes
" shall mean all U.S. federal, state, or local or non-U.S. taxes, including, without limitation, income, gross income, gross
receipts, production, excise, employment, sales, use, transfer,
ad
valorem
, value added, profits, license, capital stock, franchise, severance, stamp, withholding, Social Security, employment, unemployment, disability, worker's compensation,
payroll,
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utility,
windfall profit, custom duties, personal property, real property, taxes required to be collected from customers on the sale of services, registration, alternative or add-on minimum,
estimated, and other taxes, governmental and regulatory fees, including universal service fees or like charges of any kind whatsoever, including any interest, penalties or additions thereto; and
"
Tax
" shall mean any one of them.
"
Termination Date
" shall have the meaning set forth in Section 9.1(b).
"
the other party
" shall mean, with respect to the Company, Parent and shall mean, with respect to Parent, the Company.
"
Title IV Plan
" shall have the meaning set forth in Section 4.17(b).
"
Treasury Regulations
" shall have the meaning set forth in the Recitals hereto.
"
Uncertificated Company Stock
" shall have the meaning set forth in Section 1.7(a)(ii).
"
Vendor
" shall have the meaning set forth in Section 3.17(c).
"
Vendor Contracts
" shall have the meaning set forth in Section 3.17(c).
"
WARN
" shall have the meaning set forth in Section 3.22(d).
"
Wholly Owned Subsidiary
" of any specified Person shall mean a Subsidiary of such Person all of the outstanding capital stock or other
ownership interests of which (other than directors' qualifying
shares) will at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written.
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LEVEL 3 COMMUNICATIONS, INC.
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By:
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/s/ JEFF K. STOREY
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Name:
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Jeff K. Storey
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Title:
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President and Chief Executive Officer
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SATURN MERGER SUB 1, LLC
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By:
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/s/ JEFF K. STOREY
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Name:
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Jeff K. Storey
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Title:
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Manager
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SATURN MERGER SUB 2, LLC
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By:
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/s/ JEFF K. STOREY
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Name:
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Jeff K. Storey
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Title:
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Manager
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TW TELECOM INC.
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By:
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/s/ LARISSA L. HERDA
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Name:
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Larissa L. Herda
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Title:
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Chairman and CEO
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EXHIBIT A
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
LEVEL 3 COMMUNICATIONS, INC.
Pursuant
to Section 242 of the General Corporation Law
The
undersigned, being a duly appointed officer of Level 3 Communications, Inc. (the "
Corporation
"), a corporation organized
and existing under and by virtue of the Delaware General Corporation Law (the "
DGCL
"), for the purpose of amending the Corporation's Restated
Certificate of Incorporation, as amended (the "
Restated Certificate of Incorporation
"), filed pursuant to Section 102 of the DGCL, hereby
certifies, pursuant to Sections 242 and 103 of the DGCL, as follows:
FIRST:
That the Board of Directors of the Corporation, at a meeting of the Board of Directors of the Corporation, adopted
resolutions setting forth a certain proposed amendment to the Restated Certificate of Incorporation, as amended, declaring said amendment to be advisable, calling for the stockholders of the
Corporation to consider the amendment at the next meeting of the stockholders and calling for a special meeting of the stockholders of the corporation for consideration thereof.
SECOND:
The amendment effected hereby was duly authorized by the Corporation's Board of Directors and stockholders in
accordance with the provisions of Sections 141, 228 and 242 of the DGCL and shall be executed, acknowledged and filed in accordance with Section 103 of the DGCL.
THIRD:
That Article IV of the Restated Certificate of Incorporation, filed with the Secretary of the State of Delaware
on May 22, 2008, as amended on May 27, 2009, as amended on May 25, 2010 and as amended on October 3, 2011 is hereby amended in its entirety to read as follows:
ARTICLE IV
AUTHORIZED CAPITAL STOCK
The
total number of shares of capital stock which the Corporation shall have the authority to issue is 443,333,333 consisting of 433,333,333 shares of Common
Stock, par value $.01 per share (the "Common Stock") and 10,000,000 shares of Preferred Stock, par value $.01 per share ("Preferred Stock").
IN WITNESS WHEREOF
, this Certificate of Amendment has been signed this day of June, 2014 by the undersigned who affirms the
statements contained herein as true under penalties of perjury.
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LEVEL 3 COMMUNICATIONS, INC.
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By:
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Name:
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Title:
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Table of Contents
Annex B
EVERCORE GROUP L.L.C.
June 15,
2014
The
Board of Directors of
tw telecom Inc.
10475 Park Meadows Drive
Littleton, CO 80124
Members
of the Board of Directors:
We
understand that TW TELECOM, INC, a Delaware corporation (the "
Company
"), proposes to enter into an Agreement and Plan of Merger (the
"
Merger Agreement
") with the Company, LEVEL 3 COMMUNICATIONS, INC, a Delaware corporation ("
Parent
"),
SATURN MERGER SUB 1, LLC., a Delaware limited liability company and a direct Wholly Owned Subsidiary of Parent ("
Merger Sub 1
"), and
SATURN MERGER SUB 2, LLC, a Delaware limited liability company and a direct Wholly Owned Subsidiary of Parent, pursuant to which, and subject to the terms and conditions set forth therein,
(i) Merger Sub will be merged with and into the Company, with the Company surviving and becoming a wholly owned subsidiary of Parent (the
"
Merger
") and (ii) immediately following the consummation of the Merger, the Company will be merged with and into Merger Sub 2, with Merger Sub 2
surviving (the "
Subsequent Merger
" and together with the Merger, the "
Combination
"). As a result of the
Combination, among other things, each share of common stock of the Company, par value $0.01 per share (the "
Company Common Stock
") issued and
outstanding immediately prior to the effective time of the Merger (other than any Dissenting Shares (as such term is defined in the Merger Agreement)) will be converted into the right to receive
(i) 0.70 (the "
Stock Consideration
") of a share of common stock of Parent, par value $0.01 (the "
Parent Common
Stock
"), and (ii) $10.00 in cash, without interest (the "
Cash Consideration
", and together with the Stock Consideration,
the "
Merger Consideration
"). The terms and conditions of the Combination are more fully set forth in the Merger Agreement.
The
Board of Directors has asked us whether, in our opinion, the Merger Consideration is fair, from a financial point of view, to holders of the shares of the Company Common Stock
entitled to receive such Merger Consideration.
