STOCK REDEMPTION AGREEMENT dated as of November 10, 2005 among NORTH PITTSBURGH TELEPHONE COMPANY and THE RURAL TELEPHONE BANK
Exhibit 99.1
dated as of November 10, 2005
among
NORTH PITTSBURGH TELEPHONE COMPANY
and
THE RURAL TELEPHONE BANK
STOCK REDEMPTION AGREEMENT (this “Agreement,”) dated as of November 10, 2005, is between the RURAL TELEPHONE BANK (the “Bank”) a corporation existing under the laws of the United States of America, acting through the Chairman of the Bank and NORTH PITTSBURGH TELEPHONE COMPANY (the “Holder,”) a corporation existing under the laws of the State of Pennsylvania.
WHEREAS, the Board of Directors of the Bank has authorized the liquidation and dissolution of the Bank and approved a plan of liquidation in a Resolution adopted at its board meeting held on August 4, 2005;
WHEREAS, the Bank and the United States of America (“Government,”) acting through the Rural Utilities Service (“RUS,”) have entered into a Loan Transfer Agreement, dated as of August 4, 2005, pursuant to which the Bank has conveyed to RUS the Bank’s liquidating account loan portfolio as part of the consideration for RUS’ agreement to return all of its Class A Stock to the Bank for redemption and cancellation;
WHEREAS, upon transfer to the Government, no further advances will be made on the Liquidating Account Loans, as hereinafter defined;
WHEREAS, pursuant to Section 411 of the Act (defined herein), the Bank will pay all of its liabilities and will redeem and cancel all of its outstanding Class A Stock;
WHEREAS, the Bank has converted the paper stock certificates of its outstanding shares of Class B Stock and Class C Stock to electronic “book-entry” certificates and has canceled its printed stock certificates;
WHEREAS, pursuant to the Board of Directors’ plan of liquidation, the Bank is required to redeem all of its outstanding Class B Stock and Class C Stock;
WHEREAS, pursuant to Sections 2.2 and 2.4 of the Bylaws of the Bank, as amended, the Holder is the owner of certain shares of Class B Stock and/or Class C Stock of the Bank; and
WHEREAS, the Holder has heretofore adopted, executed, and returned the Redemption Resolution (defined herein), authorizing the undersigned to execute and deliver this Agreement to the Bank on behalf of the Holder;
THEREFORE, in consideration of the mutual promises and covenants herein contained, the parties agree and bind themselves as follows:
ARTICLE I
DEFINITIONS
“Act” means Title IV of the Rural Electrification Act of 1936, 7 U.S.C. § 941 et seq., as amended.
“Agreement” means this Stock Redemption Agreement between the Bank and the Holder.
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“Class A Stock” means all of the shares of Class A Stock of the Bank issued and outstanding pursuant to Section 406(c) of the Act.
“Class B Stock” means all of the shares of Class B Stock of the Bank issued and outstanding pursuant to Section 406(d) of the Act.
“Class C Stock” means all of the shares of Class C Stock of the Bank issued and outstanding pursuant to Section 406(e) of the Act.
“Financing Account Loan(s)” mean all loans of the Holder owed to or held by the Bank on or after October 1, 1991.
“Liquidating Account” means the Rural Telephone Bank Liquidating Account, as identified by Treasury account code 12-4231-0-3-452.
“Liquidating Account Loan(s)” mean all loans of the Holder owed to or held by the Bank before October 1, 1991, as listed on Schedule I.
“Loan Transfer Agreement” means the Loan Transfer Agreement, dated as of August 4, 2005, between the United States of America, acting through the Administrator of RUS, successor to the Rural Electrification Administration, and the Bank.
“Redemption Resolution” means that certain resolution passed by the board of directors or other governing body of the Holder which authorizes the execution and delivery of this Agreement by the undersigned on behalf of the Holder.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE HOLDER
Section 2.1 Representations and Warranties. The Holder does hereby represent and warrant as follows:
| (a) | The Holder is the lawful owner of Class B Stock and/or Class C Stock of the Bank in the amounts listed on Schedule II hereto. |
| (b) | All of the information on Schedule II hereto is true and correct. |
| (c) | The undersigned signatory for the Holder is duly authorized by the Holder to execute and deliver this Agreement on behalf of the Holder and to bind the Holder hereunder. |
| (d) | The Redemption Resolution has been duly adopted by the board of directors or other governing body of the Holder and is currently in full force and effect and has not been repealed, modified, or amended by the Holder. |
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ARTICLE III
REDEMPTION OF CLASS B STOCK AND CLASS C STOCK
Section 3.1 Delivery of Shares. The Holder hereby delivers all of its Class B Stock and/or Class C Stock of the Bank, in the amount(s) specified on Schedule II hereto, for redemption and cancellation.
Section 3.2 Redemption of Class B Stock. From funds in the Liquidating Account, the Bank shall redeem at par all of the Holder’s Class B Stock, in the amount specified in Schedule II hereto, pursuant to the terms of Section 411 of the Act and Section 2.2 of the Bylaws and shall cancel such Class B Stock.
Section 3.3 Redemption of Class C Stock. Pursuant to Section 411 of the Act and Section 2.2 of the Bylaws, after payment of all of the Bank’s liabilities, redemption of all outstanding Class A Stock, redemption of outstanding Class B Stock and monetary set aside for any unredeemed Class B Stock, all of the Holder’s Class C Stock shall be redeemed from the remaining funds in the Liquidating Account as follows:
| (a) | If the funds remaining in the Liquidating Account are sufficient to redeem all outstanding Class C Stock at par, the Class C Stock shall be redeemed at par, as specified in Schedule II hereto; or |
| (b) | If the funds remaining in the Liquidating Account are insufficient to redeem all outstanding Class C Stock at par, the Class C Stock shall be redeemed, as determined by the following formula: |
(Cash Remainder in Liquidating Account x Holder’s number of Class C Stock)
Total outstanding number of Class C Stock
The Bank shall thereafter cancel such Class C Stock.