In
connection with rendering our opinion, we have, among other things:
-
(i)
-
Reviewed
certain publicly available business and financial information relating to Parent and the Company that we deemed to be relevant, including publicly
available research analysts' estimates;
-
(ii)
-
Reviewed
certain non-public historical financial and operating data relating to Parent prepared and furnished to the Company by the management of Parent;
-
(iii)
-
Reviewed
certain non-public projected financial data relating to Parent prepared and furnished to the Company by the management of Parent (the
"
Parent Management Plan
");
-
(iv)
-
Reviewed
certain non-public projected financial data relating to the Company prepared and furnished to us by the management of the Company (the
"
Baseline Plan
");
-
(v)
-
Reviewed
certain non-public projected financial data relating to Parent under alternative business assumptions prepared and furnished to us by the
management of the Company (the "
Parent Research Derived Plan
");
Evercore Group L.L.C. 55 East 52nd Street New York, NY 10055 Tel: 212.857.3100 Fax: 212.857.3101
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-
(vi)
-
Discussed
the past and current operations, financial projections and current financial condition of Parent with the management of the Company and Parent
(including their views on the risks and uncertainties of achieving such projections);
-
(vii)
-
Reviewed
the amount, timing and use of the synergies expected by the Company's management to result from the Combination
("
Synergies
"), as well as incremental integration costs expected by the Company to be incurred in connection with the Combination, each as estimated by
the management of the Company;
-
(viii)
-
Reviewed
the amount, timing and use of certain tax attributes of Parent, the Company and the combined company as estimated by the management of the
Company;
-
(ix)
-
Reviewed
the reported prices and the historical trading activity of the Parent Common Stock and the Company Common Stock;
-
(x)
-
Compared
the financial performance of the Company and Parent and their stock market trading multiples with those of certain other publicly traded companies
that we deemed relevant;
-
(xi)
-
Reviewed
certain valuation multiples relating to the Combination with those of certain other transactions that we deemed relevant;
-
(xii)
-
Reviewed
the pro forma impact of the Combination on Parent;
-
(xiii)
-
Reviewed
a draft of the Merger Agreement dated June 15, 2014, which we have assumed is in substantially final form and from which we assume the
final form will not vary in any respect material to our analysis; and
-
(xiv)
-
Performed
such other analyses and examinations and considered such other factors as we deemed appropriate.
For
purposes of our analysis and opinion, we have assumed and relied upon, without undertaking any independent verification of, the accuracy and completeness of all of the information
publicly available, and all of the information supplied or otherwise made available to, discussed with, or reviewed by us, and we assume no liability therefor. With respect to the Parent Management
Plan, prepared and furnished to the Company by the management of Parent, we have assumed that it has been reasonably prepared on bases reflecting the best currently available estimates and good faith
judgment of the management of Parent, as to the future financial performance of Parent. With respect to the Baseline Plan and the Parent Research Derived Plan, each prepared and furnished to us by the
management of the Company, we have assumed that they each have been reasonably prepared on bases reflecting the best currently available estimates and good faith judgment of the management of the
Company as to the future financial performance of the Company and Parent. With respect to the projected Synergies prepared by the management of the Company, we have assumed that they have been
reasonably prepared on bases reflecting the best currently available estimates and good faith judgment of the management of the Company as to the amount, timing and achievability of the Synergies. We
express no view as to any projected financial data relating to the Company, Parent, the Synergies or the assumptions on which they are based.
For
purposes of rendering our opinion, we have assumed, in all respects material to our analysis, that the representations and warranties of each party contained in the Merger Agreement
are true and correct, that each party will perform all of the covenants and agreements required to be performed by it under the Merger Agreement and that all conditions to the consummation of the
Combination will be satisfied without material waiver or modification thereof. We have further assumed that all governmental, regulatory or other consents, approvals or releases necessary for the
consummation of the Combination will be obtained without any material delay, limitation, restriction or condition that would have an adverse effect on the Company or the consummation of
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the
Combination or materially reduce the benefits of the Combination to the holders of the Company Common Stock. We have assumed the final versions of all documents reviewed by us in draft form
conform in all material respects to the drafts reviewed by us.
We
have not made nor assumed any responsibility for making any independent valuation or appraisal of the assets or liabilities of the Company or Parent, nor have we evaluated the
solvency or fair value of the Company or Parent under any state or federal laws relating to bankruptcy, insolvency or similar matters. Our opinion is necessarily based upon information made available
to us as of the date hereof and financial, economic, market and other conditions as they exist and as
can be evaluated on the date hereof. It is understood that subsequent developments may affect this opinion and that we do not have any obligation to update, revise or reaffirm this opinion.
We
have not been asked to pass upon, and express no opinion with respect to, any matter other than the fairness to the holders of the Company Common Stock, from a financial point of
view, as of the date hereof, of the Merger Consideration. We do not express any view on, and our opinion does not address, the fairness of the Combination to, or any consideration received in
connection therewith by, the holders of any securities, or any creditors or other constituencies, of the Company or Parent, nor as to the fairness of the amount or nature of any compensation to be
paid or payable to any of the officers, directors or employees of the Company or Parent, or any class of such persons, whether relative to the Merger Consideration or otherwise. We have assumed that
any modification to the structure of the Combination will not vary our analysis in any material respect. Our opinion does not address the relative merits of the Combination as compared to other
business or financial strategies that might be available to the Company, nor does it address the underlying business decision of the Company to engage in the Combination.
This
letter, and our opinion, do not constitute a recommendation to the Board of Directors or to any other persons in respect of the Combination, including as to how any holder of shares
of the Company Common Stock should vote or act in respect of the Combination. We express no opinion herein as to the price at which shares of the Company Common Stock or Parent Common Stock will trade
at any time. We are not legal, regulatory, accounting, employee benefits or tax experts and have assumed the accuracy and completeness of assessments provided by the Company and its advisors with
respect to legal, regulatory, accounting, employee benefits and tax matters.
We
will receive a portion of the fees for our services upon the public announcement of the execution of the Merger Agreement. The Company has also agreed to reimburse our expenses and to
indemnify us against certain liabilities arising out of our engagement. We will also be entitled to receive a success fee if the Consummation is consummated. Prior to this engagement, we, Evercore
Group L.L.C., and our affiliates have provided financial advisory services to the Company and its affiliates and have received customary fees for the rendering of these services. We may provide
financial or other services to the Company or Parent in the future and in connection with any such services we may receive compensation.
Evercore
Group L.L.C. and its affiliates engage in a wide range of activities for their own accounts and the accounts of customers. In connection with these businesses or otherwise,
Evercore Group L.L.C. and its affiliates and/or their respective employees, as well as investment funds in which any of them may have a financial interest, may at any time, directly or indirectly,
hold long or short positions and may trade or otherwise effect transactions for their own accounts or the accounts of customers, in debt or equity securities, senior loans and/or derivative products
relating to Parent, the Company and their respective affiliates, for its own account and for the accounts of its customers.
This
letter, and the opinion expressed herein is addressed to, and for the information and benefit of, the Board of Directors in connection with its evaluation of the Combination. The
issuance of this opinion has been approved by an Opinion Committee of Evercore Group L.L.C.
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This
letter, and the opinion expressed herein, may not be disclosed, quoted, referred to or communicated (in whole or in part) to any third party for any purpose whatsoever except with
our prior written approval, except the Company may reproduce this opinion in full in any document that is required to be filed with the U.S. Securities and Exchange Commission and required to be
mailed by the Company to its stockholders relating to the Combination; provided, however, that all references to us or our opinion in any such document and the description or inclusion of our opinion
and advice or related analysis therein shall be subject to our prior consent with respect to form and substance, which consent shall not be unreasonably withheld or delayed.
Based
upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Merger Consideration is fair, from a financial point of view, to the holders of the Company
Common Stock.
|
|
|
|
|
|
|
Very truly yours,
|
|
|
EVERCORE GROUP L.L.C.
|
|
|
By:
|
|
/s/ DANIEL B. MENDELOW
Daniel B. Mendelow
Senior Managing Director
|
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Annex C
June 15,
2014
CONFIDENTIAL
The
Board of Directors
Level 3 Communications, Inc.
1025 Eldorado Boulevard
Broomfield, CO 80021
Members
of the Board of Directors:
We
understand that Level 3 Communications, Inc. ("Parent"), SATURN MERGER SUB 1, a wholly owned subsidiary of Parent ("Merger Sub 1"), SATURN MERGER SUB 2, a wholly owned
subsidiary of Parent ("Merger Sub 2") and tw telecom inc. (the "Company") propose to enter into an Agreement and Plan of Merger, dated as of June 15, 2014 (the "Merger Agreement"), which
provides, among other things, for the merger of Merger Sub 1 and the Company (the "Merger"). As a result of the Merger, Merger Sub 1 will be merged with and into the Company with the Company surviving
the Merger as a wholly owned subsidiary of Parent (the "Surviving Corporation"), and each outstanding share of common stock, par value $0.01 per share, of the Company (the "Company Common Stock"),
other than Dissenting Shares, will be converted into the right to receive (i) $10.00 in cash (the "Cash Consideration") and (ii) 0.7 of a share (such shares, the "Stock Consideration"
and, together with the Cash Consideration, the "Consideration") of the common stock, par value $0.01 per share, of Parent (the "Parent Common Stock"). Following the Merger, the Surviving Corporation
will merge with and into Merger Sub 2 (the "Subsequent Merger", and together with the Merger, the "Transaction"), with Merger Sub 2 surviving the Subsequent Merger as a wholly owned subsidiary of
Parent. Capitalized terms used herein without definition have the respective meanings ascribed to such terms in the Merger Agreement.
You
have requested our opinion as to the fairness, from a financial point of view, to Parent of the Consideration to be paid by Parent in the Transaction. In arriving at our opinion, we
have, among other things, (i) reviewed the financial terms and conditions of the Merger Agreement and execution copies of related financing commitment letters; (ii) reviewed certain
publicly available business and financial information that we deemed to be generally relevant relating to Parent and the Company, including certain research analyst reports and estimates, and to the
industry in which they operate; (iii) reviewed certain audited and unaudited financial statements relating to each of Parent and the Company; (iv) reviewed certain internal financial and
operating information with respect to the business, operations and prospects of the Company furnished to or discussed with us by the management of the Company, including certain financial forecasts
relating to the Company prepared by the management of the Company (such forecasts, the "Company Management Case") and discussed with management of the Company its assessments as to the likelihood of
achieving the future financial results reflected in the Company Management Case; (v) reviewed an alternative version of the Company Management Case incorporating certain adjustments thereto
made by the management of Parent (the "Company Sensitivity Case") and discussed with the management of Parent its assessments as to the relative likelihood of achieving the future financial results
reflected in the Company Management Case and the Company Sensitivity Case; (vi) reviewed certain internal financial and operating information with respect to the business, operations and
prospects of Parent furnished to or discussed with us by the management of Parent, including certain financial forecasts relating to Parent prepared by the management of Parent (such forecasts, the
"Parent Management Case" and together with the Company Management Case, the "Management Case") and an alternative version of the Parent Management Case adjusted by the management of Parent (the
"Parent Sensitivity Case" and together with the Company Sensitivity Case, the "Sensitivity Case");
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(vii) reviewed
pro forma financial forecasts for Parent and the Company prepared by the management of Parent based on the Sensitivity Case, the Parent Management Synergies (as defined below)
and financing adjustments (the "Pro Forma Sensitivity Case"); (viii) reviewed certain estimates as to the amount and timing of cost savings, operating synergies and integration expenses
(collectively, the "Parent Management Synergies") anticipated by the management of Parent to result from the Transaction; (ix) held discussions with the management of each of Parent and the
Company regarding the past and current operations and financial condition and prospects of the respective companies; (x) reviewed the potential pro forma financial impact of the Transaction on
the future financial performance of Parent; (xi) reviewed the reported price and trading activity for the Company Common Stock and Parent Common Stock and compared such trading histories with
each other and with the trading histories of other companies we deemed generally relevant; (xii) compared certain financial performance information for each of Parent and the Company with
similar information for certain publicly traded companies that we deemed to be generally relevant; (xiii) compared certain financial terms of the Transaction to the financial terms of certain
transactions, to the extent publicly available, that we deemed to be generally relevant; and (xiv) considered such other factors and information as we deemed appropriate. For purposes of our
opinion, we have assumed, with your consent, that the per share value of the Parent Common Stock comprising the Stock Consideration is equal to the closing price for a share of Parent Common Stock as
of June 12, 2014, the last trading day before news of the possibility of the Transaction was made available to the public.
In
the course of our analysis and in rendering our opinion, we have, with your consent, relied upon and assumed, without independent verification, the accuracy and completeness of all
information that was publicly available or was furnished or made available to us by Parent or the Company, their respective associates, affiliates and advisors, or otherwise reviewed by or for us, and
we have not assumed any responsibility or liability therefor. With respect to the Company Management Case, we have been advised by the Company, and have assumed, with the consent of Parent, that it
has been reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of the Company as to the future financial performance of the Company.
With respect to the Company Sensitivity Case, the Parent Management Case, the Parent Sensitivity Case, the Pro Forma Sensitivity Case and the Parent Management Synergies, we have assumed, at the
direction of Parent, that they have been prepared on bases reflecting the best currently available estimates and good faith judgments of the management of Parent as to the future financial performance
of the Company and Parent and the other matters covered thereby and, at the instruction of the management of Parent, we have used and relied upon the Management Case, as well as the Sensitivity Case
and the Pro Forma Sensitivity Case for purposes of our opinion. We have relied, at the direction of Parent, on the assessments of the management of Parent as to Parent's ability to achieve the Parent
Management Synergies and have been advised by Parent, and have assumed, that the Parent Management Synergies will be realized in the amounts and at the times projected. We express no view as to the
reasonableness of such forecasts and projections or the assumptions on which they are based. We have not conducted any valuation or appraisal of any of the assets or liabilities of Parent or the
Company, nor have any such valuations or appraisals been provided to us, and we do not express any opinion as to the value of such assets or liabilities.
In addition, we have not evaluated the solvency or fair value of the Company under any state, federal or foreign laws relating to bankruptcy, insolvency or similar matters.
We
have assumed that the transactions contemplated by the Merger Agreement will be consummated in accordance with the terms and conditions described in the Merger Agreement without any
waiver, amendment or delay of any terms or conditions, including, among other things, that the parties will comply with all material terms of the Merger Agreement and that in connection with the
receipt of all necessary governmental, regulatory or other approvals and consents required
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for
the Transaction, no material delays, limitations, conditions or restrictions will be imposed. We also have assumed, at the direction of Parent, that the Transaction will qualify for federal income
tax purposes as a reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended. For purposes of rendering this opinion, we have assumed that there has
not occurred any material change in the assets, financial condition, results of operations, business or prospects of Parent or the Company since the date of the most recent financial statements and
other information, financial or otherwise, relating to Parent or the Company made available to us. We do not express any opinion as to any tax or other consequences that may result from the
Transaction, nor does our opinion address any legal, tax, regulatory or accounting matters. We have relied as to all legal, tax, regulatory and accounting matters relevant to rendering our opinion
upon the assessments made by Parent and the Company and their respective other advisors with respect to such issues.