Section 3.4 Payment. All amounts to be paid to the Holder of Class B Stock and Class C Stock shall be paid as follows:
| (a) | Via wire transfer to the banking institution and account specified by the Holder on Schedule II hereto; |
| (b) | No payments shall be made hereunder until one hundred and twenty (120) days from the date hereof; the Bank shall use reasonable best efforts to make payments on properly documented and undisputed claims received by such date within sixty (60) days thereafter; and |
| (c) | Notwithstanding Paragraph 3.4(b), the Holder shall have no claim, with respect to the redemption of Class B or C Stock, to any amount other than that provided in Sections 3.2 and 3.3 hereof, and shall not be entitled to any interest or claims for payment delays. |
Section 3.5 Release of Claims. By executing this Agreement, the Holder hereby acknowledges and agrees that the redemption and cancellation by the Bank of the Class B Stock and Class C Stock held by the Holder as contemplated by this Agreement constitutes the full and
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complete satisfaction by the Bank of all of its obligations with respect to the redemption, payment and cancellation of the Class B Stock and Class C Stock owned by the Holder.
ARTICLE IV
NO FURTHER ADVANCES
Section 4.1 Liquidating Account. The Holder acknowledges and agrees that the Government, upon acquisition of the Bank’s loan portfolio, shall make no further advances on the Liquidating Account Loan(s) and that unadvanced Liquidating Account Loan funds are hereby rescinded.
Section 4.2 Unadvanced Financing Account Loan Funds for Stock Purchases. The Holder acknowledges and agrees that the Government, upon liquidation or dissolution of the Bank, shall make no further advances on the portion of the Financing Account Loan(s) for purchases of Class B Stock and that such funds may be rescinded at the discretion of the Government.
ARTICLE V
MISCELLANEOUS
Section 5.1 Entire Agreement. This Agreement, together with the attached documents, which are incorporated herein, embodies the entire agreement of the parties hereto in relation to the subject matter herein and supersedes all prior understandings or agreements, oral or written, between the parties.
Section 5.2 Headings. The headings and subheadings contained in this Agreement, except the terms identified for definition in Article I and elsewhere in this Agreement, are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any provision hereof.
Section 5.3 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement.
Section 5.4 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE FEDERAL LAW OF THE UNITED STATES OF AMERICA, AND IN THE ABSENCE OF CONTROLLING FEDERAL LAW, IN ACCORDANCE WITH THE LAWS OF THE DISTRICT OF COLUMBIA.
Section 5.5 Successors. All terms and conditions of this Agreement shall be binding on the successors and assigns of the Bank and the Holder. Except as otherwise specifically provided in this Agreement, nothing expressed or referred to in this Agreement is intended or shall be construed to give any person other than the Bank or the Holder, any legal or equitable right, remedy or claim under or with respect to this Agreement or any provisions contained herein, it being the intention of the parties hereto that this Agreement, the obligations and statements of responsibilities hereunder, and all other conditions and provisions hereof are for the sole and exclusive benefit of the Bank and the Holder.
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Section 5.6 Modification; Assignment. No amendment or other modification, or assignment of any part of this Agreement shall be effective except pursuant to a written agreement subscribed by the duly authorized representatives of the parties hereto.
Section 5.7 Remedies. The Bank may pursue all rights and remedies available to the Bank in connection with this Agreement, including, but not limited to, a suit for specific performance, injunctive relief or damages in connection with any fraud, misrepresentation, misstatement made by the Holder in this Agreement (including Schedule II hereto).
Section 5.8 Notice. All notices and other communications hereunder to be made to the parties shall be in writing and shall be addressed as specified below as appropriate. The address, telephone number, or facsimile number for either party may be changed at any time and from time to time upon written notice given by such changing party to the other party. A properly addressed notice or other communication shall be deemed to have been delivered at the time it is sent by facsimile (fax) transmission, provided that the original of such faxed notice or other communication shall have been received within five (5) business days.
The Bank
United States Department of Agriculture
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Governor
Fax: (000) 000-0000
The Holder
As listed on Schedule II
Section 5.9 Severability. If any provision of this Agreement is declared invalid or unenforceable, then, to the extent possible, all of the remaining provisions of this Agreement shall remain in full force and effect and shall be binding upon the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
| NORTH PITTSBURGH TELEPHONE COMPANY | ||
| By: |
/s/ X. X. XXXXX | |
| Name: |
X. X. Xxxxx | |
| Title: |
President and General Manager | |
| RURAL TELEPHONE BANK | ||
| By: |
/s/ XXXXXX XXXX | |
| as Chairman of the Rural Telephone Bank | ||
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SCHEDULE I
LIQUIDATING ACCOUNT LOANS
OF THE HOLDER
| Loan Designation |
Balance of Unadvanced Funds as of October 1, 2005 | |||
| None |
||||
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SCHEDULE II
STOCKHOLDER INFORMATION
Name and Address of Holder:
North Pittsburgh Telephone Company
0000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Telephone Number of Holder: (000) 000-0000
Fax Number of Holder: (000) 000-0000
Class B Stock:
Number of Shares of Class B Stock Owned by the Holder: 49,746
Par Price of Class B Stock (Per Share): $1
Total Redemption Payment on Class B Stock: $49,746
Class C Stock:
Number of Shares of Class C Stock Owned by the Holder: 19,572
Par Price of Class C Stock (Per Share): $1,000
Total Redemption Payment on Class C Stock: $19,572,000
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