Our
opinion is necessarily based on securities markets, economic, monetary, financial and other general business and financial conditions as they exist and can be evaluated on, and the
information made available to us as of, the date hereof and the conditions, prospects, financial and otherwise, of Parent and the Company, as they were reflected in the information provided to us and
as they were represented to us in discussions with the managements of Parent and the Company. We are expressing no opinion herein as to the price at which the shares of Parent Common Stock or Company
Common Stock will trade at any future time. Our opinion is limited to the fairness, from a financial point of view, to Parent of the Consideration to be paid by Parent in the Transaction, and we
express no opinion as to any underlying decision which Parent may make to engage in the Transaction or any alternative transaction. We have not been asked to, nor do we, offer any opinion as to the
terms, other than the Consideration to be paid by Parent in the Transaction to the extent expressly set forth herein, of the Merger Agreement or the Transaction.
We
and our affiliates are engaged in investment banking, brokerage and financial advisory service activities. In the ordinary course of business, we and our affiliates may trade the
securities of Parent, the Company and any of their respective affiliates, for our own accounts or for the accounts of our affiliates and customers and may at any time hold a long or short position in
such securities. We are serving as financial advisor to Parent in connection with the Transaction and are entitled to certain
fees upon delivery of this opinion. In addition, Parent has agreed to reimburse a portion of our expenses and indemnify us for certain liabilities that may arise out of our engagement. Our engagement
is limited to furnishing this opinion, and accordingly, we did not participate in the negotiation of, or provide advice with respect to, the terms of the Transaction or the Merger Agreement. In the
past, we or our affiliates have performed certain investment banking services for Parent and Temasek Holdings (Private) Limited ("Temasek"), an affiliate of a major stockholder of Parent, and have
received customary fees for such services, including providing financial advisory services to Temasek. We may in the future provide investment banking, brokerage or financial advisory services to
Parent, the Company and their respective affiliates and third parties, including Temasek and its affiliates and portfolio companies, for which we may receive compensation.
This
opinion is provided for the benefit of the Board of Directors of Parent, in its capacity as such, in connection with its evaluation of the Transaction. This opinion should not be
construed as creating any fiduciary duty on our part to any party. This opinion does not constitute a recommendation to the Board of Directors to approve the proposed Transaction or a recommendation
to any shareholder as to how such shareholder should vote or otherwise act with respect to the Transaction or any other matter. This opinion is limited to the fairness from a financial point of view,
to Parent, on the date hereof, of the Consideration to be paid by Parent in the Transaction, and we express no opinion as to the merits of the underlying decision by Parent to engage in the
Transaction or as to any aspect of the Transaction other than the amount of the Consideration. In addition, no opinion or view is expressed with respect to the fairness (financial or
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otherwise)
of the amount, nature or any other aspect of any compensation to any of the officers, directors or employees of any party to the Transaction, or class of such persons.
This
opinion may not be disclosed, referred to, or communicated (in whole or in part) to any third party for any purpose whatsoever except with our prior written approval; provided,
however, that Parent may reproduce this opinion in full in any document relating to the Transaction that is required to be filed by Parent with the United States Securities and Exchange Commission.
This opinion is given and speaks only as of the date hereof. It should be understood that subsequent developments may affect this opinion and the assumptions used in preparing it, and we do not have
any obligation to update, revise, or reaffirm this opinion. This opinion has been approved by the Global Financial Advisory Commitment Committee of Rothschild Inc.
On
the basis of and subject to the foregoing and such other matters as we considered relevant, it is our opinion that, as of the date hereof, the Consideration to be paid by Parent in
the Transaction is fair, from a financial point of view, to Parent.
Very
truly yours,
/s/
Rothschild Inc.
ROTHSCHILD INC.
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Annex D
VOTING AGREEMENT
This VOTING AGREEMENT (this "
Agreement
"), dated as of June 15, 2014, is entered
into by and between tw telecom inc., a Delaware corporation (the "
Company
"), the entity listed on Schedule A hereto (the
"
Stockholder
") and, solely for purposes of Sections 5, 9 and 10 hereof, Level 3 Communications, Inc., a Delaware corporation
("
Parent
").
WHEREAS,
the Stockholder owns (both beneficially and of record) in the aggregate 55,498,593 shares of the common stock of Parent, par value $0.01 per share
("
Mercury Common Stock
"), (such
shares of Mercury Common Stock together with any shares of Mercury Common Stock acquired by the Stockholder after the date hereof being collectively referred to herein as the
"
Shares
");
WHEREAS,
the Company, Parent, Saturn Merger Sub 1, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Parent ("
Merger Sub
1
"), and Saturn Merger Sub 2, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Parent ("
Merger Sub
2
"), have entered into an Agreement and Plan of Merger, dated as of the date hereof (the "
Merger Agreement
"); and
WHEREAS,
the Company has requested the Stockholder to enter into this Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the adequacy of which is hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:
SECTION 1.
Defined Terms.
Capitalized terms used in this Agreement and not otherwise defined herein
shall have the meanings assigned to them in the Merger Agreement; provided, that for
purposes of this Agreement, none of Parent or any of its Subsidiaries whall be deemed to be an Affiliate of the Stockholder.
SECTION 2.
Representations and Warranties of Stockholder.
The Stockholder hereby represents and
warrants to the Company as follows:
2.1
Title to the Shares.
The Stockholder is the record and beneficial owner of, and has good and marketable
title to, the number of shares of Mercury Common Stock set forth opposite the
name of the Stockholder on Schedule A hereto, which as of the date hereof constitutes all of the shares of Mercury Common Stock, or any other securities convertible into or exercisable for any
shares of Mercury Common Stock (all collectively being "
Mercury Securities
") owned beneficially and of record by the Stockholder. Except as set forth in
the Stockholder Rights Agreement, the Stockholder does not have any rights of any nature to acquire any additional Mercury Securities. Except as set forth in the Stockholder Rights Agreement and the
Security Control Agreement, the Stockholder owns all of such shares of Mercury Common Stock free and clear of all security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on voting rights, restrictions, charges, proxies and other encumbrances of any nature, and has not appointed or granted any proxy, which appointment or grant is still
effective, with respect to any of such shares of Mercury Common Stock owned by it. "
Stockholder Rights Agreement
" means that certain stockholder rights
agreement, dated as of April 10, 2011, between Parent and Stockholder, as amended by the Amendment to the Stockholder Rights Agreement dated, as of November, 28, 2011.
"
Security Control Agreement
" means that certain security control agreement, dated, as of April 3, 2012
1
between Parent and the U.S.
Department of Defense, Defense Security Service.
2.2
Organization.
The Stockholder is duly organized, validly existing, and in good standing or similar
concept under the laws of the jurisdiction of its organization.
-
1
-
Gives
effect to a letter agreement between the parties clarifying the date.
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2.3
Authority Relative to this Agreement.
The Stockholder has the power and authority to execute and deliver
this Agreement, to perform its obligations hereunder, and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the Stockholder and the consummation by the Stockholder of the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of the Stockholder. This Agreement has been duly and validly executed and delivered by the Stockholder and, assuming the due authorization, execution and
delivery by the Company and the Parent, constitutes a legal, valid and binding obligation of the Stockholder, enforceable against the Stockholder in accordance with its terms, (i) except as may
be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to enforcement of creditors' rights generally, and (ii) subject to general principles of equity
(whether considered in a proceeding in equity or at law).
2.4
No Conflict.
Except for any filings as may be required by applicable federal securities laws, the
execution and delivery of this Agreement by the Stockholder does not, and the
performance of this Agreement by the Stockholder will not, (a) require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity or any other
Person by the Stockholder; (b) conflict with, or result in any violation of, or default (with or without notice or lapse of time or both) under any provision of, the organizational documents of
the Stockholder or any other agreement to which the Stockholder is a party, or (c) conflict with or violate any judgment, order, notice, decree, statute, law, ordinance, rule or regulation
(collectively "
Laws
") applicable to the Stockholder or to the Stockholder's property or assets.
SECTION 3.
Covenants of the Stockholder.
The Stockholder hereby covenants and agrees with the Company
as follows:
3.1
Restriction on Transfer.
Prior to the termination of this Agreement, the Stockholder shall not sell,
transfer, tender, assign, hypothecate or otherwise dispose of, grant any proxy to,
deposit any Shares into a voting trust, enter into a voting trust agreement or create or permit to exist any additional security interest, lien, claim, pledge, option, right of first refusal,
limitation on voting rights, charge or other encumbrance of any nature with respect to the Shares.
3.2
Additional Shares.
Prior to the termination of this Agreement, the Stockholder will promptly notify the
Company of the number of any new shares of Mercury Common Stock or any other
Mercury Securities acquired directly or beneficially by the Stockholder, if any, after the date of this Agreement. Any such shares of Mercury Common Stock shall become "Shares" within the meaning of
this Agreement.
3.3
Nonsolicitation.
(a) None
of the Stockholder or any of its Subsidiaries shall (whether directly or indirectly through directors, officers, employees, representatives, advisors or other
intermediaries), nor shall (directly or indirectly) the Stockholder authorize or permit any of its officers, directors, representatives, advisors or other intermediaries or Subsidiaries to:
(i) solicit, initiate or knowingly encourage the submission of inquiries, proposals or offers from any Person (other than the Company) relating to any Parent Acquisition Proposal, or agree to
or endorse any Parent Acquisition Proposal; (ii) enter into any agreement to (x) consummate any Parent Acquisition Proposal, or (y) approve or endorse any Parent Acquisition
Proposal; (iii) enter into or participate in any discussions or negotiations in connection with any Parent Acquisition Proposal or inquiry with respect to any Parent Acquisition Proposal, or
furnish to any Person any non-public information with respect to its business, properties or assets in connection with any Parent Acquisition Proposal; or (iv) agree to resolve to take or take
any of the actions prohibited by clause (i), (ii) or (iii) of this sentence. The Stockholder shall immediately cease, and cause its representatives, advisors and other
intermediaries to immediately cease, any and all existing activities, discussions or negotiations with any parties conducted heretofore with respect to any of the foregoing. The Stockholder shall
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promptly
inform its representatives and advisors of the Stockholder's obligations under this Section 3.3. Any violation of this Section 3.3 by any representative of the Stockholder or
its Subsidiaries shall be deemed to be a breach of this Section 3.3 by the Stockholder. For purposes of this Section 3.3, the term "Person" means any person, corporation, entity or
"group," as defined in Section 13(d) of the Exchange Act, other than, with respect to the Stockholder, Parent or any Subsidiaries of Parent.
(b) Notwithstanding
the foregoing, the Stockholder, directly or indirectly through its directors, officers, employees, representatives, advisors or other intermediaries,
may, prior to the Parent Stockholders Meeting, engage in negotiations or discussions with any Person (and its representatives, advisors and intermediaries) that has made an unsolicited bona fide
written Parent Acquisition Proposal not resulting from or arising out of a breach of Section 3.3(a) of this Agreement to the extent that the Parent, its Subsidiaries and controlled Affiliates,
officers, directors, representatives, advisors or other intermediaries are permitted to do so under Section 7.4 of the Merger Agreement.
3.4
Restrictions on Hedging.
Prior to the termination of this Agreement, without the Company's prior written
consent, the Stockholder shall not directly or indirectly enter into any forward
sale, hedging or similar transaction involving any Mercury Securities, including any transaction by which any of the Stockholder's economic risks and/or rewards or ownership of, or voting rights with
respect to, any such Mercury Securities or Mercury Common Stock are transferred or affected.
SECTION 4.
Voting Agreement.
4.1
Voting Agreement.
The Stockholder hereby agrees that, at any meeting of the stockholders of Parent,
however called, in any action by written consent of the stockholders of Parent,
or in any other circumstances upon which the Stockholder's vote, consent or other approval is sought, the Stockholder shall vote the Shares owned beneficially or of record by the Stockholder as
follows:
(a) in
favor of adoption of the Parent Charter Amendment and the approval of the Parent Share Issuance;
(b) against
any action or agreement that has or would be reasonably likely to result in any conditions to Parent's obligations under Article VIII of the Merger
Agreement not being fulfilled;
(c) against
any Parent Acquisition Proposal;
(d) against
any amendments to the Parent Organizational Documents if such amendment would reasonably be expected to prevent or delay the consummation of the Closing; and
(e) against
any other action or agreement that is intended, or could reasonably be expected, to impede, interfere with, delay, or postpone the Combination or the
transactions contemplated by the Merger Agreement or change in any manner the voting rights of any class of stock of Parent.
Notwithstanding
the foregoing, the Stockholder shall have no obligation to vote any of its Mercury Common Stock in accordance with this Section 4.1: (a) if, without the
prior written consent of the Stockholder, there is any amendment to the Merger Agreement that (i) alters or changes the Merger Consideration, or (ii) adversely affects the holders of the
Mercury Common Stock or (b) if, in connection with the consummation of the transactions contemplated under the Merger Agreement,
any of the following would reasonably be expected to occur (i) any of the rights of the Stockholder or its Affiliates in Parent, including with respect to the Stockholder's director designees
on the Parent Board, being impaired or limited (other than in de minimis respects), including without limitation those rights under the Stockholder Rights Agreement or (ii) any obligations,
duties or limitations being imposed on the Stockholder or its Affiliates (other than in de minimis respects), including with respect to the Stockholder's designees on the Parent Board, other than
those such obligations,
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duties
and limitations existing in the Stockholder Rights Agreement, the Security Control Agreement, or in any other agreement between the Stockholder and any other Governmental Entity in the United
States of America relating to national security matters, in each case existing as of the date hereof (each an "
Adverse Event
").
4.2
Other Voting.
The Stockholder may vote on all issues that may come before a meeting of the stockholders
of the Company in its sole discretion, provided that such vote does not
contravene the provisions of this Section 4.
4.3
No Limitation.
Nothing in this Agreement shall be deemed to govern, restrict or relate to any actions,
omissions to act, or votes taken or not taken by any designee,
representative, officer or employee of the Stockholder or any of its Affiliates serving on Parent's Board of Directors in such person's capacity as a director of Parent, and no such action taken by
such person in his capacity as a director of Parent shall be deemed to violate any of the Stockholder's duties under this Agreement.
SECTION 5.
Representations and Warranties and Covenants of Parent and the Company.
Each of Parent and
the Company hereby represents and warrants to, and covenants with, the Stockholder, only as to itself and not as to the other, as follows:
5.1
Organization.
Each of Parent and the Company is duly organized, validly existing, and in good standing
under the laws of the State of Delaware.
5.2
Authority Relative to this Agreement.
Each of Parent and the Company has the corporate power and
authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this Agreement by each of Parent and the Company and the consummation by each of Parent and the Company of the transactions
contemplated hereby have been duly and validly authorized by all necessary action on the part of each of Parent and the Company. This Agreement has been duly and validly executed and delivered by each
of Parent and the Company and, assuming the due authorization, execution and delivery by the Stockholder, constitutes a legal, valid and binding obligation of each of Parent and the Company,
enforceable against each of Parent and the Company in accordance with its terms, (i) except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to enforcement of creditors' rights generally, and (ii) subject to general principles of equity.
5.3
No Conflict.
The execution and delivery of this Agreement by each of Parent and the Company does not,
and the performance of this Agreement by each of Parent and the Company
will not, (a) require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity or any other Person by Parent or the Company, except for
filings with the SEC of such reports under the Exchange Act as may be required in connection with this Agreement and the transactions contemplated by this Agreement; (b) conflict with, or
result in any violation of, or default (with or without notice or lapse of time or both) under any provision of, the certificate of incorporation or by-laws of the Parent or the Company or any other
agreement to which Parent or the Company is a party; or (c) conflict with or violate any judgment, order, notice, decree, statute, law, ordinance, rule or regulation applicable to Parent or the
Company or to Parent's or the Company's property or assets.
5.4 Each
of Parent and the Company shall, to the extent: (x) any information of, or relating to the Stockholder and/or any of its Affiliates, and/or their
relationship with Parent ("
Stockholder Information
"), is to be used or included in connection with, or in relation to, the satisfaction or waiver of any
of the conditions set forth in Article VIII of the Merger Agreement, or (y) any consultations or discussions take place with, or requests for approvals or clearances are made to, any
Governmental Entities relating to foreign ownership, control or influence issues arising from or relating to the
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transactions
contemplated by the Merger Agreement that would reasonably be expected to affect the Stockholder (collectively, the activities referred to in clauses (x) and (y) above are
referred to as "
Significant Actions
"): (a) cooperate in all reasonable respects and consult with the Stockholder, its representatives and/or
advisors in connection with any filing or submission under any applicable Law, and in connection with any investigation or other inquiry related thereto, including by allowing the Stockholder, its
representatives and/or advisors to have a reasonable opportunity to review in advance and comment on drafts of filings and submissions in connection with or relating to any
Significant Actions, (b) promptly inform the Stockholder, its representatives and/or advisors of any substantive communication received by or on behalf of Parent or the Company from, or given
by or on behalf of Parent or the Company to, any Governmental Entities under any applicable Law, by promptly providing copies to the Stockholder, its representatives and/or advisors of any such
written substantive communications, in connection with or relating to any of the foregoing Significant Actions, and (c) permit the Stockholder, its representatives and/or advisors to review any
substantive communication that it gives to, and consult with the Stockholder, its representatives and/or advisors in advance of any substantive meeting, telephone call or conference with, any
Governmental Entities under any applicable Law, and provide the Stockholder with a fair and accurate summary of any such meetings, telephone calls or conferences, in each case in connection with or
relating to any Significant Actions, and, in all cases, where any Stockholder Information is to be used or included in any of the Significant Actions, the prior written approval of the Stockholder
shall be obtained for the form, content and context in which the Stockholder Information appears or be used in any such Significant Action (which approval shall not be unreasonably withheld,
conditioned or delayed). For the avoidance of doubt and without prejudice to the foregoing, any application or filing taken in connection with the consummation of the transactions contemplated under
the Merger Agreement will not require the approval of the Stockholder.
5.5 Each
of Parent and the Company shall use its commercially reasonable efforts to ensure that, after the Parent Stockholders Meeting, no Adverse Event shall occur.
SECTION 6.
Further Assurances.
The Stockholder shall, without further consideration, from time to time,
execute and deliver, or cause to be executed and delivered, such additional or further
consents, documents and other instruments as the Company may reasonably request in order to vest, perfect, confirm or record the rights granted to the Company under this Agreement.
SECTION 7.
Stop Transfer Order.
In furtherance of this Agreement, concurrently herewith the Stockholder
shall and hereby does authorize the Company to notify Parent's transfer agent that there
is a stop transfer order with respect to all Shares (and that this Agreement places limits on the voting and transfer of the Shares). The Stockholder further agrees to cause Parent not to register the
transfer of any certificate representing any of the Shares unless such transfer is made in accordance with the terms of this Agreement.
SECTION 8.
Certain Events.
The Stockholder agrees that this Agreement and the obligations hereunder
shall attach to the Shares and shall be binding on any Person to which legal or
beneficial ownership of such Shares shall pass, whether by operation of law or otherwise. In the event of any stock split, stock dividend, merger, amalgamation, reorganization, recapitalization or
other change in the capital structure of Parent affecting the Mercury Common Stock or other voting securities of Parent, the number of Shares shall be deemed adjusted appropriately and this Agreement
and the obligations hereunder shall attach to any additional shares of Mercury Common Stock or other Mercury Securities issued to or acquired by the Stockholder.
SECTION 9.
Termination.
Notwithstanding anything to the contrary contained herein, the term of this
Agreement and the obligations of the parties hereto shall commence on the date hereof
and shall terminate upon the earliest of (i) the mutual agreement of the Company and the Stockholder, (ii) the Effective Time, and (iii) the termination of the Merger Agreement in
accordance with its terms.
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Notwithstanding
the above, the Stockholder shall be entitled to terminate the Agreement on the occurrence of any of the following, (a) any Adverse Event, or (b) if there is a continuing
material breach by Parent and the Company of Section 5 of this Agreement.
SECTION 10.
Miscellaneous.
10.1
Expenses.
All costs and expenses incurred in connection with the transactions contemplated by this
Agreement shall be paid by the party incurring such costs and expenses.
10.2
Specific Performance.
The parties hereto agree that, in the event any provision of this Agreement is
not performed in accordance with the terms hereof, (a) the non-breaching
party will sustain irreparable damages for which there is not an adequate remedy at law for money damages and (b) the parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or in equity.
10.3
Entire Agreement.
This Agreement constitutes the entire agreement among the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, among such parties with respect to the subject matter hereof.
10.4
Assignment.
Without the prior written consent of the other party to this Agreement, no party may assign
any rights or delegate any obligations under this Agreement. Any such
purported assignment or delegation made without prior consent of the other party hereto shall be null and void.
10.5
Parties in Interest.
This Agreement shall be binding upon, inure solely to the benefit of, and be
enforceable by, the parties hereto and their successors and permitted assigns.
Nothing in this Agreement, express or implied, is intended to or shall confer upon any other person not a party hereto any right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
10.6
Amendment.
This Agreement may not be amended except by an instrument in writing signed by the parties
hereto.
10.7
Severability.
If any term or other provision of this Agreement is invalid, illegal or incapable of
being enforced by any rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of this Agreement is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the terms of this Agreement remain as originally contemplated to the fullest extent
possible.
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10.8
Notices
.
(a) Any
notices, reports or other correspondence (hereinafter collectively referred to as "correspondence") required or permitted to be given hereunder shall be sent by
telecopy/facsimile, postage prepaid first class mail, courier or delivered by hand to the party to whom such correspondence is required or permitted to be given hereunder. Except as specifically set
forth below, the date of giving any notice shall be the date of its actual receipt.
(b) All
correspondence to the Company shall be addressed as follows:
tw
telecom inc.
10475 Park Meadows Drive
Littleton, CO 80124
Telecopy/Facsimile: (303) 566-1777
Attention: Tina Davis, Esq., Senior Vice President and General Counsel
with
a copy to (which shall not constitute notice):
Wachtell,
Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Telecopy/Facsimile: (212) 403-1000
Attention: Steven A. Rosenblum
Stephanie J. Seligman
(c) All
correspondence to the Stockholder shall be addressed as follows:
c/o
Singapore Technologies Telemedia Pte Ltd
1 Temasek Avenue #33-01 Millenia Tower
Singapore 039192
Telecopy/Facsimile: + 65 6720-7220
Attention: Head of Legal & Secretariat
with
a copy to (which shall not constitute notice):
Latham &
Watkins LLP
9 Raffles Place
#42-02 Republic Plaza
Singapore 048619
Telecopy/Facsimile: 65.6536.1171
Attention: Michael W. Sturrock
(d) All
correspondence to Parent shall be addressed as follows:
Level 3
Communications, Inc.
1025 Eldorado Blvd.
Broomfield, CO 80303
Telecopy/Facsimile: 720-888-5127
Attention: John M. Ryan, Executive Vice President, Chief Legal Officer and Secretary
with
a copy to (which shall not constitute notice):
Willkie
Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019
Telecopy/Facsimile: (212) 728-8111
Attention: David K. Boston
Laura L. Delanoy
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(e) Any
Person may change the address to which correspondence to it is to be addressed by notification as provided for herein.
10.9
Governing Law.
This Agreement and any controversies arising with respect hereto shall be construed in
accordance with and governed by the laws of the State of Delaware.
10.10
Exclusive Jurisdiction.
Each of the parties hereto irrevocably agrees that any legal action or proceeding
with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising
hereunder brought by the other party(ies) hereto or its successors or assigns shall be brought and determined exclusively in the Delaware Court of Chancery, or in the event (but only in the event)
that such court does not have subject matter jurisdiction over such action or proceeding, in the United States District Court for the District of Delaware. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or outside the State of Delaware. Without limiting the generality of the foregoing, each party hereto agrees that service of
process upon such party at the address referred to in Section 10.8 together with written notice of such service to such party, shall be deemed effective service of process upon such party.
10.11
Headings.
The descriptive headings contained in this Agreement are included for convenience of reference
only and shall not affect in any way the meaning or interpretation of this Agreement.
10.12
Counterparts.
This Agreement may be executed and delivered (including by facsimile transmission) in one or
more counterparts, and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
[Rest
of page intentionally blank.]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed and delivered as of the date first written above.
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TW TELECOM INC.
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By:
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/s/ LARISSA L. HERDA
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Name:
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Larissa L. Herda
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Title:
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Chairman and CEO
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[Signature
Page to the Voting Agreement]
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STT CROSSING LTD
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By:
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/s/ HO KOON LIAN IRENE
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Name:
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Ho Koon Lian Irene
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Title:
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Director
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[Signature
Page to the Voting Agreement]
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LEVEL 3 COMMUNICATIONS, INC., solely for purposes of Sections 5, 9 and 10 hereof
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By:
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/s/ JOHN M. RYAN
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Name:
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John M. Ryan
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Title:
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Chief Legal Officer
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[Signature
Page to the Voting Agreement]
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SCHEDULE A
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Name of Stockholder
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Number and Class
of Shares Owned
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Total Number of Votes
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STT Crossing Ltd.
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55,498,593 shares of Common Stock
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55,498,593
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Annex E
TITLE 8. CORPORATIONS
CHAPTER 1. GENERAL CORPORATION LAW
SUBCHAPTER IX. MERGER, CONSOLIDATION OR CONVERSION
8 Del. C. § 262
§ 262. Appraisal rights.
(a) Any
stockholder of a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to subsection (d) of this section with
respect to such shares, who continuously holds such shares through the effective date of the merger or consolidation, who has otherwise complied with subsection (d) of this section and who has
neither voted in favor of the merger or consolidation nor consented thereto in writing pursuant to § 228 of this title shall be entitled to an appraisal by the Court of Chancery of
the fair value of the stockholder's shares of stock under the circumstances described in subsections (b) and (c) of this section. As used in this section, the word "stockholder" means a
holder of record of stock in a corporation; the words "stock" and "share" mean and include what is ordinarily meant by those words; and the words "depository receipt" mean a receipt or other
instrument issued by a depository representing an interest in 1 or more shares, or fractions thereof, solely of stock of a corporation, which stock is deposited with the depository.
(b) Appraisal
rights shall be available for the shares of any class or series of stock of a constituent corporation in a merger or consolidation to be effected pursuant to
§ 251 (other than a merger effected pursuant to § 251(g) of this title and, subject to paragraph (b)(3) of this section, § 251(h) of
this title), § 252, § 254, § 255, § 256, § 257, § 258, § 263 or
§ 264 of this title:
(1) Provided,
however, that except as expressly provided in § 363(b) of this title, no appraisal rights under this section shall be available for the
shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of the meeting of
stockholders to act upon the agreement of merger or consolidation, were either (i) listed on a national securities exchange or (ii) held of record by more than 2,000 holders; and further
provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the
stockholders of the surviving corporation as provided in § 251(f) of this title.
(2) Notwithstanding
paragraph (b)(1) of this section, appraisal rights under this section shall be available for the shares of any class or series of stock of a
constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to §§ 251, 252, 254, 255, 256, 257, 258, 263
and 264 of this title to accept for such stock anything except:
a. Shares
of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof;
b. Shares
of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository
receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or held of record by more than 2,000 holders;
c. Cash
in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs (b)(2)a. and b. of this section; or
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d. Any
combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing
paragraphs (b)(2)a., b. and c. of this section.
(3) In
the event all of the stock of a subsidiary Delaware corporation party to a merger effected under § 251(h), § 253 or
§ 267 of this title is not owned by the parent immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation.
(4) In
the event of an amendment to a corporation's certificate of incorporation contemplated by § 363(a) of this title, appraisal rights shall be
available as contemplated by § 363(b) of this title, and the procedures of this section, including those set forth in subsections (d) and (e) of this section, shall
apply as nearly as practicable, with the word "amendment" substituted for the words "merger or consolidation", and the word "corporation" substituted for the words "constituent corporation" and/or
"surviving or resulting corporation".
(c) Any
corporation may provide in its certificate of incorporation that appraisal rights under this section shall be available for the shares of any class or series of its
stock as a result of an amendment to its certificate of incorporation, any merger or consolidation in which the corporation is a constituent corporation or the sale of all or substantially all of the
assets of the corporation. If the certificate of incorporation contains such a provision, the procedures of this section, including those set forth in subsections (d) and (e) of this
section, shall apply as nearly as is practicable.
(d) Appraisal
rights shall be perfected as follows:
(1) If
a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of stockholders, the
corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for notice of such meeting (or such members who received notice in
accordance with § 255(c) of this title) with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) of this section that
appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a copy of this section and, if 1 of the constituent corporations is a
nonstock corporation, a copy of § 114 of this title. Each stockholder electing to demand the appraisal of such stockholder's shares shall deliver to the corporation, before the
taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholder's shares. Such demand will be sufficient if it reasonably informs the corporation of the identity
of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder's shares. A proxy or vote against the merger or consolidation shall not constitute such a
demand. A stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the
surviving or resulting corporation shall notify each stockholder of each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become effective; or
(2) If
the merger or consolidation was approved pursuant to § 228, § 251(h), § 253, or § 267 of
this title, then either a constituent corporation before the effective date of the merger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify each
of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are
available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section and, if 1 of the constituent corporations is a
nonstock corporation, a copy of § 114 of this title. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such
stockholders of the
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effective
date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice or, in the case of a merger approved
pursuant to § 251(h) of this title, within the later of the consummation of the tender or exchange offer contemplated by § 251(h) of this title and 20 days
after the date of mailing of such notice, demand in writing from the surviving or resulting corporation the appraisal of such holder's
shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder's
shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date
of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date;
provided, however, that if such second notice is sent more than 20 days following the sending of the first notice or, in the case of a merger approved pursuant to § 251(h) of
this title, later than the later of the consummation of the tender or exchange offer contemplated by § 251(h) of this title and 20 days following the sending of the first
notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holder's shares in accordance with this subsection. An
affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that
shall be not more than 10 days prior to the date the notice is given, provided, that if the notice is given on or after the effective date of the merger or consolidation, the record date shall
be such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the
notice is given.
(e) Within
120 days after the effective date of the merger or consolidation, the surviving or resulting corporation or any stockholder who has complied with
subsections (a) and (d) of this section hereof and who is otherwise entitled to appraisal rights, may commence an appraisal proceeding by filing a petition in the Court of Chancery
demanding a determination of the value of the stock of all such stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the merger or consolidation,
any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party shall have the right to withdraw such stockholder's demand for appraisal and to accept the
terms offered upon the merger or consolidation. Within 120 days after the effective date of the merger or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) of this section hereof, upon written request, shall be entitled to receive from the corporation surviving the merger or resulting from the consolidation a
statement setting forth the aggregate number of shares not voted in favor of the merger or consolidation and with respect to which demands for appraisal have been received and the aggregate number of
holders of such shares. Such written statement shall be mailed to the stockholder within 10 days after such stockholder's written request for such a statement is received by the surviving or
resulting corporation or within 10 days after expiration of the period for delivery of demands for appraisal under subsection (d) of this section hereof, whichever is later.
Notwithstanding subsection (a) of this section, a person who is the beneficial owner of shares of such stock held either in a voting trust or by a nominee on behalf of such person may, in such
person's own name, file a petition or request from the corporation the statement described in this subsection.
(f) Upon
the filing of any such petition by a stockholder, service of a copy thereof shall be made upon the surviving or resulting corporation, which shall within
20 days after such service file in
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the
office of the Register in Chancery in which the petition was filed a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with
whom agreements as to the value of their shares have not been reached by the surviving or resulting corporation. If the petition shall be filed by the surviving or resulting corporation, the petition
shall be accompanied by such a duly verified list. The Register in Chancery, if so ordered by the Court, shall give notice of the time and place fixed for the hearing of such petition by registered or
certified mail to the surviving or resulting corporation and to the stockholders shown on the list at the addresses therein stated. Such notice shall also be given by 1 or more publications at least
1 week before the day of the hearing, in a newspaper of general circulation published in the City of Wilmington, Delaware or such publication as the Court deems advisable. The forms of the
notices by mail and by publication shall be approved by the Court, and the costs thereof shall be borne by the surviving or resulting corporation.
(g) At
the hearing on such petition, the Court shall determine the stockholders who have complied with this section and who have become entitled to appraisal rights. The
Court may require the stockholders who have demanded an appraisal for their shares and who hold stock represented by certificates to submit their certificates of stock to the Register in Chancery for
notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with such direction, the Court may dismiss the proceedings as to such stockholder.
(h) After
the Court determines the stockholders entitled to an appraisal, the appraisal proceeding shall be conducted in accordance with the rules of the Court of Chancery,
including any rules specifically governing appraisal proceedings. Through such proceeding the Court shall determine the fair value of the shares exclusive of any element of value arising from the
accomplishment or expectation of the merger or consolidation, together with interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the Court
shall take into account all relevant factors. Unless the Court in its discretion determines otherwise for good cause shown, interest from the effective date of the merger through the date of payment
of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the
effective date of the merger and the date of payment of the judgment. Upon application by the surviving or resulting corporation or by any stockholder entitled to participate in the appraisal
proceeding, the Court may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the stockholders entitled to an appraisal. Any stockholder whose name appears on
the list filed by the surviving or resulting corporation pursuant to subsection (f) of this section and who has submitted such stockholder's certificates of stock to the Register in Chancery,
if such is required, may participate fully in all proceedings until it is finally determined that such stockholder is not entitled to appraisal rights under this section.
(i) The
Court shall direct the payment of the fair value of the shares, together with interest, if any, by the surviving or resulting corporation to the stockholders
entitled thereto. Payment shall be so made to each such stockholder, in the case of holders of uncertificated stock forthwith, and the case of holders of shares represented by certificates upon the
surrender to the corporation of the certificates representing such stock. The Court's decree may be enforced as other decrees in the Court of Chancery may be enforced, whether such surviving or
resulting corporation be a corporation of this State or of any state.
(j) The
costs of the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the circumstances. Upon application of a
stockholder, the Court may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorney's fees and
the fees and expenses of experts, to be charged pro rata against the value of all the shares entitled to an appraisal.
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(k) From
and after the effective date of the merger or consolidation, no stockholder who has demanded appraisal rights as provided in subsection (d) of this section
shall be entitled to vote such stock for any purpose or to receive payment of dividends or other distributions on the stock (except dividends or other distributions payable to stockholders of record
at a date which is prior to the effective date of the merger or consolidation); provided, however, that if no petition for an appraisal shall be filed within the time provided in subsection (e)
of this section, or if such stockholder shall deliver to the surviving or resulting corporation a written withdrawal of such stockholder's demand for an appraisal and an acceptance of the merger or
consolidation, either within 60 days after the effective date of the merger or consolidation as provided in subsection (e) of this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery shall be dismissed as to any stockholder
without the approval of the Court, and such approval may be conditioned upon such terms as the Court deems just; provided, however that this provision shall not affect the right of any stockholder who
has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholder's demand for appraisal and to accept the terms offered upon the merger or
consolidation within 60 days after the effective date of the merger or consolidation, as set forth in subsection (e) of this section.
(l) The
shares of the surviving or resulting corporation to which the shares of such objecting stockholders would have been converted had they assented to the merger or
consolidation shall have the status of authorized and unissued shares of the surviving or resulting corporation.
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